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Water Supply Agreement - 1/17/1985SENDER: Complete items 1.4.3 and 4. Put your address In the ••RETURN TO" spate on the reverse aide. Failure to do Ws wW presentthleaaa from being returned to you.7aa.ew.n rsebt ha wW amid. you the name of the person *finned testa the date of delivery. For additional learns following services are availabl•• Cenault PeetflteeteOlf fees and cinch boxiest far seminal,/ requemed. z. 1. ❑ snow to whom, dap and edema of delivery. 2. ❑ Restricted Delivery. 3. Art le J. om 11ay, Director, BRA 4400 Cobbs Dr. P.O. Box 7555 Waco, Texas 76714 -7555 4. TYPO** Service: gl Registered ❑ Insured ❑ Certified ❑ COD ❑ Express Mad Article Number P608 099 313 Always obtain signature of addressesgagent and DATE DELIVERED. S. si — Addreaey /1 x X �(,/(, 66 +�ss� S. re _ Agent 7. Dees of Delivery 8. Addruse a s Adams (ORLY"Tine:Mald fee p11a1J L 0 RETURN TO UNRED SWES OFFICIAL JAN PAMVOBf Ilalll•. ad*sw.i & Rc Itt+• spare Co kerns I.2,a.sM worm aa • Attachtot eatof wads othevAse affix to back of artlels. • Worse MtlCe "Roam lise•Iplppaaeed" secant to number. CITY OF ROUND ROCK (Ul) (Nrn. of Bonder) 214 E. Main (City, State, end ZIP Cede) PeU . y Pon PRIVATE Ulf MO (No. •nd Qtr t, A 8un•, P.O. b• •r n.D. No.) Round Rock, Texas 78664 Honorable Mike Robinson Mayor, City of Round Rock 214 E. Main St. Round Rock, Texas 78664 Dear Mayor Robinson: JTR :bb Encls. cc: Mr. Bob Bennett, City Manager BRAZOS RIVER AUTHORITY 4400 COBBS DRIVE • P. O. BOX 7555 • TELEPHONE AREA CODE 817 776 -1441 Very truly urs, R A g J/ � J. TOM Planning rector WACO, TEXAS 76714 -7555 January 17, 1985 A number of changes have been made to the "WATER SUPPLY AGREEMENT BETWEEN BRAZOS RIVER AUTHORITY AND CITY OF ROUND ROCK transmitted to you by my letter dated December 6, 1984. To insure that the Agreement will be an effective instrument for any subsequent sale of revenue bonds, the Authority requested that its Bond Counsel review the Agreement. A number of changes were identified by the Bond Counsel particularly those in Paragraph 4 dealing with pricing. One of the participants requested addi— tional provisions to Paragraph 22 dealing with the sale of water. The changes to the Agreement include the minor editorial changes made by the Authority staff. All changes are indicated on Enclosure 1. The Authority's Board of Directors at their January 14, 1985 meeting approved the revised Agreement and authorized the General Manager to execute the document. I have enclosed for your review and execution four (4) copies of this Agreement which has been signed by the General Manager. The previous agreement is con— sidered void, but I have enclosed one copy of that voided agreement for your files and use in comparing with the revised Agreement. Since the City has previously established the en— dorsement of its City Council to execute this Agreement, we are requesting that the Agreement be executed and two (2) copies be returned to the Authority no later than February 1, 1985. The Authority's Accounting Section will notify the City of the price and payment due under the Agreement for calendar year 1985. If you or your staff have any questions regarding the Agreement please do not hesitate to contact me. WATER SUPPLY AGREEMENT BETWEEN BRAZOS RIVER AUTHORITY AND CITY OF ROUND ROCK AGREEMENT made this cY' day of Q/Yl , 1985, by and between BRAZOS RIVER AUTHORITY ( "A thority"), a river au- thority of the State of Texas, and THE CITY OF ROUND ROCK ( "City "), of Williamson County. 1. RECITALS. Authority has entered into a contract with the United States of America by virtue of which it has obtained the right to utilize a portion of the storage space in Stillhouse Hollow Lake ( "Stillhouse ") in Bell County, Texas, constructed by the United States Army Corps of Engineers on the Lampasas River. Under said contract Authority has the right to supply water from Stillhouse to various cities and others having need for water. The purpose of this Agreement is to provide for Authority to make available to City from Stillhouse water which City needs and for City to purchase and pay for such water. 2. WATER SUPPLY. Beginning in January, 1985, there is com- mitted to City and City has the right to begin withdrawals from Stillhouse and shall thereafter pay at the rate specified in Paragraph 4, below, for the water which it has the right to withdraw whether it is actually being withdrawn or not, in the amount of 16,134 acre -feet per year (14.406 million gallons per day averaged over the period of one year). 3. OPTION. Authority grants unto City an option, contingent upon development of sufficient additional sources of supply in Authority's basin -wide water system to enable Authority to make such additional water available, to purchase an additional 1080 acre -feet of water per year (0.963 million gallons per day aver- aged over a period of one year) over and above that agreed to be made available under Paragraph 2, above. At such time, now esti- mated to be January 1, 1989, as Authority shall have completed definitive studies of the costs and feasibility of construction of facilities which will provide additional sources of supply of water in Authority's basin -wide water system, the Authority will notify City in writing of the "Completion Year' (now anticipated to be 1993), which is defined as the year in which Authority must begin payments for the capital cost of the additions to its basin -wide reservoir system necessary to provide additional water which will enable it to fulfill its obligations under this Para- graph 3 and in which it is expected that such additional water will be available, and of the then estimated price that will be charged for all water made available under this Agreement begin- ning with the Completion Year. The date on which such notice is given is hereinafter called "Notification Date ". On or before ninety (90) days following Notification Date, City will notify Authority in writing of how much, if any, of the option provided in this Paragraph it elects to exercise and how much, if any, water in addition to the amount available to it under Paragraph 2, above, and under the option provided in this Paragraph 3, it wishes to contract for. At the end of such ninety (90) day peri- od, City's option with respect to water as to which it shall have failed to notify Authority of its election to take and pay for under the option provided in this Paragraph 3, shall terminate. Should City notify Authority that it desires to have water made available to it in excess of the amounts provided in Paragraph 2, above, and under the option provided in this Paragraph 3, Author- ity will, on or before 210 days following Notification Date, in- dicate the amount of water in addition to that provided in Para- graph 2, above, and under the option already described in this Paragraph 3, it can make available to City on account of the failure of others (including parties who do not have rights simi- lar to those provided in Paragraph 2, above) having agreements similar to this Agreement to exercise the options provided in said agreements. The amount which can thus be made available shall be the product of multiplying the amount sought by City by the quotient obtained by dividing the number of acre -feet of water with respect to which the parties having such similar agreements shall have failed to have exercised their options by 2. the total number of acre -feet of water sought under provisions similar to this by the City and others with contracts similar to this Agreement. Further, Authority will, in the same written notice, identify the then anticipated Completion Year and update its estimate of the price for water that will be in effect beginning with the Completion Year. On or before 270 days following Notification Date, if City shall elect to take all or part of the additional water available to it as a result of failure of others to exercise their options it will give Authority written notice of such election. Failure to give such notice shall result in termination of City's right to receive such additional water. Election by City to exercise the option provided in this Paragraph shall commit Authority to undertaking its best efforts to complete by or before the Completion Year the additions to its basin -wide water supply system required to make water available to City in addition to that committed under Paragraph 2, above. However, City and Authority understand that Authority's ability to make water available to City pursuant to this Paragraph 3 is contingent upon the exercise by parties to other agreements similar to this of the options for additional water granted in such agreements. Water to be made available to City pursuant to this Paragraph 3, shall be supplied from Stillhouse and will be available for diversion by City as soon as water can be supplied from other sources as a substitute for water now committed from Stillhouse to others. Authority will give written notice to City when water committed to City pursuant to this Paragraph 3 is available for diversion from Stillhouse. 4. PRICE. City shall give Authority written notice ( "Elec- tion Notice ") not less than 90 days prior to the date when it elects to have Authority begin to make available for diversion from Stillhouse all or part of the water committed to it under Paragraph 2, above. Each Election Notice shall specify the total amount of water per year in acre -feet which City elects to have made available for diversion as well as the date on which it elects that such availability shall begin. City will make pay- ments to Authority for the water committed to City under this 3. contract as follows: (a) Prior to Completion Year, water which is committed under Paragraph 2, above, but not yet made available for diver- sion pursuant to an Election Notice, will be paid for at a price which is established at $23.64 per acre -foot in 1984 and which shall thereafter be escalated annually in accord- ance with the procedure hereinafter set forth. Notification of price for year 1985 and subsequent years will be in ac- cordance with Paragraph 4(g), below. (b) Prior to the Completion Year, water which is committed under Paragraph 2 and made available for diversion from Stillhouse pursuant to an Election Notice will be paid for at a price which is established at $115.00 per acre -foot in 1984 and which shall thereafter be escalated annually in accordance with the procedure hereinafter set forth. Noti- fication of the price for year 1985 and subsequent years will be in accordance with Paragraph 4(g), below. (c) Beginning with the Completion Year, all water committed to City under this Agreement will be paid for, whether or not diverted or available for diversion, at a price which will be established by Authority's Board of Directors for Completion Year on the basis of the costs associated with increasing the supplies of water available from Authority's basin -wide system of water supply reservoirs by an amount equal to or greater than the total of the amounts committed to City as a result of City's exercise of the option granted to it under Paragraph 3 of this Agreement and /or to others as a result of the exercise of options similar to that granted to City under Paragraph 3 of this Agreement. Such price will be escalated annually in accordance with the procedure hereinafter set forth. Notification of price for subsequent years will be in accordance with Paragraph 4(g), below. 4. (d) Where it is provided above in this Paragraph 4 for esca- lation of specified prices, the procedure for such escala- tion shall be as follows: Let P = the price established as set forth in the applica- ble subparagraphs above; Let A = the adjusted price after escalation; Let X = the Consumer Price Index ( "Index ") for Urban Wage Earners and Clerical Workers (1967 = 100) for the following months: then (i) for price adjustment for any year prior to and in- cluding Completion Year, the month of November 1983; (ii) for price adjustment for any year after Comple- tion Year, the month of November of the Completion year; Let Y = the Consumer Price Index for Urban Wage Earners and Clerical Workers for the month of November immedi- ately preceding the date on which the adjusted price for water is established; A=P x Y X. Should Index cease to be published, Authority shall select another index published by an agency of the United States government as being as similar as possible to Index as sub- stitute for Index in making the computation provided for in this subparagraph. (e) Once City has given Authority an Election Notice it shall thereafter pay for the amount of water which it elects in said notice to have made available to it for diversion at the price specified herein for water made available for 5. diversion pursuant to an Election Notice, as distinguished from the price for water committed but not yet made avail- able for diversion, whether or not such water is actually diverted. Once established, the amount considered to be available for diversion by City shall not be reduced. Actual diversion by City of an amount of water during a calendar year in excess of the total amounts for which it shall theretofore have given Election Notices shall con— stitute the giving of an Election Notice to have made avail- able for diversion during such calendar year and thereafter the amount diverted in such calendar year. (f) The giving of an Election Notice shall result in City's being charged for the amount of water specified in the Election Notice to be made available for diversion at the price specified herein for water available for diversion, as distinguished from committed water, for the calendar year in which the notice is given. (g) Authority shall determine prices to be paid by City for water committed under this Agreement under the formulas set forth in this Paragraph 4 for each calendar year on or be- fore February 1 of such calendar year and shall notify City in writing of the price thus determined on or before such date. (h) The amount payable for the calendar year shall be paid by City to Authority on or before February 15 following such February 1. Should the amount of City's use, or the amount of water made available to City for diversion pursuant to an Election Notice, increase during such calendar year above the amount for which payment is made on February 15, City will pay the increased amount of money due Authority on account of such increase at the time when its next sub- sequent payment is due to be made to Authority. 6. (i) All payments to be made under this Agreement shall be made at Waco, McLennan County, Texas. 5. IMPOSED COSTS. In addition to the adjustments in price for the water as described in Paragraph 4, above, any additional direct cost(s) or expense(s) which may be imposed on Authority in connection with fulfillment of its obligations under this Agree- ment by taxation or as the result of regulations or requirements lawfully imposed by the State, the United States or any State or Federal agency subsequent to execution of this Agreement shall be passed through Authority to City in like amount(s) and shall be included in the adjusted price for water made available by Authority to City under the terms of this Agreement. 6. SOURCE OF PAYMENTS. The payments to be made hereunder by City shall constitute operating expenses of City's water works system or City's combined water works and sewer systems. City shall charge rates for services of its water works system or its combined water works and sewer systems that will be sufficient to pay the operating and maintenance expenses thereof, including the payments provided for hereunder, and the interest on and prin- cipal of, as the same come due and mature, obligations now or hereafter payable from the resources of said system or systems. 7. RATE. The water to be made available to City under this Agreement may be diverted from Stillhouse at daily rates desired by City, provided that Authority does not covenant to make water available for diversion by City at a daily rate in excess of five times the average daily rate which would result in diversion dur- ing a calendar year of the total number of acre -feet of water per year then agreed to be made available for diversion by City. 8. COMPLIANCE WITH STATE RULES. Authority and City shall comply with Rules 156.02.50.003, 156.02.50.004, 156.02.50.005 and 156.02.50.006 of the Rules of the Texas Water Development Board (Texas Administrative Code Sections 303.112 -116). 7. 9. CONSERVATION OF WATER. It is the intent of the parties to this Agreement to provide to the maximum extent practicable for the conservation of water, and City agrees that it is a con- dition of this Agreement that it shall maintain and operate its facilities in a manner that will prevent unnecessary waste of water. 10. INTEREST ON PAST DUE PAYMENT. In the event of failure of City to make any payment to Authority provided to be made in this Agreement at the time when same shall be due, the past due pay- ment shall bear interest at the lesser of the highest rate or 18% per annum. 11. CANCELLATION FOR NONPAYMENT. Should City fail to make payment to Authority when due hereunder, Authority may, by writ- ten notice of such nonpayment delivered to City on or before 30 days before the date specified in said notice for cancellation, provided that the nonpayment with respect to which notice has been given shall not be cured by the date thus specified in such notice, cancel this Agreement. In the absence of cancellation of this Agreement by Authority, the obligation of City to make the payments for water called for in Paragraph 4, above, shall be un- conditional and absolute. 12. FORCE MAJEURE. Neither party hereto shall he under any liability or be deemed in default with respect to its obligations under this Agreement for any failure to perform or for delay in performing such party's obligations hereunder where such failure or delay is due to acts of God, fire, storm, flood, war, riots, sabotage, drought, low inflows of water to Stillhouse, strikes or other differences with labor (whether or not within the power of the parties to settle same), decrees or orders of the courts or other governmental authority, or other similar or dissimilar causes not within the reasonable control of such party and not 8. due to negligence of such party, while and to the extent that the performance is prevented by such cause (Force Majeure) and due diligence is being used to resume performance at the earliest practicable time. Notwithstanding the provisions of this para— graph for Force Majeure, the obligation of City to make payments for water called for in Paragraph 4, above, shall be uncon— ditional and absolute. 13. WAIVER. Any waiver at any time by any party of its rights with respect to default under this Agreement shall not be deemed a waiver of such rights with respect to any subsequent de— fault or matter. 14. REMEDIES. Nothing in this Agreement shall be construed as, in any manner, to abridge, limit or deprive either party hereunto of any means which it would otherwise have of enforcing any right or remedy either in law or in equity for breach of any of the provisions hereof. 15. ARBITRATION. Disputes between the parties arising under this Agreement shall be submitted to arbitration under the rules of the American Arbitration Association. 16. WITHDRAWAL FACILITIES. The provision of facilities for diversion from Stillhouse of the water agreed to be made avail— able by Authority to City hereunder shall be the responsibility of City. Authority shall use its reasonable efforts to assist City in obtaining an easement for right —of —way for City's diver— sion facilities across United States Government lands at Stillhouse at no cost to City subject to the conditions that the design and location of such facilities shall be approved by the District Engineer, Fort Worth District, U.S. Army Corps of Engineers, that City shall prepare and furnish all documentation necessary for obtaining the easement including a map of convenient size locating the point of diversion by course and distance from a survey corner or other identifiable points, which 9. map shall at that time be made a part of this Agreement as Appen- dix I, and that City shall operate the facilities located on United States Government lands in a manner acceptable to the Dis- trict Engineer, Fort Worth District, U.S. Army Corps of Engi- neers. 17. METERING. City agrees that it shall install, operate and maintain meters for the accurate measuring of all water diverted from Stillhouse. Further, such meter or meters shall be tested and calibrated for accuracy by and at the expense of City once each calendar year at intervals of approximately 12 months, and a report of such test and calibration shall be furnished to Author- ity. Authority shall be given at least two days prior notice of the time of any test and calibration of City's meters, or any of them, and Authority shall have the right to have a representative present at each test to observe the test and any calibrations found thereby to be necessary. Authority shall have the right to inspect and check the accuracy of City's meters at any time dur- ing usual business hours after not less than one nor more than five days notice. In the event any question arises at any time as to the accuracy of any such meter, such meter shall be tested promptly upon demand of the Authority, the expense of such test to be borne by Authority if the meter is found to be correct and by City if it is found to be incorrect. Readings within 2% of ac- curacy, plus or minus, shall be considered correct. If, as a re- sult of any test, any meter is found to be registering inac- curately (i.e., in excess of 2% of accuracy, plus or minus), the readings of such meter shall be corrected at the rate of its inaccuracy for any period which is definitely known and agreed upon, but in case the period is not definitely known and agreed upon, then the shorter of the following periods shall be used as the basis for correction: (a) a period extending back either 60 days from the date of demand for the test or, if no demand for the test was made, 60 days from the date of the test; 10. (b) a period extending back half of the time elapsed since the last previous test; and the records of readings shall be adjusted accordingly. Following each test of a meter, the same shall be calibrated by City to register accurately. 18. REPORTING. City agrees that it will keep accurate records of the daily readings from the meter or meters installed pursuant to Paragraph 17, above. These records shall be subject to inspection by Authority at reasonable times and places. City shall submit reports to Authority by the 10th day of each month showing the amount of water pumped each day during the preceding month. 19. SURPLUS WATER. City may not cancel this Agreement nor reduce the amounts of water it is obligated to pay for under the terms of Paragraphs 2 and 3, above. However, should City deter— mine after the Completion Year that it has water surplus to its anticipated needs from water to be supplied by the Authority under this Agreement, and upon City's notification to Authority of the quantity of water City designates as surplus water, Authority will use its best efforts to find another party who is able and willing to purchase such surplus water upon terms and at a price not less favorable to Authority than the price and terms under this Agreement. Should Authority succeed in finding such a party and enter into a contract for sale of the surplus water at such price and upon such terms, then City's obligation to pay for such surplus water shall be cancelled, and the parties shall thereupon have no further obligations to one another with respect to such surplus water; otherwise, the provisions and obligations of this Agreement shall remain unchanged. 20. TERM OF AGREEMENT. The term of this Agreement shall be for a period of 50 years from January 1, 1985, and the Agreement 11. shall be extended at the written request of City for so long as Authority continues to have the right to use storage in Still - house for water supply purposes. 21. TRANSPORTATION OF WATER. City and Authority understand that City must make arrangements for the transportation of water made available under this Contract from Stillhouse to Lake Georgetown. If within two years from January 1, 1985 City has been unable to make arrangements which in its opinion will allow City to transport water from Stillhouse to Lake Georgetown, City may at its option cancel this contract by written notice to Authority effective on December 31, 1986. After cancellation of this Contract City and Authority are released of all obligations under this Contract. If written notice of cancellation by City has not been received by Authority on or before December 31, 1986 the provisions of this Paragraph No. 21 expire. 22. SALES. It is the understanding of the parties hereto that City is entering into this Contract to obtain a supply of surface water to be treated by City and delivered to City's customers as potable water. City may not, without written con- sent of Authority, sell to others the water agreed to be supplied to it under this contract except as potable treated water, pro- vided, however, that if City desires to make all or a portion of the water purchased under Paragraph 2 available for resale as raw water on an interim basis prior to the time when it shall have given an Election Notice with respect to such water, Authority will, upon written request from City, use reasonable efforts to sell such water and will apply the proceeds of any such sale in excess of Authority's costs in making such sale and supplying the water sold against the obligations of City to make payments to Authority under this Contract. Water sold by Authority pursuant to the preceding sentence shall be considered as water which is committed under Paragraph 2 and made available for diversion from Stillhouse Hollow pursuant to an Election Notice in determination of the price to be paid for such water by City under Paragraph 12. 4.b., above, during the term of such interim sale but upon expir— ation of such term shall be considered as water which is com— mitted under Paragraph 2 but not yet made available until such time as City shall have given an Election Notice with respect to same. No interim sale will be made which will result in an in— crease in cost to City under this Contract. 23. NOTICES AND CERTIFICATIONS. Notices and certifications provided for in this Agreement shall be in writing. The same shall be delivered by mailing certified mail, postage paid, re— turn receipt requested, to the respective parties at the follow— ing addresses: Authority: City: Brazos River Authority P.O. Box 7555 Waco, Texas 76714 -7555 City of Round Rock 214 East Main Street Round Rock, Texas 78664 Either party may change its address as shown above by writ— ten notice to the other party. Notices shall be deemed to have been delivered on the business day following their deposit in the United States mail, postage paid and properly addressed and certified. 13. ENCLOSURE 1. 1. Paragraph 1. RECITALS. Line 1, the word "contracts" has been made singular. 2. Paragraph 2. WATER SUPPLY. Line 1, following the date January, 1985, the words "there is committed to [City/ - Corporation] and" are inserted. Line 2, the words "shall have" are replaced by the word "has ". 3. Paragraph 3. OPTION. On page 3, first sentence, the words "the [City /Corporation] and" were inserted before the word "others ". In the third sentence on the same page, the words "all or part of" were inserted after the word "take ". 4. Paragraph 4. PRICE. The last sentence of subsection (e) on page 6 was revised to read as follows: "Actual diversion by [City /Corporation] of an amount of water during a calendar year in excess of the total amounts for which it shall theretofore have given Election Notices shall consti- tute the giving of an Election Notice to have made available for diversion during such calendar year and thereafter the amount diverted in such calendar year ". Subsection (f), the words "on a date other than January 1" were deleted. The last paragraph on page 6 is designated subsection (h), and the words "for diversion" are added in the second sen- tence before the word "pursuant ". Subsection (h) on page 7 is relettered, "Subsection (i) ". 5. On page 7, a new Paragraph 6. "SOURCE OF PAYMENTS" is inserted and subsequent sections are renumbered accordingly. 6. Paragraph 8. COMPLIANCE WITH STATE RULES. The words "agree that the effectiveness of this Agreement is dependent upon Authority's and /or [City's /Corporation's] compliance" have been deleted and replaced by the words "shall comply ". 7. Paragraph 16. WITHDRAWAL FACILITIES. In the second sentence, the words "use its reasonable efforts" have been inserted after the words "Authority shall ". 8. Paragraph 18. REPORTING. The reference to Paragraph 16 is changed to "17 ". 9. Paragraph 21. TRANSPORTATION OF WATER. The reference to Paragraph 20 is changed to "21 ". 10. Paragraph 22. SALES. The final period is changed to a comma and a new section regarding sales of water to others is added. This section was added at the request of one of the contracting entities. ATTEST: ATTEST: Assistant Secretary City Secretary 14. 17th January DATED THIS THE day of , 1985. BRAZOS RIVER AUTHORITY By � I f r f Carson H. Hoge, GeneraQ' Mger CITY OF ROUND /RODUND yROOCK G!G' By ZL jyw Mayor WATER SUPPLY AGREEMENT BETWEEN BRAZOS RIVER AUTHORITY AND CITY OF ROUND ROCK AGREEMENT made this /7 day of ffl g/ , 19844 by and between BRAZOS RIVER AUTHORITY ( "Authority "), a river au- thority of the State of Texas, and THE CITY OF ROUND ROCK "City "), of Williamson County, Texas. 1. RECITALS. Authority has entered into contracts with the United States of America by virtue of which it has obtained the right to utilize a portion of the storage space in Stillhouse Hollow Lake ( "Stillhouse ") in Bell County, Texas, constructed by the United States Army Corps of Engineers on the Lampasas River. Under said contract Authority has the right to supply water from Stillhouse to various cities and others having need for water. The purpose of this Agreement is to provide for Authority to make available to City from Stillhouse water which City needs and for City to purchase and pay for such water. 2. WATER SUPPLY. Beginning in January, 1985, City shall have the right to begin withdrawals from Stillhouse and shall thereafter pay at the rate specified in Paragraph 4, below, for the water which it has the right to withdraw whether it is ac- tually being withdrawn or not, in the amount of 14,465 acre - feet per year (12.915 million gallons per day averaged over the period of one year). 3. OPTION. Authority grants unto City an option, contingent upon development of sufficient additional sources of supply in Authority's basin -wide water system to enable Authority to make such additional water available, to purchase an additional 2,749 acre -feet of water per year (2.454 million gallons per day aver- aged over a period of one year) over and above that agreed to be made available under Paragraph 2, above. At such time, now esti- mated to be January 1, 1989, as Authority shall have completed definitive studies of the costs and feasibility of construction of facilities which will provide additional sources of supply of water in Authority's basin -wide water system, the Authority will notify City in writing of the "Completion Year" (now anticipated to be 1993), which is defined as the year in which Authority must begin payments for the capital cost of the additions to its basin -wide reservoir system necessary to provide additional water which will enable it to fulfill its obligations under this Para- graph 3 and in which it is expected that such additional water will be available, and of the then estimated price that will be charged for all water made available under this Agreement begin- ning with the Completion Year. The date on which such notice is given is hereinafter called "Notification Date ". On or before ninety (90) days following Notification Date, City will notify Authority in writing of how much, if any, of the option provided in this Paragraph it elects to exercise and how much, if any, water in addition to the amount available to it under Paragraph 2, above, and under the option provided in this Paragraph 3, it wishes to contract for. At the end of such ninety (90) day peri- od, City's option with respect to water as to which it shall have failed to notify Authority of its election to take and pay for under the option provided in this Paragraph 3, shall terminate. Should City notify Authority that it desires to have water made available to it in excess of the amounts provided in Paragraph 2, above, and under the option provided in this Paragraph 3, Author- ity will, on or before 210 days following Notification Date, in- dicate the amount of water in addition to that provided in Para- graph 2, above, and under the option already described in this Paragraph 3, it can make available to City on account of the failure of others (including parties who do not have rights simi- lar to those provided in Paragraph 2, above) having agreements similar to this Agreement to exercise the options provided in said agreements. The amount which can thus be made available shall be the product of multiplying the amount sought by City by the quotient obtained by dividing the number of acre -feet of water with respect to which the parties having such similar agreements shall have failed to have exercised their options by the total number of acre -feet of 'water sought under provisions similar to this by others with contracts similar to this Agree- ment. Further, Authority will, in the same written notice, identify the then anticipated Completion Year and update its estimate of the price for water that will be in effect beginning with the Completion Year. On or before 270 days following Noti- fication Date, if City shall elect to take the additional water available to it as a result of failure of others to exercise their options it will give Authority written notice of such elec- tion. Failure to give such notice shall result in termination of City's right to receive such additional water. Election by City to exercise the option provided in this Paragraph shall commit Authority to undertaking its best efforts to complete by or be- fore the Completion Year the additions to its basin - wide water supply system required to make water available to City in addi- tion to that committed under Paragraph 2, above. However, City and Authority understand that Authority's ability to make water available to City pursuant to this Paragraph 3 is contingent upon the exercise by parties to other agreements similar to this of the options for additional water granted in such agreements. Water to be made available to City pursuant to this Paragraph 3, shall be supplied from Stillhouse and will be available for diversion by City as soon as water can be supplied from other sources as a substitute for water now committed from Stillhouse to others. Authority will give written notice to City when water committed to City pursuant to this Paragraph 3 is available for diversion from Stillhouse. 4. PRICE. City shall give Authority written notice ( "Elec- tion Notice ") not less than 90 days prior to the date when it elects to have Authority begin to make available for diversion from Stillhouse all or part of the water committed to it under Paragraph 2, above. Each Election Notice shall specify the total amount of water per year in acre -feet which City elects to have made available for diversion as well as the date on which it elects that such availability shall begin. City will make Page 3 payments to Authority for the water committed to City under this contract as follows: (a) Prior to Completion Year, water which is committed under Paragraph 2, above, but not yet made available for diver- sion pursuant to an Election Notice, will be paid for at a price which is established at $23.64 per acre -foot in 1984 and which shall thereafter be escalated annually in accord- ance with the procedure hereinafter set forth. Notification of price for year 1985 and subsequent years will be in ac- cordance with Paragraph 4(g), below. (b) Prior to the Completion Year, water which is committed under Paragraph 2 and made available for diversion from Stillhouse pursuant to an Election Notice will be paid for at a price which is established at $115.00 per acre -foot in 1984 and which shall thereafter be escalated annually in accordance with the procedure hereinafter set forth. Noti- fication of the price for year 1985 and subsequent years will be in accordance with Paragraph 4(g), below. (c) Beginning with the Completion Year, all water committed to City under this Agreement will be paid for, whether or not diverted or available for diversion, at a price which will be established by Authority's Board of Directors for Completion Year on the basis of the costs associated with increasing the supplies of water available from Authority's basin -wide system of water supply reservoirs by an amount equal to or greater than the total of the amounts committed to City as a result of City's exercise of the option grant- ed to it under Paragraph 3 of this Agreement and /or to others as a result of the exercise of options similar to that granted to City under Paragraph 3 of this Agreement. Such price will be escalated annually in accordance with the procedure hereinafter set forth. Notification of price for subsequent years will be in accordance with Paragraph 4(g), below. Page 4 (d) Where it is provided above in this Paragraph 4 for esca- lation of specified prices, the procedure for such escala- tion shall be as follows: Let P = the price established as set forth in the applica- ble subparagraphs above; Let A = the adjusted price after escalation; Let X = the Consumer Price Index ( "Index ") for Urban Wage Earners and Clerical Workers (1967 = 100) for the following months: then (i) for price adjustment for any year prior to and in- cluding Completion Year, the month of November 1983; (ii) for price adjustment for any year after Comple- tion Year, the month of November of the Completion year; Let Y = the Consumer Price Index for Urban Wage Earners and Clerical Workers for the month of November immedi- ately preceding the date on which the adjusted price for water is established; A = P x Y X. Should Index cease to be published, Authority shall select another index published by an agency of the United States goverment as being as similar as possible to Index as sub- stitute for Index in making the computation provided for in this subparagraph, (e) Once City has given Authority an Election Notice it shall thereafter pay for the amount of water which it elects in said notice to have made available to it for Page 5 diversion at the price specified herein for water made available for diversion pursuant to an Election Notice, as distinguished from the price for water committed but not yet made available for diversion, whether or not such water is actually diverted. Once established, the amount considered to be available for diversion by City shall not be reduced. Actual use by City of an amount of water during a calendar year of an amount in excess of the amounts for which it shall then have given Election Notice shall constitute the giving of an Election Notice to have made available for diversion during such calendar year and thereafter the amount used in such calendar year. (f) The giving of an Election Notice on a date other than January 1 shall result in City's being charged for the amount of water specified in the Election Notice to be made available for diversion at the price specified herein for water available for diversion, as distinguished from com- mitted water, for the calendar year in which the notice is given. (g) Authority shall determine prices to be paid by City for water committed under this Agreement under the formulas set forth in this Paragraph 4 for each calendar year on or be- fore February 1 of such calendar year and shall notify City in writing of the price thus determined on or before such date. The amount payable for the calendar year shall be paid by City to Authority on or before February 15 following such February 1. Should the amount of City's use, or the amount of water made available to City pursuant to an Election No- tice, increase during such calendar year above the amount for which payment is made on February 15, City will pay the increased amount of money due Authority on account of such increase at the time when its next subsequent payment is due to be made to Authority. Page 6 (h) All payments to be made under this Agreement shall be made at Waco, McLennan County, Texas. 5. IMPOSED COSTS. In addition to the adjustments in price for the water as described in Paragraph 4, above, any additional direct cost(s) or expense(s) which may be imposed on Authority in connection with fulfillment of its obligations under this Agree- ment by taxation or as the result of regulations or requirements lawfully imposed by the State, the United States or any State or Federal agency subsequent to execution of this Agreement shall be passed through Authority to City in like amount(s) and shall be included in the adjusted price for water made available by Authority to City under the terms of this Agreement. 6. RATE. The water to be made available to City under this Agreement may be diverted from Stillhouse at daily rates desired by City, provided that Authority does not covenant to make water available for diversion by City at a daily rate in excess of five times the average daily rate which would result in diversion dur- ing a calendar year of the total number of acre -feet of water per year then agreed to be made available for diversion by City. 7. COMPLIANCE WITH STATE RULES. Authority and City agree that the effectiveness of this Agreement is dependent upon Authority's and /or City's compliance with Rules 156.02.50.003, 156.02.50.004, 156.02.50.005 and 156.02.50.006 of the Rules of the Texas Water Development Board (Texas Administrative Code Sec- tions 303.112 -116). 8. CONSERVATION OF WATER. It is the intent of the parties to this Agreement to provide to the maximum extent practicable for the conservation of water, and City agrees that it is a condition of this Agreement that it shall maintain and operate Page 7 its facilities in a manner that will prevent unnecessary waste of water. 9. INTEREST ON PAST DUE PAYMENT. In the event of failure of City to make any payment to Authority provided to be made in this Agreement at the time when same shall be due, the past due pay— ment shall bear interest at the lesser of the highest legal rate or 18% per annum. 10. CANCELLATION FOR NONPAYMENT. Should City fail to make payment to Authority when due hereunder, Authority may, by writ— ten notice of such nonpayment delivered to City on or before 30 days before the date specified in said notice for cancellation, provided that the nonpayment with respect to which notice has been given shall not be cured by the date thus specified in such notice, cancel this Agreement, In the absence of cancellation of this Agreement by Authority, the obligation of City to make the payments for water called for in Paragraph 4, above, shall be un— conditional and absolute. 11. FORCE MAJEURE. Neither party hereto shall be under any liability or be deemed in default with respect to its obligations under this Agreement for any failure to perform or for delay in performing such party's obligations hereunder where such failure or delay is due to acts of God, fire, storm, flood, war, riots, sabotage, drought, low inflows of water to Stillhouse, strikes or other differences with labor (whether or not within the power of the parties to settle same), decrees or orders of the courts or other governmental authority, or other similar or dissimilar causes not within the reasonable control of such party and not due to negligence of such party, while and to the extent that the performance is prevented by such cause (Force Majeure) and due diligence is being used to resume performance at the earliest Page 8 practicable time. Notwithstanding the provisions of this para- graph for Force Majeure, the obligation of City to make payments for water called for in Paragraph 4, above, shall be un- conditional and absolute. 12. WAIVER. Any waiver at any time by any party of its rights with respect to default under this Agreement shall not be deemed a waiver of such rights with respect to any subsequent de- fault or matter. 13. REMEDIES. Nothing in this Agreement shall be construed as, in any manner, to abridge, limit or deprive either party hereunto of any means which it would otherwise have of enforcing any right or remedy either in law or in equity for breach of any of the provisions hereof. 14. ARBITRATION. Disputes between the parties arising under this Agreement shall be submitted to arbitration under the rules of the American Arbitration Association. 15. WITHDRAWAL FACILITIES. The provision of facilities for diversion from Stillhouse of the water agreed to be made avail- able by Authority to City hereunder shall be the responsibility of City. Authority shall assist City in obtaining an easement for right -of -way for City's diversion facilities across United States Government lands at Stillhouse at no cost to City subject to the conditions that the design and location of such facilities shall be approved by the District Engineer, Fort Worth District, U.S. Array Corps of Engineers, that City shall prepare and furnish all documentation necessary for obtaining the easement including a map of convenient size locating the point of diversion by course and distance from a survey corner or other identifiable points, which map shall at that time be made a part of this Agreement as Appendix I, and that City shall operate the facil- ities located on United States Government lands in a manner ac- ceptable to the District Engineer, Fort Worth District, U.S. Army Corps of Engineers. Page 9 16. METERING. City agrees that it shall install, operate and maintain meters for the accurate measuring of all water diverted from Stillhouse. Further, such meter or meters shall be tested and calibrated for accuracy by and at the expense of City once each calendar year at intervals of approximately 12 months, and a report of such test and calibration shall be furnished to Author- ity. Authority shall be given at least two days prior notice of the time of any test and calibration of City's meters, or any of them, and Authority shall have the right to have a representative present at each test to observe the test and any calibrations found thereby to be necessary. Authority shall have the right to inspect and check the accuracy of City's meters at any time dur- ing usual business hours after not less than one nor more than five days notice. In the event any question arises at any time as to the accuracy of any such meter, such meter shall be tested promptly upon demand of the Authority, the expense of such test to be borne by Authority if the meter is found to be correct and by City if it is found to be incorrect. Readings within 2% of accuracy, plus or minus, shall be considered correct. If, as a result of any test, any meter is found to be registering inaccu- rately (i.e., in excess of 2% of accuracy, plus or minus), the readings of such meter shall be corrected at the rate of its inaccuracy for any period which is definitely known and agreed upon, but in case the period is not definitely known and agreed upon, then the shorter of the following periods shall be used as the basis for correction: (a) a period extending back either 60 days from the date of demand for the test or, if no demand for the test was made, 60 days from the date of the test; (b) a period extending back half of the time elapsed since the last previous test; Page 10 and the records of readings shall be adjusted accordingly. Following each test of a meter, the same shall be calibrated by City to register accurately. 17. REPORTING. City agrees that it will keep accurate records of the daily readings from the meter or meters installed pursuant to Paragraph 16, above. These records shall be subject to inspection by Authority at reasonable times and places. City shall submit reports to Authority by the 10th day of each month showing the amount of water pumped each day during the preceding month. 18. SURPLUS WATER. City may not cancel this Agreement nor reduce the amounts of water it is obligated to pay for under the terms of Paragraphs 2 and 3, above. However, should City deter— mine after the Completion Year that it has water surplus to its anticipated needs from water to be supplied by the Authority under this Agreement, and upon City's notification to Authority of the quantity of water City designates as surplus water, Authority will use its best efforts to find another party who is able and willing to purchase such surplus water upon terms and at a price not less favorable to Authority than the price and terms under this Agreement. Should Authority succeed in finding such a party and enter into a contract for sale of the surplus water at such price and upon such terms, then City's obligation to pay for such surplus water shall be cancelled, and the parties shall thereupon have no further obligations to one another with respect to such surplus water; otherwise, the provisions and obligations of this Agreement shall remain unchanged. 19. TERM OF AGREEMENT. The term of this Agreement shall be for a period of 50 years from January 1, 1985, and the Agreement shall be extended at the written request of City for so long as Authority continues to have the right to use storage in Still — house for water supply purposes. Page 11 20. TRANSPORTATION OF WATER. City and Authority understand that City must make arrangements for the transportation of water made available under this Contract from Stillhouse to Lake Georgetown. If within two years from January 1, 1985 City has been unable to make arrangements which in its opinion will allow City to transport water from Stillhouse to Lake Georgetown, City may at its option cancel this contract by written notice to Authority effective on December 31, 1986. After cancellation of this Contract City and Authority are released of all obligations under this Contract. If written notice of cancellation by City has not been received by Authority on or before December 31, 1986 the provisions of this Paragraph No. 20 ex- pire. 21. SALES. It is the understanding of the parties hereto that City is entering into this Contract to obtain a supply of surface water to be treated by City and delivered to City's customers as po- table water. City may not, without written consent of Authority, sell to others the water agreed to be supplied to it under this con- tract except as potable treated water. 22. NOTICES AND CERTIFICATIONS. Notices and certifications provided for in this Agreement shall be in writing. The same shall be delivered by mailing certified mail, postage paid, return receipt requested, to the respective parties at the following addresses: Authority: City: Brazos River Authority P.O. Box 7555 Waco, Texas 76714 - 7555 City of Round Rock 214 East Main Street Round Rock, Texas 78664 Either party may change its address as shown above by written notice to the other party. Notices shall be deemed to have Page 12 been delivered on the business day following their deposit in the United States mail, postage paid and properly addressed and certified. ATTEST: ATTEST: DATED THIS THE Assistant Secretary City Secretary day of , 1985. BRAZOS RIVER AUTHORITY By By Carson Page 13 (HG CITY OF ROUND ROCK al Manager Mayor