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R-90-1533 - 11/8/1990WHEREAS, on July 20, 1990, the City of Round Rock filed a Petition with the Texas Water Commission seeking Commission review of the rates and fees charged to the Brushy Creek Municipal Utility District ( "District "),and WHEREAS, in the event the Commission agrees with the City's proposed rate structure, certain of the fees presently charged will be eliminated, and WHEREAS, it is possible that the Commission could order new rates in effect from the date the petition was filed, and WHEREAS, an Agreement between the City, the District, Hy -Land Joint Venture, Hy -Land North Joint Venture, Hy -Land Resources, Inc. (collectively "Hy- Land ") and EC Joint Venture has been proposed whereby the City will hold the fees paid since July 20, 1990 in trust pending the outcome of the rate review proceeding, 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 an Agreement with the District, Hy -Land and EC Joint Venture, a copy of said Agreement being attached hereto and incorporated herein for all purposes. RESOLVED this 8th day of November, 1990. AT EST: RS11090C LAND, Ci y Secretary RESOLUTION NO. 1533R 11- MIKE ROBINSON, Mayor City of Round Rock, Texas DRAFT 10/31/90 ESCROW AGREEMENT AMONG THE CITY OF ROUND ROCK, BRUSHY CREEK MUNICIPAL UTILITY DISTRICT, HY -LAND JOINT VENTURE, HY -LAND NORTH JOINT VENTURE, HY -LAND MANAGEMENT, INC., AND EC JOINT VENTURE WHEREAS, on October 14, 1986, the City of Round Rock ( "Round Rock ") and Brushy Creek Municipal Utility District (formerly Williamson County Municipal Utility District No. 2) (the "District ") entered into that certain "Agreement Between the City of Round Rock and Williamson County Municipal Utility District No. 2 for the Sale of Potable Water" (the "Water Agreement "). WHEREAS, the Water Agreement provides that Round Rock will charge the District a "Prepayment Fee" (the "Prepayment Fee," as specified in Section 3.3 of the Water Agreement), a "Reserved Commitment Charge" (the "Reserved Commitment Charge," as specified in Section 4.3 of the Water Agreement) and a "Surcharge" (the "Surcharge,' as specified in Section 4.4 of the Water Agreement) (such charges being collectively referred to hereinafter as the "Water Agreement Fees "), among other charges. WHEREAS, the District, Hy -Land Joint Venture, Hy -Land North Joint Venture and Hy -Land Management, Inc. (collectively, "Hy- Land "), entered into that certain "Agreement Between Williamson County Municipal Utility District No. 2, Hy -Land Joint Venture, Hy- Land North Joint Venture, and Hy -Land Management, Inc., Concerning Payment of and Security for Reserved Commitment Charge and Surcharge" (the "Security Agreement ") dated October 13, 1986, whereby all parties to said Agreement other than the District agreed to pay to the District, which would in turn pay to Round Rock, the Reserved Commitment Charge and the Surcharge. WHEREAS, certain of the responsibilities of the parties to the Security Agreement other than the District have been, and continue to be, performed by EC Joint Venture ( "E.C.') so that EC Joint Venture has paid and continues to pay a portion of the Reserved Commitment Charge and the Surcharge under the Security Agreement. WHEREAS, Hy -Land, E.C., and other persons who connect to the District's water or wastewater system are required by the District to pay, at the time of connection, the Prepayment Fee in the amount set by Round Rock and charged to the District under the Water Agreement in order that the District may in turn pay the Prepayment Fee to Round Rock for each such connection. WHEREAS, on December 28, 1989, Round Rock adopted Ordinance No. 2440 specifying a rate for wholesale water service to the District which rate does not specifically provide for payment of the Water Agreement Fees. WHEREAS, on July 20, 1990, Round Rock filed its "Original Petition of the City of Round Rock, Texas" (the "Rate Petition ") against the District with the Texas Water Commission (the "Commission ") seeking to have the Commission review the prices that Round Rock charges and proposes to charge the District for water, and establish just, reasonable and non - discriminatory terms and prices for the water to be supplied to the District by Round Rock. WHEREAS, the parties to this Agreement believe that the Commission's final order made in connection with the Rate Petition will clarify whether Hy -Land and E.C. are required to pay the Water Agreement Fees to the District and, correspondingly, whether the District is required to pay the Water Agreement Fees to Round Rock; WHEREAS, Hy -Land and E.C. are willing to pay the Water Agreement Fees to the District, but only under protest and pursuant to the terms of this Escrow Agreement, and, likewise, the District is willing to continue to pay the Water Agreement Fees to Round Rock, but only under protest and pursuant to the terms of this Escrow Agreement. WHEREAS, the District is willing to accept payment of the Water Agreement Fees under protest by Hy -Land and E.C. as provided in this Escrow Agreement, and likewise Round Rock is willing to accept payment of the Water Agreement Fees by the District under protest as provided in this Escrow Agreement. NOW, THEREFORE, IT IS HEREBY AGREED among the parties as follows: 1. The parties agree that during the pendency of the Rate Petition, the District will continue to pay the Water Agreement Fees to Round Rock, unless otherwise ordered or provided by the Commission; provided, however, such payments shall be made under protest and shall be held in escrow pursuant to the terms of Section 3, below. Round Rock agrees that it will not claim or allege any default by the District under the Water Agreement by reason of the fact that such payments are being made into escrow as provided in this Escrow Agreement. 2. Hy -Land and E.C. agree to continue paying the Water Agreement Fees to the District, for the sole purpose of allowing the District to pay the Water Agreement Fees to Round Rock for the purpose of being received into the escrow account as hereinafter provided in Section 3; provided, however, that such payments by Hy -Land and E.C. are being made under protest and for the sole purpose of being placed into the escrow account as hereinafter provided. 3. All Water Agreement Fees paid after July 20, 1990 by the District to Round Rock, including Water Agreement Fees paid by Hy -Land and E.C. to or on behalf of the District shall be placed into an escrow account (the "Escrow Account ") which shall be established in the name of Round Rock, as Trustee (the "Trustee ") at Bank (the "Bank"). All monies in the Escrow Account shall be invested as deemed ATTEST: appropriate by the Trustee and all interest shall accrue and be a part of the Escrow Account. _ 4. At the time the order of the Texas Water Commission in the Rate Case shall be final and non - appealable, if the Commission order provides for the collection of the Water Agreement Fees from the District pursuant to the terms of the Water Agreement, then all funds in the Escrow Account shall be paid to Round Rock; otherwise, at that time all monies in the Escrow Account shall be paid to Hy -Land and E.C. and such other persons who paid the Water Agreement Fees, together with any accrued interest on such payments. This Agreement shall be effective from and after ,1990. THE CITY OF ROUND ROCK By Joanne Land, City Secretary 3 Mike Robinson, Mayor ATTEST: Board of Directors , Secretary 4 BRUSHY CREEK MUNICIPAL UTILITY DISTRICT . By - James Donaldson, President Board of Directors HY -LAND JOINT VENTURE By - David C. Bodenman, Agent and Attorney -in -Fact HY -LAND NORTH JOINT VENTURE By David C. Bodenman, Agent and Attorney -in -Fact hyland /escrow.egr 5 HY -LAND RESOURCES, INC. By EC JOINT VENTURE By Debra Sale Trust, Managing Partner By Ed Wendler, Jr., Trustee DATE: November 5, 1990 SUBJECT: City Council Meeting, November 8, 1990 ITEM: 12.C. Consider a resolution authorizing the Mayor to enter into an agreement with Brushy Creek Municipal Utility District, Hyland Resources Inc. and E C Joint Venture regarding water fees pending the Texas Water Commission rate case. STAFF RESOURCE PERSON: Steve: Sheets STAFF RECOMMENDATION: Last July, the City filed a petition for rate review with the Texas Water Commission. If the City prevails, certain fees paid by developers in the Brushy Creek MUD may be subject to rebate. This agreement merely provides for these fees to be placed into a separate interest bearing account pending the final Texas Water Commission decision.