R-95-10-12-18A - 10/12/1995WHEREAS, the City of Round Rock ( "City ") and Brushy Creek
Municipal Utility District ( "District ") have one water rate case
pending before the Supreme Court of Texas, two water rate cases
pending before the Texas Natural Resource Conservation Commission,
and one lawsuit pending before the 277th District Court in
Williamson County, and
WHEREAS, the City and District have agreed upon a full and
final settlement and compromise of the aforementioned claims and
actions, and
WHEREAS, the City Council wishes to approve the proposed
Compromise and Settlement Agreement attached hereto, 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 the Compromise and Settlement Agreement which is
attached hereto as Exhibit "A."
RESOLVED this 12 day of October, 1995.
ATTEST:
E LAND, City Secretary
0, \WPDOCS \CITY \ECMDD \RESOLDTO.WPD /s1s
vptu wKe
RESOLUTION NO. R- 95- 10- 12 -18A
CHARLES CUL•E'''ER, Mayor
City of Round Rock, Texas
STATE OF TEXAS
COMPROMISE AND SETTLEMENT AGREEMENT
COUNTY OF WILLIAMSON
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) KNOW ALL MEN BY THESE PRESENTS:
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COME NOW the City of Round Rock (hereinafter referred to as "the City ") and the Brushy
Creek Municipal Utility District (hereinafter referred to as the District ") and enter into this
Compromise and Settlement Agreement (hereinafter referred to as "Agreement ") of certain claims
as follows:
RECITALS
L
1.1 WHEREAS, in 1986, the District entered into a Water Supply Contract (the "Water
Contract ") with the City. The Water Contract provided the terms under which the City would
provide the District with water through the year 2006, including the price for water and the capital
recovery fees to be paid for each new connection. In 1991, the City petitioned the Texas Water
Commission, predecessor to the Texas Natural Resource Conservation Commission (hereinafter
collectively referred to as "the TNRCC"), seeking to increase the fees to be charged to the District.
In 1992, the TNRCC granted the City its requested relief and authorized the City to charge higher
fees to the District for water service. Such fees include minimum fixed rates, higher water rates, and
increased capital recovery fees for each new connection. The District Court of Travis County
affirmed the TNRCC's order.
1.2 WHEREAS, the District appealed such order and in March, 1994, the Court of
Appeals reversed the District Court's order and remanded the cause of action to the District Court
with instructions to the District Court to further remand the matter to the TNRCC with instructions
for the TNRCC to dismiss the petition for lack of jurisdiction. The District and the TNRCC filed a
motion for re- hearing on the matter, which motion was denied. Thereafter, the TNRCC filed an
appeal of the Court of Appeals decision with the Texas Supreme Court.
1.3 WHEREAS, since the time the City petitioned the TNRCC for permission to increase
its fees charged to the District, the City has on two occasions increased such rates. On both
occasions the District filed a rate appeal with the TNRCC, which appeals are pending before the
TNRCC. The District has continued to pay the increased water rates under protest and continued
to charge the capital recovery fees to those persons seeking taps for new construction within the
District.
1.4 WHEREAS, in June, 1993, the City filed suit seeking a declaration that the TNRCC's
prior ruling regarding the Water Contract rendered the Water Contract null and void; that the Water
Contract is rescinded due to fraudulent misrepresentations by the District; that the District breached
COMPROMISE AND SETTLEMENT AGREEMENT PAGE I
the Water Contract; and seeking $78,268.43 plus interest as damages. The District has filed a plea
to the jurisdiction of the court and a plea in abatement, both of which challenge the action before the
court because of the ongoing appeal of the TNRCC's order. Oral arguments have been heard on the
plea to jurisdiction and plea to abate, but the court has not ruled on the pleas. No trial on the merits
has been set.
1.5 WHEREAS, the City and the District have agreed upon a full and final settlement and
compromise of any and all claims, demands and causes of action that exist as a part of the pending
rate disputes. The parties acknowledge that all claims between them as set forth above are in dispute.
The compromised settlement of their claims is based upon the uncertainty of litigation and is not to
be construed as an admission of liability by any party.
AGREEMENT
IL
Now, therefore, in consideration of the mutual promises and agreements contained herein,
including the Recitals set forth above, the parties, intending to be legally bound, desire to compromise
and settle all claims and do hereby agree as follows:
2.1 Case Number 95 -0021 before the Supreme Court of Texas will continue to proceed
to a final decision. Once the final decision in Case Number 95 -0021 is reached, the past and future
rates shall be based either on the "Contract Rate " or the " TNRCC methodology," as appropriate
based on the Supreme Court's ruling.
2.2 The remaining rate cases presently filed with the TNRCC, i.e., Nos. 9849 -A and
30221 -A, shall be dismissed. During the interim between the dismissal of those cases and the decision
by the Supreme Court in Case Number 95 -0021, the parties shall accept and utilize the City's
interpretation of the TNRCC methodology as modified by the District's consultant, Gebhard -Sarma
Group, Inc., in dealing with water rates. The formula for the computation of the TNRCC
methodology as modified by Gebhard - Sarma Group, Inc. is attached hereto as Attachment A.
Additionally, the calculations under the TNRCC methodology for the years 1992, 1993, and 1994
are contained in Attachment B hereto.
2.3 The City shall no longer collect water capital recovery fees from the District, unless
the District becomes a permanent water customer of the City in the future.
2.4 The City shall take a non -suit and dismiss Cause No. 93- 029 -C277 within 15 days of
the execution of this Agreement.
2.5 Each party further warrants that it has not assigned, transferred, or conveyed the
claims settled and compromised herein, that it is the sole holder of said claims, that each party is duly
authorized to execute this Agreement for the purposes and in the capacity set forth herein, and that
any individual or business entity executing this document is not under any legal, physical, or mental
COMPROMISE AND SETTLEMENT AGREEMENT PAGE 2
disability on the date of execution. The parties further agree that the specific warranties set forth in
this paragraph shall survive the execution of this Agreement.
MUTUAL RELEASE
HL
3.1 Release by City. Now therefore, know all by these presents that the City for and in
consideration of the mutual promises described above, does hereby RELEASE, REMISE, ACQUIT,
FOREVER DISCHARGE AND COVENANT TO HOLD HARMLESS the District, and its officers,
directors, employees, attorneys, predecessors, successors, assigns, administrators, agents, insurers
and legal representatives, that might in any manner be liable to the City for any and all claims and
causes of action, whatsoever the nature, known or unknown, past or present, arising out of the
Water Supply Contract, as described above. By signature of its representative below, the City does
hereby acknowledge that the consideration as set out above is a full, final and complete satisfaction,
settlement and discharge of any and all liability whatsoever by reason of any manner, against the
District in any way connected with or arising out of such aforesaid transaction.
3.2 Release by District: Now therefore, know all by these presents that the District for
and in consideration of the mutual promises described above, does hereby RELEASE, REMISE,
ACQUIT, FOREVER DISCHARGE AND COVENANT TO HOLD HARMLESS the City, and its
officers, directors, employees, attorneys, predecessors, successors, assigns, administrators, agents,
insurers and legal representatives, that might in any manner be liable to the District for any and all
claims and causes of action, whatsoever the nature, known or unknown, past or present, arising out
of the Water Supply Contract, as described above. By signature of its representative below, the
District does hereby acknowledge that the consideration as set out above is a full, final and complete
satisfaction, settlement and discharge of any and all liability whatsoever by reason of any manner,
against the City in any way connected with or arising out of such aforesaid transaction.
INDEMNIFICATION
IV.
4.1 All information and documents furnished or to be furnished to any other party
hereunder are true, accurate and complete. Each party hereto shall hold every other party hereto
harmless from and against any losses, damages, costs or expenses (including attorney's fees) incurred
by such other parties as a direct or indirect result of (i) the breach of any representation or warranty
contained in this Agreement, (ii) any breach or default by the party under any of the covenants or
agreements contained in this Agreement to be performed by the party, or (iii) any claim, demand, or
cause brought by or through the parties arising out of the aforesaid real estate transaction which may
hereafter be asserted against them. The parties acknowledge they are each responsible for payment
of their own costs or expenses which they have incurred or which has been incurred on their behalf
to the date of this agreement.
COMPROMISE AND SETTLEMENT AGREEMENT PAGE 3
MISCELLANEOUS PROVISIONS
V.
5.1 Each party warrants that it has read and understands the effects of the foregoing
Agreement and executes the same of its own free will and accord for the purposes and considerations
set forth herein.
5.2 It is understood and agreed that this Agreement shall be governed by, construed, and
enforced in accordance with and subject to the laws of the State of Texas.
5.3 The parties agree that proper venue for enforcing the terms of this Agreement shall
be in the Courts of Williamson County, Texas, and that the prevailing party in any action brought
hereunder shall be entitled to recover their reasonable attorney's fees and all court costs.
5.4 Each party further warrants that it understands that this Agreement is contractual and
not merely recital and that it has had an opportunity to review the Agreement with legal counsel of
its choice.
5.5 This written agreement shall be effective on the date last executed by all the parties
and shall not be effective as to any party unless executed by all the parties.
5.6 This Agreement embodies the entire agreement between the parties hereto and
supersedes all prior agreements and understandings between the parties hereto relating to the subject
matter hereof.
5.7 This written Agreement represents the final agreement between the parties and may
not be contradicted by evidence of prior contemporaneous or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties. The provisions of this
Agreement and the other documents delivered in connection herewith may be amended or waived
only by an instrument in writing signed by the parties affected by such amendment or waiver.
5.8 This Agreement maybe executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.
SIGNED this ) 011 day of (odt &A.) , 1995.
COMPROMISE AND SETTLEMENT AGREEMENT PAGE 4
THE STATE OF TEXAS
COUNTY OF WILLIAMSON
A 1ArTi,N:Z j
hb1a ;', u s'a W d T_r
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CITY OF R '' i ROCK
By:
Printed Name:
Title:
r
CU(.PEP/ .e.
BRUSITYCREEKMUNICIPALUTILITYDISTRICT
By: '
Printed N : .1 A ,-nE.f
Title: PQESI4FvT
IMF
BEFORE ME, the undersigned authority, on this day personally appeared (1 //4,X CeifL.
.65 PE7',PE�
w y €,e e /Ty OF I p 2c/&) ZOC,e known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the
purposes and considerations therein expressed, in the capacity therein stated, as the act and deed of
said corporation.
SWORN AND SUBSCRIBED TO BEFORE ME on this day of October, 1995.
0,10,u,h/yL z
Notary Public, State of Texas
COMPROMISE AND SETTLEMENT AGREEMENT PAGE 5
THE STATE OF TEXAS
COUNTY OF WILLIAMSON
BEFORE ME, the undersigned authority, on this day personally appeared Jimmy Griffith,
President, Board of Directors, Brushy Creek Municipal Utility District, known to me to be the person
whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the
same for the purposes and considerations therein expressed, in the capacity therein stated, as the act
and deed of said corporation.
SWORN AND SUBSCRIBED TO BEFORE ME on this / 0 day of October, 1995.
APPROVED AS TO FORM ONLY:
SHEETS & CROSSFIELD, P.C.
309 E. Main Street
Round Rock, Texas 78664
(512) 255-887
By:
Attorneys for City of Round Rock
DIETZ & ASSOCIATES, P.C.
106 Fannin Avenue East
Round Rock, Texas 78664
(512) 244 -9314
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Attorneys for Brushy Creek Municipal
Utility District
Notary Public, State of Texas
COMPROMISE AND SETTLEMENT AGREEMENT PAGE 6
GEBHARD SARMA GROUP, INC.
Engineers, Planners, and Regulatory Consultants
Principals
B.E. (Barry) Sarma, P.E.
Bruce 5. Aupperle, P.E.
Felix 1. Menke, P.E.
511 West 7th Street
Austin, Texas 78781
512 476 -6595
Fox 512 476-3439
ATTACHMENT A
The following two sheets describe the computation of the methodology used
by the Texas Natural Resource Conservation Commission (TNRCC) in Docket
8600 -M and used to compute rates to be charged Brushy Creek Municipal Utility
District ( BCMUD) by the City of Round Rock for FY 1992, FY 1993, and FY
1994. These two sheets list the formulas used in the spreadsheet program, EXCEL.
The first sheet computes allocation factors from water usage data input, and the
second sheet calculates rates using the allocation factors from the first sheet and
the cost data input.
The data required for the first sheet includes:
Billed Gallons in Round Rock (C,11), Estimated Usage by RR Municipal
Departments (C,13), Billed Gallonage to All Wholesale Customers (E- 0,14), Peak
Day Usage by All Wholesale Customers (F,27 -34), Round Rock System
Connections (I,47), BCMUD Connections (I,48), and Miscellaneous Income by
Category (B,57 -63).
The data required for the second sheet includes only Expenses by Category
(W,12 -60).
Allocation factors on the second sheet that were determined in Docket 8600
include Customer Service Allocation of Materials and Supplies (AJ,31), Customer
Service Allocation of Capital Expenditures (AJ,33), and Base Related Retail
Allocations of Regional Water Line Debt (AA,45), Pretreatment/Laboratory
(AA,47), GO Debt Service (AA,53), Revenue Bond Debt Service (AA,54), and
Revenue Bond Coverage (AA,55).
Pretreatment/Laboratory Expenses were not separately listed expenses of the
City of Round Rock in Docket 8600 but were added as an applicable expense for
subsequent fiscal years.
A 1 B 1 C 1 D 1 8 1 F I 3 I 11 1 1 I 1 1 N 1 1.
5
a
i
55
31
S2
A
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7NCC 05o3713. MO.
MID 6YLONE 31.610 COL
CALCULATION OF GALLONS BILLED
.
1077001 •
PAOEIOFS
FY 556
LOSSES S MIA/ID HA50
•
617. 11OLL P -OLNC. DEPT
YAt6 '
ADM. Y M UNTO (1,24
..413.011
2352
12606
7576
03362
3
X.
.1L
20
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CALCULATION OF ALLOCATION FACTORS
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15 OMam.r
a
27 nan7 R.
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.54
11)55
e _
.537/30
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.525435
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•
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.C331:37
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-.nom
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51 NIC11030
.115
.5551305
.=31=7
57
5NDw •
.3711G31
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.•5327165
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6113
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..13385
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457 •
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.
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36
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0213(0RC51)
..4155027
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.1077 5734)
.535.537
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..76.227
.43505
-.men
31
IS
At
.SL
42
n
44
SELECTED ALLCCATION FACTORS
45
47
48
.2!
53
... - - 0 0( 'trS '"�:.! cf:�'
..1x.2.. . _ 3.,- Y • .�x..;faba' N ..
BASE DMA CAPACITY. .007
eE- s :....... - . -. S• > - of •
.::.v.•.. .'N `. •. k:.,. Ci?;1'^r'' t'n •:°,#.. Y^; w; "
SYSTEM COMEC11043. 1126 •
BASE COSTS ALL005T10N. ..=577537
6=1250 CONNECTIONS. 1 '
MESS 00515 ALLOCATION .1 -d8
9=1100 COM ILLOCA11 .)4537
i1
R
53
0002517
OB0CN15•50M
Cobol,
Oaia.r
Davao
Ommal
IOW MA
MO •
Mat T.P.
O1Maaa 51104.
..557
666 •
Waxy_ Font
Calms 51.0
..525
5716 •
MawrlaW31m 805 ME.F
Claims 91.b
.850
2
27167 •
Nur. Ir51611Nm13
01r4 P
.BMA
1655
Will! II 7713 050
Cmte1 7 3ta1M
.451
nen •
Water -Manna
0.31.
..552
35103
Mar- Mew N Mina 0IF
OUmar Santo.
.16
.SUM)557:86)
Cle00y7440
TDM
5114(6733)
X116057003)
P53 320
.16516015)
.1.16
N • DENOTES VALUES W55CN REQUIRE 1171.51100 TIE MODFI
rm■s �. .mnrfflrimom
1lbrnue.ut Flub
m Pumn.I B..vRrr 170670 ..oD.O ..T16 0 v. - 0 o .MU16Mn
� ri� ..0JII 11S
0
El tnTrEeN 0=11111 COMIIMION
ursiimm T
_rr .rs
..M161N16
REV. REQUIREMENT
SOWS
TOTAL OEM EXP.
T1u.Mr b Wow! Fuld
.1 -Y16
TM16 G .[t ..1631
k'. 4n nc: Aive•L -0M1 t�:�: 'fi
BASE COSTS
CAPACITY COSTS
DATE: October 10, 1995
SUBJECT: City Council Meeting - October 12, 1995
ITEM: 21.A. Consider a resolution authorizing the Mayor to
execute a Compromise and Settlement Agreement
regarding three water rate cases and a lawsuit
involving the City and Brushy Creek Municipal
Utility District.