R-86-887 - 7/1/1986WHEREAS, the Council of the City of Round Rock is charged
with the health, safety and welfare of the Citizens; and
WHEREAS, the Council has contracted for additional water for
the present and future Citizens of Round Rock; and
WHEREAS, the Brazos River Authority has submitted a proposed
contract for the design and construction of a raw water line to
transport water from Lake Stillhouse Hollow to Lake Georgetown;
and
WHEREAS, the Council wishes to enter into the contract with
the Brazos River Authority; Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS
That the Mayor is hereby authorized and directed to execute
on behalf of the City of Round Rock, Texas, a Raw Water Line
Contract with the Brazos River Authority, a copy of which is
attached hereto and herein for all intents and purposes.
ATTEST:
RESOLVED this
RESOLUTION NO. P//\
� .1T
LAND, City Secretary
day of (,( i(y- , 1986.
MIKE ROBINSON, Mayor
City of Round Rock, Texas
600 CONGRESS AVENUE 717 NORTH HARWOOD
1250 ONE AMERICAN CENTER NINTH FLOOR
AUSTIN, TEXAS 78701 -3248 DALLAS. TEXAS 75201-65E17
TELEPHONE. 512 470 3 505 TE,EPH'ONE'. 214 754 -9200
FACSIMILE. 512472051 FACSIMILE 2147549250
Robert Bennett, Jr.
City Manager
City of Round Rock
221 East Main Street
Round Rock, Texas 78664
Dear Mr. Bennett:
LAW OFFICES
MCCALL, PARKHURST a HORTON L.L.P.
November 17, 2000
700 N. ST. MARY'S STREET
1225 ONE RIVERWALK PLACE
SAN ANTONIO, TEXAS 78205 -3503
TE,EVNOr,e: 210 225 -2800
FACSIMILE 210 2252984
Re: Brazos River Authority Contract Revenue Bonds, Series 2000 (Williamson County
Regional Raw Water Line Project)
As hopefully the final documentation we will need from you and the other Participants in the
Williamson County Regional Raw Water Line Project in order to clear the captioned bond issue
through the office of the Attorney General, enclosed are eight (8) copies of a General Certificate to
be executed by the City Manager and the City Secretary and then sealed as indicated. The Attorney
General will require this documentation before they will approve the transcript of proceedings
pertaining to the Bonds. Since we have scheduled a closing on this bond issue for November 30,
2000, we need to receive the executed copies of the enclosures no later than Monday, November 27,
2000 so we can clear these documents through their office.
As always, thank you for your help. If you should have any questions, please advise.
Respectfully yours, l / / '
vi ^*ice G'�-+^d
G. Charles Kobdish
GENERAL CERTIFICATE OF ROUND ROCK
THE STATE OF TEXAS
COUNTIES OF WILLIAMSON AND TRAVIS
CITY OF ROUND ROCK
We, the undersigned City Manager and City Secretary of the City of Round Rock,
Texas (the "Participant ") hereby certify as follows:
1. That this certificate is executed for the benefit of the Attorney General of the State
of Texas and the prospective owners of the proposed BRAZOS RIVER AUTHORITY
CONTRACT REVENUE BONDS, SERIES 2000 (WILLIAMSON COUNTY REGIONAL
RAW WATER LINE PROJECT), dated November 1, 2000 (the "Bonds "), authorized by a
resolution adopted by the Board of Directors of the Brazos River Authority (the "Authority ")
on October 30, 2000 (the "Bond Resolution ").
2. That said Participant is a duly incorporated Home Rule City, operating and existing
under the Constitution and laws of the State of Texas and the duly adopted Home Rule
Charter of said Participant, which Charter has not been changed or amended since the passage
of the ordinance authorizing the most recently issued Series of outstanding obligations of the
Participant which have been approved by the Attorney General of Texas.
3. That the statements and information set forth in the Official Statement pertaining
to the Participant and the Bonds, and particularly the Participant's operating statements, debt
service requirements, revenues, taxable values, rates for water and sewer services (which rates
have been set by official action of the Participant and are now in effect), and other information
set forth therein are true and correct in all material respects.
4. That the Project Agreements (as defined in the Bond Resolution), between the
Authority and the Participant, have been duly authorized by the Participant and properly
executed by authorized officials of the Participant.
5. That the Project Agreements, between the Authority and the Participant, are still
in full force and effect, have not been amended or rescinded, there is no litigation pending
relating to the Project Agreements or the authority of the Participant to enter into the Project
Agreements and no default exists in connection therewith.
[The balance of this page is intentionally left blank.]
SIGNED the day of
(SEAL)
, 2000.
CI ' F ROUND ROCK
Cit Manager .
BRAZOS RIVER AUTHORITY
Mr. Jack A. Harzke
City Manager
City of Round Rock
214 East Main Street
Round Rock, Texas 78664
joxiA-
Dear Mr arzke:
Also enclosed for your file are executed original copies of the
Agreement between the Brazos River Authority and the City of
Georgetown and the Jonah Water Supply Corporation.
RAR:bw
Encl.
4400 COBBS DRIVE • P. O. BOX 7555 • TELEPHONE AREA CODE 817776 -1441
WACO, TEXAS 78714 -7555
Enclosed for your file is an executed original copy of the
Williamson County Regional Raw Water Line Agreement ( "Agree-
ment") between the Brazos River Authority and the City of Round
Rock.
Sincerely,
R 0
ROY A. ROBERTS
Assistant General Manager
AM.
1836.1986
July 16, 1986
WILLIAMSON COUNTY REGIONAL RAW WATER
LINE AGREEMENT
BETWEEN
BRAZOS RIVER AUTHORITY
AND
CITY OF GEORGETOWN, CITY OF ROUND ROCK
AND JONAH WATER SUPPLY CORPORATION
June 30, 1986
i'�
INDEX
1. Recitals 1
2. Definitions 2
(a) Authority 2
(b) Authority Surplus Water 2
(c) Board 2
(d) Bonds 2
(e) Bond Resolution 2
(f) Capital Costs 3
(g) Certified Projections 3
(h) City Surplus Water 3
(i) Completion Year 3
(j) Corps 3
(k) Debt Service 3
(1) Dependable Yield 4
(m) Final Design and Construction Phase 4
(n) Fiscal Year 4
(o) Georgetown 4
(p) Jonah 4
(q) Lake Georgetown 4
(r) Lake Georgetown Supply Contracts 4
(s) Lake Stillhouse Hollow 5
(t) mgd 5
(u) Maintenance and Operation Expense 5
(v) Monthly Charges 6
(w) Participants 6
(x) Preliminary Design Phase 6
(y) Project 7
(z) Repair and Replacement Fund 7
(aa) Repair and Replacement Repayment 7
(bb) Round Rock 7
(cc) Stillhouse Supply Agreements 7
(dd) Stillhouse Supply Agreement
Payments 8
( #11RawA1 -A2) - i -
PAGE
(ee) Surplus Water 8
3. Design, Construction and Operation
of Project 8
4. Bonds 9
5. Payment 10
6. Investment of Funds 15
7. Meters 16
8. Projection Information 17
9. Surplus Water 20
10. Payments For Surplus Water 22
11. Compensation of Georgetown and
Round Rock 23
12. Duration of Availability of Surplus
Water 26
13. Time of Completion of Project 27
14. Use of Stillhouse Supply Agreement
Payments 28
15. Additional Participants 29
16. General Provisions 32
17. Special Assignment 45
Signatures 46
THIS CONTRACT IS SUBJECT TO ARBITRATION UNDER THE
TEXAS ARBITRATION ACT
( #11Raw1 -46)
***** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * **
WILLIAMSON COUNTY REGIONAL RAW WATER
LINE AGREEMENT
*** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * **
AGREEMENT made and entered into by and between BRAZOS
RIVER AUTHORITY, and CITY OF GEORGETOWN, CITY OF ROUND ROCK
and JONAH WATER SUPPLY CORPORATION.
1. RECITALS. Authority is authorized to store water
in and to divert water from Lake Georgetown and Lake
Stillhouse Hollow. The other parties to this Agreement
supply water in various areas in Williamson County, Texas,
for municipal use. Authority has contracted with each such
other party to make available to such party water from Lake
Stillhouse Hollow. Such other parties are so located that
it is desirable from the standpoint of cost that each should
divert the surface water which it needs for municipal supply
from Lake Georgetown rather than from Lake Stillhouse
Hollow. The purpose of this Agreement is to provide for
Authority to design, construct and operate facilities for
transporting water from Lake Stillhouse Hollow committed to
the other parties to this Agreement under the contracts men-
tioned above to Lake Georgetown for diversion by them from
Lake Georgetown and, in the period between the date of exe-
cution of this Agreement and the date when such facilities
become operational, to allow such other parties to use water
from Lake Georgetown as an interim supply.
2. DEFINITIONS.
(a) "Authority" means Brazos River Authority, a
river authority established by a statute enacted by the
Legislature of the State of Texas.
(b) "Authority Surplus Water" means the Dependable
Yield of Lake Georgetown in excess of 12 mgd.
(c) "Board" means the Authority's Board of Directors.
(d) "Bonds" means revenue bonds or other obligations
issued by Authority to obtain funds for use in the design,
construction, expansion, improvement, completion, repair or
replacement of Project, whether one or more issues.
(e) "Bond Resolution" means any resolution of Board
authorizing the issuance of Bonds and providing for their
security and payment, as such resolution(s) may be amended
from time to time as therein permitted.
-2-
(f) "Capital Costs" means all sums of money which are
required by the terms of a Bond Resolution to be paid to or
on behalf of holders of Bonds or to be paid into any reserve
fund or sinking fund.
(g) "Certified Projections" means a projection or
projections made by a Participant pursuant to this Agreement
of such Participant's annual average and maximum daily need
for water during a five (5) year period beginning as of the
date of such projection which is certified by the
Participant to Authority.
(h) "City Surplus Water" means the excess, expressed
in mgd, of 12 mgd over the sum of the Effective Rates in
force from time to time of Georgetown and Round Rock under
the Lake Georgetown Supply Contracts.
(i) "Completion Year" means the Fiscal Year in which
Project becomes fully operational.
(j) "Corps" means the United States Army Corps of
Engineers.
(k) "Dept Service" means the amounts of money
required to pay Capital Costs plus fees, charges and costs
such as those of paying agents, registrars and trustees
which are incurred incident to the handling and servicing of
Bonds.
-3-
(1) "Dependable Yield" means the maximum volume of
water that can be withdrawn from a lake or reservoir during
each calendar year without ever completely depleting all of
the water in storage in such lake or reservoir, taking into
account reservoir storage capacity, inflows, evaporation,
releases to honor prior rights and anticipated diversion
schedules.
(m) "Final Design and Construction Phase" means the
work of completing design, preparing final plans and speci-
fications and constructing the Project.
(n) "Fiscal Year" means the fiscal year of Authority,
which is September 1 through August 31.
(o) "Georgetown" means the City of Georgetown,
Williamson County, Texas.
(p) "Jonah" means Jonah Water Supply Corporation, a
Texas corporation.
(q) "Lake Georgetown" means Lake Georgetown
constructed by the Corps on the North San Gabriel River in
Williamson County, Texas.
(r) "Lake Georgetown Supply Contracts" means the
contracts between Authority on the one hand and Georgetown
and Round Rock on the other providing for Authority to make
-4-
water available to Georgetown and Round Rock, respectively,
from Lake Georgetown.
(s) "Lake Stillhouse Hollow" means Lake Stillhouse
Hollow constructed by the Corps on the Lampasas River in
Bell County, Texas.
(t) "mgd" means millions of gallons of water per day.
(u) "Maintenance and Operation Expense" means all
costs of repairs and replacements of Project for which no
special fund is created and all costs of maintenance and
operation of Project including (for greater certainty but
without limiting the generality of the foregoing) super-
vision, engineering, accounting, auditing and payments made
by Authority in satisfaction of judgments resulting from
claims not covered by Authority's insurance, legal expense,
energy costs and any other labor, supplies, insurance, ser-
vices and equipment necessary for the proper operation of
the Project plus any additional direct cost(s) or expense(s)
which may be imposed on Authority in connection with the
fulfillment of its obligations under this Agreement by taxa-
tion or as the result of regulations or requirements
lawfully imposed by the State of Texas, the United States or
any state or federal agency subsequent to the execution of
-5--
this Agreement plus an amount determined annually by
Authority's certified public accountants to be appropriate
to cover Authority's expenses of supervision and admi-
nistration attributable to the obligations under this
Agreement and an appropriate part of its unallocated general
and administrative expense. In making such determination,
Authority's accountants shall utilize generally accepted
accounting principles to allocate a percentage of unallo-
cated expenses which is generally equivalent to the percen-
tage of expenses incured by Authority under this Agreement
as compared to the overall expenses of Authority.
(v) "Monthly Charges" means the amount of the charge
to be made monthly by Authority to each Participant for the
services to be provided by Authority under this Agreement.
(w) "Participants" means Georgetown, Round Rock and
Jonah and parties who may become Additional Participants
under the provisions of Paragraph 15, below.
(x) "Preliminary Design Phase" means the work of
studying, designing and preparing Project layout plans
necessary for acquiring land rights or options for land
rights and permits necessary for final design and construc-
tion of Project.
-6-
(y) "Project" means facilities capable of
transporting from Lake Stillhouse Hollow to Lake Georgetown
the water agreed to be made available from Lake Stillhouse
Hollow by Authority to Participants under Stillhouse Supply
Agreements.
(z) "Repair and Replacement Fund" means the fund to
be established by the Authority, the monies from which will
be used for major repairs and replacements to the Project,
for extraordinary or non - recurring expenses not budgeted as
Maintenance and Operation Expense and for Maintenance and
Operation Expenses in excess of the amounts budgeted.
(aa) "Repair and Replacement Repayment" means the
portion of the Monthly Charge required or necessary during
such month to replenish and maintain the Repair and
Replacement Fund.
(bb) "Round Rock" means the City of Round Rock,
Williamson County, Texas.
(cc) "Stillhouse Supply Agreements" means the
following contracts between Authority on the one hand and
Participants, respectively, on the other providing that
Authority will make water available from Lake Stillhouse
Hollow to such Participants:
-7-
(i) Agreement with Georgetown dated January
24, 1985;
(ii) Agreement with Round Rock dated January
24, 1985;
(iii) Agreement with Jonah dated January 31,
1985; and
(dd) "Stillhouse Supply Agreement Payments" means
payments required to be made by Participants to Authority
prior to Completion Year for water committed but not yet
made available under Stillhouse Supply Agreement.
(ee) "Surplus Water" means Authority Surplus Water
and City Surplus Water.
3. DESIGN, CONSTRUCTION AND OPERATION OF PROJECT.
Authority agrees that as soon as sufficient funds are
available from the issuance of Bonds, it will promptly begin
work on the Preliminary Design Phase. Further, Authority
agrees that it will use its best efforts to begin the Final
Design and Construction Phase in time so that if the work is
diligently pursued, it is reasonable to expect that Project
will be operational by the time Participants' needs for
water under the Stillhouse Supply Agreements are expected to
begin on the basis of the Certified Projections. Once
begun, such work will be diligently pursued, but it is
-8-
estimated that the earliest time when Project can be opera-
tional is four (4) years from the date when work begins on
the Preliminary Design Phase. Completion of the
Preliminary Design Phase is expected to require eighteen
(18) months and it is presently expected that the Final
Design and Construction Phase will require two and one -half
(2 -1/2) years. When Project becomes operational, Authority
shall operate it to deliver water agreed to be made
available from Lake Stillhouse Hollow under Stillhouse
Supply Agreements to Lake Georgetown and will make such
water available to Participants for diversion from Lake
Georgetown.
4. BONDS. Immediately upon execution of this
Agreement, Authority will begin and diligently pursue the
work necessary for the issuance of Bonds if that is deter-
mined by Authority to be the best means for obtaining funds
to begin work on the Preliminary Design Phase and will
thereafter issue additional Bonds from time to time as
necessary to continue diligently with the completion of the
Preliminary Design Phase and to begin and diligently pursue
completion of the Final Design and Construction Phase, as
herein provided. From the proceeds of the first issue of
Bonds issued to obtain funds for the Final Design and
-9-
Construction Phase, Authority will establish a Repair and
Replacement Fund in the amount of $500,000.00. The Bond
Resolution providing for the issuance of such Bonds may pro-
vide that funds in the Repair and Replacement Fund may be
used for Debt Service if other funds are not available or if
the Board, in its sole discretion, determines that such use
is in the best interest of Participants. Such Bond
Resolution may further provide that such funds may be used
for any Project - related purpose at the sole discretion of
the Board.
5. PAYMENT. (a) Each Participant shall pay to
Authority a Monthly Charge each month during the term of
this Agreement. The Monthly Charges to be paid by all
Participants shall be the total of the amounts necessary to
pay Debt Service, Maintenance and Operation Expense and any
Repair and Replacement Repayment payable during such month,
plus a management fee described in subparagraph 5(e), below,
as compensation to Authority for managing the Project for
the benefit of the Participants.
(b) The Debt Service part of each Monthly Charge shall
be an amount which, when multiplied by the number of months
for which the Debt Service is due (between the due dates),
-10-
will produce a product which shall be sufficient to produce
the amount of money which will be needed by Authority to pay
such Debt Service when due. Each Participant's share of the
Debt Service part of the Monthly Charge for each month shall
be a percentage of the total Debt Service which percentage
is equal to the percentage of the total water available to
all Participants under the Stillhouse Supply Agreements
which is available to such Participant. The amounts of
water available to the Participants and the percentages the
individual amounts represent of the total available under
the Stillhouse Supply Agreements are as set forth in the
following table:
PARTICIPANT WATER (mqd) PERCENTAGES (%)
Georgetown 4.864 22.794
Round Rock 15.369 72.023
Jonah 1.106 5.183
TOTAL 21.339 100.00
(c) Prior to the date on which Project becomes opera-
tional, the Board shall prepare a budget in which it makes
an estimate of Maintenance and Operation Expense to be in-
curred during the Completion Year. During the period
between the date on which Project becomes operational and
the end of the Completion Year, the Maintenance and
Operation Expense part of the Monthly Charge will be an
amount which, when multiplied by the number of months bet-
ween the first day of the month in which Project becomes
operational and the end of Completion Year will produce suf-
ficient monies to enable Authority to pay such estimated
Maintenance and Operation Expense for such period from such
Maintenance and Operation Expense part of the Monthly
Charges. Thereafter, the Board shall on or before July 31 of
each year prepare a budget in which it estimates the amount
of Maintenance and Operation Expense to be incurred during
the next following Fiscal Year. The monthly Maintenance and
Operation Expense part of the Monthly Charges for each
Fiscal Year following Completion Year shall be that amount
of money which, when multiplied by 12, shall equal the
amount of Maintenance and Operation Expense budgeted by the
Board for such Fiscal Year, adjusted upward or downward for
any deviation in the amount of Maintenance and Operation
Expense actually incurred in the preceding Fiscal Year over
or under the amount budgeted by Board. During the period
between the date on which Project becomes operational and
-12-
the end of Completion Year, the Maintenance and Operation
Expense part of the Monthly Charge shall be allocated among
Participants on the same basis as the allocation of the Debt
Service part of the Monthly Charge per subparagraph (b),
above. Thereafter, the Maintenance and Operation Expense
will be allocated among Participants on the basis of the
amount of water, expressed in mgd, withdrawn by each
Participant from Lake Georgetown during the preceding twelve
(12) month period ending June 30, except that the amount
allocated to Georgetown and Round Rock, respectively, shall
be based on the amount of withdrawals of each less its
"Effective Rate" then in effect under the Lake Georgetown
Supply Contracts.
(d) The Repair and Replacement Repayment part of the
Monthly Charge shall be payable only when expenditures from
the Repair and Replacement Fund shall have reduced the
amount of money in that fund below $500,000.00. Each expen-
diture from the Repair and Replacement Fund shall be paid
back into the Repair and Replacement Fund in not more than
thirty -six (36) equal monthly payments, starting with the
beginning of the Fiscal Year after such expenditure is made.
The Repair and Replacement Repayment part of the Monthly
-13-
Charge during any Fiscal Year shall be the sum of the
monthly payments into the Repair and Replacement Fund
required during such Fiscal Year pursuant to the provisions
of the sentence next preceding. The Repair and Replacement
Repayment part of the Monthly Charge shall be allocated
among Participants on the same basis as the Maintenance and
Operation
paragraph
(e)
Expense is allocated under
(b),
Each
above.
Participant shall pay
-14-
the provisions of sub-
a portion of the total
management fee due to Authority in each month in which such
Participant is obligated to pay a Monthly Charge. The
amount of the management fee payable by a Participant in any
month in which such Participant is obligated to pay a
management fee shall be equal to five one - hundredths (0.05)
of the amounts such Participant is obligated to pay
month to pay its share of Maintenance and Operation
plus five one - thousandths (0.005) of the sum of the
in such
Expense,
amounts
such Participant is obligated to pay in such month to pay
its share of Debt Service and Repair and Replacement
Payment.
(f) The Monthly Charge for any month shall be payable
on or before the 10th day of each month (the "due date ").
(g) The Monthly Charge shall be payable at the
central office of the Authority, Waco, McLennan County,
Texas.
(h) Each Monthly Charge not paid before the due date
shall bear interest at the lesser of the highest lawful rate
or 18% per annum from the due date until the date paid.
(i) On or before thirty (30) days prior to the date
on which the first Monthly Charge hereunder becomes due and
payable, Authority shall certify to each Participant the
amount of its Monthly Charge for the remainder of the then
current Fiscal Year. On or before each July 31 thereafter
while this Agreement remains in force, Authority shall cer-
tify to each Participant the amount of its Monthly Charge
for the next succeeding Fiscal Year.
6. INVESTMENT OF FUNDS. Pending expenditure, all
proceeds of Bonds, including sums on deposit in funds
required to be established under the terms of a Bond
Resolution, shall be kept invested in revenue producing
investments which Authority is permitted by law to make,
with the objective of producing the maximum revenue which
can be produced without impairing the exemption of interest
on Bonds from federal income tax or the availability of such
-15-
funds for expenditure by Authority as needed in the
fulfillment of its obligations hereunder. The earnings on
such investments shall be used to pay Debt Service and
reduce the Debt Service part of the Monthly Charges to the
Participants, except that to the extent necessary, such
earnings may be used to complete construction of the
project.
7. METERS. Each Participant shall install, operate
and maintain or arrange for the installation, operation and
maintenance of a meter which will accurately measure and
record the amount of water withdrawn by the Participant
from Lake Georgetown. Authority shall have the right to
read such meter once each month in the presence of Partici-
pant's representative. The meter is to be tested and cali-
brated for accuracy once each year at Participant's expense
and a report of such test and calibration shall be furnished
to Authority. If questions regarding the accuracy of the
meter arise, Authority may demand testing in addition to the
annual test, above required. If, as a result of any such
additional test, the meter is found to be inaccurate in
excess of 2 %, Participant shall pay for the test and for
having the meter promptly calibrated for accuracy. If the
-16--
meter is found to be within 2% tolerance, Authority shall
pay for the testing. Adjustments for inaccuracies
discovered in metering as a result of any test shall be com-
puted based upon an agreed period of adjustment or if
agreement cannot be reached, the shorter of a period
beginning 60 days prior to the date of the test or a period
covering one -half of the time since the last previous test.
Participant shall provide daily use records reflecting
withdrawals from Lake Georgetown to Authority by the 10th
day of the month following the month of withdrawal.
8. PROJECTION INFORMATION. Within thirty (30) days
from the date of execution of this Agreement and on each
September 1 thereafter until Project becomes operational,
each Participant shall provide Authority with a copy of its
water use records for the preceding twelve (12) months,
current supply capacities, including the estimated safe
yield that can be expected during drought conditions from
each well that is part of Participant's water supply, and a
Certified Projection. Beginning on September 30, 1986, and
annually thereafter, Authority shall consolidate the
Certified Projections and other data thus furnished, prepare
a five (5) year projection of the annual average and maximum
-17-
daily water needs of Participants and shall prepare an asso-
ciated construction schedule that will specify when Final
Design and Construction Phase must begin in order to meet
the projected water needs of the Participants. The five (5)
year projection shall be based on the data provided by each
Participant utilizing the previous summer's use of water,
the Certified Projections, and the drought capacity of all
Participants' water wells. It shall identify all sources of
water that will be used by each Participant for the five (5)
year projection period. Within thirty (30) days after each
October 1, Authority will provide its projections and
construction schedule to each Participant for review. If,
after the first year during which this Agreement has been in
force, a Participant shall fail to provide the aforesaid
information and Certified Projection, then the Certified
Projection then in effect shall be deemed the Participant's
current Certified Projection. On or before November 15 of
each year, each Participant may review and comment upon the
projections made by Authority and the construction schedule
proposed by it. That projection and construction schedule
shall be deemed acceptable to each Participant unless writ-
ten comments are received in Authority's Waco office on or
-18-
before November 15. At its regular January meeting
following such November 15, the Board shall review all
comments regarding Authority's projection and construction
schedule received from any Participant; shall make such
changes therein as it may deem appropriate; and shall adopt
an "Adjusted Certified Projection" for each Participant and
a construction schedule based thereon. The Adjusted
Certified Projections and construction schedule adopted by
the Board shall be binding on
same and the other provisions
withstanding, Authority shall
any Participant on account of
of Project in accordance with
all parties. The adoption of
of this Agreement not -
never have any liability to
failure to complete any part
any construction schedules or
in time to meet needs projected in any such Adjusted
Certified Projections and each Participant agrees to hold
Authority harmless with respect to any and all liability to
it arising out of any such failure and out of any inability
or failure to sell Bonds in time to complete any part of
Project in accordance with any such Adjusted Certified
Projection and /or construction schedules; provided, however,
this shall not be construed as obligating the Participants
to hold and save the Authority harmless from damages or
-19-
liability resulting from the sole negligence of the
Authority, its officers, agents, or employees and not
involving negligence on the part of the Participants or
their agents, officers, or employees.
9. SURPLUS WATER. Until Project becomes
operational, the only water which Authority can furnish to
Participants (other than the first 6 mgd to be furnished to
each of Georgetown and Round Rock under the Lake Georgetown
Supply Contracts respectively) is Surplus Water. The amount
of Surplus Water committed to each Participant during each
year prior to the date when Project becomes operational
shall be the amount of water projected by Authority to be
needed by such Participant during such year, as shown in the
Adjusted Certified Projection furnished to Participant, less
the amount of water reflected as being available to such
Participant from other sources in the information provided
to Authority per the provisions of Paragraph 8, above.
Should the total amount of Surplus Water needed by
Participants as reflected in such Adjusted Certified
Projections and other information exceed the total amount
of Surplus Water available, then the amount available shall
be shared by Participants prorata to their needs as thus
-20-
determined. All City Surplus Water shall be committed for
use prior to commitment of Authority Surplus Water. Each
Participant may withdraw from Lake Georgetown each year
an amount of water which shall not exceed the amount of
Surplus Water committed to such Participant. Once an amount
of water is committed to a Participant out of Surplus Water,
the Participant may not reduce the amount of the commitment
without written agreement of Authority. If a Participant
determines that it will have need for more water at any time
in the future than is reflected in its current Adjusted
Certified Projection, it may file a written request for an
increased commitment at least ninety (90) days prior to the
desired date of such increase. Upon receipt of any such
written request, Authority will send a notice to all other
Participants to determine if the other Participants also
need additional uncommitted Surplus Water. If it is deter-
mined by Authority that there is a sufficient amount of
uncommitted Surplus Water which can be made available to
supply the need indicated in the request, the request will
be approved and additional Surplus Water will he committed
to such Participant(s). Authority shall then send notice to
such Participant(s) that such additional Surplus Water is
-21-
available and such Participant(s) shall, on or before thirty
(30) days following such notice, pay Authority for the
Additional Surplus Water to be used during the remainder of
the fiscal year in which such notice is sent to such
Participant(s) on the basis of the prices specified in
Paragraph 10, below. The share of City Surplus Water com-
mitted to each Participant shall be a fraction of which the
numerator shall be the amount of Surplus Water committed to
such Participant and the denominator shall be the amount of
Surplus Water committed to all Participants. The remainder
of Surplus Water committed to such Participant shall be
deemed Authority Surplus Water.
10. PAYMENTS FOR SURPLUS WATER.
(a) In addition to the payments required in Paragraph
9, above, payments for the use of Surplus Water shall be
made as follows:
(i) Each Participant shall pay to Authority
for the City Surplus Water committed to it
each calendar year an amount determined by
applying 150% of the price established
for "Water Made Available" under Paragraph
III of the Lake Georgetown Supply
Contracts, as such price shall vary from
year to year, to the amount of City
Surplus Water committed to such
Participant during such year.
-22-
(ii) Each Participant shall pay to Authority
for Authority Surplus Water committed to
it during each calendar year an amount
determined by applying the price
established for "Water Made Available"
under Paragraph III of the Lake Georgetown
Supply Contracts, as such price shall vary
from year to year, to the amount of
Authority Surplus Water committed to
such Participant during such year.
(iii) The 1985 price for "Water Made Available"
under Lake Georgetown Supply Contracts is
$58.65 per acre -foot.
(b) Payments required to be made under Subparagraphs
(i) and (ii), above, shall be payable on or before February
15 of each calendar year with respect to which such payments
are required to be made, except that payments for the
calendar year during which Surplus Water is first committed
shall be due on or before 30 days after the date on which
Surplus Water is committed.
(c) Such payments shall be made at the central office
of the Authority, Waco, McLennan County, Texas.
(d) Such payments not paid on or before the February
15 by which they are due shall bear interest at the lesser
of the highest lawful rate or 18% per annum from the due
date until paid.
11. COMPENSATION OF GEORGETOWN AND ROUND ROCK. Under
-23-
Lake Georgetown Supply Contracts, Georgetown and Round Rock
each have a right to have 6 mgd made available to them from
Lake Georgetown. The availability of City Surplus Water
results from the fact that neither Georgetown nor Round Rock
has exercised in full its right to have made available to it
from Lake Georgetown such 6 mgd. Because of its commitment
to Georgetown and Round Rock under the Lake Georgetown
Supply Contracts, Authority cannot make City Surplus Water
available to other Participants without the agreement of
Georgetown and Round Rock each to limit its use of water
from Lake Georgetown to the amounts shown in its Adjusted
Certified Projection. Georgetown and Round Rock each hereby
agree to thus limit its use of water from Lake Georgetown.
In consideration for such agreement, Authority agrees that
it will pay to Georgetown and Round Rock each year out of
monies received by it from Participants for City Surplus
Water per the provisions of Subparagraph 10(a), above, an
amount determined by applying 50% of the price established
from year to year for "Water Made Available" in Paragraph
III of the Lake Georgetown Supply Contracts to the amount of
City Surplus Water committed to each Participant.
Additionally, should either Georgetown or Round Rock ever
-24-
become liable to make payments under Paragraph IV of Lake
Georgetown Supply Contracts for "Reserve Water" while
Participants are obligated to make payments to Authority
under Subparagraph 10(a), above, for Surplus Water which is
available as such because the party liable to make such
payments for Reserve Water has not fully exercised its
rights to have such water made available to it, the party
otherwise liable to Authority under Paragraph IV of the Lake
Georgetown Supply Contracts shall be excused from liability
to make payments to Authority under said Paragraph IV with
respect to the water available as Surplus Water so long
as Participants are obligated to pay for it as Surplus
Water. Payments to be made to Georgetown and Round Rock
pursuant to this Paragraph 11, with respect to City Surplus
Water committed to each Participant shall be due on or
before ten (10) days after receipt by Authority of each
payment from each Participant for City Surplus Water com-
mitted to such Participant during each calendar year.
Authority shall have no liability to make payments to
Georgetown and /or Round Rock under this Paragraph 11 with
respect to monies owing by any Participant until and unless
it receives payment from such Participant. The total of the
-25-
payments to be made to Georgetown and Round Rock in a given
calendar year per this Paragraph 11 shall be prorated be-
tween them and paid to each in direct ratio to the amount of
water committed to each under the Lake Georgetown Supply
Contracts that is made available for use as City Surplus
Water divided by the total of City Surplus Water that is
available in such year.
12. DURATION OF AVAILABILITY OF SURPLUS WATER. Until
the Project is operational, Georgetown and Round Rock,
respectively, each agree to limit exercise of its right to
increase its "Effective Rate" and use of water from Lake
Georgetown under the Lake Georgetown Supply Contracts to the
amount shown in any Adjusted Certified Projection,
including the initial Adjusted Certified Projection, for a
period of the four (4) years from the date upon which such
Adjusted Certified Projection becomes effecive, prior to
completion of Preliminary Design Phase and for a period of
two and one -half (2 -1/2) years from the date upon which each
such Adjusted Certified Projection becomes effective after
completion of Preliminary Design Phase, provided however,
that the obligations of each of Georgetown and Round Rock,
respectively, under this Agreement to limit exercise of its
-26-
right to increase its "Effective Rate" and use of water from
Lake Georgetown under the Lake Georgetown Supply Contracts
shall cease upon completion of the Project, and the rights
and obligations of all Participants and of Authority with
regard to availability and commitment of Surplus Water under
this Agreement shall also cease upon the date the Project is
complete and operational.
13. TIME OF COMPLETION OF PROJECT. Authority will
use its best efforts to complete the Preliminary Design
Phase within eighteen (18) months from the date funds for
doing so become available and to complete the Final Design
and Construction Phase in time to make water available under
the Stillhouse Supply Contracts when needed. However, all
parties recognize that delays can occur which are beyond the
control of the Authority. In the event construction of the
Project is delayed, use of City Surplus Water by
Participants under this Agreement will be curtailed in order
that Authority can fulfill its existing obligations to
Georgetown and Round Rock under the Lake Georgetown Supply
Contracts. Should such curtailing of water use occur,
Authority will pursue all steps available to it to expedite
completion of Project, including utilization of multiple
-27-
construction contracts, payment of incentive bonuses to
contractors and other similar or dissimilar measures which,
in the judgment of Board, may result in expedited comple-
tion. Any additional costs incurred as a result of such
efforts to expedite completion shall be financed through the
issuance of Bonds. The obligation of Authority to proceed
with the Preliminary Design Phase and /or the Final Design
and Construction Phase shall be conditioned on its ability
to sell Bonds.
14. USE OF STILLHOUSE SUPPLY AGREEMENT PAYMENTS.
Authority shall use funds received as Stillhouse Supply
Agreement Payments and other Authority funds to secure a
Letter of Credit necessary to issue Bonds to obtain funds to
pay the cost of completing the Preliminary Design Phase.
Out of the proceeds of the sale of the first Bonds sold to
obtain money for the Final Design and Construction Phase,
all Bonds, if any, still outstanding that were issued to
finance the Preliminary Design Phase will be refinanced and
Authority shall be reimbursed its costs incurred and
outstanding in the fulfillment of its obligations under this
Agreement.
-28-
15. ADDITIONAL PARTICIPANTS. Authority may allow
parties other than those who are listed as Participants
under this Agreement to become Participants provided that
service to be made available to such Additional Participants
shall not interfere with or diminish Authority's ability to
fulfill its obligations under this Agreement to the
Participants which are parties to this Agreement and pro-
vided further that the provision of service to such
Additional Participants shall not cause the Monthly Charges
to any Participant which is a party to this Agreement at any
time while this Agreement remains in force to be greater
than it would have been if service to such Additional
Participants had not been provided. In the event that
Authority does provide service to Additional Participants,
the Maintenance and Operation Expense part of the Monthly
Charge and the Repair and Replacement Repayment part of the
Monthly Charge becoming payable after service to such
Additional Participants begin, shall be allocated as if the
Additional Participants had been Participants under this
Agreement. The Debt Service part of the Monthly Charge
shall be allocated as if the Additional Participants had
been Participants under this Agreement and as if the water
-29-
supplied to them were being supplied under the Stillhouse
Supply Agreements, with the amounts of water to be supplied
and the percentages set forth in the table contained in
subparagraph 5(b), above, being appropriately adjusted. The
foregoing provisions with reference to allocations after
service to such Additional Participants shall be modified
during the initial years of service to such Additional
Participants in order to prevent injustice to the
Participants resulting from the fact of their payments of
Debt Service part of the Monthly Charges for the period
during which such Additional Participants shall not have
participated in the payment of the Debt Service (if this
shall occur) will have created the then present ability of
Authority to provide service to the Additional Participants
from the Project. The modification will be as follows:
(a) Each Additional Participant shall pay to
Authority a sum of money, hereinafter called "Equity
Payment ", plus interest on the unpaid balance of such sum
from the date on which such Additional Participant and
Authority enter into a contract providing that Authority
will supply service from Project to such Additional
Participant, with the amount of the Equity Payment in each
-30-
case to be determined by the Board, in its sole discretion,
as being appropriate to prevent injustice to Participants.
(b) The Equity Payment and interest thereon shall be
payable in not more than sixty (60) consecutive monthly
installments, the first such installment to be payable with
the first Monthly Charge required to be paid by such
Additional Participant and with one additional installment
to be payable with the payment of each Monthly Charge which
thereafter becomes payable by such Additional Participant,
until paid in full. The amount of each installment shall
be:
(i) A fraction of the Equity Payment, the
numerator of which shall be one and the
denominator shall be the number of months
over which the Equity Payment is to be
amortized; plus
(ii) Accrued interest on the Equity Payment.
(c) During each Fiscal Year in which there remains an
unpaid balance of Equity Payment, interest shall be payable
on the unpaid balance at the rate of the lesser:
(i) The base rate of interest, whether charged
or not, established by InterFirst Bank
Dallas, N. A. on June 1 of the Fiscal
Year preceding the fiscal year during
which such rate is payable; or
-31-
(ii) The highest lawful rate.
(d) On or before August 1 of each year immediately
preceding September 1 on which a Fiscal Year during which an
Additional Participant shall be required to make Equity
Payments shall begin, Authority shall notify such Additional
Participant of the interest rate to be payable during such
Fiscal Year on the unpaid balance of the Equity Payment and
the amount of each installment which such Additional
Participant shall be required to pay against the Equity
Payment during such Fiscal Year.
(e) Equity Payments received by Authority shall be
applied as received to reduce pro rata the next subsequent
Debt Service part of the Monthly Charge allocable to each
Participant.
16. GENERAL PROVISIONS.
(a) The term of this Agreement shall continue in force
and effect for a period of time which shall be the greater
of, (a) the period of time any Bonds or bonds issued to
refund same are outstanding and unpaid, or (b) fifty (50)
years and so long thereafter with respect to each Participant
as such Participant shall be entitled to receive water
-32-
under Stillhouse Supply Agreements. The term of this
Agreement having expired, upon cessation of use of Project
by all Participants, all lands and personal property consti-
tuting a part of Project shall be considered as having been
purchased by the Participants by payments made hereunder,
and thereafter shall be owned by Participants as tenants -in-
common with their respective interests to be in proportion
to their obligations to make payments with respect to Debt
Service under Paragraph 5, above.
(b) All notices and communications provided for
herein shall be in writing and shall be either delivered or
mailed to Authority or Participants, and if mailed, shall be
sent certified mail, return receipt requested, postage pre-
paid, addressed as follows:
(i) If to Authority -
General Manager
Brazos River Authority
P.O. Box 7555
4400 Cobbs Drive
Waco, Texas 76714 -7555
(ii) If to Georgetown
City of Georgetown
P.O. Box 409
Georgetown, Texas 78627
-33-
(iii) If to Round Rock
City of Round Rock
214 East Main Street
Round Rock, Texas 78664
(iv) If to Jonah
Jonah Water Supply Corporation
Route 1, Box 112B
Georgetown, Texas 78656
(c) It is recognized by the parties that payments
made to Authority by Participants hereunder shall be the
only resource of Authority for the payment of Maintenance
and Operation Expense and Debt Service. It is further
recognized that in order for Authority to be able to sell
Bonds most advantageously, it is necessary that prospective
purchasers of Bonds have assurance that each Participant is
unconditionally obligated to pay its allocated part of the
Debt Service. Therefore, it is agreed by each Participant
that it will pay its allocated share of the Debt Service
part of the Monthly Charges required under Subparagraph
5(b), above, whether or not Project is ever completed and
whether or not it ever receives or continues to receive
water available to it from Lake Stillhouse Hollow under the
Stillhouse Supply Agreements in Lake Georgetown as a result
of operation of the Project. Further, each Participant
-34-
agrees that should any Participant become bankrupt or other-
wise financially unable to pay its allocated portion of the
Debt Service Charges, the amount due from such bankrupt or
otherwise financially unable Participant shall be allocated
among the other Participants and paid by them pro rata on
the basis of the part of the Debt Service part of the
Monthly Charge allocated to each Participant under the pro-
visions of subparagraph 5, above.
(d) This Agreement shall be subject to all valid
rules or regulations and laws applicable hereto passed or
promulgated by the United States of America, the State of
Texas or any governmental body or agency having lawful
jurisdiction or any authorized representative or agency of
any of them. Any tax or fee required to be paid by
Authority on account of ownership or operation of Project
shall be considered a part of Maintenance and Operation
Expense.
(e) Authority shall not have the right to demand
payment by Georgetown and /or Round Rock of any obligation
undertaken by or imposed upon any of them by virtue of this
Agreement from funds raised or to be raised by taxation.
The obligations of such cities under this Agreement shall
-35-
never be construed to be a debt of any of such cities of
such kind as to require any such city under the Constitution
and laws of the State of Texas to levy and collect a tax to
discharge such obligation. Payments due by any city which
is a Participant hereunder shall be made from the revenues
of its water system. Each of such cities represents and
covenants to Authority that all payments to be made
hereunder by it shall constitute "Operating Expenses" of its
water distribution system as authorized by the State of
Texas and as defined in Article 1113 of the Revised Civil
Statutes of Texas as amended.
(f) Each Participant agrees to fix and collect such
rates and charges for water supplied through its water
distribution system as will make possible the prompt payment
of all expenses of operating and maintaining its water
distribution system, including all payments contracted
hereunder, and the prompt payment of the principal of and
interest on its obligations payable from the revenues of its
water distribution system.
(g) If by reason of force majeure, any party hereto
shall be rendered unable, wholly or in part to carry out its
obligations under this Agreement, then such party shall give
-36-
notice and full particulars of such force majeure in writing
to Authority if such party is a Participant or to each
Participant if such party is Authority within a reasonable
time after occurrence of the event or cause relied on, and
the obligations of the party giving such notice, insofar as
they are affected by such force majeure, shall be suspended
during the continuance of the inability thus claimed, but
for no longer period, and any such party shall endeavor to
remove or overcome such inability with all reasonable
dispatch. The term "force majeure" as employed herein shall
mean acts of God, strikes, lockouts, or other industrial
disturbances, acts of a public enemy, orders of any kind of
the government of the United States or the State of Texas,
or any civil or military authority, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurri-
canes, storms, floods, washouts, droughts, arrests,
restraints by government, civil disturbances, explosions,
breakages, or accidents to machinery, pipelines, pumps or
other facilities, partial or entire failure of water supply
or any other cause beyond the reasonable control of such
party. It is understood and agreed that the settlement of
strikes and lockouts shall be entirely within the discretion
-37-
of the party having the difficulty and that the above
requirement that any force majeure shall be remedied. with
all reasonable dispatch shall not require settlement of
strikes and lockouts by acceding to demands of the opposing
party or parties when such settlement is unfavorable to it
in the judgment of the party having the difficulty. The
provisions of this Subparagraph 16(g) notwithstanding force
majeure shall not relieve any Participant of its obligations
to make payments to Authority as its share of the Debt
Service as required under the provisions of sub-
paragraph 5(a), above.
(h) Any controversy arising with respect to amounts
of money to be paid by any Participant to Authority
hereunder or with respect to availability of Surplus Water
or with respect to construction of this Agreement shall be
settled in accordance with the rules of the American
Arbitration Association in effect as of the time such
controversy shall arise and judgment upon the award may be
entered by any court having jurisdiction thereof, provided
that no award or judgment involving the Debt Service shall
result in Authority's inability to pay Debt Service as
same shall become due from monies produced by the Debt
-38-
Service part of the Monthly Charges. The other provisions
hereof notwithstanding, this provision for arbitration shall
never be construed to deprive the Texas Water Commission of
jurisdiction over any matter which would otherwise be sub-
ject to its jurisdiction.
(i) Authority shall maintain financial records
respecting its construction and operation of Project in
accordance with the procedures used by it in maintaining
records of its affairs which are audited annually by its
certified public accountants. All such records and
Authority's annual statement shall be available for inspec-
tion by any Participant at any reasonable time during
business hours.
(j) Authority agrees that while this Agreement
remains in force it will, for the purpose of assuring proper
maintenance, operation, repair and replacement of Project
from time to time, employ an independent engineer or
engineering firm or corporation having favorable repute for
skill and experience in such work and will, at all
appropriate times, cause such consulting engineer to submit
and give necessary or desirable advice and recommendations
concerning operations, renewals, replacements, extensions,
-39-
betterments, and improvements of the Project to the end that
the Project shall be operated and maintained in the most
efficient and satisfactory manner. Further, Authority shall
cause the consulting engineer to make in writing a full sur-
vey, review and report of the physical condition of Project
once every five (5) years, commencing five (5) years from
the date when the Project becomes operational. A copy of
such survey, review and report shall be available to any
Participant at any reasonable time during business hours.
Authority further agrees that it will cause such consulting
engineer to include as part of the above report, such
engineer's recommendations and advice as to the proper main-
tenance, repair and operation of the Project, including
findings as to whether or not properties of the Project have
been maintained in good repair and sound operating
condition; the extension, improvements, renewals and replace-
ments which should be made during the ensuing five (5)
years; and the amounts and types of insurance which should
be carried by Authority on the Project.
(k) In event of default by any Participant in making
payments required of Participant under this Agreement,
Authority may, at its option, terminate this Agreement and
-40-
Stillhouse Supply Agreements with such Participant or it may
recover amounts agreed to be paid by such Participant by
appropriate legal action. Should other Participants be
required to make increased payments to Authority pursuant to
Subparagraph 16(c), above, on account of failure of a
defaulting Participant to make payments to Authority,
Authority shall exercise the options to cancel provided in
the preceding sentence. In the event of exercise by
Authority of such options to cancel, the rights of the
Participant with respect to which such options are exercised
shall be made available to the other Participants who are
willing to assume the obligations of the cancelled
Participant under this Agreement and under Stillhouse Supply
Agreements pro rata on the basis of the percentages of total
water available to each under Subparagraph 5(a), above.
(1) Any waiver at any time by any party of its rights
with respect to default under this Agreement or with respect
to any other matter arising in connection with this
Agreement shall not be deemed the waiver with respect to any
subsequent default or matter.
(m) Nothing contained in this Agreement shall be
construed in any manner to abridge, limit or deprive any
-41-
party hereto of any means which it would otherwise have of
enforcing any remedy, in law or in equity, for breach of any
of the provisions hereof, provided, however, that this provi-
sion shall not be deemed to eliminate or diminish the right
of any party to arbitration and to enforcement of
arbitration awards under subparagraph (h), above.
(n) This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of the respective
parties hereto, provided, however, that no assignment shall
have the effect of relieving the party making such assign-
ment of any liability hereunder, except that Jonah may be
relieved of liability upon assumption of its liabilities
hereunder by a political subdivision of the State of Texas
which shall succeed to ownership of its water distribution
system and certificate of convenience and necessity
respecting same. All assignments are subject to Authority
approval, which approval shall not be unreasonably withheld.
(o) As between Authority on the one hand and each
Participant on the other, each shall protect and save the
other harmless from any loss or damage to persons or
property occasioned on its own side of points of delivery of
water into Lake Georgetown or in connection with apparatus
-42-
or appurtenances including pumps, transmission lines and
conduits operated by it, except as to loss or damage caused
by the negligence of the other party, its agents, servants,
or employees and except as to injury or death of employees
of the other party.
(p) It is recognized by the parties that default by
Authority in its obligations hereunder can result in injury
to Participants which cannot be compensated by damages.
Therefore, the remedy of specific performance shall be
available to Participants and each of them for enforcement
of Authority's obligations hereunder.
(q) It is the intent of the parties to this Agreement
to provide to the maximum extent practical for the conser-
vation of water. Each Participant agrees that it is a con-
dition of this Agreement that it shall maintain and operate
its facilities in a manner which will prevent unnecessary
waste of water. Authority agrees that it will maintain and
operate Project in a manner that will prevent unnecessary
waste of water.
(r) Circulation of copies of this Agreement among
Participants to obtain the signatures of all Participants on
the same copies hereof would be inconvenient and result in
-43-
delay. Therefore, this Agreement has been prepared in
multiple copies with two copies being prepared for signature
on behalf of Authority, on the one hand, and on behalf of
each Participant, alone, on the other hand. When all copies
have been signed on behalf of Authority and each of the two
copies prepared for signature for each Participant, alone,
has also been signed by each Participant, Authority shall
give written notice of such fact to all Participants and
this Agreement shall thereupon become effective. Authority
shall receive possession of one copy of this Agreement exe-
cuted by it on the one hand and each Participant, alone, on
the other hand. Each Participant shall receive possession
of one copy executed by Authority on the one hand and it
alone on the other. The Agreement, when it becomes effec-
tive, shall be binding on Authority and all Participants and
subject to enforcement by any party against any other.
(s) This Agreement shall not prevent a Participant
from selling or transferring its interests hereunder to
Authority in the future as a part of a regional water supply
agreement by which the Participant purchases a treated water
supply from Authority. It is understood, however, that
Authority's willingness and ability to undertake such an
-44-
arrangement in the future is contingent upon its ability to
undertake such obligations without impairing bond obliga-
tions or its obligations to other Participants.
17. SPECIAL ASSIGNMENT. Jonah agrees that, not-
withstanding any and all other provisions of this Agreement,
all rights of Jonah hereunder are subject to the condition
that Jonah, will, on written request from Authority, take
all steps necessary in order to cause the organization of an
assignee ( "Assignee ") which is a political subdivision of
the State of Texas created to succeed to the rights and
obligations of Jonah; that Assignee shall be organized; that
Jonah, upon completion of organization of Assignee, will
assign its rights under this Agreement unto Assignee; and
that failure by Jonah to make such assignment within a
reasonable time after the making of such written request by
Authority, shall result in cancellation of the rights under
this Agreement of Jonah. Authority agrees that upon
transfer of Jonah's rights under this Agreement to Assignee,
Jonah's obligations to Authority under this Agreement shall
terminate.
-45-
ATTEST:
n -m
Dated this the % day of v UG y
Assistant Secretary
ATTEST:
BY
City Secretary
BRAZOS ER AAUUTHORITY
. LiJ 0
-46-
Carson H. Hoge,
General Manager
, 1986.
"Authority"
CITY OF GOOD flow -v
BY
Mayor
"Participant"
t
WILLIAMSON COUNTY REGIONAL RAW WATER
LINE AGREEMENT
BETWEEN
BRAZOS RIVER AUTHORITY
AN D
CITY OF GEORGETOWN, CITY OF ROUND ROCK
AND JONAH WATER SUPPLY CORPORATION
June 30, 1986
•
INDEX
1. Recitals 1
2. Definitions 2
(a) Authority 2
(b) Authority Surplus Water 2
(c) Board 2
(d) Bonds 2
(e) Bond Resolution 2
(f) Capital Costs 3
(g) Certified Projections 3
(h) City Surplus Water 3
(i) Completion Year 3
(j) Corps 3
(k) Debt Service 3
(1) Dependable Yield 4
(m) Final Design and Construction Phase 4
(n) Fiscal Year 4
(o) Georgetown 4
(p) Jonah 4
(q) Lake Georgetown 4
(r) Lake Georgetown Supply Contracts 4
(s) Lake Stillhouse Hollow 5
(t) mgd 5
(u) Maintenance and Operation Expense 5
(v) Monthly Charges 6
(w) Participants 6
(x) Preliminary Design Phase 6
(y) Project 7
(z) Repair and Replacement Fund 7
(aa) Repair and Replacement Repayment 7
(bb) Round Rock 7
(cc) Stillhouse Supply Agreements 7
(dd) Stillhouse Supply Agreement
Payments 8
( #11RawAl -A2) - i -
PAGE
(ee) Surplus Water 8
3. Design, Construction and Operation
of Project 8
4. Bonds 9
5. Payment 10
6. Investment of Funds 15
7. Meters 16
8. Projection Information 17
9. Surplus Water 20
10. Payments For Surplus Water 22
11. Compensation of Georgetown and
Round Rock 23
12. Duration of Availability of Surplus
Water 26
13. Time of Completion of Project 27
14. Use of Stillhouse Supply Agreement
Payments 28
15. Additional Participants 29
16. General Provisions 32
17. Special Assignment 45
Signatures 46
THIS CONTRACT IS SUBJECT TO ARBITRATION UNDER THE
TEXAS ARBITRATION ACT
( #11Raw1 -46)
***** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * **
WILLIAMSON COUNTY REGIONAL RAW WATER
LINE AGREEMENT
***** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * **
AGREEMENT made and entered into by and between BRAZOS
RIVER AUTHORITY, and CITY OF GEORGETOWN, CITY OF ROUND ROCK
and JONAH WATER SUPPLY CORPORATION.
1. RECITALS. Authority is authorized to store water
in and to divert water from Lake Georgetown and Lake
Stillhouse Hollow. The other parties to this Agreement
supply water in various areas in Williamson County, Texas,
for municipal use. Authority has contracted with each such
other party to make available to such party water from Lake
Stillhouse Hollow. Such other parties are so located that
it is desirable from the standpoint of cost that each should
divert the surface water which it needs for municipal supply
from Lake Georgetown rather than from Lake Stillhouse
Hollow. The purpose of this Agreement is to provide for
Authority to design, construct and operate facilities for
transporting water from Lake Stillhouse Hollow committed to
the other parties to this Agreement under the contracts men-
tioned above to Lake Georgetown for diversion by them from
Lake Georgetown and, in the period between the date of exe-
cution of this Agreement and the date when such facilities
become operational, to allow such other parties to use water
from Lake Georgetown as an interim supply.
2. DEFINITIONS.
(a) "Authority" means Brazos River Authority, a
river authority established by a statute enacted by the
Legislature of the State of Texas.
(b) "Authority Surplus Water" means the Dependable
Yield of Lake Georgetown in excess of 12 mgd.
(c) "Board" means the Authority's Board of Directors.
(d) "Bonds" means revenue bonds or other obligations
issued by Authority to obtain funds for use in the design,
construction, expansion, improvement, completion, repair or
replacement of Project, whether one or more issues.
(e) "Bond Resolution "`means any resolution of Board
authorizing the issuance of Bonds and providing for their
security and payment, as such resolution(s) may be amended
from time to time as therein permitted.
-2-
(f) "Capital Costs" means all sums of money which are
required by the terms of a Bond Resolution to be paid to or
on behalf of holders of Bonds or to be paid into any reserve
fund or sinking fund.
(g) "Certified Projections" means a projection or
projections made by a Participant pursuant to this Agreement
of such Participant's annual average and maximum daily need
for water during a five (5) year period beginning as of the
date of such projection which is certified by the
Participant to Authority.
(h) "City Surplus Water" means the excess, expressed
in mgd, of 12 mgd over the sum of the Effective Rates in
force from time to time of Georgetown and Round Rock under
the Lake Georgetown Supply Contracts.
(i) "Completion Year" means the Fiscal Year in which
Project becomes fully operational.
(j) "Corps" means the United States Army Corps of
Engineers.
(k) "Debt Service" means the amounts of money
required to pay Capital Costs plus fees, charges and costs
such as those of paying agents, registrars and trustees
which are incurred incident to the handling and servicing of
Bonds.
-3-
(1) "Dependable Yield" means the maximum volume of
water that can be withdrawn from a lake or reservoir during
each calendar year without ever completely depleting all of
the water in storage in such lake or reservoir, taking into
account reservoir storage capacity, inflows, evaporation,
releases to honor prior rights and anticipated diversion
schedules.
(m) "Final Design and Construction Phase" means the
work of completing design, preparing final plans and speci-
fications and constructing the Project.
(n) "Fiscal Year" means the fiscal year of Authority,
which is September 1 through August 31.
(o) "Georgetown" means the City of Georgetown,
Williamson County, Texas.
(p) "Jonah" means Jonah Water Supply Corporation, a
Texas corporation.
(q) "Lake Georgetown" means Lake Georgetown
constructed by the Corps on the North San Gabriel River in
Williamson County, Texas.
(r) "Lake Georgetown Supply Contracts" means the
contracts between Authority on the one hand and Georgetown
and Round Rock on the other providing for Authority to make
-4-
water available to Georgetown and Round Rock, respectively,
from Lake Georgetown.
(s) "Lake Stillhouse Hollow" means Lake Stillhouse
Hollow constructed by the Corps on the Lampasas River in
Bell County, Texas.
(t) "mgd" means millions of gallons of water per day.
(u) "Maintenance and Operation Expense" means all
costs of repairs and replacements of Project for which no
special fund is created and all costs of maintenance and
operation of Project including (for greater certainty but
without limiting the generality of the foregoing) super-
vision, engineering, accounting, auditing and payments made
by Authority in satisfaction of judgments resulting from
claims not covered by Authority's insurance, legal expense,
energy costs and any other labor, supplies, insurance, ser-
vices and equipment necessary for the proper operation of
the Project plus any additional direct cost(s) or expense(s)
which may be imposed on Authority in connection with the
fulfillment of its obligations under this Agreement by taxa-
tion or as the result of regulations or requirements
lawfully imposed by the State of Texas, the United States or
any state or federal agency subsequent to the execution of
-5-
this Agreement plus an amount determined annually by
Authority's certified public accountants to be appropriate
to cover Authority's expenses of supervision and admi-
nistration attributable to the obligations under this
Agreement and an appropriate part of its unallocated general
and administrative expense. In making such determination,
Authority's accountants shall utilize generally accepted
accounting principles to allocate a percentage of unallo-
cated expenses which is generally equivalent to the percen-
tage of expenses incured by Authority under this Agreement
as compared to the overall expenses of Authority.
(v) "Monthly Charges" means the amount of the charge
to be made monthly by Authority to each Participant for the
services to be provided by Authority under this Agreement.
(w) "Participants" means Georgetown, Round Rock and
Jonah and parties who may become Additional Participants
under the provisions of Paragraph 15, below.
(x) "Preliminary Design Phase" means the work of
studying, designing and preparing Project layout plans
necessary for acquiring land rights or options for land
rights and permits necessary for final design and construc-
tion of Project.
-6-
(y) "Project" means facilities capable of
transporting from Lake Stillhouse Hollow to Lake Georgetown
the water agreed to be made available from Lake Stillhouse
Hollow by Authority to Participants under Stillhouse Supply
Agreements.
(z) "Repair and Replacement Fund" means the fund to
be established by the Authority, the monies from which will
be used for major repairs and replacements to the Project,
for extraordinary or non - recurring expenses not budgeted as
Maintenance and Operation Expense and for Maintenance and
Operation Expenses in excess of the amounts budgeted.
(aa) "Repair and Replacement Repayment" means the
portion of the Monthly Charge required or necessary during
such month to replenish and maintain the Repair and
Replacement Fund.
(bb) "Round Rock" means the City of Round Rock,
Williamson County, Texas.
(cc) "Stillhouse Supply Agreements" means the
following contracts between Authority on the one hand and
Participants, respectively, on the other providing that
Authority will make water available from Lake Stillhouse
Hollow to such Participants:
-7-
(i) Agreement with Georgetown dated January
24, 1985;
(ii) Agreement with Round Rock dated January
24, 1985;
(iii) Agreement with Jonah dated January 31,
1985; and
(dd) "Stillhouse Supply Agreement Payments" means
payments required to be made by Participants to Authority
prior to Completion Year for water committed but not yet
made available under Stillhouse Supply Agreement.
(ee) "Surplus Water" means Authority Surplus Water
and City Surplus Water.
3. DESIGN, CONSTRUCTION AND OPERATION OF PROJECT.
Authority agrees that as soon as sufficient funds are
available from the issuance of Bonds, it will promptly begin
work on the Preliminary Design Phase. Further, Authority
agrees that it will use its best efforts to begin the Final
Design and Construction Phase in time so that if the work is
diligently pursued, it is reasonable to expect that Project
will be operational by the time Participants' needs for
water under the Stillhouse Supply Agreements are expected to
begin on the basis of the Certified Projections. Once
begun, such work will be diligently pursued, but it is
-8-
estimated that the earliest time when Project can be opera-
tional is four (4) years from the date when work begins on
the Preliminary Design Phase. Completion of the
Preliminary Design Phase is expected to require eighteen
(18) months and it is presently expected that the Final
Design and Construction Phase will require two and one -half
(2 -1/2) years. When Project becomes operational, Authority
shall operate it to deliver water agreed to be made
available from Lake Stillhouse Hollow under Stillhouse
Supply Agreements to Lake Georgetown and will make such
water available to Participants for diversion from Lake
Georgetown.
4. BONDS. Immediately upon execution of this
Agreement, Authority will begin and diligently pursue the
work necessary for the issuance of Bonds if that is deter-
mined by Authority to be the best means for obtaining funds
to begin work on the Preliminary Design Phase and will
thereafter issue additional Bonds from time to time as
necessary to continue diligently with the completion of the
Preliminary Design Phase and to begin and diligently pursue
completion of the Final Design and Construction Phase, as
herein provided. From the proceeds of the first issue of
Bonds issued to obtain funds for the Final Design and
-9-
Construction Phase, Authority will establish a Repair and
Replacement Fund in the amount of $500.000.00. The Bond
Resolution providing for the issuance of such Bonds may pro-
vide that funds in the Repair and Replacement Fund may be
used for Debt Service if other funds are not available or if
the Board, in its sole discretion, determines that such use
is in the best interest of Participants. Such Bond
Resolution may further provide that such funds may be used
for any Project - related purpose at the sole discretion of
the Board.
5. PAYMENT. (a) Each Participant shall pay to
Authority a Monthly Charge each month during the term of
this Agreement. The Monthly Charges to be paid by all
Participants shall be the total of the amounts necessary to
pay Debt Service, Maintenance and Operation Expense and any
Repair and Replacement Repayment payable during such month,
plus a management fee described in subparagraph 5(e), below,
as compensation to Authority for managing the Project for
the benefit of the Participants.
(b) The Debt Service part of each Monthly Charge shall
be an amount which, when multiplied by the number of months
for which the Debt Service is due (between the due dates),
-10-
will produce a product which shall be sufficient to produce
the amount of money which will be needed by Authority to pay
such Debt Service when due. Each Participant's share of the
Debt Service part of the Monthly Charge for each month shall
be a percentage of the total Debt Service which percentage
is equal to the percentage of the total water available to
all Participants under the Stillhouse Supply Agreements
which is available to such Participant. The amounts of
water available to the Participants and the percentages the
individual amounts represent of the total available under
the Stillhouse Supply Agreements are as set forth in the
following table:
PARTICIPANT WATER (mqd) PERCENTAGES ( %)
Georgetown 4.864 22.794
Round Rock 15.369 72.023
Jonah 1.106 5.183
TOTAL 21.339 100.00
(c) Prior to the date on which Project becomes opera-
tional, the Board shall prepare a budget in which it makes
an estimate of Maintenance and Operation Expense to be in-
curred during the Completion Year. During the period
between the date on which Project becomes operational and
the end of the Completion Year, the Maintenance and
Operation Expense part of the Monthly Charge will be an
amount which, when multiplied by the number of months bet-
ween the first day of the month in which Project becomes
operational and the end of Completion Year will produce suf-
ficient monies to enable Authority to pay such estimated
Maintenance and Operation Expense for such period from such
Maintenance and Operation Expense part of the Monthly
Charges. Thereafter, the Board shall on or before July 31 of
each year prepare a budget in which it estimates the amount
of Maintenance and Operation Expense to be incurred during
the next following Fiscal Year. The monthly Maintenance and
Operation Expense part of the Monthly Charges for each
Fiscal Year following Completion Year shall be that amount
of money which, when multiplied by 12, shall equal the
amount of Maintenance and Operation Expense budgeted by the
Board for such Fiscal Year, adjusted upward or downward for
any deviation in the amount of Maintenance and Operation
Expense actually incurred in the preceding Fiscal Year over
or under the amount budgeted by Board. During the period
between the date on which Project becomes operational and
-12-
the end of Completion Year, the Maintenance and Operation
Expense part of the Monthly Charge shall be allocated among
Participants on the same basis as the allocation of the Debt
Service part of the Monthly Charge per subparagraph (b),
above. Thereafter, the Maintenance and Operation Expense
will be allocated among Participants on the basis of the
amount of water, expressed in mgd, withdrawn by each
Participant from Lake Georgetown during the preceding twelve
(12) month period ending June 30, except that the amount
allocated to Georgetown and Round Rock, respectively, shall
be based on the amount of withdrawals of each less its
"Effective Rate" then in effect under the Lake Georgetown
Supply Contracts.
(d) The Repair and Replacement Repayment part of the
Monthly Charge shall be payable only when expenditures from
the Repair and Replacement Fund shall have reduced the
amount of money in that fund below $500,000.00. Each expen-
diture from the Repair and Replacement Fund shall be paid
back into the Repair and Replacement Fund in not more than
thirty -six (36) equal monthly payments, starting with the
beginning of the Fiscal Year after such expenditure is made.
The Repair and Replacement Repayment part of the Monthly
-13-
Charge during any Fiscal Year shall be the sum of the
monthly payments into the Repair and Replacement Fund
required during such Fiscal Year pursuant to the provisions
of the sentence next preceding. The Repair and Replacement
Repayment part of the Monthly Charge shall be allocated
among Participants on the same basis as the Maintenance and
Operation Expense is allocated under the provisions of sub-
paragraph (b), above.
(e) Each Participant shall pay a portion of the total
management fee due to Authority in each month in which such
Participant is obligated to pay a Monthly Charge. The
amount of the management fee payable by a Participant in any
month in which such Participant is obligated to pay a
management fee shall be equal to five one - hundredths (0.05)
of the amounts such Participant is obligated to pay in such
month to pay its share of Maintenance and Operation Expense,
plus five one - thousandths (0.005) of the sum of the amounts
such Participant is obligated to pay in such month to pay
its share of Debt Service and Repair and Replacement
Payment.
(f) The Monthly Charge for any month shall be payable
on or before the 10th day of each month (the "due date ").
-14-
(g) The Monthly Charge shall be payable at the
central office of the Authority, Waco, McLennan County,
Texas.
(h) Each Monthly Charge not paid before the due date
shall bear interest at the lesser of the highest lawful rate
or 18% per annum from the due date until the date paid.
(i) On or before thirty (30) days prior to the date
on which the first Monthly Charge hereunder becomes due and
payable, Authority shall certify to each Participant the
amount of its Monthly Charge for the remainder of the then
current Fiscal Year. On or before each July 31 thereafter
while this Agreement remains in force, Authority shall cer-
tify to each Participant the amount of its Monthly Charge
for the next succeeding Fiscal Year.
6. INVESTMENT OF FUNDS. Pending expenditure, all
proceeds of Bonds, including sums on deposit in funds
required to be established under the terms of a Bond
Resolution, shall be kept invested in revenue producing
investments which Authority is permitted by law to make,
with the objective of producing the maximum revenue which
can be produced without impairing the exemption of interest
on Bonds from federal income tax or the availability of such
-15-
funds for expenditure by Authority as needed in the
fulfillment of its obligations hereunder. The earnings on
such investments shall be used to pay Debt Service and
reduce the Debt Service part of the Monthly Charges to the
Participants, except that to the extent necessary, such
earnings may be used to complete construction of the
project.
7. METERS. Each Participant shall install, operate
and maintain or arrange for the installation, operation and
maintenance of a meter which will accurately measure and
record the amount of water withdrawn by the Participant
from Lake Georgetown. Authority shall have the right to
read such meter once each month in the presence of Partici-
pant's representative. The meter is to be tested and cali-
brated for accuracy once each year at Participant's expense
and a report of such test and calibration shall be furnished
to Authority. If questions regarding the accuracy of the
meter arise, Authority may demand testing in addition to the
annual test, above required. If, as a result of any such
additional test, the meter is found to be inaccurate in
excess of 2%, Participant shall pay for the test and for
having the meter promptly calibrated for accuracy. If the
-16-
meter is found to be within 2% tolerance, Authority shall
pay for the testing. Adjustments for inaccuracies
discovered in metering as a result of any test shall be com-
puted based upon an agreed period of adjustment or if
agreement cannot be reached, the shorter of a period
beginning 60 days prior to the date of the test or a period
covering one -half of the time since the last previous test.
Participant shall provide daily use records reflecting
withdrawals from Lake Georgetown to Authority by the 10th
day of the month following the month of withdrawal.
8. PROJECTION INFORMATION. Within thirty (30) days
from the date of execution of this Agreement and on each
September 1 thereafter until Project becomes operational,
each Participant shall provide Authority with a copy of its
water use records for the preceding twelve (12) months,
current supply capacities, including the estimated safe
yield that can be expected during drought conditions from
each well that is part of Participant's water supply, and a
Certified Projection. Beginning on September 30, 1986, and
annually thereafter, Authority shall consolidate the
Certified Projections and other data thus furnished, prepare
a five (5) year projection of the annual average and maximum
-17-
daily water needs of Participants and shall prepare an asso-
ciated construction schedule that will specify when Final
Design and Construction Phase must begin in order to meet
the projected water needs of the Participants. The five (5)
year projection shall be based on the data provided by each
Participant utilizing the previous summer's use of water,
the Certified Projections, and the drought capacity of all
Participants' water wells. It shall identify all sources of
water that will be used by each Participant for the five (5)
year projection period. Within thirty (30) days after each
October 1, Authority will provide its projections and
construction schedule to each Participant for review. If,
after the first year during which this Agreement has been in
force, a Participant shall fail to provide the aforesaid
information and Certified Projection, then the Certified
Projection then in effect shall be deemed the Participant's
current Certified Projection. On or before November 15 of
each year, each Participant may review and comment upon the
projections made by Authority and the construction schedule
proposed by it. That projection and construction schedule
shall be deemed acceptable to each Participant unless writ-
ten comments are received in Authority's Waco office on or
-18-
before November 15. At its regular January meeting
following such November 15, the Board shall review all
comments regarding Authority's projection and construction
schedule received from any Participant; shall make such
changes therein as it may deem appropriate; and shall adopt
an "Adjusted Certified Projection" for each Participant and
a construction schedule based thereon. The Adjusted
Certified Projections and construction schedule adopted by
the Board shall be binding on all parties. The adoption of
same and the other provisions of this Agreement not-
withstanding, Authority shall never have any liability to
any Participant on account of failure to complete any part
of Project in accordance with any construction schedules or
in time to meet needs projected in any such Adjusted
Certified Projections and each Participant agrees to hold
Authority harmless with respect to any and all liability to
it arising out of any such failure and out of any inability
or failure to sell Bonds in time to complete any part of
Project in accordance with any such Adjusted Certified
Projection and /or construction schedules; provided, however,
this shall not be construed as obligating the Participants
to hold and save the Authority harmless from damages or
-19-
liability resulting from the sole negligence of the
Authority, its officers, agents, or employees and not
involving negligence on the part of the Participants or
their agents, officers, or employees.
9. SURPLUS WATER. Until Project becomes
operational, the only water which Authority can furnish to
Participants (other than the first 6 mgd to be furnished to
each of Georgetown and Round Rock under the Lake Georgetown
Supply Contracts respectively) is Surplus Water. The amount
of Surplus Water committed to each Participant during each
year prior to the date when Project becomes operational
shall be the amount of water projected by Authority to be
needed by such Participant during such year, as shown in the
Adjusted Certified Projection furnished to Participant, less
the amount of water reflected as being available to such
Participant from other sources in the information provided
to Authority per the provisions of Paragraph 8, above.
Should the total amount of Surplus Water needed by
Participants as reflected in such Adjusted Certified
Projections and other information exceed the total amount
of Surplus Water available, then the amount available shall
be shared by Participants prorata to their needs as thus
-20-
determined. All City Surplus Water shall he committed for
use prior to commitment of Authority Surplus Water. Each
Participant may withdraw from Lake Georgetown each year
an amount of water which shall not exceed the amount of
Surplus Water committed to such Participant. Once an amount
of water is committed to a Participant out of Surplus Water,
the Participant may not reduce the amount of the commitment
without written agreement of Authority. If a Participant
determines that it will have need for more water at any time
in the future than is reflected in its current Adjusted
Certified Projection, it may file a written request for an
increased commitment at least ninety (90) days prior to the
desired date of such increase. Upon receipt of any such
written request, Authority will send a notice to all other
Participants to determine if the other Participants also
need additional uncommitted Surplus Water. If it is deter-
mined by Authority that there is a sufficient amount of
uncommitted Surplus Water which can be made available to
supply the need indicated in the request, the request will
be approved and additional Surplus Water will be committed
to such Participant(s). Authority shall then send notice to
such Participant(s) that such additional Surplus Water is
-21-
available and such Participant(s) shall, on or before thirty
(30) days following such notice, pay Authority for the
Additional Surplus Water to be used during the remainder of
the fiscal year in which such notice is sent to such
Participant(s) on the basis of the prices specified in
Paragraph 10, below. The share of City Surplus Water com-
mitted to each Participant shall be a fraction of which the
numerator shall be the amount of Surplus Water committed to
such Participant and the denominator shall be the amount of
Surplus Water committed to all Participants. The remainder
of Surplus Water committed to such Participant shall be
deemed Authority Surplus Water.
10. PAYMENTS FOR SURPLUS WATER.
(a) In addition to the payments required in Paragraph
9, above, payments for the use of Surplus Water shall be
made as follows:
(i)
Each Participant shall pay to Authority
for the City Surplus Water committed to it
each calendar year an amount determined by
applying 150% of the price established
for "Water Made Available" under Paragraph
III of the Lake Georgetown Supply
Contracts, as such price shall vary from
year to year, to the amount of City
Surplus Water committed to such
Participant during such year.
-22-
(ii) Each Participant shall pay to Authority
for Authority Surplus Water committed to
it during each calendar year an amount
determined by applying the price
established for "Water Made Available"
under Paragraph III of the Lake Georgetown
Supply Contracts, as such price shall vary
from year to year, to the amount of
Authority Surplus Water committed to
such Participant during such year.
(iii) The 1985 price for "Water Made Available"
under Lake Georgetown Supply Contracts is
$58.65 per acre -foot.
(b) Payments required to be made under Subparagraphs
(i) and (ii), above, shall be payable on or before February
15 of each calendar year with respect to which such payments
are required to be made, except that payments for the
calendar year during which Surplus Water is first committed
shall be due on or before 30 days after the date on which
Surplus Water is committed.
(c) Such payments shall be made at the central office
of the Authority, Waco, McLennan County, Texas.
(d) Such payments not paid on or before the February
15 by which they are due shall bear interest at the lesser
of the highest lawful rate or 18% per annum from the due
date until paid.
11. COMPENSATION OF GEORGETOWN AND ROUND ROCK. Under
-23--
Lake Georgetown Supply Contracts, Georgetown and Round Rock
each have a right to have 6 mgd made available to them from
Lake Georgetown. The availability of City Surplus Water
results from the fact that neither Georgetown nor Round Rock
has exercised in full its right to have made available to it
from Lake Georgetown such 6 mgd. Because of its commitment
to Georgetown and Round Rock under the Lake Georgetown
Supply Contracts, Authority cannot make City Surplus Water
available to other Participants without the agreement of
Georgetown and Round Rock each to limit its use of water
from Lake Georgetown to the amounts shown in its Adjusted
Certified Projection. Georgetown and Round Rock each hereby
agree to thus limit its use of water from Lake Georgetown.
In consideration for such agreement, Authority agrees that
it will pay to Georgetown and Round Rock each year out of
monies received by it from Participants for City Surplus
Water per the provisions of Subparagraph 10(a), above, an
amount determined by applying 50% of the price established
from year to year for "Water Made Available" in Paragraph
III of the Lake Georgetown Supply Contracts to the amount of
City Surplus Water committed to each Participant.
Additionally, should either Georgetown or Round Rock ever
-24-
become liable to make payments under Paragraph IV of Lake
Georgetown Supply Contracts for "Reserve Water" while
Participants are obligated to make payments to Authority
under Subparagraph 10(a), above, for Surplus Water which is
available as such because the party liable to make such
payments for Reserve Water has not fully exercised its
rights to have such water made available to it, the party
otherwise liable to Authority under Paragraph IV of the Lake
Georgetown Supply Contracts shall be excused from liability
to make payments to Authority under said Paragraph IV with
respect to the water available as Surplus Water so long
as Participants are obligated to pay for it as Surplus
Water. Payments to be made to Georgetown and Round Rock
pursuant to this Paragraph 11, with respect to City Surplus
Water committed to each Participant shall be due on or
before ten (10) days after receipt by Authority of each
payment from each Participant for City Surplus Water com-
mitted to such Participant during each calendar year.
Authority shall have no liability to make payments to
Georgetown and /or Round Rock under this Paragraph 11 with
respect to monies owing by any Participant until and unless
it receives payment from such Participant. The total of the
-25-
payments to be made to Georgetown and Round Rock in a given
calendar year per this Paragraph 11 shall be prorated be-
tween them and paid to each in direct ratio to the amount of
water committed to each under the Lake Georgetown Supply
Contracts that is made available for use as City Surplus
Water divided by the total of City Surplus Water that is
available in such year.
12. DURATION OF AVAILABILITY OF SURPLUS WATER. Until
the Project is operational, Georgetown and Round Rock,
respectively, each agree to limit exercise of its right to
increase its "Effective Rate" and use of water from Lake
Georgetown under the Lake Georgetown Supply Contracts to the
amount shown in any Adjusted Certified Projection,
including the initial Adjusted Certified Projection, for a
period of the four (4) years from the date upon which such
Adjusted Certified Projection becomes effecive, prior to
completion of Preliminary Design Phase and for a period of
two and one -half (2 -1/2) years from the date upon which each
such Adjusted Certified Projection becomes effective after
completion of Preliminary Design Phase, provided however,
that the obligations of each of Georgetown and Round Rock,
respectively, under this Agreement to limit exercise of its
-26-
right to increase its "Effective Rate" and use of water from
Lake Georgetown under the Lake Georgetown Supply Contracts
shall cease upon completion of the Project, and the rights
and obligations of all Participants and of Authority with
regard to availability and commitment of Surplus Water under
this Agreement shall also cease upon the date the Project is
complete and operational.
13. TIME OF COMPLETION OF PROJECT. Authority will
use its best efforts to complete the Preliminary Design
Phase within eighteen (18) months from the date funds for
doing so become available and to complete the Final Design
and Construction Phase in time to make water available under
the Stillhouse Supply Contracts when needed. However, all
parties recognize that delays can occur which are beyond the
control of the Authority. In the event construction of the
Project is delayed, use of City Surplus Water by
Participants under this Agreement will be curtailed in order
that Authority can fulfill its existing obligations to
Georgetown and Round Rock under the Lake Georgetown Supply
Contracts. Should such curtailing of water use occur,
Authority will pursue all steps available to it to expedite
completion of Project, including utilization of multiple
-27--
construction contracts, payment of incentive bonuses to
contractors and other similar or dissimilar measures which,
in the judgment of Board, may result in expedited comple-
tion. Any additional costs incurred as a result of such
efforts to expedite completion shall be financed through the
issuance of Bonds. The obligation of Authority to proceed
with the Preliminary Design Phase and /or the Final Design
and Construction Phase shall be conditioned on its ability
to sell Bonds.
14. USE OF STILLHOUSE SUPPLY AGREEMENT PAYMENTS.
Authority shall use funds received as Stillhouse Supply
Agreement Payments and other Authority funds to secure a
Letter of Credit necessary to issue Bonds to obtain funds to
pay the cost of completing the Preliminary Design Phase.
Out of the proceeds of the sale of the first Bonds sold to
obtain money for the Final Design and Construction Phase,
all Bonds, if any, still outstanding that were issued to
finance the Preliminary Design Phase will be refinanced and
Authority shall be reimbursed its costs incurred and
outstanding in the fulfillment of its obligations under this
Agreement.
-28-
15. ADDITIONAL PARTICIPANTS. Authority may allow
parties other than those who are listed as Participants
under this Agreement to become Participants provided that
service to be made available to such Additional Participants
shall not interfere with or diminish Authority's ability to
fulfill its obligations under this Agreement to the
Participants which are parties to this Agreement and pro-
vided further that the provision of service to such
Additional Participants shall not cause the Monthly Charges
to any Participant which is a party to this Agreement at any
time while this Agreement remains in force to be greater
than it would have been if service to such Additional
Participants had not been provided. In the event that
Authority does provide service to Additional Participants,
the Maintenance and Operation Expense part of the Monthly
Charge and the Repair and Replacement Repayment part of the
Monthly Charge becoming payable after service to such
Additional Participants begin, shall be allocated as if the
Additional Participants had been Participants under this
Agreement. The Debt Service part of the Monthly Charge
shall be allocated as if the Additional Participants had
been Participants under this Agreement and as if the water
-29-
supplied to them were being supplied under the Stillhouse
Supply Agreements, with the amounts of water to be supplied
and the percentages set forth in the table contained in
subparagraph 5(b), above, being appropriately adjusted. The
foregoing provisions with reference to allocations after
service to such Additional Participants shall be modified
during the initial years of service to such Additional
Participants in order to prevent injustice to the
Participants resulting from the fact of their payments of
Debt Service part of the Monthly Charges for the period
during which such Additional Participants shall not have
participated in the payment of the Debt Service (if this
shall occur) will have created the then present ability of
Authority to provide service to the Additional Participants
from the Project. The modification will be as follows:
(a) Each Additional Participant shall pay to
Authority a sum of money, hereinafter called "Equity
Payment ", plus interest on the unpaid balance of such sum
from the date on which such Additional Participant and
Authority enter into a contract providing that Authority
will supply service from Project to such Additional
Participant, with the amount of the Equity Payment in each
-30-
case to be determined by the Board, in its sole discretion,
as being appropriate to prevent injustice to Participants.
(b) The Equity Payment and interest thereon shall be
payable in not more than sixty (60) consecutive monthly
installments, the first such installment to be payable with
the first Monthly Charge required to be paid by such
Additional Participant and with one additional installment
to be payable with the payment of each Monthly Charge which
thereafter becomes payable by such Additional Participant,
until paid in full. The amount of each installment shall
be:
(i)
(i)
A fraction of the Equity Payment, the
numerator of which shall be one and the
denominator shall be the number of months
over which the Equity Payment is to be
amortized; plus
(ii) Accrued interest on the Equity Payment.
(c) During each Fiscal Year in which there remains an
unpaid balance of Equity Payment, interest shall be payable
on the unpaid balance at the rate of the lesser:
The base rate of interest, whether charged
or not, established by InterFirst Bank
Dallas, N. A. on June 1 of the Fiscal
Year preceding the fiscal year during
which such rate is payable; or
-31-
(ii) The highest lawful rate.
(d) On or before August 1 of each year immediately
preceding September 1 on which a Fiscal Year during which an
Additional Participant shall be required to make Equity
Payments shall begin, Authority shall notify such Additional
Participant of the interest rate to be payable during such
Fiscal Year on the unpaid balance of the Equity Payment and
the amount of each installment which such Additional
Participant shall be required to pay against the Equity
Payment during such Fiscal Year.
(e) Equity Payments received by Authority shall be
applied as received to reduce pro rata the next subsequent
Debt Service part of the Monthly Charge allocable to each
Participant.
16. GENERAL PROVISIONS.
(a) The term of this Agreement shall continue in force
and effect for a period of time which shall be the greater
of, (a) the period of time any Bonds or bonds issued to
refund same are outstanding and unpaid, or (b) fifty (50)
years and so long thereafter with respect to each Participant
as such Participant shall be entitled to receive water
-32--
under Stillhouse Supply Agreements. The term of this
Agreement having expired, upon cessation of use of Project
by all Participants, all lands and personal property consti-
tuting a part of Project shall be considered as having been
purchased by the Participants by payments made hereunder,
and thereafter shall be owned by Participants as tenants -in-
common with their respective interests to be in proportion
to their obligations to make payments with respect to Debt
Service under Paragraph 5, above.
(b) All notices and communications provided for
herein shall be in writing and shall be either delivered or
mailed to Authority or Participants, and if mailed, shall be
sent certified mail, return receipt requested, postage pre-
paid, addressed as follows:
(i) If to Authority -
General Manager
Brazos River Authority
P.O. Box 7555
4400 Cobbs Drive
Waco, Texas 76714 -7555
(ii) If to Georgetown
City of Georgetown
P.O. Box 409
Georgetown, Texas 78627
-33-
(iii) If to Round Rock
City of Round Rock
214 East Main Street
Round Rock, Texas 78664
(iv) If to Jonah
Jonah Water Supply Corporation
Route 1, Box 112E
Georgetown, Texas 78656
(c) It is recognized by the parties that payments
made to Authority by Participants hereunder shall be the
only resource of Authority for the payment of Maintenance
and Operation Expense and Debt Service. It is further
recognized that in order. for Authority to be able to sell
Bonds most advantageously, it is necessary that prospective
purchasers of Bonds have assurance that each Participant is
unconditionally obligated to pay its allocated part of the
Debt Service. Therefore, it is agreed by each Participant
that it will pay its allocated share of the Debt Service
part of the Monthly Charges required under Subparagraph
5(b), above, whether or not Project is ever completed and
whether or not it ever receives or continues to receive
water available to it from Lake Stillhouse Hollow under the
Stillhouse Supply Agreements in Lake Georgetown as a result
of operation of the Project. Further, each Participant
-34-
agrees that should any Participant become bankrupt or other-
wise financially unable to pay its allocated portion of the
Debt Service Charges, the amount due from such bankrupt or
otherwise financially unable Participant shall be allocated
among the other Participants and paid by them pro rata on
the basis of the part of the Debt Service part of the
Monthly Charge allocated to each Participant under the pro-
visions of subparagraph 5, above.
(d) This Agreement shall be subject to all valid
rules or regulations and laws applicable hereto passed or
promulgated by the United States of America, the State of
Texas or any governmental body or agency having lawful
jurisdiction or any authorized representative or agency of
any of them. Any tax or fee required to be paid by
Authority on account of ownership or operation of Project
shall be considered a part of Maintenance and Operation
Expense.
(e) Authority shall not have the right to demand
payment by Georgetown and /or Round Rock of any obligation
undertaken by or imposed upon any of them by virtue of this
Agreement from funds raised or to be raised by taxation.
The obligations of such cities under this Agreement shall
-35-
never be construed to be a debt of any of such cities of
such kind as to require any such city under the Constitution
and laws of the State of Texas to levy and collect a tax to
discharge such obligation. Payments due by any city which
is a Participant hereunder shall be made from the revenues
of its water system. Each of such cities represents and
covenants to Authority that all payments to be made
hereunder by it shall constitute "Operating Expenses" of its
water distribution system as authorized by the State of
Texas and as defined in Article 1113 of the Revised Civil
Statutes of Texas as amended.
(f) Each Participant agrees to fix and collect such
rates and charges for water supplied through its water
distribution system as will make possible the prompt payment
of all expenses of operating and maintaining its water
distribution system, including all payments contracted
hereunder, and the prompt payment of the principal of and
interest on its obligations payable from the revenues of its
water distribution system.
(g) If by reason of force majeure, any party hereto
shall be rendered unable, wholly or in part to carry out its
obligations under this Agreement, then such party shall give
-36-
notice and full particulars of such force majeure in writing
to Authority if such party is a Participant or to each
Participant if such party is Authority within a reasonable
time after occurrence of the event or cause relied on, and
the obligations of the party giving such notice, insofar as
they are affected by such force majeure, shall be suspended
during the continuance of the inability thus claimed, but
for no longer period, and any such party shall endeavor to
remove or overcome such inability with all reasonable
dispatch. The term "force majeure" as employed herein shall
mean acts of God, strikes, lockouts, or other industrial
disturbances, acts of a public enemy, orders of any kind of
the government of the United States or the State of Texas,
or any civil or military authority, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurri-
canes, storms, floods, washouts, droughts, arrests,
restraints by government, civil disturbances, explosions,
breakages, or accidents to machinery, pipelines, pumps or
other facilities, partial or,entire failure of water supply
or any other cause beyond the reasonable control of such
party. It is understood and agreed that the settlement of
strikes and lockouts shall be entirely within the discretion
-37-
of the party having the difficulty and that the above
requirement that any force majeure shall be remedied.with
all reasonable dispatch shall not require settlement of
strikes and lockouts by acceding to demands of the opposing
party or parties when such settlement is unfavorable to it
in the judgment of the party having the difficulty. The
provisions of this Subparagraph 16(g) notwithstanding force
majeure shall not relieve any Participant of its obligations
to make payments to Authority as its share of the Debt
Service as required under the provisions of sub-
paragraph 5(a), above.
(h) Any controversy arising with respect to amounts
of money to be paid by any Participant to Authority
hereunder or with respect to availability of Surplus Water
or with respect to construction of this Agreement shall be
settled in accordance with the rules of the American
Arbitration Association in effect as of the time such
controversy shall arise and judgment upon the award may be
entered by any court having jurisdiction thereof, provided
that no award or judgment involving the Debt Service shall
result in Authority's inability to pay Debt Service as
same shall become due from monies produced by the Debt
-38-
Service part of the Monthly Charges. The other provisions
hereof notwithstanding, this provision for arbitration shall
never be construed to deprive the Texas Water Commission of
jurisdiction over any matter which would otherwise be sub-
ject to its jurisdiction.
(i) Authority shall maintain financial records
respecting its construction and operation of Project in
accordance with the procedures used by it in maintaining
records of its affairs which are audited annually by its
certified public accountants. All such records and
Authority's annual statement shall be available for inspec-
tion by any Participant at any reasonable time during
business hours.
(j) Authority agrees that while this Agreement
remains in force it will, for the purpose of assuring proper
maintenance, operation, repair and replacement of Project
from time to time, employ an independent engineer or
engineering firm or corporation having favorable repute for
skill and experience in such work and will, at all
appropriate times, cause such consulting engineer to submit
and give necessary or desirable advice and recommendations
concerning operations, renewals, replacements, extensions,
-39-
betterments, and improvements of the Project to the end that
the Project shall be operated and maintained in the most
efficient and satisfactory manner. Further, Authority shall
cause the consulting engineer to make in writing a full sur-
vey, review and report of the physical condition of Project
once every five (5) years, commencing five (5) years from
the date when the Project becomes operational. A copy of
such survey, review and report shall be available to any
Participant at any reasonable time during business hours.
Authority further agrees that it will cause such consulting
engineer to include as part of the above report, such
engineer's recommendations and advice as to the proper main-
tenance, repair and operation of the Project, including
findings as to whether or not properties of the Project have
been maintained in good repair and sound operating
condition; the extension, improvements, renewals and replace-
ments which should be made during the ensuing five (5)
years; and the amounts and types of insurance which should
be carried by Authority on the Project.
(k) In event of default by any Participant in making
payments required of Participant under this Agreement,
Authority may, at its option, terminate this Agreement and
-40-
Stillhouse Supply Agreements with such Participant or it may
recover amounts agreed to be paid by such Participant by
appropriate legal action. Should other Participants be
required to make increased payments to Authority pursuant to
Subparagraph 16(c), above, on account of failure of a
defaulting Participant to make payments to Authority,
Authority shall exercise the options to cancel provided in
the preceding sentence. In the event of exercise by
Authority of such options to cancel, the rights of the
Participant with respect to which such options are exercised
shall be made available to the other Participants who are
willing to assume the obligations of the cancelled
Participant under this Agreement and under Stillhouse Supply
Agreements pro rata on the basis of the percentages of total
water available to each under Subparagraph 5(a), above.
(1) Any waiver at any time by any party of its rights
with respect to default under this Agreement or with respect
to any other matter arising in connection with this
Agreement shall not be deemed the waiver with respect to any
subsequent default or matter.
(m) Nothing contained in this Agreement shall be
construed in any manner to abridge, limit or deprive any
-41-
party hereto of any means which it would otherwise have of
enforcing any remedy, in law or in equity, for breach of any
of the provisions hereof, provided, however, that this provi-
sion shall not be deemed to eliminate or diminish the right
of any party to arbitration and to enforcement of
arbitration awards under subparagraph (h), above.
(n) This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of the respective
parties hereto, provided, however, that no assignment shall
have the effect of relieving the party making such assign-
ment of any liability hereunder, except that Jonah may be
relieved of liability upon assumption of its liabilities
hereunder by a political subdivision of the State of Texas
which shall succeed to ownership of its water distribution
system and certificate of convenience and necessity
respecting same. All assignments are subject to Authority
approval, which approval shall not be unreasonably withheld.
(o) As between Authority on the one hand and each
Participant on the other, each shall protect and save the
other harmless from any loss or damage to persons or
property occasioned on its own side of points of delivery of
water into Lake Georgetown or in connection with apparatus
-42-
or appurtenances including pumps, transmission lines and
conduits operated by it, except as to loss or damage caused
by the negligence of the other party, its agents, servants,
or employees and except as to injury or death of employees
of the other party.
(p) It is recognized by the parties that default by
Authority in its obligations hereunder can result in injury
to Participants which cannot be compensated by damages.
Therefore, the remedy of specific performance shall be
available to Participants and each of them for enforcement
of Authority's obligations hereunder.
(q) It is the intent of the parties to this Agreement
to provide to the maximum extent practical for the conser-
vation of water. Each Participant agrees that it is a con-
dition of this Agreement that it shall maintain and operate
its facilities in a manner which will prevent unnecessary
waste of water. Authority agrees that it will maintain and
operate Project in a manner that will prevent unnecessary
waste of water.
(r) Circulation of copies of this Agreement among
Participants to obtain the signatures of all Participants on
the same copies hereof would be inconvenient and result in
-43-
delay. Therefore, this Agreement has been prepared in
multiple copies with two copies being prepared for signature
on behalf of Authority, on the one hand, and on behalf of
each Participant, alone, on the other hand. When all copies
have been signed on behalf of Authority and each of the two
copies prepared for signature for each Participant, alone,
has also been signed by each Participant, Authority shall
give written notice of such fact to all Participants and
this Agreement shall thereupon become effective. Authority
shall receive possession of one copy of this Agreement exe-
cuted by it on the one hand and each Participant, alone, on
the other hand. Each Participant shall receive possession
of one copy executed by Authority on the one hand and it
alone on the other. The Agreement, when it becomes effec-
tive, shall be binding on Authority and all Participants and
subject to enforcement by any party against any other.
(s) This Agreement shall not prevent a Participant
from selling or transferring its interests hereunder to
Authority in the future as a part of a regional water supply
agreement by which the Participant purchases a treated water
supply from Authority. It is understood, however, that
Authority's willingness and ability to undertake such an
-44-
arrangement in the future is contingent upon its ability to
undertake such obligations without impairing bond obliga-
tions or its obligations to other Participants.
17. SPECIAL ASSIGNMENT. Jonah agrees that, not-
withstanding any and all other provisions of this Agreement,
all rights of Jonah hereunder are subject to the condition
that Jonah, will, on written request from Authority, take
all steps necessary in order to cause the organization of an
assignee ( "Assignee ") which is a political subdivision of
the State of Texas created to succeed to the rights and
obligations of Jonah; that Assignee shall be organized; that
Jonah, upon completion of organization of Assignee, will
assign its rights under this Agreement unto Assignee; and
that failure by Jonah to make such assignment within a
reasonable time after the making of such written request by
Authority, shall result in cancellation of the rights under
this Agreement of Jonah. Authority agrees that upon
transfer of Jonah's rights under this Agreement to Assignee,
Jonah's obligations to Authority under this Agreement shall
terminate.
-45-
ATTEST:
Assistant Secretary
ATTEST:
Dated this the
9 day of
BRAZOS ' VER AUTHORITY
A
BY
94 Secretary
ca/.v� %fie&
BY d d Z '
-46-
J Uty
Carson H. Hog
General Manager
, 1986.
"Authority"
"Participant"
WILLIAMSON COUNTY REGIONAL RAW WATER
LINE AGREEMENT
BETWEEN
BRAZOS RIVER AUTHORITY
AND
CITY OF GEORGETOWN, CITY OF ROUND ROCK
AND JONAH WATER SUPPLY CORPORATION
June 30, 1986
DO 17/02_
o.
INDEX
1. Recitals 1
2. Definitions 2
(a) Authority 2
(b) Authority Surplus Water 2
(c) Board 2
(d) Bonds 2
(e) Bond Resolution 2
(f) Capital Costs 3
(g) Certified Projections 3
(h) City Surplus Water 3
(i) Completion Year 3
(j) Corps 3
(k) Debt Service 3
(1) Dependable Yield 4
(m) Final Design and Construction Phase 4
(n) Fiscal Year 4
(o) Georgetown 4
(p) Jonah 4
(q) Lake Georgetown 4
(r) Lake Georgetown Supply Contracts 4
(s) Lake Stillhouse Hollow 5
(t) mgd 5
(u) Maintenance and Operation Expense 5
(v) Monthly Charges 6
(w) Participants 6
(x) Preliminary Design Phase 6
(y) Project 7
(z) Repair and Replacement Fund 7
(aa) Repair and Replacement Repayment 7
(bb) Round Rock 7
(cc) Stillhouse Supply Agreements 7
(dd) Stillhouse Supply Agreement
Payments 8
( #11RawAl -A2) -i-
PAGE
(ee) Surplus Water 8
3. Design, Construction and Operation
of Project 8
4. Bonds 9
5. Payment 10
6. Investment of Funds 15
7. Meters 16
8. Projection Information 17
9. Surplus Water 20
10. Payments For Surplus Water 22
11. Compensation of Georgetown and
Round Rock 23
12. Duration of Availability of Surplus
Water 26
13. Time of Completion of Project 27
14. Use of Stillhouse Supply Agreement
Payments 28
15. Additional Participants 29
16. General Provisions 32
17. Special Assignment 45
Signatures 46
THIS CONTRACT IS SUBJECT TO ARBITRATION UNDER THE
TEXAS ARBITRATION ACT
( #11Raw1 -46)
***** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * **
WILLIAMSON COUNTY REGIONAL RAW WATER
LINE AGREEMENT
***** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * **
AGREEMENT made and entered into by and between BRAZOS
RIVER AUTHORITY, and CITY OF GEORGETOWN, CITY OF ROUND ROCK
and JONAH WATER SUPPLY CORPORATION.
1. RECITALS. Authority is authorized to store water
in and to divert water from Lake Georgetown and Lake
Stillhouse Hollow. The other parties to this Agreement
supply water in various areas in Williamson County, Texas,
for municipal use. Authority has contracted with each such
other party to make available to such party water from Lake
Stillhouse Hollow. Such other parties are so located that
it is desirable from the standpoint of cost that each should
divert the surface water which it needs for municipal supply
from Lake Georgetown rather than from Lake Stillhouse
Hollow. The purpose of this Agreement is to provide for
Authority to design, construct and operate facilities for
transporting water from Lake Stillhouse Hollow committed to
the other parties to this Agreement under the contracts men-
tioned above to Lake Georgetown for diversion by them from
Lake Georgetown and, in the period between the date of exe-
cution of this Agreement and the date when such facilities
become operational, to allow such other parties to use water
from Lake Georgetown as an interim supply.
2. DEFINITIONS.
(a) "Authority" means Brazos River Authority, a
river authority established by a statute enacted by the
Legislature of the State of Texas.
(b) "Authority Surplus Water" means the Dependable
Yield of Lake Georgetown in excess of 12 mgd.
(c) "Board" means the Authority's Board of Directors.
(d) "Bonds" means revenue bonds or other obligations
issued by Authority to obtain funds for use in the design,
construction, expansion, improvement, completion, repair or
replacement of Project, whether one or more issues.
(e) "Bond Resolution "'means any resolution of Board
authorizing the issuance of Bonds and providing for their
security and payment, as such resolution(s) may be amended
from time to time as therein permitted.
-2--
(f) "Capital Costs" means all sums of money which are
required by the terms of a Bond Resolution to be paid to or
on behalf of holders of Bonds or to be paid into any reserve
fund or sinking fund.
(g) "Certified Projections" means a projection or
projections made by a Participant pursuant to this Agreement
of such Participant's annual average and maximum daily need
for water during a five (5) year period beginning as of the
date of such projection which is certified by the
Participant to Authority.
(h) "City Surplus Water" means the excess, expressed
in mgd, of 12 mgd over the sum of the Effective Rates in
force from time to time of Georgetown and Round Rock under
the Lake Georgetown Supply Contracts.
(i) "Completion Year" means the Fiscal Year in which
Project becomes fully operational.
(j) "Corps" means the United States Army Corps of
Engineers.
(k) "Debt Service" means the amounts of money
required to pay Capital Costs plus fees, charges and costs
such as those of paying agents, registrars and trustees
which are incurred incident to the handling and servicing of
Bonds.
-3--
(1) "Dependable Yield" means the maximum volume of
water that can be withdrawn from a lake or reservoir during
each calendar year without ever completely depleting all of
the water in storage in such lake or reservoir, taking into
account reservoir storage capacity, inflows, evaporation,
releases to honor prior rights and anticipated diversion
schedules.
(m) "Final Design and Construction Phase" means the
work of completing design, preparing final plans and speci-
fications and constructing the Project.
(n) "Fiscal Year" means the fiscal year of Authority,
which is September 1 through August 31.
(o) "Georgetown" means the City of Georgetown,
Williamson County, Texas.
(p) "Jonah" means Jonah Water Supply Corporation, a
Texas corporation.
(q) "Lake Georgetown" means Lake Georgetown
constructed by the Corps on the North San Gabriel River in
Williamson County, Texas.
(r) "Lake Georgetown Supply Contracts" means the
contracts between Authority on the one hand and Georgetown
and Round Rock on the other providing for Authority to make
-4-
water available to Georgetown and Round Rock, respectively,
from Lake Georgetown.
(s) "Lake Stillhouse Hollow" means Lake Stillhouse
Hollow constructed by the Corps on the Lampasas River in
Bell County, Texas.
(t) "mgd" means millions of gallons of water per day.
(u) "Maintenance and Operation Expense" means all
costs of repairs and replacements of Project for which no
special fund is created and all costs of maintenance and
operation of Project including (for greater certainty but
without limiting the generality of the foregoing) super-
vision, engineering,
accounting, auditing and payments made
by Authority in satisfaction of judgments resulting from
claims not covered by Authority's insurance, legal expense,
energy costs and any other labor, supplies, insurance, ser-
vices and equipment necessary for the proper operation of
the Project plus any additional direct cost(s) or expense(s)
which may be imposed on Authority in connection with the
fulfillment of its obligations under this Agreement by taxa-
tion or as the result of regulations or requirements
lawfully imposed by the State of Texas, the United States or
any state or federal agency subsequent to the execution of
-5-
this Agreement plus an amount determined annually by
Authority's certified public accountants to be appropriate
to cover Authority's expenses of supervision and admi-
nistration attributable to the obligations under this
Agreement and an appropriate part of its unallocated general
and administrative expense. In making such determination,
Authority's accountants shall utilize generally accepted
accounting principles to allocate a percentage of unallo-
cated expenses which is generally equivalent to the percen-
tage of expenses incured by Authority under this Agreement
as compared to the overall expenses of Authority.
(v) "Monthly Charges" means the amount of the charge
to be made monthly by Authority to each Participant for the
services to be provided by Authority under this Agreement.
(w) "Participants" means Georgetown, Round Rock and
Jonah and parties who may become Additional Participants
under the provisions of Paragraph 15, below.
(x) "Preliminary Design Phase" means the work of
studying, designing and preparing Project layout plans
necessary for acquiring land rights or options for land
rights and permits necessary for final design and construc-
tion of Project.
-6-
(y) "Project" means facilities capable of
transporting from Lake Stillhouse Hollow to Lake Georgetown
the water agreed to be made available from Lake Stillhouse
Hollow by Authority to Participants under Stillhouse Supply
Agreements.
(z) "Repair and Replacement Fund" means the fund to
be established by the Authority, the monies from which will
be used for major repairs and replacements to the Project,
for extraordinary or non - recurring expenses not budgeted as
Maintenance and Operation Expense and for Maintenance and
Operation Expenses in excess of the amounts budgeted.
(aa) "Repair and Replacement Repayment" means the
portion of the Monthly Charge required or necessary during
such month to replenish and maintain the Repair and
Replacement Fund.
(bb) "Round Rock" means the City of Round Rock,
Williamson County, Texas.
(cc) "Stillhouse Supply Agreements" means the
following contracts between Authority on the one hand and
Participants, respectively, on the other providing that
Authority will make water available from Lake Stillhouse
Hollow to such Participants:
-7-
(i) Agreement with Georgetown dated January
24, 1985;
(ii) Agreement with Round Rock dated January
24, 1985;
(iii) Agreement with Jonah dated January 31,
1985; and
(dd) "Stillhouse Supply Agreement Payments" means
payments required to be made by Participants to Authority
prior to Completion Year for water committed but not yet
made available under Stillhouse Supply Agreement.
(ee) "Surplus Water" means Authority Surplus Water
and City Surplus Water.
3. DESIGN, CONSTRUCTION AND OPERATION OF PROJECT.
Authority agrees that as soon as sufficient funds are
available from the issuance of Bonds, it will promptly begin
work on the Preliminary Design Phase. Further, Authority
agrees that it will use its best efforts to begin the Final
Design and Construction Phase in time so that if the work is
diligently pursued, it is reasonable to expect that Project
•
will be operational by the time Participants' needs for
water under the Stillhouse Supply Agreements are expected to
begin on the basis of the Certified Projections. Once
begun, such work will be diligently pursued, but it is
-8-
estimated that the earliest time when Project can be opera-
tional is four (4) years from the date when work begins on
the Preliminary Design Phase. Completion of the
Preliminary Design Phase is expected to require eighteen
(18) months and it is presently expected that the Final
Design and Construction Phase will require two and one -half
(2 -1/2) years. When Project becomes operational, Authority
shall operate it to deliver water agreed to be made
available from Lake Stillhouse Hollow under Stillhouse
Supply Agreements to Lake Georgetown and will make such
water available to Participants for diversion from Lake
Georgetown.
4. BONDS. Immediately upon execution of this
Agreement, Authority will begin and diligently pursue the
work necessary for the issuance of Bonds if that is deter-
mined by Authority to be the best means for obtaining funds
to begin work on the Preliminary Design Phase and will
thereafter issue additional Bonds from time to time as
necessary to continue diligently with the completion of the
Preliminary Design Phase and to begin and diligently pursue
completion of the Final Design and Construction Phase, as
herein provided. From the proceeds of the first issue of
Bonds issued to obtain funds for the Final Design and
-9-
Construction Phase, Authority will establish a Repair and
Replacement Fund in the amount of $500,000.00. The Bond
Resolution providing for the issuance of such Bonds may pro-
vide that funds in the Repair and Replacement Fund may be
used for Debt Service if other funds are not available or if
the Board, in its sole discretion, determines that such use
is in the best interest of Participants. Such Bond
Resolution may further provide that such funds may be used
for any Project - related purpose at the sole discretion of
the Board.
5. PAYMENT. (a) Each Participant shall pay to
Authority a Monthly Charge each month during the term of
this Agreement. The Monthly Charges to be paid by all
Participants shall be the total of the amounts necessary to
pay Debt Service, Maintenance and Operation Expense and any
Repair and Replacement Repayment payable during such month,
plus a management fee described in subparagraph 5(e), below,
as compensation to Authority for managing the Project for
the benefit of the Participants.
(b) The Debt Service part of each Monthly Charge shall
be an amount which, when multiplied by the number of months
for which the Debt Service is due (between the due dates),
-10-
will produce a product which shall be sufficient to produce
the amount of money which will be needed by Authority to pay
such Debt Service when due. Each Participant's share of the
Debt Service part of the Monthly Charge for each month shall
be a percentage of the total Debt Service which percentage
is equal to the percentage of the total water available to
all Participants under the Stillhouse Supply Agreements
which is available to such Participant. The amounts of
water available to the Participants and the percentages the
individual amounts represent of the total available under
the Stillhouse Supply Agreements are as set forth in the
following table:
PARTICIPANT WATER (mgd) PERCENTAGES ( %)
Georgetown 4.864 22.794
Round Rock 15.369 72.023
Jonah 1.106 5.183
TOTAL 21.339 100.00
(c) Prior to the date on which Project becomes opera-
tional, the Board shall prepare a budget in which it makes
an estimate of Maintenance and Operation Expense to be in-
curred during the Completion Year. During the period
between the date on which Project becomes operational and
the end of the Completion Year, the Maintenance and
Operation Expense part of the Monthly Charge will be an
amount which, when multiplied by the number of months bet-
ween the first day of the month in which Project becomes
operational and the end of Completion Year will produce suf-
ficient monies to enable Authority to pay such estimated
Maintenance and Operation Expense for such period from such
Maintenance and Operation Expense part of the Monthly
Charges. Thereafter, the Board shall on or before July 31 of
each year prepare a budget in which it estimates the amount
of Maintenance and Operation Expense to be incurred during
the next following Fiscal Year. The monthly Maintenance and
Operation Expense part of the Monthly Charges for each
Fiscal Year following Completion Year shall be that amount
of money which, when multiplied by 12, shall equal the
amount of Maintenance and Operation Expense budgeted by the
Board for such Fiscal Year, adjusted upward or downward for
any deviation in the amount of Maintenance and Operation
Expense actually incurred in the preceding Fiscal Year over
or under the amount budgeted by Board. During the period
between the date on which Project becomes operational and
-12-
the end of Completion Year, the Maintenance and Operation
Expense part of the Monthly Charge shall be allocated among
Participants on the same basis as the allocation of the Debt
Service part of the Monthly Charge per subparagraph (b),
above. Thereafter, the Maintenance and Operation Expense
will be allocated among Participants on the basis of the
amount of water, expressed in mgd, withdrawn by each
Participant from Lake Georgetown during the preceding twelve
(12) month period ending June 30, except that the amount
allocated to Georgetown and Round Rock, respectively, shall
be based on the amount of withdrawals of each less its
"Effective Rate" then in effect under the Lake Georgetown
Supply Contracts.
(d) The Repair and Replacement Repayment part of the
Monthly Charge shall be payable only when expenditures from
the Repair and Replacement Fund shall have reduced the
amount of money in that fund below $500,000.00. Each expen-
diture from the Repair and Replacement Fund shall be paid
back into the Repair and Replacement Fund in not more than
thirty -six (36) equal monthly payments, starting with the
beginning of the Fiscal Year after such expenditure is made.
The Repair and Replacement Repayment part of the Monthly
-13-
Charge during any Fiscal Year shall be the sum of the
monthly payments into the Repair and Replacement Fund
required during such Fiscal Year pursuant to the provisions
of the sentence next preceding. The Repair and Replacement
Repayment part of the Monthly Charge shall be allocated
among Participants on the same basis as the Maintenance and
Operation Expense is allocated under the provisions of sub-
paragraph (b), above.
(e) Each Participant shall pay a portion of the total
management fee due to Authority in each month in which such
Participant is obligated to pay a Monthly Charge. The
amount of the management fee payable by a Participant in any
month in which such Participant is obligated to pay a
management fee shall be equal to five one - hundredths (0.05)
of the amounts such Participant is obligated to pay in such
month to pay its share of Maintenance and Operation Expense,
plus five one - thousandths (0.005) of the sum of the amounts
such Participant is obligated to pay in such month to pay
its share of Debt Service and Repair and Replacement
Payment.
(f) The Monthly Charge for any month shall be payable
on or before the 10th day of each month (the "due date ").
-14-
(g) The Monthly Charge shall be payable at the
central office of the Authority, Waco, McLennan County,
Texas.
(h) Each Monthly Charge not paid before the due date
shall bear interest at the lesser of the highest lawful rate
or 18% per annum from the due date until the date paid.
(i) On or before thirty (30) days prior to the date
on which the first Monthly Charge hereunder becomes due and
payable, Authority shall certify to each Participant the
amount of its Monthly Charge for the remainder of the then
current Fiscal year. On or before each July 31 thereafter
while this Agreement remains in force, Authority shall cer-
tify to each Participant the amount of its Monthly Charge
for the next succeeding Fiscal Year.
6. INVESTMENT OF FUNDS. Pending expenditure, all
proceeds of Bonds, including sums on deposit in funds
required to be established under the terms of a Bond
Resolution, shall be kept invested in revenue producing
investments which Authority is permitted by law to make,
with the objective of producing the maximum revenue which
can be produced without impairing the exemption of interest
on Bonds from federal income tax or the availability of such
-15-
funds for expenditure by Authority as needed in the
fulfillment of its obligations hereunder. The earnings on
such investments shall be used to pay Debt Service and
reduce the Debt Service part of the Monthly Charges to the
Participants, except that to the extent necessary, such
earnings may be used to complete construction of the
project.
7. METERS. Each Participant shall install, operate
and maintain or arrange for the installation, operation and
maintenance of a meter which will accurately measure and
record the amount of water withdrawn by the Participant
from Lake Georgetown. Authority shall have the right to
read such meter once each month in the presence of Partici-
pant's representative. The meter is to be tested and cali-
brated for accuracy once each year at Participant's expense
and a report of such test and calibration shall be furnished
to Authority. If questions regarding the accuracy of the
meter arise, Authority may demand testing in addition to the
annual test, above required. If, as a result of any such
additional test, the meter is found to be inaccurate in
excess of 2%, Participant shall pay for the test and for
having the meter promptly calibrated for accuracy. If the
-16-
meter is found to be within 2% tolerance, Authority shall
pay for the testing. Adjustments for inaccuracies
discovered in metering as a result of any test shall be com-
puted based upon an agreed period of adjustment or if
agreement cannot be reached, the shorter of a period
beginning 60 days prior to the date of the test or a period
covering one -half of the time since the last previous test.
Participant shall provide daily use records reflecting
withdrawals from Lake Georgetown to Authority by the 10th
day of the month following the month of withdrawal.
8. PROJECTION INFORMATION. Within thirty (30) days
from the date of execution of this Agreement and on each
September 1 thereafter until Project becomes operational,
each Participant shall provide Authority with a copy of its
water use records for the preceding twelve (12) months,
current supply capacities, including the estimated safe
yield that can be expected during drought conditions from
each well that is part of Participant's water supply, and a
Certified Projection. Beginning on September 30, 1986, and
annually thereafter, Authority shall consolidate the
Certified Projections and other data thus furnished, prepare
a five (5) year projection of the annual average and maximum
-17-
daily water needs of Participants and shall prepare an asso-
ciated construction schedule that will specify when Final
Design and Construction Phase must begin in order to meet
the projected water needs of the Participants. The five (5)
year projection shall be based on the data provided by each
Participant utilizing the previous summer's use of water,
the Certified Projections, and the drought capacity of all
Participants' water wells. It shall identify all sources of
water that will be used by each Participant for the five (5)
year projection period. Within thirty (30) days after each
October 1, Authority will provide its projections and
construction schedule to each Participant for review. If,
after the first year during which this Agreement has been in
force, a Participant shall fail to provide the aforesaid
information and Certified Projection, then the Certified
Projection then in effect shall be deemed the Participant's
current Certified Projection. On or before November 15 of
each year, each Participant may review and comment upon the
projections made by Authority and the construction schedule
proposed by it. That projection and construction schedule
shall be deemed acceptable to each Participant unless writ-
ten comments are received in Authority's Waco office on or
-18-
before November 15. At its regular January meeting
following such November 15, the Board shall review all
comments regarding Authority's projection and construction
schedule received from any Participant; shall make such
changes therein as it may deem appropriate; and shall adopt
an "Adjusted Certified Projection" for each Participant and
a construction schedule based thereon. The Adjusted
Certified Projections and construction schedule adopted by
the Board shall be binding on all parties. The adoption of
same and the other provisions of this Agreement not-
withstanding, Authority shall never have any liability to
any Participant on account of failure to complete any part
of Project in accordance with any construction schedules or
in time to meet needs projected in any such Adjusted
Certified Projections and each Participant agrees to hold
Authority harmless with respect to any and all liability to
it arising out of any such failure and out of any inability
or failure to sell Bonds in time to complete any part of
Project in accordance with any such Adjusted Certified
Projection and /or construction schedules; provided, however,
this shall not be construed as obligating the Participants
to hold and save the Authority harmless from damages or
-19-
liability resulting from the sole negligence of the
Authority, its officers, agents, or employees and not
involving negligence on the part of the Participants or
their agents, officers, or employees.
9. SURPLUS WATER. Until Project becomes
operational, the only water which Authority can furnish to
Participants (other than the first 6 mgd to be furnished to
each of Georgetown and Round Rock under the Lake Georgetown
Supply Contracts respectively) is Surplus Water. The amount
of Surplus Water committed to each Participant during each
year prior to the date when Project becomes operational
shall be the amount of water projected by Authority to be
needed by such Participant during such year, as shown in the
Adjusted Certified Projection furnished to Participant, less
the amount of water reflected as being available to such
Participant from other sources in the information provided
to Authority per the provisions of Paragraph 8, above.
Should the total amount of Surplus Water needed by
Participants as reflected in such Adjusted Certified
Projections and other information exceed the total amount
of Surplus Water available, then the amount available shall
be shared by Participants prorata to their needs as thus
-20-
determined. All City Surplus Water shall be committed for
use prior to commitment of Authority Surplus Water. -Each
Participant may withdraw from Lake Georgetown each year
an amount of water which shall not exceed the amount of
Surplus Water committed to such Participant. Once an amount
of water is committed to a Participant out of Surplus Water,
the Participant may not reduce the amount of the commitment
without written agreement of Authority. If a Participant
determines that it will have need for more water at any time
in the future than is reflected in its current Adjusted
Certified Projection, it may file a written request for an
increased commitment at least ninety (90) days prior to the
desired date of such increase. Upon receipt of any such
written request, Authority will send a notice to all other
Participants to determine if the other Participants also
need additional uncommitted Surplus Water. If it is deter-
mined by Authority that there is a sufficient amount of
uncommitted Surplus Water which can be made available to
supply the need indicated in the request, the request will
be approved and additional Surplus Water will be committed
to such Participant(s). Authority shall then send notice to
such Participant(s) that such additional Surplus Water is
-21--
available and such Participant(s) shall, on or before thirty
(30) days following such notice, pay Authority for the
Additional Surplus Water to be used during the remainder of
the fiscal year in which such notice is sent to such
Participant(s) on the basis of the prices specified in
Paragraph 10, below. The share of City Surplus Water com-
mitted to each Participant shall be a fraction of which the
numerator shall be the amount of Surplus Water committed to
such Participant and the denominator shall be the amount of
Surplus Water committed to all Participants. The remainder
of Surplus Water committed to such Participant shall be
deemed Authority Surplus Water.
10. PAYMENTS FOR SURPLUS WATER.
(a) In addition to the payments required in Paragraph
9, above, payments for the use of Surplus Water shall be
made as follows:
(i)
Each Participant shall pay to Authority
for the City Surplus Water committed to it
each calendar year an amount determined by
applying 150% of the price established
for "Water Made Available" under Paragraph
III of the Lake Georgetown Supply
Contracts, as such price shall vary from
year to year, to the amount of City
Surplus Water committed to such
Participant during such year.
-22-
(ii) Each Participant shall pay to Authority
for Authority Surplus Water committed to
it during each calendar year an amount
determined by applying the price
established for "Water Made Available"
under Paragraph III of the Lake Georgetown
Supply Contracts, as such price shall vary
from year to year, to the amount of
Authority Surplus Water committed to
such Participant during such year.
(iii) The 1985 price for "Water Made Available"
under Lake Georgetown Supply Contracts is
$58.65 per acre -foot.
(b) Payments required to be made under Subparagraphs
(i) and (ii), above, shall be payable on or before February
15 of each calendar year with respect to which such payments
are required to be made, except that payments for the
calendar year during which Surplus Water is first committed
shall be due on or before 30 days after the date on which
Surplus Water is committed.
(c) Such payments shall be made at the central office
of the Authority, Waco, McLennan County, Texas.
(d) Such payments not paid on or before the February
15 by which they are due shall bear interest at the lesser
of the highest lawful rate or 18% per annum from the due
date until paid.
11. COMPENSATION OF GEORGETOWN AND ROUND ROCK. Under
-23-
Lake Georgetown Supply Contracts, Georgetown and Round Rock
each have a right to have 6 mgd made available to them from
Lake Georgetown. The availability of City Surplus Water
results from the fact that neither Georgetown nor Round Rock
has exercised in full its right to have made available to it
from Lake Georgetown such 6 mgd. Because of its commitment
to Georgetown and Round Rock under the Lake Georgetown
Supply Contracts, Authority cannot make City Surplus Water
available to other Participants without the agreement of
Georgetown and Round Rock each to limit its use of water
from Lake Georgetown to the amounts shown in its Adjusted
Certified Projection. Georgetown and Round Rock each hereby
agree to thus limit its use of water from Lake Georgetown.
In consideration for such agreement, Authority agrees that
it will pay to Georgetown and Round Rock each year out of
monies received by it from Participants for City Surplus
Water per the provisions of Subparagraph 10(a), above, an
amount determined by applying 50% of the price established
from year to year for "Water•Made Available" in Paragraph
III of the Lake Georgetown Supply Contracts to the amount of
City Surplus Water committed to each Participant.
Additionally, should either Georgetown or Round Rock ever
-24-
become liable to make payments under Paragraph IV of Lake
Georgetown Supply Contracts for "Reserve Water" while
Participants are obligated to make payments to Authority
under Subparagraph 10(a), above, for Surplus Water which is
available as such because the party liable to make such
payments for Reserve Water has not fully exercised its
rights to have such water made available to it, the party
otherwise liable to Authority under Paragraph IV of the Lake
Georgetown Supply Contracts shall be excused from liability
to make payments to Authority under said Paragraph IV with
respect to the water available as Surplus Water so long
as Participants are obligated to pay for it as Surplus
Water. Payments to be made to Georgetown and Round Rock
pursuant to this Paragraph 11, with respect to City Surplus
Water committed to each Participant shall be due on or
before ten (10) days after receipt by Authority of each
payment from each Participant for City Surplus Water com-
mitted to such Participant during each calendar year.
Authority shall have no liability to make payments to
Georgetown and /or Round Rock under this Paragraph 11 with
respect to monies owing by any Participant until and unless
it receives payment from such Participant. The total of the
-25-
payments to be made to Georgetown and Round Rock in a given
calendar year per this Paragraph 11 shall be prorated be-
tween them and paid to each in direct ratio to the amount of
water committed to each under the Lake Georgetown Supply
Contracts that is made available for use as City Surplus
Water divided by the total of City Surplus Water that is
available in such year.
12. DURATION OF AVAILABILITY OF SURPLUS WATER. Until
the Project is operational, Georgetown and Round Rock,
respectively, each agree to limit exercise of its right to
increase its "Effective Rate" and use of water from Lake
Georgetown under the Lake Georgetown Supply Contracts to the
amount shown in any Adjusted Certified Projection,
including the initial Adjusted Certified Projection, for a
period of the four (4) years from the date upon which such
Adjusted Certified Projection becomes effecive, prior to
completion of Preliminary Design Phase and for a period of
two and one -half (2 -1/2) years from the date upon which each
such Adjusted Certified Projection becomes effective after
completion of Preliminary Design Phase, provided however,
that the obligations of each of Georgetown and Round Rock,
respectively, under this Agreement to limit exercise of its
-26-
right to increase its "Effective Rate" and use of water from
Lake Georgetown under the Lake Georgetown Supply Contracts
shall cease upon completion of the Project, and the rights
and obligations of all Participants and of Authority with
regard to availability and commitment of Surplus Water under
this Agreement shall also cease upon the date the Project is
complete and operational.
13. TIME OF COMPLETION OF PROJECT. Authority will
use its best efforts to complete the Preliminary Design
Phase within eighteen (18) months from the date funds for
doing so become available and to complete the Final Design
and Construction Phase in time to make water available under
the Stillhouse Supply Contracts when needed. However, all
parties recognize that delays can occur which are beyond the
control of the Authority. In the event construction of the
Project is delayed, use of City Surplus Water by
Participants under this Agreement will be curtailed in order
that Authority can fulfill its existing obligations to
Georgetown and Round Rock under the Lake Georgetown Supply
Contracts. Should such curtailing of water use occur,
Authority will pursue all steps available to it to expedite
completion of Project, including utilization of multiple
-27-
construction contracts, payment of incentive bonuses to
contractors and other similar or dissimilar measures which,
in the judgment of Board, may result in expedited comple-
tion. Any additional costs incurred as a result of such
efforts to expedite completion shall be financed through the
issuance of Bonds. The obligation of Authority to proceed
with the Preliminary Design Phase and /or the Final Design
and Construction Phase shall be conditioned on its ability
to sell Bonds.
14. USE OF STILLHOUSE SUPPLY AGREEMENT PAYMENTS.
Authority shall use funds received as Stillhouse Supply
Agreement Payments and other Authority funds to secure a
Letter of Credit necessary to issue Bonds to obtain funds to
pay the cost of completing the Preliminary Design Phase.
Out of the proceeds of the sale of the first Bonds sold to
obtain money for the Final Design and Construction Phase,
all Bonds, if any, still outstanding that were issued to
finance the Preliminary Design Phase will be refinanced and
Authority shall be reimbursed its costs incurred and
outstanding in the fulfillment of its obligations under this
Agreement.
-28-
15. ADDITIONAL PARTICIPANTS. Authority may allow
parties other than those who are listed as Participants
under this Agreement to become Participants provided that
service to be made available to such Additional Participants
shall not interfere with or diminish Authority's ability to
fulfill its obligations under this Agreement to the
Participants which are parties to this Agreement and pro-
vided further that the provision of service to such
Additional Participants shall not cause the Monthly Charges
to any Participant which is a party to this Agreement at any
time while this Agreement remains in force to be greater
than it would have been if service to such Additional
Participants had not been provided. In the event that
Authority does provide service to Additional Participants,
the Maintenance and Operation Expense part of the Monthly
Charge and the Repair and Replacement Repayment part of the
Monthly Charge becoming payable after service to such
Additional Participants begin, shall be allocated as if the
Additional Participants had been Participants under this
Agreement. The Debt Service part of the Monthly Charge
shall be allocated as if the Additional Participants had
been Participants under this Agreement and as if the water
-29-
supplied to them were being supplied under the Stillhouse
Supply Agreements, with the amounts of water to be supplied
and the percentages set forth in the table contained in
subparagraph 5(b), above, being appropriately adjusted. The
foregoing provisions with reference to allocations after
service to such Additional Participants shall be modified
during the initial years of service to such Additional
Participants in order to prevent injustice to the
Participants resulting from the fact of their payments of
Debt Service part of the Monthly Charges for the period
during which such Additional Participants shall not have
participated in the payment of the Debt Service (if this
shall occur) will have created the then present ability of
Authority to provide service to the Additional Participants
from the Project. The modification will be as follows:
(a) Each Additional Participant shall pay to
Authority a sum of money, hereinafter called "Equity
Payment ", plus interest on the unpaid balance of such sum
from the date on which such Additional Participant and
Authority enter into a contract providing that Authority
will supply service from Project to such Additional
Participant, with the amount of the Equity Payment in each
-30-
case to be determined by the Board, in its sole discretion,
as being appropriate to prevent injustice to Participants.
(b) The Equity Payment and interest thereon shall be
payable in not more than sixty (60) consecutive monthly
installments, the first such installment to be payable with
the first Monthly Charge required to be paid by such
Additional Participant and with one additional installment
to be payable with the payment of each Monthly Charge which
thereafter becomes payable by such Additional Participant,
until paid in full. The amount of each installment shall
be:
(i)
A fraction of the Equity Payment, the
numerator of which shall be one and the
denominator shall be the number of months
over which the Equity Payment is to be
amortized; plus
(ii) Accrued interest on the Equity Payment.
(c) During each Fiscal Year in which there remains an
unpaid balance of Equity Payment, interest shall be payable
on the unpaid balance at the rate of the lesser:
(i) The base rate of interest, whether charged
or not, established by InterFirst Bank
Dallas, N. A. on June 1 of the Fiscal
Year preceding the fiscal year during
which such rate is payable; or
-31-
(ii) The highest lawful rate.
(d) On or before August 1 of each year immediately
preceding September 1 on which a Fiscal Year during which an
Additional Participant shall be required to make Equity
Payments shall begin, Authority shall notify such Additional
Participant of the interest rate to be payable during such
Fiscal Year on the unpaid balance of the Equity Payment and
the amount of each installment which such Additional
Participant shall be required to pay against the Equity
Payment during such Fiscal Year.
(e) Equity Payments received by Authority shall be
applied as received to reduce pro rata the next subsequent
Debt Service part of the Monthly Charge allocable to each
Participant.
16. GENERAL PROVISIONS.
(a) The term of this Agreement shall continue in force
and effect for a period of time which shall be the greater
of, (a) the period of time any Bonds or bonds issued to
refund same are outstanding and unpaid, or (b) fifty (50)
years and so long thereafter with respect to each Participant
as such Participant shall be entitled to receive water
-32-
under Stillhouse Supply Agreements. The term of this
Agreement having expired, upon cessation of use of Project
by all Participants, all lands and personal property consti-
tuting a part of Project shall be considered as having been
purchased by the Participants by payments made hereunder,
and thereafter shall be owned by Participants as tenants -in-
common with their respective interests to be in proportion
to their obligations to make payments with respect to Debt
Service under Paragraph 5, above.
(b) All notices and communications provided for
herein shall be in writing and shall be either delivered or
mailed to Authority or Participants, and if mailed, shall be
sent certified mail, return receipt requested, postage pre-
paid, addressed as follows:
(i) If to Authority -
General Manager
Brazos River Authority
P.O. Box 7555
4400 Cobbs Drive
Waco, Texas 76714 -7555
(ii) If to Georgetown
City of Georgetown
P.O. Box 409
Georgetown, Texas 78627
-33-
(iii) If to Round Rock
City of Round Rock
214 East Main Street
Round Rock, Texas 78664
(iv) If to Jonah
Jonah Water Supply Corporation
Route 1, Box 112B
Georgetown, Texas 78656
(c) It is recognized by the parties that payments
made to Authority by Participants hereunder shall be the
only resource of Authority for the payment of Maintenance
and Operation Expense and Debt Service. It is further
recognized that in order. for Authority to be able to sell
Bonds most advantageously, it is necessary that prospective
purchasers of Bonds have assurance that each Participant is
unconditionally obligated to pay its allocated part of the
Debt Service. Therefore, it is agreed by each Participant
that it will pay its allocated share of the Debt Service
part of the Monthly Charges required under Subparagraph
5(b), above, whether or not,Project is ever completed and
whether or not it ever receives or continues to receive
water available to it from Lake Stillhouse Hollow under the
Stillhouse Supply Agreements in Lake Georgetown as a result
of operation of the Project. Further, each Participant
-34-
agrees that should any Participant become bankrupt or other-
wise financially unable to pay its allocated portion of the
Debt Service Charges, the amount due from such bankrupt or
otherwise financially unable Participant shall be allocated
among the other Participants and paid by them pro rata on
the basis of the part of the Debt Service part of the
Monthly Charge allocated to each Participant under the pro-
visions of subparagraph 5, above.
(d) This Agreement shall be subject to all valid
rules or regulations and laws applicable hereto passed or
promulgated by the United States of America, the State of
Texas or any governmental body or agency having lawful
jurisdiction or any authorized representative or agency of
any of them. Any tax or fee required to be paid by
Authority on account of ownership or operation of Project
shall be considered a part of Maintenance and Operation
Expense.
(e) Authority shall not have the right to demand
payment by Georgetown and /or - Round Rock of any obligation
undertaken by or imposed upon any of them by virtue of this
Agreement from funds raised or to be raised by taxation.
The obligations of such cities under this Agreement shall
-35-
never be construed to be a debt of any of such cities of
such kind as to require any such city under the Constitution
and laws of the State of Texas to levy and collect a tax to
discharge such obligation. Payments due by any city which
is a Participant hereunder shall be made from the revenues
of its water system. Each of such cities represents and
covenants to Authority that all payments to be made
hereunder by it shall constitute "Operating Expenses" of its
water distribution system as authorized by the State of
Texas and as defined in Article 1113 of the Revised Civil
Statutes of Texas as amended.
(f) Each Participant agrees to fix and collect such
rates and charges for water supplied through its water
distribution system as will make possible the prompt payment
of all expenses of operating and maintaining its water
distribution system, including all payments contracted
hereunder, and the prompt payment of the principal of and
interest on its obligations payable from the revenues of its
water distribution system.
(g) If by reason of force majeure, any party hereto
shall be rendered unable, wholly or in part to carry out its
obligations under this Agreement, then such party shall give
-36-
notice and full particulars of such force majeure in writing
to Authority if such party is a Participant or to each
Participant if such party is Authority within a reasonable
time after occurrence of the event or cause relied on, and
the obligations of the party giving such notice, insofar as
they are affected by such force majeure, shall be suspended
during the continuance of the inability thus claimed, but
for no longer period, and any such party shall endeavor to
remove or overcome such inability with all reasonable
dispatch. The term "force majeure" as employed herein shall
mean acts of God, strikes, lockouts, or other industrial
disturbances, acts of a public enemy, orders of any kind of
the government of the United States or the State of Texas,
or any civil or military authority, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurri-
canes, storms, floods, washouts, droughts, arrests,
restraints by government, civil disturbances, explosions,
breakages, or accidents to machinery, pipelines, pumps or
other facilities, partial or entire failure of water supply
or any other cause beyond the reasonable control of such
party. It is understood and agreed that the settlement of
strikes and lockouts shall be entirely within the discretion
-.37-
of the party having the difficulty and that the above
requirement that any force majeure shall be remedied_with
all reasonable dispatch shall not require settlement of
strikes and lockouts by acceding to demands of the opposing
party or parties when such settlement is unfavorable to it
in the judgment of the party having the difficulty. The
provisions of this Subparagraph 16(g) notwithstanding force
majeure shall not relieve any Participant of its obligations
to make payments to Authority as its share of the Debt
Service as required under the provisions of sub-
paragraph 5(a), above.
(h) Any controversy arising with respect to amounts
of money to be paid by any Participant to Authority
hereunder or with respect to availability of Surplus Water
or with respect to construction of this Agreement shall be
settled in accordance with the rules of the American
Arbitration Association in effect as of the time such
controversy shall arise and judgment upon the award may be
entered by any court having jurisdiction thereof, provided
that no award or judgment involving the Debt Service shall
result in Authority's inability to pay Debt Service as
same shall become due from monies produced by the Debt
-38-
Service part of the Monthly Charges. The other provisions
hereof notwithstanding, this provision for arbitration shall
never be construed to deprive the Texas Water Commission of
jurisdiction over any matter which would otherwise be sub-
ject to its jurisdiction.
(i) Authority shall maintain financial records
respecting its construction and operation of Project in
accordance with the procedures used by it in maintaining
records of its affairs which are audited annually by its
certified public accountants. All such records and
Authority's annual statement shall be available for inspec-
tion by any Participant at any reasonable time during
business hours.
(j) Authority agrees that while this Agreement
remains in force it will, for the purpose of assuring proper
maintenance, operation, repair and replacement of Project
from time to time, employ an independent engineer or
engineering firm or corporation having favorable repute for
skill and experience in such work and will, at all
appropriate times, cause such consulting engineer to submit
and give necessary or desirable advice and recommendations
concerning operations, renewals, replacements, extensions,
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betterments, and improvements of the Project to the end that
the Project shall be operated and maintained in the most
efficient and satisfactory manner. Further, Authority shall
cause the consulting engineer to make in writing a full sur-
vey, review and report of the physical condition of Project
once every five (5) years, commencing five (5) years from
the date when the Project becomes operational. A copy of
such survey, review and report shall be available to any
Participant at any reasonable time during business hours.
Authority further agrees that it will cause such consulting
engineer to include as part of the above report, such
engineer's recommendations and advice as to the proper main-
tenance, repair and operation of the Project, including
findings as to whether or not properties of the Project have
been maintained in good repair and sound operating
condition; the extension, improvements, renewals and replace-
ments which should be made during the ensuing five (5)
years; and the amounts and types of insurance which should
be carried by Authority on the Project.
(k) In event of default by any Participant in making
payments required of Participant under this Agreement,
Authority may, at its option, terminate this Agreement and
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Stillhouse Supply Agreements with such Participant or it may
recover amounts agreed to be paid by such Participant by
appropriate legal action. Should other Participants be
required to make increased payments to Authority pursuant to
Subparagraph 16(c), above, on account of failure of a
defaulting Participant to make payments to Authority,
Authority shall exercise the options to cancel provided in
the preceding sentence. In the event of exercise by
Authority of such options to cancel, the rights of the
Participant with respect to which such options are exercised
shall be made available to the other Participants who are
willing to assume the obligations of the cancelled
Participant under this Agreement and under Stillhouse Supply
Agreements pro rata on the basis of the percentages of total
water available to each under Subparagraph 5(a), above.
(1) Any waiver at any time by any party of its rights
with respect to default under this Agreement or with respect
to any other matter arising in connection with this
Agreement shall not be deemed the waiver with respect to any
subsequent default or matter.
(m) Nothing contained in this Agreement shall be
construed in any manner to abridge, limit or deprive any
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party hereto of any means which it would otherwise have of
enforcing any remedy, in law or in equity, for breach of any
of the provisions hereof, provided, however, that this provi-
sion shall not be deemed to eliminate or diminish the right
of any party to arbitration and to enforcement of
arbitration awards under subparagraph (h), above.
(n) This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of the respective
parties hereto, provided, however, that no assignment shall
have the effect of relieving the party making such assign-
ment of any liability hereunder, except that Jonah may be
relieved of liability upon assumption of its liabilities
hereunder by a political subdivision of the State of Texas
which shall succeed to ownership of its water distribution
system and certificate of convenience and necessity
respecting same. All assignments are subject to Authority
approval, which approval shall not be unreasonably withheld.
(o) As between Authority on the one hand and each
Participant on the other, each shall protect and save the
other harmless from any loss or damage to persons or
property occasioned on its own side of points of delivery of
water into Lake Georgetown or in connection with apparatus
-42-
or appurtenances including pumps, transmission lines and
conduits operated by it, except as to loss or damage caused
by the negligence of the other party, its agents, servants,
or employees and except as to injury or death of employees
of the other party.
(p) It is recognized by the parties that default by
Authority in its obligations hereunder can result in injury
to Participants which cannot be compensated by damages.
Therefore, the remedy of specific performance shall be
available to Participants and each of them for enforcement
of Authority's obligations hereunder.
(q) It is the intent of the parties to this Agreement
to provide to the maximum extent practical for the conser-
vation of water. Each Participant agrees that it is a con-
dition of this Agreement that it shall maintain and operate
its facilities in a manner which will prevent unnecessary
waste of water. Authority agrees that it will maintain and
operate Project in a manner that will prevent unnecessary
waste of water.
(r) Circulation of copies of this Agreement among
Participants to obtain the signatures of all Participants on
the same copies hereof would be inconvenient and result in
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delay. Therefore, this Agreement has been prepared in
multiple copies with two copies being prepared for signature
on behalf of Authority, on the one hand, and on behalf of
each Participant, alone, on the other hand. When all copies
have been signed on behalf of Authority and each of the two
copies prepared for signature for each Participant, alone,
has also been signed by each Participant, Authority shall
give written notice of such fact to all Participants and
this Agreement shall thereupon become effective. Authority
shall receive possession of one copy of this Agreement exe-
cuted by it on the one hand and each Participant, alone, on
the other hand. Each Participant shall receive possession
of one copy executed by Authority on the one hand and it
alone on the other. The Agreement, when it becomes effec-
tive, shall be binding on Authority and all Participants and
subject to enforcement by any party against any other.
(s) This Agreement shall not prevent a Participant
from selling or transferring its interests hereunder to
Authority in the future as a part of a regional water supply
agreement by which the Participant purchases a treated water
supply from Authority. It is understood, however, that
Authority's willingness and ability to undertake such an
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arrangement in the future is contingent upon its ability to
undertake such obligations without impairing bond obliga-
tions or its obligations to other Participants.
17. SPECIAL ASSIGNMENT. Jonah agrees that, not-
withstanding any and all other provisions of this Agreement,
all rights of Jonah hereunder are subject to the condition
that Jonah, will, on written request from Authority, take
all steps necessary in order to cause the organization of an
assignee ( "Assignee ") which is a political subdivision of
the State of Texas created to succeed to the rights and
obligations of Jonah; that Assignee shall be organized; that
Jonah, upon completion of organization of Assignee, will
assign its rights under this Agreement unto Assignee; and
that failure by Jonah to make such assignment within a
reasonable time after the making of such written request by
Authority, shall result in cancellation of the rights under
this Agreement of Jonah. Authority agrees that upon
transfer of Jonah's rights under this Agreement to Assignee,
Jonah's obligations to Authority under this Agreement shall
terminate.
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Dated this the 9 day of JULY
ATTEST:
Assistant Secretary
BRAZOS_RIVER AUTH
Carson H. .ge,
General Manager
BY
AT °ST:
City Secretary
CITY OF ROU/Wo R'xx
BY 7 t/L
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RITY
, 1986.
"Authority"
Mayor
"Participant"