R-97-04-24-10A - 4/24/1997WHEREAS, the City of Round Rock ( "City ") has previously
entered into a Wastewater Disposal Contract with the Brazos River
Authority and the Lower Colorado River Authority (collectively "the
Alliance "), and
WHEREAS, one of the purposes of the Wastewater Disposal
Contract is to provide for the treatment of wastewater on a
regional basis, and
WHEREAS, the City of Cedar Park would like to enter into a
similar agreement with the City and the Alliance, 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 a revised Wastewater Disposal Contract which
includes the City of Cedar Park, a copy of said revised contract
being attached hereto as an exhibit.
RESOLVED this 24th day of April, 1997.
ATTEST:
E LAND, City Secretary
K: WPDOCS \RESOLDTI \AS00■24A.NPD /e1e
RESOLUTION NO. R- 97- 04- 24 -10A
ii6
CHARLES CULP PER, Mayor
City of Round Rock, Texas
WASTEWATER DISPOSAL CONTRACT
dated
1997
among
BRAZOS RIVER AUTHORITY
LOWER COLORADO RIVER AUTHORITY
CITY OF CEDAR PARK
and
CITY OF ROUND ROCK
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITION OF TERMS. 4
Section 1.02. INTERPRETATION. 13
ARTICLE II
DESIGN, ACQUISITION AND
CONSTRUCTION OF SYSTEM BY THE ALLIANCE
Section 2.01. ALLIANCE RESPONSIBILITIES. 13
Section 2 02 ALLIANCE MODIFICATIONS 15
Section 2.03. ACQUISITION AND CONSTRUCTION OF
PHASE I OF THE SYSTEM. 15
Section 2.04. CONDITIONS PRECEDENT TO CONSTRUCTION. 17
Section 2.05. CONSTRUCTION OF PHASE II 17
Section 2.06. EXPANSIONS BEYOND PHASE II 19
Section 2.07. CONSTRUCTION OF REQUIRED IMPROVEMENTS. 20
Section 2.08. LCRA RIGHT TO RESERVED CAPACITY. . 20
Section 2.09. DEPOSITS ON FUNDING DATES. 20
ARTICLE III
•• t 1 la •► • u .
Section 3.01. OPERATION 21
Section 3.02. COMPETITIVE BIDS. 21
Section 3.03. PAYMENTS TO BRA FOR OPERATION OF SYSTEM 22
Section 3.04. OPERATION & MAINTENANCE MANAGEMENT FEE 22
Section 3.05. COOPERATION DURING MAINTENANCE OR EMERGENCY
i
22
ARTICLE IV
RFSF.RVFT) CAPACITY AND DISCHARGE OF WASTEWATER
Section 4.01. DISCHARGE QUANTITIES 23
Section 4.02. POINT(S) OF ENTRY 24
Section 4.03. RATE AND QUANTITY AT POINT(S) OF ENTRY. 24
Section 4.04. DISCHARGE QUALITY. 24
Section 4.05. REGULATIONS 25
Section 4.06. INDUSTRIAL WASTES 25
Section 4.07. SYSTEM LIMITATIONS 26
Section 4.08. RESPONSIBILITY FOR TREATMENT
AND DISPOSAL OF WASTEWATER. 26
Section 4.09. METERING. 26
Section 4.10. UNIT OF MEASUREMENT 27
ARTICLE V
SYSTEM BIIDGFTS AND CHARGES
Section 5.01. ESTABLISHING BUDGETS AND CHARGES. 27
Section 5.02. CUSTOMER DISPUTES. 29
Section 5.03. CHANGES FROM NEW CUSTOMERS,
EMERGENCIES AND LEGAL ACTION. 29
Section 5.04. CAPITAL CHARGES. 30
Section 5.05. FLOW CHARGES 32
Section 5.06. HOW, WHEN AND WHERE PAYMENTS ARE TO BE MADE 33
Section 5.07. DEFAULT. 33
Section 5.08. CAPITAL MANAGEMENT FEE 34
ARTICLE VI
TECHNICAL. REVIEW COMMITTEE
Section 6.01. COMPOSITION OF TECHNICAL REVIEW COMMITTEE. ... 34
Section 6.02. RESPONSIBILITY OF TECHNICAL REVIEW COMMITTEE .. 34
ARTICLE VII
GENERAL PROVISIONS
Section 7.01. NO TAX OBLIGATION OF CUSTOMERS. 35
Section 7.02. PAYMENTS TO CONSTITUTE
OPERATING EXPENSES OF CUSTOMER 36
Section 7.03. CUSTOMER RATES, FEES AND CHARGES. 36
Section 7.04. USE OF PUBLIC PROPERTY. 36
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Section 7.05. FORCE MAJEURE 37
Section 7.06. INSURANCE. 37
Section 7.07. GOVERNMENTAL REGULATION 37
Section 7.08. CUSTOMER COOPERATION TO
ASSURE REGULATORY COMPLIANCE 38
Section 7.09. CONTRACTS WITH OTHERS IN RELATION TO SYSTEM. 38
Section 7.10. NON - INFRINGEMENT 39
Section 7.11. SALE OR TRANSFER OF SYSTEM;
CUSTOMERS' RIGHT OF FIRST REFUSAL 39
Section 7.12. LCRA RIGHT OF FIRST REFUSAL TO
PURCHASE CEDAR PARK TREATMENT PLANT. 39
Section 7.13. EXPANSION OF CEDAR PARK TREATMENT PLANT. 40
Section 7.14. ANNUAL REPORT OF SYSTEM AND AUDITS. 40
Section 7.15. NO ADDITIONAL WAIVER IMPLIED. 40
Section 7.16. ADDRESSES AND NOTICE. 40
Section 7.17. MODIFICATION. 42
Section 7.18. ASSIGNABILITY 42
Section 7.19. SEVERABILITY. 42
Section 7.20. MERGER. 42
ARTICLE VIII
NEGOTIATION AND MEDIATION OF DISPUTES
Section 8.01. AGREEMENT REGARDING REMEDIES 42
Section 8.02. AGREEMENT TO NEGOTIATE FIRST TO RESOLVE ISSUES. 43
Section 8.03. AGREEMENT TO MEDIATE 43
Section 8.04. PRESENTATION OF WRITTEN CLAIM
REGARDING DISPUTES NOT RESOLVED BY NEGOTIATION. 43
Section 8.05. PERFORMANCE DURING MEDIATION 43
Section 8.06. APPOINTMENT OF MEDIATOR. 43
Section 8.07. RULES FOR MEDIATION 43
Section 8.08. EXCEPTION 45
ARTICLE IX
EFFECTIVE DATE AND TERM OF AGREEMENT
Section 9.01. EFFECTIVE DATE. 45
Section 9.02. TERM OF AGREEMENT. 45
Section 9.03. EFFECT ON CERTAIN PRIOR AGREEMENTS. 45
iii
WASTEWATER DISPOSAL CONTRACT
This agreement (the "Agreement ") is entered into between the Brazos River Authority
( "BRA "), the Lower Colorado River Authority ( "LCRA ") acting together pursuant to the Brazos -
Colorado Water Alliance (the "Alliance "), the City of Round Rock ( "Round Rock ") and the City
of Cedar Park ( "Cedar Park "). Round Rock, Cedar Park and, to the extent contemplated by
Section 2.08, LCRA are hereafter collectively referred to as the "Customers."
RECITALS
LCRA and BRA have recognized that there are areas in the vicinity of the boundaries of
the Colorado and Brazos River Basins in which each can provide services which can be better
provided if they cooperate and pool resources.
Pursuant to such recognition, they have entered into an Alliance to implement such
cooperation and pooling of resources, including financial and engineering resources and BRA's
experience in the operation of regional sewerage systems.
The Alliance is not a separate entity, but a cooperative effort and dedication of resources
of LCRA and BRA.
The undertakings of each of LCRA and BRA provided for in this Agreement are in
furtherance of the purposes of the Alliance and are, in that sense, activities of the Alliance.
Because the Alliance is not a separate entity, the undertakings of each of LCRA and BRA
in this Agreement, though in furtherance of the purposes of the Alliance, are undertakings of the
party specified as making same and are, in no sense, undertakings of the other, so that each of
LCRA and BRA shall be solely responsible for its own undertakings provided in this Agreement
and neither LCRA nor BRA shall be responsible for the performance by the other of its
undertakings provided herein.
The City of Austin ( "Austin "), Round Rock and Brushy Creek Water Control and
Improvement District No. 1 (the "WCID ") entered into a certain "Wastewater Disposal
Agreement ", as amended (the "Wastewater Disposal Agreement "), setting forth terms and
conditions of those parties to participate in the joint financing, construction, operation and
maintenance of the WCID's system (the "WCID System ") intended to provide wastewater
transportation and treatment services for that portion of the Brushy Creek watershed located within
the respective corporate limits and /or extraterritorial jurisdictions of Austin and Round Rock.
Pursuant to the Wastewater Disposal Agreement, the WCID acquired or constructed in its
name for the benefit and at the expense of Austin and Round Rock, engineering studies and plans
of the proposed WCID System, a wastewater discharge permit, designation of the WCID as the
regional provider of wastewater services for a portion of the Brushy Creek watershed, portions
of the proposed wastewater collection and transportation components of the WCID System and
certain easements and property rights appurtenant thereto.
Additionally, Austin and Round Rock transferred to the custody and control of the WCID
certain funds, equipment and other assets for use with the WCID System.
Austin and Round Rock also respectively acquired or constructed or determined to use in
their own names certain land, wastewater facilities and property rights in contemplation of the
later use by or dedication of same to the WCID.
By virtue of that certain "Agreement for Termination of Brushy Creek Regional
Wastewater Disposal Agreement" effective September 19, 1994, as amended on September 18,
1995 and March 19, 1996 (the "Termination Agreement "), Austin, Round Rock and the WCID
set forth terms and conditions for termination of the Wastewater Disposal Agreement, for transfer
of all WCID System assets acquired or constructed by the WCID to Austin and Round Rock and
for assumption by Austin and Round Rock of all WCID System obligations, liabilities and
responsibilities.
Austin, Round Rock and the WCID have implemented the Termination Agreement
which resulted in Austin and Round Rock owning, jointly and severally, all of the assets formerly
held by the WCID as part of the WCID System.
Each Customer desires to accomplish the implementation of a regional wastewater
collection, treatment and disposal system for the benefit of the Customers.
LCRA and BRA, acting in furtherance of the purposes of the Alliance, agree to utilize their
collective financial, engineering and operational resources and expertise to assist in the
implementation of the regional wastewater collection, treatment and disposal system (hereafter,
the "System ").
On July 7, 1996, LCRA, BRA and Round Rock entered into that certain "Wastewater
Disposal Contract" and "Supplemental Agreement" (collectively, the "RR/Alliance Service
Contract "), and LCRA and Round Rock entered into that certain "Agreement for Acquisition of
Wastewater System Assets (the "RR/Alliance Acquisition Contract ").
Subsequent to implementation of the Termination Agreement, LCRA has acquired Round
Rock's interests in the assets formerly held by the WCID as part of the WCID System and the East
Plant and West Plant (as hereafter defined).
LCRA is in the process of purchasing additional wastewater assets from Round Rock
pursuant to the RR/Alliance Acquisition Agreement.
Cedar Park, simultaneously with its execution of this Agreement, is entering into that
certain "Agreement for Conveyance of Interests and Temporary Pass - Through Wastewater
Service" with Austin to acquire an undivided interest in certain of the assets owned by Austin as
2
a result of implementation of the Termination Agreement and Austin's participation in efforts to
implement the WCID System (the "Austin /Cedar Park Transfer Agreement ").
Cedar Park is willing to assign LCRA Cedar Park's interests in the Austin /Cedar Park
Transfer Agreement to acquire the assets as more particularly described on Exhibit A as provided
in that certain "Agreement for Assignment of Contract Rights" between LCRA and Cedar Park,
dated of even date herewith, to be used by BRA and LCRA, in furtherance of the purposes of the
Alliance, in connection with and to be part of the System.
The Customers desire to discharge wastewater from their wastewater collection systems
into the System in order to serve the wastewater needs of the Customers, to achieve efficiencies
of cost and operation and to protect and preserve the environment of the Brushy Creek watershed.
LCRA, acting in furtherance of the purposes of the Alliance, is willing to acquire,
construct, improve and expand the System, as described in the Engineering Report, to receive
wastewater from the Customers' wastewater collection systems.
In that connection, LCRA is willing to provide engineering, technical and other assistance
for the System and to advance financial assistance by providing that the System will be part of the
"LCRA System" as now or hereafter defined in the resolutions authorizing and governing LCRA's
Priority Revenue Bonds, LCRA's Junior Lien Revenue Bonds and LCRA's Commercial Paper
Notes (collectively, the "LCRA Debt").
BRA, acting in furtherance of the purposes of the Alliance, is willing to operate and
maintain the System in order to receive wastewater from the Customers' wastewater collection
systems and to treat and dispose of such wastewater.
All parties hereto further recognize that although Austin has not signed this Agreement at
this time, the parties believe that Austin will enter into an agreement with the parties within the
next few months on terms substantially the same in all material respects to this Agreement and
become a "Customer" of the "System" at that time. In contemplation thereof, LCRA intends to
pay a prorata share (either with or without capacity for Austin's Lake Creek watershed) of design,
permitting and construction costs related to certain of the System Components (as hereafter
defined) so that the sizing of said facilities will include sufficient capacity to provide service
eventually to Austin (either with or without capacity for Austin's Lake Creek watershed) in the
event it signs an agreement similar to this Agreement in the future. The parties agree that LCRA
may construct such additional capacity by paying its prorata share (either with or without capacity
for Austin's Lake Creek watershed) of the costs of design, permitting and construction related
thereto.
BRA, LCRA and the Customers are authorized to make this Agreement under the
provisions of Chapter 30, Texas Water Code; Section 791.026, Texas Government Code; and
other applicable provisions of state law.
3
In consideration of the mutual covenants and agreements herein contained, LCRA and
BRA, each acting in furtherance of the purposes of the Alliance, and the Customers agree as
follows:
ARTICLE!
DEFINITIONS
Section 1.01. DEFINITION OF TERMS. Terms and expressions as used in this
Agreement, unless the context clearly shows otherwise, shall have the following meanings:
(a) "Accumulated Coverage" means the amounts, together with interest
earnings thereon, received by LCRA or BRA from Capital Charges consisting of the
coverage requirements specified in subsection (ii) of the definition of Bond Costs herein.
(b)
"Agreement" means this agreement.
(c) "Annual Operation and Maintenance Expense Requirement" means the
annual amount budgeted, as provided in Article V, for all Operation and Maintenance
Expenses during any Fiscal Year. The Annual Operation and Maintenance Expense
Requirement does not include any portion of the Annual Project Requirement.
(d) "Annual Project Requirement" means the annual amount budgeted, as
provided in Article V, for the capital related costs of the System, including, without
limitation, that year's Bond Costs, any LIF Advance Costs, and the Capital Management
Fee. The Annual Project Requirement does not include any portion of the Annual
Operation and Maintenance Expense Requirement.
(e) "Annual Project Requirement - Downstream Collection System" means that
portion of the Annual Project Requirement attributable to the Downstream Collection
System in accordance with the provisions of Section 5.04.
(f) "Annual Project Requirement - Treatment Facilities" means that portion of
the Annual Project Requirement attributable to the Treatment Facilities in accordance with
the provisions of Section 5.04.
(g) "Annual Project Requirement - Upstream Collection System" means that
portion of the Annual Project Requirement attributable to the Upstream Collection System
in accordance with the provisions of Section 5.04.
(h) "Austin" means the City of Austin.
(i) "Austin /Cedar Park Transfer Agreement" means that certain "Agreement
for Conveyance of Interests and Temporary Pass- Through Wastewater Service" entered
into contemporaneously with this Agreement, between Austin and Cedar Park relating to
the acquisition of an undivided interest in certain assets of Austin by Cedar Park.
4
(j) "Bond" means any bond, note or other evidence of indebtedness to be issued
by LCRA or BRA pursuant to this Agreement to provide temporary, interim or permanent
financing for the acquisition, construction, expansion, extension, enlargement,
improvement, repair or decommissioning of the System, whether one or more issues, or
any bond issued to refund the same, or issued for any purpose necessary to acquire,
construct, expand, extend, enlarge, improve or repair the System, but does not include any
other bonds of LCRA or BRA issued heretofore or hereafter for any other LCRA or BRA
purpose.
(k) "Bond Costs" means
(i) the payments due with respect to Bonds, including the principal,
redemption premium, if any, and the interest, if any, attributable to Bonds, issued
by LCRA or BRA as such become due during any Fiscal Year, whether at maturity
or at redemption prior to maturity, less interest to be paid out of Bond proceeds as
permitted by the Bond Resolution, plus the amounts, if any, required to be
deposited to restore any deficiency in the debt service reserve fund in accordance
with the provisions of the Bond Resolution; plus
(ii) any amounts required to pay charges, fees or expenses of any
trustee, paying agent or registrar for the Bonds; plus
(iii) the larger of
(1) the amount necessary to provide for any required coverage
on any outstanding Bonds and any additional Bonds proposed to be issued
within a time ending no later than twelve months after the end of the Fiscal
Year for which the Bond Costs are budgeted, or
(2) the amount necessary to provide the coverage specified
below, which amount the parties agree is appropriate and reasonable in any
event to prudently finance the System:
((a)) FY 1997: two percent (2 %) of that year's principal
and interest on any outstanding Bonds;
((b)) FY 1998: four percent (4 %) of that year's principal
and interest on any outstanding Bonds;
((c)) FY 1999: six percent (6 %) of that year's principal
and interest on any outstanding Bonds;
((d)) FY 2000: eight percent (8 %) of that year's principal
and interest on any outstanding Bonds;
5
((e)) FY 2001 and beyond: ten percent (10 %) of that
year's principal and interest on any outstanding Bonds.
(1) "Bond Issuance Costs" means all reasonable costs associated with the
authorization, issuance, sale and delivery of the Bonds, including all legal, financial
advisory, engineering, rating, credit enhancement and similar fees related thereto,
expenses of printing the Bonds, expenses to retain a trustee, paying agent or registrar for
the Bonds, advertising expenses, capitalized interest and all other out -of- pocket expenses
directly related to the authorization, issuance, sale and delivery of the Bonds.
(m) "Bond Resolution" means any resolution of the Board of Directors of LCRA
or BRA authorizing the issuance of Bonds and providing for their security and payment,
as such resolution may be amended from time to time as therein permitted; without
limitation, "Bond Resolution" shall include any trust indenture pursuant to which the
Bonds are issued.
(n) "Capital Charge" means the amount to be paid each month calculated in
accordance with Section 5.04 of this Agreement and owed by each of the Customers to pay
for the Annual Project Requirement.
(o) "Capital Management Fee" means the fee to be paid pursuant to Section
5.08 of this Agreement.
(P)
"Cedar Park" means the City of Cedar Park.
(q) "Cedar Park Regional System Assets" means the undivided interests in
certain of the assets owned by Austin to be obtained pursuant to the Austin /Cedar Park
Transfer Agreement which is to be assigned by Cedar Park to LCRA pursuant to the terms
of the CP /Alliance Acquisition Contract.
(r) "Cedar Park Treatment Plant" means Cedar Park's existing 2.5 MGD
wastewater treatment plant located at 900 Brushy Creek Road, and any expansions thereto
as permitted in Section 7.13 of this Agreement.
(s) "Combined Wastewater Formula" has the meaning for that term as allowed
by 40 CFR 403.6(e).
(t) "Commission" means the Texas Natural Resource Conservation Commission
or its successor agency.
(u) "Contract 6A Wastewater Interceptor Line" means the undivided interest in
that portion of the Downstream Collection System currently existing and to be acquired by
LCRA as part of the Cedar Park Regional System Assets and the Round Rock Regional
System Assets and referred to in the Engineering Report as being part of "Contract 6A"
6
(v) "Contractual Flow" means, for any particular Customer, the amount of
Wastewater projected to be discharged by that Customer in a particular year (initially, in
the amounts set forth in Exhibit B) or such other amount as may be required or permitted
to be established pursuant to Section 5.04.
(w) "CP /Alliance Acquisition Contract" means that certain "Agreement for
Assignment of Contract Rights" between Cedar Park and LCRA providing for the transfer
by Cedar Park to LCRA of Cedar Park's rights and obligations in the Austin /Cedar Park
Transfer Agreement.
(x) "Customers" means Cedar Park, Round Rock, and, to the extent that LCRA
is acquiring Reserved Capacity in the System pursuant to Sections 2.08 and 4.01 of this
Agreement, LCRA.
(y) "Downstream Collection System" means that portion of the System
consisting of the System's interceptor line from Node B -3 downstream to the East Plant,
as described in the Engineering Report.
(z) "East Plant" means the plant purchased by LCRA which was formerly
Round Rock's 3.6 MGD wastewater treatment plant and appurtenances as described in the
Engineering Report and any improvements or expansions thereto.
(aa) "Engineering Report" means the report prepared by Espey, Huston &
Associates, Inc., on behalf of LCRA, entitled BRA /LCRA Alliance Brushy Creek
Regional Wastewater System Engineering Report, dated March 1996, as revised May 1,
June 26, December 19, 1996, and March 19, 1997, hereby incorporated herein by
reference, which describes the System Components currently contemplated, the estimated
construction costs, the proposed construction schedule and other pertinent matters; and any
further supplements or amendments thereto as contemplated herein.
(bb) "EPA" means the United States Environmental Protection Agency.
(cc) "Expansion" means any System Components which constitute an expansion,
extension or enlargement beyond Phase I and II of the System.
(dd) "Fiscal Year" means the twelve (12) month period beginning September I
of each year.
(ee) "Flow Charge" means the amount to be paid each month by each Customer
calculated in accordance with Section 5.05 of this Agreement.
(ff) "Funding" means the receipt from time to time by LCRA or BRA of the
funds necessary to pay the Project Costs.
(gg) "Funding Date" means the date or dates on which a Funding occurs.
7
(gg) "Indirect Discharges" has the meaning for that term as defined by 40 CFR
403(g).
(hh) "Industrial Users" has the meaning for that term as defined by 40 CFR
403(h).
(ii) "Initial Funding(s)" means the Funding(s) necessary to accomplish
implementation of the RRJAlliance Acquisition Contract and the Austin /Cedar Park
Transfer Agreement as assigned to LCRA by the CP /Alliance Acquisition Contract and the
construction of the remainder of Phase I of the System.
(kk)
"Initial Funding Date(s)" means the dates of the Initial Funding(s).
"Interference" has the meaning for that term as defined by 40 CFR 403.3(i).
(11) "LCRA Debt" means LCRA's Priority Revenue Bonds, LCRA's Junior
Lien Revenue Bonds and all of LCRA's subordinate lien obligations.
(mm) "LCRA System" means the properties or interests therein owned by LCRA
and now or hereafter defined as the LCRA "System" in the resolutions authorizing and
governing the LCRA Debt.
(nn) "LIF" means, collectively, the various LCRA Internal Funds from which
LCRA System improvement may be constructed all as created with respect to the LCRA
System in the resolutions authorizing and creating the LCRA Debt.
(oo) "LIF Advance" means a payment for any Project Cost by LCRA from the
LIF, other than payments from Accumulated Coverage.
(pp) "LIF Advance Costs" means the annual payments due from the Customers
with respect to an LIF Advance which amount shall consist of repayment of principal
amounts advanced and carrying costs thereon amortized over a period substantially the
same as if such amounts had been borrowed at the then current market interest rate and for
a term of years by a governmental entity similar to LCRA and with a similar credit rating
for a project similar to that being financed for the System, and coverage calculated in the
manner set forth in the definition of Bond Costs.
(qq) "List of Inadmissible Wastes" means the list of wastes not permitted to be
discharged into the System pursuant to applicable federal and state requirements.
(rr) "Month" means a calendar month.
(ss) "Operation and Maintenance Expense" means all direct and indirect costs
(other than those incurred as a result of the gross negligence or willful misconduct of
LCRA or BRA) of operation, maintenance, repair, rehabilitation, replacement and
8
decommissioning of the System and of facilities owned either by one or more Customers
or LCRA pursuant to the provisions of Article II below incurred by BRA or LCRA to the
extent not (i) paid from the Repair and Replacement Reserve Fund, (ii) paid from the
Operation and Maintenance Reserve Fund, or (iii) repayable as part of Annual Project
Requirement, including, but not limited to:
(1) costs of maintaining any permits or licenses necessary to own,
operate and maintain the System;
(2) costs (other than those incurred as a result of the gross negligence
or willful misconduct of LCRA or BRA) such as, but not limited to, costs of labor,
materials, utilities, supervision, engineering, accounting, auditing, legal and
professional services, insurance, personnel, data processing and purchasing;
(3) expenses of BRA, LCRA and the Technical Review Committee in
fulfilling the Technical Review Committee's responsibilities;
(4) BRA's and LCRA's costs of complying with this Agreement,
including, but not limited to, its remedy and mediation provisions;
(5) such other costs or expenses as may be imposed upon LCRA or
BRA in connection with fulfillment of their obligations under this Agreement
because of laws, regulations or requirements of the State of Texas, the United
States, or of any agency or governmental subdivision of the State of Texas or any
agency of the United States having jurisdiction;
(6) costs of any other tools, supplies, inventory, services and
equipment, together with administrative costs not otherwise included in this
definition necessary for proper operation and maintenance of the System;
(7) payments made by LCRA or BRA in satisfaction of judgments
resulting from or settlement of claims not covered by the insurance maintained by
LCRA or BRA or not paid by one particular Customer arising in connection with
the ownership, operation or maintenance of the System;
(8) any and all expenses incurred by LCRA or BRA in connection with
any litigation or administrative proceedings of any nature whatsoever concerning
the System or LCRA's or BRA's responsibilities hereunder to any person, entity
or party hereto;
(9) the cost of restoration of the Operation and Maintenance Reserve
Fund after expenditures are made therefrom with any such replenishment amounts
to be amortized over a reasonable period of time at a reasonable carrying cost; and
(10) the Operation & Maintenance Management Fee.
9
Depreciation shall not be considered an item of Operation and Maintenance Expense.
Operation and Maintenance Expenses shall not include any Project Costs.
(tt) "Operation and Maintenance Management Fee" means a fee of five percent
(5%) of the amounts (other than that portion of the Annual Operation and Maintenance
Expense Requirement consisting of the Operation & Maintenance Management Fee and
fines imposed by governmental regulatory authorities) budgeted for the Annual Operation
and Maintenance Expense Requirement each year.
(uu) "Operation and Maintenance Reserve Fund" means the fund in an amount
adjusted annually to equal one -sixth (1/6) of the Annual Operation and Maintenance
Expense Requirement in order to provide moneys to operate and maintain the System in
the event current revenues of the System are insufficient to meet the Operation and
Maintenance Expenses of the System or pending receipt of payments from Customers
required hereunder.
(vv) "Pass Through" has the meaning for that term as defined by 40 CFR
403.3(n).
(ww) "Phase I of the System" means the facilities described as such in the
Engineering Report.
(xx) "Phase II of the System" means the facilities described as such in the
Engineering Report.
(yy) "Point of Entry" means a point at which Wastewater enters the System.
(zz) "POTW" means publicly owned treatment works as defined in 40 CFR
405.5(a).
(aaa) "Project Costs" means all acquisition, construction, reconstruction,
rehabilitation, replacement and decommissioning costs as those terms are generally under-
stood in standard accounting practice as applied to projects of the nature of the System and
Bond Issuance Costs, if Bonds are issued to pay the Project Costs; and without limiting the
generality of the foregoing, the term shall include the cost of any Required Improvements;
the costs of obtaining all licenses and permits; purchase of equipment, property, rights in
property, costs of land, easements and rights -of -way, including damages to land and
property; engineering, inspections, administrative, auditing, legal expenses incurred in
connection with the planning, development, acquisition, construction, reconstruction or
decommissioning of the System; tools and equipment required for the operation and
maintenance of the System; costs of the same nature for any expansion, extension,
enlargement, improvement, rehabilitation or replacement of the System; the costs of
establishing and replenishing the Repair and Replacement Reserve Fund; legal and other
expenses incurred by LCRA or BRA in accomplishing the acquisition or construction of
the System (other than those incurred as a result of the gross negligence or willful
10
misconduct of LCRA or BRA), including all expenses incurred by LCRA or BRA in
connection with any litigation or administrative proceedings of any nature whatsoever
concerning the acquisition, construction, reconstruction or decommissioning of System or
responsibilities of LCRA or BRA hereunder to any person, entity or party hereto. Project
Costs will not include any Operation and Maintenance Expenses.
(bbb) "Repair and Replacement Reserve Fund" means the fund, to be established
initially by LCRA, in an amount of not to exceed one -half of one percent (.5%) of the
Project Costs expended at any given time or such other amount as LCRA and BRA, with
the approval of the Technical Review Committee, may jointly determine to be appropriate
given the age, condition and size of the System, and additional similar funds established
by BRA or LCRA.
(ccc) "Required Improvement" means any improvement, betterment, enlarge-
ment, addition, repair, rehabilitation or replacement to any System Component (i) required
to be installed or constructed by applicable governmental law, rule, regulation, order or
similar requirement or (ii) needed to maintain the capability of the System to perform its
intended function of providing adequate Wastewater service to the Customers in
accordance with their rights under this Agreement.
(ddd) "Reserved Capacity" means the total quantity of Wastewater that a
Customer is entitled to deliver into any System Component during a specified period of
time pursuant to this Agreement, or, alternatively, the percentage of capacity of a System
Component that a Customer is entitled to utilize in any System Component pursuant to this
Agreement, all as set forth in Exhibit B.
(eee)
"Round Rock" means the City of Round Rock.
(fft) "Round Rock Regional System Assets" means the land, wastewater facilities
and property rights transferred and to be transferred by Round Rock to LCRA pursuant
to the terms of the RR/Alliance Acquisition Contract.
(ggg) "RR /Alliance Acquisition Contract" means that certain "Agreement for
Acquisition of Wastewater System Assets" between Round Rock and LCRA providing for
the transfer of the Round Rock Regional System Assets.
(hhh) "Significant Industrial Users" has the meaning for that term as defined by
40 CFR 403.3(t).
(iii) "System" means all of the facilities constructed or acquired by LCRA or
BRA for receiving, measuring, transporting, treating and disposing of Wastewater from
the Customers in Phases I and II of the System as described in the Engineering Report,
together with any Expansions or Required Improvements added by LCRA or BRA
pursuant to this Agreement.
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(jjj) "System Component" means a specified facility comprising part of the
System and listed as a System Component in the Engineering Report.
(kick) "Technical Review Committee" means the committee created by Article VI
of this Agreement.
(111) "Termination Agreement" means that certain "Agreement for Termination of
Brushy Creek Regional Wastewater Disposal Agreement" dated effective September 19,
1994, and amended on September 18, 1995, and March 19, 1996, between Austin, Round
Rock and the WCID, setting forth the terms and conditions for termination of the
Wastewater Disposal Agreement and providing for certain other matters.
(mmm) "Treatment Facilities" means any wastewater treatment and disposal
facilities acquired or constructed by LCRA or BRA to comprise a part of the System,
together with any extensions, improvements, expansions, betterments, rehabilitations or
replacements thereof.
(nnn) "Total Reserved Capacity" means the sum of the Reserved Capacities of all
Customers in a particular System Component pursuant to this Agreement as set forth in
Exhibit B.
(000) "Upstream Collection System" means that portion of the System consisting
of the System's interceptor line from Node B -3 upstream, as described in the Engineering
Report.
(ppp) "Wastewater" means liquid and water carried waste discharged from sanitary
conveniences of dwellings, business buildings, institutions and the like including garbage
which has been shredded to such degree that all particles will be carried freely under flow
conditions normally prevailing in public sewers, with no particle greater than one -half
(1/2) inch in any dimension and the liquid wastes from industrial processes, and includes
any infiltration water that has migrated from the ground into the System.
(qqq) "Wastewater Disposal Agreement" means the prior Wastewater Disposal
Agreement, as amended, among Austin, Round Rock and the WCID.
(rrr) "WCID" means the Brushy Creek Water Control and Improvement District
No. 1 of Williamson and Milam Counties.
(sss) "WCID System" means the former regional wastewater transportation and
treatment system of the WCID.
(ttt) "West Plant" means the plant purchased by LCRA which was formerly
Round Rock's 3.0 MGD wastewater treatment plant and appurtenances as described in the
Engineering Report..
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Section 1.02. INTERPRETATION. Terms used in this Agreement with initial letters
capitalized and not otherwise defined in this Agreement have the meanings assigned to them in
Section 1.01. Except where the context otherwise requires, words imparting the singular number
shall include the plural number and vice versa. Reference to any document means that document
as amended or supplemented from time to time. Reference to any party or governmental
regulatory agency means that entity and its successors and assigns.
ARTICLE II
DESIGN, ACQUISITION AND
C.ONSTRIJCTION OF SYSTEM RY THE AT,LIANCF.
Section 2.01. ALLIANCE RESPONSIBILITIES.
(a) General. The System will be used for receiving, transporting, treating and
disposing of Wastewater for the Customers. LCRA will design, acquire, construct,
expand, extend, enlarge, improve and repair the System. BRA will operate and maintain
the System, together with any facilities owned either by one or more Customers or by
LCRA pursuant to this Article II.
(b) ' System Acquisition and Construction. The System shall be implemented
as described in the Engineering Report. LCRA shall exercise due diligence to complete
acquisition and construction of the System as set forth in the Engineering Report and this
Agreement. The Engineering Report may be amended and updated from time to time,
with the unanimous approval of the Technical Review Committee, as provided in 6.02(k),
to reflect final design and construction changes in the System and to reflect further actions
and understandings of the parties pursuant to this Agreement. A copy of all amendments
and updates to the Engineering Report will be provided promptly to the Customers.
(c) Permits and Approvals. LCRA shall obtain and hold all permits and
approvals required for acquisition, construction and ownership of System. LCRA and
BRA jointly shall hold all permits and approvals for operation of the System granting to
each party the legal authority to operate the System. lf, by virtue of regulatory, legal,
financial or other requirements, it is necessary or appropriate that any permit or approval
should be held jointly in order for LCRA to own facilities operated by BRA, LCRA and
BRA agree to fully cooperate with each other in efforts to obtain, hold and comply with
such permits or approvals.
(d) Payment of Project Costs. LCRA agrees that the System will be part of the
LCRA System and that LCRA will pay all Project Costs from sources utilized by LCRA
for financing the LCRA System and in a manner which is financially prudent for both the
LCRA System and the System. Such payment may be made from the proceeds of Bonds,
from an LIF Advance, or from Accumulated Coverage. Subject to the provisions of the
Bond Resolutions or the resolutions authorizing and governing the LCRA Debt, LCRA and
BRA agree that Accumulated Coverage shall inure to the benefit of the System and be used
by LCRA or BRA solely for the purpose of paying future Project Costs. LCRA will
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inform the Technical Review Committee of the source(s) of funds to be used to pay Project
Costs, of the amortization and carrying costs, if appropriate, and the anticipated effect of
same on the Annual Project Requirement. Funds in the Repair and Replacement Reserve
Funds shall be used, when appropriate, to pay for repairs and replacements of the System
Components in order to minimize the need for budget adjustments. LCRA shall use
diligent efforts so that Project Costs incurred by LCRA and ultimately repaid by the
Customers are reasonable and justified.
(e) Construction by LCRA. Except in the case of Expansions which LCRA
shall elect not to construct, all planning and construction provided to be done under this
Agreement shall be done and paid for by LCRA as a Project Cost. In all cases where
construction is to be done by LCRA, preliminary engineering memoranda, modifications
and updates to the Engineering Report, all plans and specifications and substantive change
orders therefor shall be submitted to BRA and the Technical Review Committee for
comments and suggestions sufficiently in advance of the time when bids for the planned
work are to be taken to allow BRA and the Technical Review Committee to make a
thorough review thereof and all comments and suggestions from BRA and the Technical
Review Committee shall be given serious consideration by LCRA and its engineers. BRA
shall be the onsite inspector on the premises where construction is to be done by LCRA
and shall report to LCRA as owner. Such inspector shall have access to the work as it
progresses and shall be permitted to comment on and make suggestions with respect to
such work. All such comments and suggestions shall be given serious consideration by
LCRA and its engineers. The cost of such inspector and his work shall be deemed a
Project Cost.
(f) Construction by BRA. If LCRA should ever elect not to construct and pay
for any Expansion, BRA may proceed to construct and pay for it. In the case of
construction by BRA, LCRA and the Technical Review Committee shall have the same
rights and privileges accorded to BRA and the Technical Review Committee, respectively,
by the preceding subsection (e), except that BRA shall remain as the onsite inspector.
Further, BRA shall have the same construction duties as set forth in subsection (h) below
for LCRA. All facilities so constructed and all assets acquired by BRA in any such
Expansion shall be part of the System which shall continue to be owned by LCRA. The
Repair and Replacement Fund and any similar funds required in connection with
Expansions shall be provided by LCRA, except that any such similar fund required in
connection with construction to be done and paid for by BRA shall be provided by BRA.
(g) BRA and LCRA Distinct Obligations. Neither BRA nor LCRA shall ever
have any liability to the other or to any Customer arising out of failure of the other to
construct or any defect in any construction done by the other. Bonds issued for
construction shall be those of the entity which is to do the construction, as above provided,
and neither BRA nor LCRA shall ever have any liability for the payment of indebtedness
evidenced by or provided in Bonds issued by the other.
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(h) Construction Duties. LCRA will acquire and construct the System in
accordance with accepted good business and engineering practices and in accordance with
requirements of the Clean Water Act and the Texas Water Code, as amended, and as said
laws may be amended in the future, and any rules and regulations issued and to be issued
by appropriate agencies in the administration of said laws. LCRA will prepare plans and
specifications for the System Component(s) to be constructed in Phase I as soon as possible
and proceed to take all other action necessary to acquire or construct the System Compo-
nent(s). After all such regulatory approvals have been obtained, LCRA shall proceed, as
appropriate, to advertise for bids for construction of the remainder of the System
Component(s). Upon receipt of such bids, LCRA shall tabulate the bids and notify BRA,
the Customers and the Technical Review Committee of the bids which have been received
and shall recommend approval of the lowest and best bid for the construction of the
System Component(s). LCRA shall also notify BRA, the Customers and Technical
Review Committee, based on such lowest and best bid, of the estimated Project Costs of
the System Component(s) and the Funding Date for such Project Costs. LCRA may accept
the lowest and best bid for the construction of the System Component(s). In determining
whether or not to accept any such bid, LCRA shall consider advice and recommendations
of BRA, the Customers and the Technical Review Committee, but the decision as to its
acceptance shall be within the sole discretion of LCRA. Thereafter, LCRA will diligently
construct the System Component(s).
Section 2.02. ALLIANCE MODIFICATIONS. BRA and LCRA may jointly modify their
respective responsibilities to each other under this Agreement without approval of the Customers
to the extent that such modification does not adversely affect the Customers and the Customers
and Technical Review Committee are provided prior written notice of such modifications.
Section 2.03. ACQUISITION AND CONSTRUCTION OF PHASE I OF THE SYSTEM.
(a) Acquisition of Existing Assets. LCRA and the Customers agree to proceed
as expeditiously as possible to consummate the remaining transactions contemplated in the
RR/Alliance Acquisition Contract and the CP /Alliance Acquisition Contract. The parties
anticipate that the Initial Funding for each of these contracts is, respectively, October 11.
1996, and April 30, 1997.
(b) Construction of Remainder of Phase 1 of the System. Promptly after
execution and delivery of this Agreement by all parties, LCRA shall, and upon execution
of this Agreement by one or more Customers LCRA may, prepare plans and specifications
for the remainder of Phase I as soon as possible and proceed to take all other action
necessary to acquire or construct the remainder of Phase I of the System. LCRA will use
diligent efforts to complete construction of line segments B3 to 135 of Phase I'of the
System within eighteen (18) months after the Initial Funding of the purchase of the Cedar
Park Regional System Assets, and the remaining portions of Phase 1 within twenty -four
(24) months of that Initial Funding. These deadlines are excusable only for reasons of
15
Force Majeure or if, in the opinion of LCRA after review and recommendation of the
Technical Review Committee, the process of obtaining necessary easements or right -of-
way for the construction has become so burdensome as to justify a delay in order for the
Project Costs to remain reasonable. If LCRA fails to complete these line segments within
the respective times required above in this section, (i) LCRA, with the advice of the
Technical Review Committee, may construct or acquire alternative System Components
or services (either interim or permanent) to provide adequate and timely service to the
Customers, or (ii) Cedar Park will have the right (but not the obligation) to construct these
line segments using any funds available to them. If it elects to do so, Cedar Park will be
entitled to retain ownership of any of these line segments which it constructs entirely and
will have no obligation to sell, transfer or assign any interests in the line segments it owns
to LCRA. In such event, Cedar Park will be entitled to utilize, on a non - exclusive basis,
any easements that have been obtained by LCRA or BRA for these line segments without
any charge. The parties shall cooperate to document any such non - exclusive rights, if
necessary.
(c) Notwithstanding anything in this Agreement to the contrary, the parties
agree that:
(1) Cedar Park shall have no obligation to make any payments to LCRA
and /or BRA under this Agreement until such time as a construction contract for
Line Segments B3 to B5 of Phase I of the System has been awarded and notice to
proceed under the contract issued; provided, however, Cedar Park shall escrow the
payments otherwise due to LCRA and /or BRA under this Agreement during such
period of time and, upon award of such contract and issuance of notice to proceed
thereunder, shall pay the escrowed amount to LCRA and BRA, together with any
interest earnings thereon;
(2) the contract for construction of Line Segments B3 to B5 of Phase I of
the System will contain a requirement that construction is to be substantially
completed by the contractor within nine months (or such other time as unanimously
approved by the Technical Review Committee and LCRA) after issuance of notice
to proceed, and the contract will include a provision for liquidated damages if the
project is not substantially completed within said period. The amount of the
liquidated damages shall be equal to the payments that would otherwise be owed
by Cedar Park to LCRA and /or BRA for service under this Agreement between the
time that the contract was to be substantially completed pursuant to its terms and
the time that the contract is actually substantially completed, thereby making the
liquidated damages payment equal to the payments which would otherwise be owed
by Cedar Park under this Agreement and, therefore, such payments will not be
owed by Cedar Park during the period of time that the contractor is in default for
not having substantially completed construction timely. Accordingly, if the project
is not substantially completed within nine (9) months as required, Cedar Park will
have no obligation to make any payments to LCRA and /or BRA under this
Agreement for the time period commencing nine (9) months from the date of
16
issuance of the notice to proceed and continuing until the project is substantially
completed, and those payments will be totally abated. LCRA and /or BRA's sole
recourse for the abated payments will be against the contractor for the project.
(3) Beginning with the time provided in the construction contract for
construction of Line Segments B3 to B5 of Phase I of the System to be completed,
until the time that all of Phase II of the System is completed, Cedar Park shall be
entitled to a minimum of .5 MGD (on a thirty day average) of Reserved Capacity
in the Onion Branch Lift Station (to be obtained from Austin as part of the Cedar
Park Regional System Assets) and related Downstream Collection System
Components of the System. If, for whatever reason, .5 MGD of capacity is not
available for Cedar Park's use in the Onion Branch Lift Station and related
facilities, then LCRA, with the advice of the Technical Review Committee, shall
construct or acquire alternative System Components or services (either interim or
permanent) to provide adequate and timely service to Cedar Park in the amount of
at least .5 MGD as provided herein.
Section 2.04. CONDITIONS PRECEDENT TO CONSTRUCTION. The obligation of
LCRA to acquire and construct the System shall be conditioned upon the following:
(a) LCRA's obtaining sufficient funds to pay the Project Costs of Phase I of the
System;
(b) LCRA's ability to reasonably obtain all sites, rights -of -way, easements,
labor, equipment and materials required for acquisition or construction of Phase I of the
System; and
(c) BRA's and LCRA's obtaining all permits, approvals and licenses required
to acquire, construct or operate Phase I of the System, including waste discharge permits
issued by the Commission and /or the EPA.
The parties recognize that at the time this Agreement is being executed, LCRA has
obtained a loan commitment from the Texas Water Development Board in an amount of
approximately $44,000,000 for the System. LCRA has obtained approximately $26,000,000 of
said funds from the Texas Water Development Board and agrees to use diligent efforts to
consummate the closing of the remainder of said loan commitment and the acquisition of the
remainder of said $44,000,000 of funds from the Texas Water Development Board for the System.
Section 2.05. CONSTRUCTION OF PHASE It. (a) When appropriate to provide for
continued service to the Customers, LCRA shall proceed diligently with design and construction
of Phase II of the System. It is understood that LCRA, in its sole discretion, may determine
whether to construct the Downstream Collection System portion of Phase II of the System with
or without Reserved Capacity for anticipated future wastewater flows from Austin's Lake Creek
watershed. Such determination shall affect the Customers' Reserved Capacities as set forth in the
two alternative scenarios described on pages 1 -4 of Exhibit B. Until and unless LCRA
17
commences construction or acquisition of Phase II of the Downstream Collection System with
capacity for anticipated future wastewater flows from Austin's Lake Creek watershed, it shall be
conclusively presumed for all purposes of this Agreement that Phase II of the Downstream
Collection System will not have capacity for anticipated future wastewater flows from Austin's
Lake Creek watershed. LCRA shall commence preliminary design of all or any necessary
portions of Phase II of the System to provide continuous and adequate service to the Customers
from the System at the earlier of (i) such time as any Customer reaches flows in any three (3)
consecutive months of at least thirty (30) percent of its Reserved Capacity in the System
Component described as the "Onion Branch Lift Station" in the Engineering Report or (ii) Cedar
Park's discharges from the Cedar Park Treatment Plant for any three (3) consecutive months are
at least seventy -five (75) percent of the permitted capacity of the Cedar Park Treatment Plant.
LCRA shall have commenced construction of all or any necessary portions of Phase II of the
System to provide continuous and adequate service to the Customers from the System at the
earlier of (i) such time as any Customer's flow over any three (3) consecutive months at the
"Onion Branch Lift Station" shall average more than fifty (50) percent of the Customer's Reserved
Capacity in the "Onion Branch Lift Station" or (ii) Cedar Park's discharges from the Cedar Park
Treatment Plant for any three (3) consecutive months are at least ninety (90) percent of the
permitted capacity of the Cedar Park Treatment Plant. LCRA shall have completed construction
of the Upstream Collection System portion of Phase II of the System within twelve (12) months
after commencement of construction of same and the Downstream Collection System portion of
Phase II of the System within twenty -four (24) months after commencement of construction of
same. If LCRA fails to complete Phase II within the required time as provided in this section,
(i) LCRA, with the advice and approval of the Technical Review Committee, shall construct or
acquire alternative System Components or services (either interim or permanent) to provide
adequate and timely service to the Customers, or (ii) the Customer whose flows have necessitated
the commencement of construction of Phase II of the System will have the right (but not the
obligation) to construct Phase II of the System using any funds available to it. If it elects to do
so, it shall be entitled to retain ownership of any portion of Phase II which it constructs entirely
and will have no obligation to sell, transfer or assign any interest in any portion of Phase Il of the
System it owns to LCRA. In such event, such Customer will be entitled to utilize, on a non-
exclusive basis, any easements that have been obtained by LCRA or BRA for Phase II of the
System without any charge. The parties shall cooperate to document any such non - exclusive
rights, if necessary.
(b) The parties further recognize that as set forth in Section 4.01(a)(ii), LCRA will
need to acquire or construct other facilities, or capacity therein, in connection with that portion
of the Downstream Collection System consisting of the Contract 6A Wastewater Interceptor Line
in order to fully meet the obligation of LCRA hereunder to provide for the Reserved Capacities
of the Customers in said System Component. The parties agree that LCRA's duty to acquire or
construct such additional facilities, or capacity therein, shall be governed by the provisions of
Section 2.06 of this Contract as if the same were an Expansion beyond Phase II, except that the
seventy -five percent (75 %) and ninety percent (90 %) requirements shall relate to the total
Reserved Capacities of all Customers in the Contract 6A Wastewater Interceptor Line as opposed
to each individual Customer's respective Reserved Capacity in said System Component.
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Section 2.06. EXPANSIONS BEYOND PHASE II.
(a) Requests for Expansions. Any Customer may request that an Expansion of the
System be made by LCRA. When the actual flow of Wastewater from a Customer reaches
seventy -five percent (75%) of the Reserved Capacity of that Customer in a System
Component, that Customer shall be deemed to have requested LCRA to commence
planning and design for an appropriate Expansion, unless the Customer's anticipated
growth does not warrant making the Expansion. When the actual flow of Wastewater from
a Customer reaches ninety percent (90 %) of the Reserved Capacity of that Customer in a
System Component, that Customer shall be deemed to have requested commencement of
construction of an appropriate Expansion by LCRA, unless the Customer's anticipated
growth does not warrant making the Expansion. Except as provided in Section 7.13,
during the term of this Agreement, the Customers agree to request Expansions for all of
their Wastewater service needs in their respective currently existing corporate and
extraterritorial jurisdictions as depicted in the map contained in the Engineering Report as
Figure 1. Any request shall be filed with LCRA and BRA in writing, with copies to the
Technical Review Committee and each other Customer. For purposes of this section,
LCRA's "corporate limits and extraterritorial jurisdiction" shall mean that part of Austin's
corporate limits and extraterritorial jurisdiction in the Brushy Creek Watershed.
(b) Construction by LCRA, BRA. Should any Customer request in writing, or be
deemed to have requested, an Expansion, LCRA and BRA shall notify such Customer and
the other Customers and the Technical Review Committee in writing within forty -five (45)
days as to whether either is willing to construct the Expansion. If LCRA or BRA
constructs the Expansion, upon completion of construction the Expansion will be part of
the System, the Reserved Capacity of the Expansion will be reserved for the Customer and
the Annual Project Requirement attributable to the Expansion shall be charged to the
Customer in its Capital Charge. In the event more than one Customer participates in an
Expansion, the Reserved Capacity and Annual Project Requirement shall be divided pro
rata between the participating Customers.
(c) Construction by Customer(s). If neither LCRA nor BRA is willing to construct
the Expansion, the requesting Customer may construct the Expansion. LCRA and BRA
will fully cooperate with the constructing Customer(s) in efforts to obtain necessary
governmental and regulatory approvals and permits and will use their best efforts to
provide assistance in this regard, which shall be paid for solely by the requesting
Customer(s), shall be owned by it, and shall not be part of the System.
(d) General. In any event, the preparation of plans and specifications, and the
receipt and acceptance of bids for construction shall be subject to the same requirements
contained in this Article II in regard to advertisement for and award of bids for
construction and for notice thereof to parties. Such plans and specifications shall be
subject to approval of LCRA and BRA, which shall not be unreasonably withheld or
delayed. Such construction shall be under the supervision of LCRA and onsite inspection
shall be provided by BRA.
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Section 2.07. CONSTRUCTION OF REQUIRED IMPROVEMENTS. At such time as
LCRA or BRA shall determine that construction of Required Improvements is necessary in order
for the System to be able to treat and dispose of Wastewater expected to be delivered to it without
violation of applicable permits or in order to avoid violation(s) of permits or other regulatory
requirements related to the System, the party making the determination shall give forty - five (45)
days prior written notice and opportunity to comment to the other and each Customer and to the
Technical Review Committee of its intention to proceed with construction of such Required
Improvements. Thereafter, the Required Improvements will be constructed by LCRA as otherwise
provided for Expansions and in accordance with the requirements of Section 2.01(h), to the extent
applicable.
Section 2.08. LCRA RIGHT TO RESERVED CAPACITY. LCRA shall be considered
a "Customer" for all purposes of this Agreement for that part of the Reserved Capacity referenced
in Section 4.01 and shown in Exhibit B as being reserved for LCRA. The parties recognize and
contemplate, however, Austin's joining the System in the future and acquiring LCRA's Reserved
Capacity at that time. In that regard, the parties agree to reasonably cooperate to try to obtain
Austin's agreement to enter into an agreement with the parties hereto substantially the same in all
material respects to this Agreement and any corresponding agreement in which LCRA would
purchase regional wastewater system assets. In addition, LCRA may sell all or any part of its
Reserved Capacity to any other entity or may use its Reserved Capacity for any other lawful
purpose. In the event LCRA sells all or any part of its Reserved Capacity to another entity under
an agreement substantially similar to this Agreement, BRA and the other Customers agree that
LCRA will be released from all, or an appropriate part, of its obligations as a Customer with
respect to the sold Reserved Capacity provided the other entity assumes such released obligations.
LCRA shall provide written notice to BRA and the other Customers, signed by LCRA and the
party to whom the Reserved Capacity is being transferred, specifying the amount of transferred
Reserved Capacity and the affected System Component(s), and providing that the parties otherwise
ratify and confirm their pre - existing obligations under this Agreement. No such transfer shall be
effective until and unless such notice is provided.
Section 2.09. DEPOSITS ON FUNDING DATES. After LCRA or BRA, as appropriate,
obtains all funds related to Funding on the Funding Date for Phase I, Phase 11 or any Expansion
of the System, LCRA or BRA, as appropriate, shall deposit all of said funds into the construction
fund or reserve funds provided in any applicable Bond Resolution and the one -half of one percent
(1/2 %) of Project Costs necessary to fund the Repair and Replacement Reserve Fund. Upon the
first to occur of the Initial Fundings, BRA shall deposit the agreed amount of money into the
Operation and Maintenance Reserve Fund which shall be maintained by it as a part of the
enterprise fund to be established on its books and records and identified in its financial statements,
in connection with the operation of the System.
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Section 3.01. OPERATION.
ARTICLE III
OPF :RATION OF SYSTF,M RY BRA
(a) General. The System, together with any facilities owned either by one or more
Customers or LCRA pursuant to Article II of this Agreement, shall be operated by BRA; provided
that LCRA will provide certain management, bookkeeping, billing and similar services for the
System. As the transactions in which LCRA is acquiring the assets of the System are closed,
pocsession of the assets being acquired by LCRA for use in operation of the System shall be made
available to BRA. Possession of facilities to be constructed by LCRA in connection with the
remainder of the System shall be made available to BRA as same become useful in operation of
the System. BRA will operate the System, together with any facilities owned either by one or
more Customers or LCRA pursuant to Article II of this Agreement, in accordance with accepted
good business and engineering practices and in accordance with requirements of the Clean Water
Act and the Texas Water Code, as amended, and as said laws may be amended in the future, and
any rules and regulations issued and to be issued by appropriate agencies in the administration of
said laws. BRA's obligation for operation of facilities delivered to its possession under the
provisions of this Agreement shall begin after a reasonable transition period to allow orderly
transfer of operational responsibility from previous operators, in the case of existing facilities, and
orderly start up in the case of newly constructed facilities.
(b) Initiation of Service to Customers. LCRA and BRA have commenced operation
of the System and service to Round Rock already. The obligations of BRA to provide service
initially to Cedar Park are conditioned upon consummation of the CP /Alliance Acquisition
Contract in accordance with the provisions thereof and completion of construction of Phase I.
Section 3.02. COMPETITIVE BIDS. Costs to Customers for Operation and Maintenance
Expenses shall be of primary importance to BRA. BRA shall use diligent efforts so that Operation
and Maintenance Expenses incurred by BRA and ultimately repaid by the Customers are
reasonable and justified. If specifically requested to do so by the Technical Review Committee,
BRA shall seek competitive bids or proposals from others to provide day -to -day operation of the
System or any Component thereof for specific periods not to exceed five (5) years in length at the
following times:
(a) (i) If the System or such component is being operated for the owner
under contract with a private operator when BRA assumes management under this
Agreement, prior to termination of the private operator; or
(ii) If the System or such component is not being operated for the owner by a
private operator under contract at the time when BRA assumes management, prior to
assumption of operation by BRA; and
21
(b) At the end of every period of operation by a private operator or at the end
of five (5) years of operation by BRA.
Before competitive bids or proposals are taken, BRA shall make a written estimate of the
cost of the process of taking bids or proposals and shall furnish such written estimate to the
Technical Review Committee. BRA will proceed with the steps necessary to take competitive bids
or proposals only after written approval of such estimate from the Technical Review Committee.
Provided that such written approval is obtained, the cost of the process of taking such competitive
bids or proposals shall be and become an Operation and Maintenance Expense. When competitive
bids or proposals are taken pursuant to this Section 3.02, BRA may submit its own proposal for
the day -to -day operation of the System or such component thereof with its own employees.
Promptly after such competitive bids or proposals are received, same shall be submitted to the
Technical Review Committee for evaluation. The Technical Review Committee shall provide to
the Board of Directors of BRA its advice as to which of the bids or proposals will result in the
most efficient and cost effective set to the Customers. After receiving and considering such
advice, the Board of Directors shall determine which of such bids or proposals shall be accepted.
The determination shall be based on the Board's reasonable judgment as to which will result in
the most efficient and cost effective service to the Customers. If the bid to be accepted is from
a bidder other than BRA itself, BRA shall contract with the bidder on the basis of the bid for day -
to-day operation of the System or such component for a period established by BRA not to exceed
five years. If it is that of BRA itself, BRA shall conduct day -to -day operation of the System or
such component on the basis of its own bid until the next occasion on which competitive bids or
proposals are taken under this Section 3.02.
Section 3.03. PAYMENTS TO BRA FOR OPERATION OF SYSTEM. Pursuant to the
understanding between BRA and LCRA, acting in furtherance of the purposes of the Alliance,
BRA's portion of the Annual Operation and Maintenance Expense Requirement of the System,
including the Operation & Maintenance Management Fee shall be remitted to BRA by LCRA
within one working day after receipt of any corresponding Flow Charges by LCRA or as
otherwise agreed between BRA and LCRA.
Section 3.04. OPERATION & MAINTENANCE MANAGEMENT FEE. The Operation
& Maintenance Management Fee shall constitute a regional fee which BRA expects to utilize in
furtherance of its efforts to continue to provide additional services to residents of the Brazos River
Basin; provided that LCRA may retain for its use the portion of the Operation & Maintenance
Management Fee related to Operation and Maintenance Expenses paid by LCRA.
Section 3.05. COOPERATION DURING MAINTENANCE OR EMERGENCY.
Customers will cooperate with BRA during periods of an emergency or required maintenance of
the System and, if necessary, will discontinue, cycle, test, inspect, or otherwise operate and
maintain their wastewater facilities at their expense in a manner determined by BRA to be
necessary to the safe and efficient completion of repairs or the replacement of the System's
facilities, the restoration of service, and the protection of the public health, safety, and welfare.
BRA will attempt to provide the Customers reasonable notice under the circumstance of the
22
actions to be undertaken by BRA and cooperate to try to minimize inconvenience to the
Customers.
ARTICLE IV
RESERVED CAPACITY AND DISCHARGE OF WASTEWATER
Section 4.01. DISCHARGE QUANTITIES.
(a) Initial Reserved Capacities. (i) Except as provided below in subsection
(a)(ii), each Customer, respectively, shall have the exclusive right to discharge Wastewater
into the System to the extent, and by utilizing, its Reserved Capacity in each System
Component as described in Exhibit B. Except as provided below in subsection (a)(ii), no
Reserved Capacity may be allocated to or used by anyone other than the Customer on
whose behalf that capacity has been reserved, unless the affected Customer specifically
agrees in writing to the allocation or use.
(ii) Notwithstanding the above two sentences, it is specifically
recognized by the parties hereto that the portion of the Cedar Park Regional System
Assets and Round Rock Regional System Assets contemplated to be acquired by
LCRA from Austin at the Initial Fundings may be insufficient to permit LCRA, after
the Initial Fundings, to enable all of the Customers to have access to all of their
respective Reserved Capacities in that portion of the Contract 6A Wastewater
Interceptor Line. The parties agree that any Customer may discharge its Wastewater
through the Contract 6A Wastewater Interceptor Line in amounts up to its respective
Reserved Capacity in said line and so long as the total Reserved Capacity of the
Contract 6A Wastewater Interceptor Line of all Customers is not exceeded. .
(b) Transfer of Reserved Capacity. Any Customer may transfer any portion
of its Reserved Capacity in one or more System Components to another Customer, BRA,
LCRA, or another entity in exchange for such consideration as the parties to such transfer
shall deem appropriate. The parties making any such transfer shall provide written notice
to LCRA, BRA and the other Customers, signed by the parties accomplishing the transfer,
specifying the amount of transferred Reserved Capacity and the affected System
Component(s), and providing that the parties otherwise ratify and confirm their pre-
existing obligations under this Agreement. No such transfer shall be effective until and
unless such notice is provided. A transfer of Reserved Capacity shall not change any
payment or other obligations of the Customers, BRA or LCRA, unless agreed to by all
parties hereto.
(c) Documentation of Transferred Reserved Capacity In System Components.
In the event that Reserved Capacity is transferred LCRA shall cause a written addition to
be made to Exhibit B describing such transfer and setting forth the revised Reserved
Capacity of each Customer in such new System Component(s).
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(d) Notice of Use of Reserved Capacity. At least once each year, BRA shall
notify the Technical Review Committee of the level of usage by each Customer of its
Reserved Capacity in each System Component if BRA has such information. BRA, LCRA
or any Customer may, but none shall have any duty to, enforce or restrict the discharge
of Wastewater by any Customer to its Reserved Capacity.
Section 4.02. POINT(S) OF ENTRY. The parties recognize that at this time they are
unable to designate specific Points of Entry for each Customer. Each Customer shall discharge
its Wastewater at a Point or Points of Entry to be designated for each Customer in an amendment
to the Engineering Report to be mutually agreed upon by BRA, LCRA and any Customer utilizing
such Point of Entry as design of the System progresses. It shall be the sole responsibility of each
Customer to convey its Wastewater to the Point or Points of Entry.
Section 4.03. RATE AND QUANTITY AT POINT(S) OF ENTRY. The rate and
quantity of Wastewater discharged into the System at the Point or Points of Entry by each
Customer shall be metered unless otherwise agreed by all parties to this Agreement. BRA, LCRA
and the Customers will cooperate in good faith to design the Points of Entry to be at appropriate
sizes and in appropriate locations to receive the Customers' Reserved Capacities. Each Point of
Entry shall be designed to accept discharges at a maximum rate to be agreed upon by BRA, LCRA
and the Customers as design of the System progresses and stated in an amendment to the
Engineering Report, and no Customer shall ever make discharges into the System at such Point
of Entry at a rate exceeding such agreed design rate.
Section 4.04. DISCHARGE QUALITY. The Customers shall have the right to discharge
Wastewater into the System meeting the requirements of quality as set forth in this Article and not
containing wastes identified in the List of Inadmissible Wastes attached as Exhibit C of this
Agreement.
(a) General Requirements. In order to permit BRA to properly treat and
dispose of the Customers' Wastewater; to protect the public health; and to permit
cooperation with other agencies which have requirements for the protection of the
physical, chemical, and bacteriological quality of public water and water courses, each
Customer agrees to prohibit discharge into the System at unauthorized points of entry or
at rates of flow or of quality not herein specified as admissible.
(b) Admissible Wastes. Discharges into the System shall consist only of waste
which the System is capable of handling:
(1) so that the effluent and sludge from the System meets the current
legal standards of the EPA, the Commission or any governmental body having
legal authority to set standards for such effluents;
(2) without causing damage to the System which would result in
increased maintenance costs;
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(3) without causing excessive treatment costs; and
(4) which meets the requirements of the EPA Pretreatment Regulations,
40 CFR Part 403, the Customer's applicable ordinances and the EPA - approved
pretreatment program for the System.
(c) Inadmissible Wastes. A List of Inadmissible Wastes promulgated by BRA
is attached hereto as Exhibit C. EPA and the Commission periodically modify standards
on prohibited discharges; therefore, revisions to, additions to or deletions from the items
listed in this Section will become nerPssary to comply with these latest standards. It is the
intention of this Agreement that prohibited discharge requirements be reviewed
periodically by BRA and that Exhibit C be revised by BRA in accordance with the latest
standards of EPA, the Commission or federal or state agency having regulatory authority
over the discharges made to the System. Exhibit C may also be revised on the basis of
changes in the treatment process or the general character of wastewater received at the
treatment works or indicated ih the monitoring data collected pursuant to the System
pretreatment program. Any required revisions shall be made by BRA only after notice and
opportunity to comment has been provided to LCRA, the Customers and the Technical
Review Committee and shall become effective upon written notice thereof being given to
LCRA, the Customers and the Technical Review Committee. Each Customer shall be
responsible for integrating such changes into its local sewer use ordinances and notifying
all affected users of the change.
Section 4.05. REGULATIONS. Discharges to the System shall be governed by the
requirements set forth in the EPA pretreatment regulations, Commission pretreatment regulations,
the List of Inadmissible Wastes, the System pretreatment program and the Customers' respective
sewer use ordinances.
Periodically, BRA will promulgate a new List of Inadmissible Wastes, Exhibit C, of this
Agreement, in response to changes in federal or state requirements, changes in the treatment
process, or the general character of the wastewater received at the treatment works, as described
in Section 4.04(c) above. The List of Inadmissible Wastes will contain pollutant allocations to
each Customer. Each Customer is responsible for developing specific local limits from the
pollutant allocations and enforcing these limits through the Customers' ordinances and sewer use
permits.
Section 4.06. INDUSTRIAL WASTES. Each Customer agrees to implement and enforce
the System pretreatment program for all areas receiving sanitary sewer service from the Customer.
Each Customer also covenants that it will have in effect and will enforce a sewer use ordinance
in accordance with EPA and Commission regulations or regulations of other governmental
agencies having lawful jurisdiction to set standards for waste discharges. Furthermore, each
Customer shall, at any reasonable time upon request by BRA, produce pretreatment program
records for review.
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Each Customer also agrees that no new Significant Industrial User shall be allowed to
connect to the Customer's sewer system without prior notification being given by the Customer
to BRA of the intent to connect. The Customer will provide BRA with a copy of the draft sewer
use permit and permit application at the time such notification is given. All Significant Industrial
Users that are customers of a Customer and located outside the Customer's city limits will also
be required to obtain a sewer use permit.
BRA will be responsible for treatment plant monitoring and reporting as required by the
EPA and the Commission. All additional responsibilities not mentioned in this Agreement are
outlined in the EPA - approved System pretreatment program which may be amended from time
to time.
Section 4.07. SYSTEM LIMITATIONS. LCRA and BRA shall be obligated to receive
into the System at the Points of Entry only Wastewater meeting the quantity limits and quality
requirements of the Article IV of this Agreement; provided, however, (i) the total quantity of
Wastewater discharged into the System shall never exceed the amount which the System is capable
of receiving, treating, and disposing, and (ii) no discharge will be made into the System which
would cause it to be overloaded or be in violation of its permits from the State of Texas and /or
the United States of America.
Section 4.08. RESPONSIBILITY FOR TREATMENT AND DISPOSAL OF WASTE-
WATER. Responsibility for the reception, transportation, delivery and disposal of all Wastewater
discharged hereunder shall remain with each Customer to the Points of Entry, and upon passing
through the Points of Entry, responsibility shall, except as provided below, pass to BRA, which
shall be responsible for the proper reception, transportation, treatment and disposal of all such
Wastewater, meeting the applicable quality standards, received by it at the Points of Entry.
Section 4.09. METERING. LCRA will furnish and install as a Project Cost, and BRA
will operate and maintain at its expense, at each Point of Entry the necessary equipment and
devices of standard type for measuring properly all Wastewater to be discharged under this
Agreement as such devices are specified in the Engineering Report. Such meters and other
equipment shall remain the property of LCRA and constitute a portion of the System. The
Customers shall have arcpss to such metering equipment at all reasonable times for inspection and
examination. The reading, calibration and adjustment of meters shall be done by employees or
agents of BRA after two (2) working days notice to the Customers and in the presence of a
representative of any Customer if requested by the Customer. All readings of meters will be
entered upon proper books of record or in computer records maintained by BRA and a copy or
printout of said readings supplied to the Customers and LCRA. Upon written request any
Customer may have access to said record books or computer printouts during reasonable business
hours.
BRA shall calibrate the meters at least once in each year of operation. BRA shall provide
reasonable notice of at least two (2) days to the Customers of a calibration and provide the
Customers an opportunity to observe the calibration. Not more than three (3) times in each year
of operation, BRA shall calibrate the meters, if requested in writing by the affected Customer, in
26
the presence of a representative of the requesting party. Such parties shall jointly observe any
adjustments which are made to the meters in case any adjustment is found to be necessary. If, for
any reason, any meters are out of service or out of repair, or if, upon any test, the percentage of
inaccuracy of any meter is found to be in excess of five percent (5 %), registration thereof shall
be corrected for a period of time extending back to the time when such inaccuracy began, if such
time is ascertainable, and if not ascertainable, then for a period extending back one -half (1/2) of
the time elapsed since the date of the last calibration, but in no event further back than a period
of six (6) months. Any Customer may, at its option and its own expense, install and operate a
check meter to check each meter operated by BRA, but the measurement for the purpose of this
Agreement shall be solely by LCRA's meters, except during any period when a check meter may
be used under specific written consent by BRA. All such check meters shall be of standard make
and shall be subject at all reasonable times to inspection and examination by any employee or
agent of BRA, but the reading, calibration and adjustment thereof shall be made only by the
Customer installing same.
Section 4.10. UNIT OF MEASUREMENT. The unit of measurement for Wastewater
delivered hereunder shall be one thousand (1,000) gallons, U.S. Standard Liquid Measure.
ARTICLE V
SYSTEM AIJDGF.TS AND CHARGES
Section 5.01. ESTABLISHING BUDGETS AND CHARGES.
(a) Initial Proposals. As soon as reasonably possible during the first partial Fiscal
Year and not less than one hundred five (105) days before commencement of each Fiscal
Year thereafter while this Agreement is in effect, BRA shall furnish to LCRA a detailed
estimate of expenses or costs projected to be incurred by it in the next ensuing Fiscal Year
which it deems properly includable in the Annual Project Requirement for such next
following Fiscal Year and LCRA shall furnish to BRA a detailed estimate of expenses or
costs projected to be incurred by it in such next ensuing Fiscal Year which it deems
properly includable in the Annual Operation and Maintenance Expense Requirement for
such next following Fiscal Year. Copies will be provided to the Technical Review
Committee. As soon as reasonably possible during the first partial Fiscal Year and not less
than seventy-five (75) days before commencement of each Fiscal Year thereafter while this
Agreement is in effect, LCRA and BRA, respectively, shall cause to be prepared and filed
with each other, the Technical Review Committee and each Customer the tentative budgets
for Annual Project Requirement and Annual Operation and Maintenance Expense Require-
ment and corresponding proposed Capital Charges and Flow Charges for the System for
the next ensuing Fiscal Year.
(b) Approval of Budget if No Protest. If no protest or request for a hearing on
such tentative budgets and proposed Capital Charges and Flow Charges is presented within
thirty (30) days after such filing of the tentative budgets and proposed Capital Charges and
Flow Charges, the tentative budgets and proposed Capital Charges and Flow Charges for
27
the System, when adopted by LCRA's and BRA's Boards of Directors, respectively, shall
be deemed to be in effect for all purposes for the next ensuing Fiscal Year.
(c) Procedures for Protested Budget. If a protest or request for a hearing is duly
filed, it shall be the duty of BRA and/or LCRA to fix a date and time for a hearing on the
tentative budget or budgets and proposed Capital Charges and /or Flow Charges to be
conducted in a manner to enable interested persons to communicate such information as
they shall desire to present and such views as they shall desire to express to the Board of
Directors of the entity at whose budget the protest or request is directed. The party filing
such protest, the Technical Review Committee, and all Customers shall be advised in
writing of the time and place of such hearing. After consideration of the information and
comments produced at such hearing, the Boards of Directors of BRA and /or LCRA may
adopt the budget or budgets and proposed Capital Charges and /or Flow Charges or make
such amendments thereof as may seem proper. The budget or budgets and proposed
Capital Charges and /or Flow Charges thus approved by the Boards of Directors of BRA
and LCRA shall be deemed to be in effect for the next ensuing Fiscal Year.
(d) General. Subject to the provisions of the resolutions authorizing LCRA debt,
all interest income earned by the investment of any funds created in the Bond Resolution
or any other funds related to the System (with exception of the Operation and Maintenance
Reserve Fund) shall inure to the benefit of the System and be taken into account in
determining the Budgets. BRA and LCRA shall consult with each other regarding the use
of the Repair and Replacement Fund and LCRA shall use the moneys from the Repair and
Replacement Fund to pay costs of repairs or replacements of the System which are such
that they should be spread over a number of years rather than included as a part of the
Operation and Maintenance Expense in a single year. Any such duties and responsibilities
performed in response to this Agreement not specifically described herein as the role of
LCRA or BRA shall be decided by the two parties as they occur and the related costs
thereof included in Project Costs or Operation and Maintenance Expense, as applicable.
(e) BRA and LCRA Relations. To the extent applicable law delegates to LCRA
or BRA (the "mandated entity") the responsibility and authority to approve the budget or
budgets or the Capital Charge or Flow Charge, but the other of LCRA or BRA (the "other
entity") actually establishes and submits to the other said proposed budget or charge, then
failure to protest or request a hearing within the timeframes provided above shall be
deemed to be approval by the mandated entity of the proposed budget or charge adopted
by the other entity. Otherwise, to the extent that the mandated entity reasonably
determines that the budget or charge finally adopted by the other entity requires modifica-
tions, then ultimate authority to make modifications to said budget or charge shall lie with
the mandated entity which shall promptly make any such modifications to the budget or
charge as reasonably required and notify the other entity and all Customers of same, which
shall be effective upon receipt. Copies of the approved budgets and a schedule of a
projected Capital Charges and Flow Charges shall be provided to the Customers promptly.
Should LCRA be the mandated entity with respect to any item of Operation and
Maintenance Expense budgeted by BRA to be paid by BRA and should it effectively
28
exercise its rights as the mandated entity to make any modification in the amount of such
item budgeted by BRA, BRA may, upon ninety (90) days written notice to LCRA,
Customers and the Technical Review Committee, surrender and transfer to LCRA its
rights and obligations with respect to Operation and Maintenance of System pursuant to
this Agreement. Upon the delivery of such notice, LCRA shall, at the expiration of such
ninety (90) day period, succeed to the rights and obligations provided herein for operation
and maintenance of the System by BRA and BRA shall have no further rights or
obligations hereunder, except that its rights with respect to collection of Capital Charges
resulting from Project Costs theretofore incurred by BRA shall not be affected and LCRA
shall pay it for all Operation and Maintenance Expense incurred by it up to and including
the time of termination of its rights and obligations provided herein, together with the costs
incurred by it in effecting termination, which termination costs shall constitute Operation
and Maintenance Expense.
Section 5.02. CUSTOMER DISPUTES. The Customers retain such rights as they may
possess under applicable law to seek review of the reasonableness of LCRA's or BRA 's charges
under this Agreement by the Commission. If a Customer at any time disputes the amount to be
paid by it under this Agreement, such Customer shall nevertheless promptly make the payment
or payments determined by BRA and LCRA. If it is subsequently determined by agreement,
administrative agency or court decision that such disputed payments made by the Customer should
be changed, BRA and LCRA shall promptly revise and reallocate the charges among all
Customers then being served by BRA and LCRA in such manner that the Customers will pay
amounts which cumulatively permit BRA and LCRA to receive the entire amount of the Annual
Project Requirement and the Annual Operation and Maintenance Expense Requirement permitted
hereunder as the same may be modified by final effective order of an administrative agency or
court of appropriate jurisdiction; provided, however, nothing herein shall ever be construed to
prevent LCRA or BRA from recovering from the Customers the amount required to meet the
Annual Project Requirement hereunder. If the Capital Charges or Flow Charges are redetermined
as herein provided, BRA and LCRA will promptly furnish each Customer with an updated
schedule of monthly payments reflecting such redetermination.
Section 5.03. CHANGES FROM NEW CUSTOMERS, EMERGENCIES AND LEGAL
ACTION. LCRA and BRA may adopt amendments to the budgets or the Capital Charges or Flow
Charges by following a process similar to that provided above for the establishment of such ,
matters initially if, during a Fiscal Year:
(i) new customers are added to the System by agreement of the
Customers, BRA and LCRA;
(ii) unanticipated emergency Project Costs or Operation and Mainte-
nance Expenses are experienced; or
(iii) an adjustment is necessitated by regulatory requirement.
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Section 5.04. CAPITAL CHARGES.
(a) General. On or before the twentieth day of each month, every•Customer
shall pay its Capital Charge. During the term of this Agreement, the Capital Charge for
each Customer to be paid each month shall be determined by allocating among the
Customers one - twelfth (1 /12) of the Annual Project Requirement in the manner set forth
in subsection (b) below, which the Customers, LCRA and BRA believe is a reasonable
basis upon which to allocate said costs. Notwithstanding anything in this Agreement to
the contrary, in all circumstances, the sum of the Capital Charges paid by all Customers
shall equal one hundred percent (100 %) of the Annual Project Requirement.
(b) Allocation of Annual Project Requirement. The Annual Project
Requirement will be allocated among Customers in two steps:
(i) The Annual Project Requirement will be functionalized between
Treatment Facilities, Downstream Collection System and Upstream Collection
System in proportion to LCRA's and BRA'S cumulative Project Costs in each.
LCRA's continuing property records will be used for cost functionalization.
Project Costs not directly attributable to one of the three categories will be
functionalized among the three categories in proportion to the Project Costs directly
functionalized to those categories.
(ii) (A) The Annual Project Requirement - Treatment Facilities will
be allocated among the Customers in proportion to the Customers' Reserved
Capacities (as shown in Exhibit B). The resulting proportions of the Annual
Project Requirement to be allocated to each Customer for each year are also shown
on that Exhibit B. The resulting percentages are also shown on that Exhibit.
(B) The Annual Project Requirement - Downstream Collection
System will be allocated among the Customers in proportion to their Contractual
Flows in Year 2036 as shown on Exhibit B. The resulting percentages are also
shown on that Exhibit. Until and unless LCRA commences construction or
acquisition of Phase II of the Downstream Collection System with capacity for
anticipated future Wastewater flows from Austin's Lake Creek watershed, it shall be
conclusively presumed for purposes of this subsection that the Downstream
Collection System will not have capacity for anticipated future Wastewater flows
from Austin's Lake Creek watershed.
(C) The Annual Project Requirement - Upstream Collection
System will be allocated between the Customers in proportion to the Customers'
Contractual Flows into only the Upstream Collection System in year 2036 as shown
on Exhibit B. The resulting percentages are also shown on that Exhibit.
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(c) Recognizing that LCRA or BRA will pledge the revenues of the System,
together with, in the case of LCRA, other revenues of the LCRA System, to pay, secure
and finance the issuance of Bonds, it is hereby agreed that upon the effective date of this
Agreement, except at otherwise provided in Section 2.03(c)(1) and (2), each Customer
shall be unconditionally obligated to pay the Capital Charge and Flow Charge regardless
of whether or not such Customer actually discharges Wastewater hereunder, whether due
to Force Majeure or otherwise. Except as otherwise provided in Section 2.03(c)(1) and
(2), each Customer agrees that its obligation to pay the Capital Charge and Flow Charge
shall be absolute and unconditional, irrespective of any rights of set -off, diminution,
abatement, recoupment or counterclaim the Customer might otherwise have against BRA
or LCRA or any other person, and the Customer covenants not to seek and hereby waives,
to the extent permitted by applicable law, the benefits of any rights which it may have at
any time to any stay or extension of time for performance or to terminate, cancel or limit
its liability to pay the Capital Charge and Flow Charge. Each Customer hereby agrees that
the holders from time to time of the Bonds shall be entitled to rely upon the agreement of
the Customer to pay the Capital Charge and Flow Charge regardless of the validity of the
remainder of this Agreement or any other agreement. Each Customer agrees, if requested
to do so by LCRA or BRA, as appropriate, to execute a separate agreement with LCRA,
the owners of the Bonds or a trustee acting on behalf of the owners of the Bonds
evidencing its unconditional obligation, except as otherwise provided in Section 2.03(c)(1)
and (2), to pay the Capital Charge and Flow Charge to enable LCRA or BRA, as
appropriate, to pay debt service on the Bonds issued by LCRA or BRA for the System.
Such additional agreements shall in all respects be consistent with the requirements of this
Agreement regarding the payment of the Capital Charge and Flow Charge by the
Customer.
(d) The preceding paragraph shall not be construed to release BRA or LCRA
from the performance of any of their undertakings contained in this Agreement or, except
to the extent provided in this section, prevent or restrict any Customer from asserting any
rights which it may have against BRA, LCRA or any other person under this Agreement
or under any provision of law or prevent or restrict such Customer, at its own cost and
expense, from prosecuting or defending any action or proceeding against or by third
parties or taking any other action to secure or protect its rights under this Agreement.
(e) The parties recognize the unique status of development of Cedar Park's
utility system which is not as developed as that of Round Rock. Because of this, all parties
have agreed to cooperate to attempt to structure repayment of the Project Costs in the first
five years of this Agreement so as to minimize the potential for unplanned retail rate
adjustments by Cedar Park. Accordingly, LCRA agrees to use diligent and prudent efforts
to amortize the Project Costs for Phases I and II of the System in a manner and over a
period that results in total costs of regional service to Cedar Park in the first Live full years
of the project in amounts no more than:
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FY 1998 $400,000
FY 1999 $450,000
FY 2000 $615,000
FY 2001 $850,000
FY 2002 $1,100,000
(f) Each Customer recognizes that the Bonds issued by LCRA or BRA, as
appropriate, for the System will be supported by the pledge, directly or indirectly, of the
payment of the Capital Charges and Flow Charge by the Customers under the terms of the
Agreement and, therefore, that each Customer is an "obligated person" as that term is
applied within the meaning of Securities Exchange Commission Rule 15c2 -12. In order
to enable LCRA or BRA, as appropriate, to issue the Bonds and comply with applicable
securities laws, each Customer agrees to execute, and by signing this Agreement approves
and authorizes the execution of, if requested by BRA and LCRA, a continuing disclosure
agreement in form and substance substantially as provided in Exhibit D hereto.
(g) As described in Exhibit B, Round Rock will be responsible for paying for
the Flow Charges and Capital Charges related to Wastewater service to Austin for Brushy
Creek Municipal Utility District and Fern Bluff Municipal Utility District for Fiscal Years
1997 -2000 and LCRA will be responsible for paying for those charges after Fiscal Year
2000.
Section 5.05. FLOW CHARGES. Each Customer shall be required to pay each month
a Flow Charge for use in meeting the Annual Operation and Maintenance Expense Requirement.
Subject to, and in accordance with, the provisions of Sections 5.01 and 5.02, (i) before the Initial
Funding Date and (ii) before the first day of each Fiscal Year thereafter, BRA shall estimate and
Budget the Annual Operation and Maintenance Expense Requirement for the period between Initial
Funding Date and August 31, 1997, in the case of that period, and for the following Fiscal Year
in the case of each subsequent Fiscal Year. In the case of each annual Operation and Maintenance
Expense budget made after the availability of the annual report required by the provisions of
Section 7.13, below, covering a Fiscal Year during which Flow Charges from any Customer have
been payable hereunder, the amount estimated for the following Fiscal Year per the sentence next
preceding shall be adjusted upward or downward, as appropriate, to account for difference
between actual Operation and Maintenance Expense as reflected by the annual report and that
estimated for the previously reported period. The monthly Flow Charge for each Customer for
the period for which the estimate is made shall be 1 /12th (or in the case of the initial Fiscal Year,
the fraction obtained by dividing 1 by the number of complete calendar months between the Initial
Funding Date and August 31, 1997) of the amount calculated by multiplying the actual flows of
Wastewater from such party's collector system into the System during the twelve (12) month
period ending on April 30 preceding the beginning of the Fiscal Year for which the calculation
is being made, expressed in thousands of gallons, by the quotient obtained by dividing the
estimated Annual Operation and Maintenance Expense Requirement for the period for which the
calculation is being made, expressed in dollars, by the actual flows into System, also expressed
in thousands of gallons, from the collector systems of all Customers during the twelve (12) months
period ending on such April 30. In the initial Fiscal Year of service, the allocation of the
32
Operation and Maintenance Expenses among the Customers shall be based on projected flows as
follows: Cedar Park - 0 gallons, and Round Rock - 2,343,700,000 gallons.
Section 5.06. HOW, WHEN AND WHERE PAYMENTS ARE TO BE MADE. Delivery
to the Customers of the final budgets for a Fiscal Year, together with the schedule of resulting
Capital Charges and Flow Charges, shall constitute the invoice for same for the entire Fiscal Year.
Payment of all Capital Charges and Flow Charges required to be paid by Customers under the
provisions of this Agreement shall be made to LCRA. LCRA and the individual(s) acting for it
in receiving payment of such charges shall receive the portion of each payment received consisting
of Capital Charges owing to BRA as agent for BRA. Receipt of such payments by LCRA as agent
for BRA shall completely discharge any liability of Customer to BRA for such payments. All
such funds so received as agent shall be immediately disbursed to BRA per directions to be given
by BRA to LCRA in writing, and the duties of the agent shall be completely discharged by such
disbursement. All charges payable for any calendar month shall be due and payable in Travis
County, Texas, on or before the twentieth day of such month. Past due payments shall bear
interest from the date due until paid at the lower of ten percent (10 %) per annum or the highest
lawful rate in the State of Texas.
Section 5.07. DEFAULT.
(a) Monetary Defaults by Customers. In the event any Customer defaults in
the payment of the Capital Charge or Flow Charge required hereunder, BRA and LCRA
shall immediately give notice of such default to such Customer and other Customers;
provided, however, that nothing in this section shall prevent any Customer from paying
under protest any amount alleged as owed by BRA or LCRA or prevent BRA or LCRA
from accepting any payment even if less than the amount alleged by BRA or LCRA as
owed by the Customer. Payment or receipt of any such disputed amount shall not be
construed as a waiver of any right of the party making or receiving such disputed amount
to contest such matter and to demand payment or receipt of a different amount.
Thereafter, the defaulting Customer shall take all appropriate steps to correct such default
and shall correct such default within ten (10) days after receipt of such notice. Any past
due amount shall be paid, together with interest at the lesser of ten percent (10 %) per
annum or the maximum legal rate of interest then in effect.
(b) Other Defaults by Customers. BRA and I.CRA. In the event that any
Customer or BRA or LCRA defaults in the performance of any of their respective
obligations under this Agreement, other than the obligation to make payments of the
Capital Charge or Flow Charge, any of the non - defaulting parties, after giving reasonable
notice of the default and opportunity to cure same, may exercise any remedy provided
below in Article VIII.
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Section 5.08. CAPITAL MANAGEMENT FEE.
It is agreed between the parties that, in addition to all other compensation or reimburse-
ment authorized and required to be made by the Customers as otherwise provided in this
Agreement, LCRA, or BRA as appropriate, shall receive a fee in the total aggregate amount from
all Customers of five percent (5 %) of the portion of the Annual Project Requirement (exclusive
of that portion of the Annual Project Requirement consisting of the Capital Management Fee and
coverage as described in Section 1.01(k)(iii)) to compensate LCRA for agreeing to include the
System in the LCRA System and for the increased responsibility, financial risk and regulatory risk
borne by LCRA, or BRA as appropriate, in fulfilling its management obligations under this
Agreement. Such fee shall be included in the Annual Project Requirement to be recovered
through the Capital Charges paid by the Customers of the System. Money received by LCRA,
or BRA as appropriate, from such fee may be used for any lawful purpose. Provided further,
however, that if BRA pays the Project Costs which result in receipt of Annual Project
Requirement repayments by the Customers, that part of the five percent (5 %) Capital Management
Fee shall be remitted by LCRA to BRA.
ARTICLE VI
TF.CHNICAI. REVIEW COMMITTEE
Section 6.01. COMPOSITION OF TECHNICAL REVIEW COMMITTEE. There is
hereby created an Technical Review Committee to be composed of the following:
(a) Two representatives appointed by Cedar Park; and
(b) Two representatives appointed by Round Rock.
The governing bodies of the Customers shall each appoint their representatives (and
alternate representatives to serve in the absence of the Customers' representatives) to the Technical
Review Committee promptly after execution of this Agreement, and shall immediately notify BRA
and LCRA of such appointment. Each representative (or alternate representative) of a Customer'
shall serve at the will of the governing body which the person represents. Upon the 'death,
resignation or revocation of the power of such representative (or alternate representative), the
governing body of the appropriate entity shall promptly appoint a new representative (or alternate
representative) to the Technical Review Committee.
Section 6.02. RESPONSIBILITY OF TECHNICAL REVIEW COMMITTEE. The
Technical Review Committee shall represent the individual and collective interests of Customers
and shall consult with and advise BRA and LCRA, through their respective General Managers or
designated representatives, with regard to the following matters pertaining to the System:
(a) The issuance of Bonds or refunding thereof;
(b) The operation and maintenance of the System;
34
(c) The addition of new customers to the System and the terms and conditions
of the agreements with such new customers consistent with the provisions of this
Agreement;
(d) Review of the budgets, prior to submission to the Boards of Directors of
BRA or LCRA;
(e) Review of the annual reports of the System;
(f) Improvements to and Expansions of the System;
(g) Review of the funding and use of the Operation and Maintenance Reserve
Fund and the Repair and Replacement Reserve Fund;
(h) Consideration of whether BRA should solicit proposals or bids for operation
of the System;
(i) Review and provide recommendations regarding proposals for operation of
the System;
(j) Review and make suggestions regarding proposals submitted to LCRA and
BRA for engineering services related to the System;
(k) Changes to the Engineering Report (which shall not be made by BRA and
LCRA without unanimous approval by the Technical Review Committee); and
(1) Any other pertinent matters relating to the management of the System.
The Technical Review Committee shall meet at regular intervals to review progress of construction
of the System and the ongoing operation of the System. The Technical Review Committee shall
have access to and may inspect at any reasonable time all physical elements of the System and all
records and accounts of BRA and LCRA pertaining to the System. The Technical Review
Committee shall be diligent, prompt and timely in reviewing and commenting on matters
submitted to it. The Customers recognize that the activities of the Technical Review Committee
are an important function of the operation of the System and authorize payment of all expenses
and charges associated therewith.
ARTICLE VII
CF.NF.RAL PROVISIONS
Section 7.01. NO TAX OBLIGATION OF CUSTOMERS. Unless otherwise specifically
provided in writing by subsequent agreement between BRA and LCRA and any Customer, neither
BRA nor LCRA shall ever have the right to demand payment by a Customer of any obligation
assumed or imposed on it under and by virtue of this Agreement from funds raised or to be raised
35
by taxation, it being expressly understood by the parties hereto that all payments due by the
Customers hereunder are to be made from the revenues and income received by each Customer
from its waterworks and sanitary sewer systems.
Section 7.02. PAYMENTS TO CONSTITUTE OPERATING EXPENSES OF
CUSTOMER. Each Customer represents and covenants that the services to be obtained pursuant
to this Agreement are essential and necessary to the operation by the Customer of its own
wastewater facilities and the provision of sanitary sewer services to its constituents, and that all
payments to be made hereunder by it will constitute reasonable and necessary operating expenses
of the Customer's waterworks and sanitary sewer systems, within the meaning of Article 1113,
Vernon's Texas Civil Statutes, and the provisions of all ordinances or resolutions, as appropriate,
authorizing the issuance of all bonds of the Customer which are payable from revenues of the
Customer's waterworks and sanitary sewer systems. The parties acknowledge that, to the extent
each Customer has Reserved Capacity in any System Component, LCRA and BRA intend to own
and operate the System as capital improvements on behalf of that Customer within the meaning
of Section 395.002(1), Texas Local Government Code. The parties understand and agree that
the decision as to whether the capital improvements constructed or acquired by LCRA and BRA
on behalf of a Customer are used to serve new development (within the meaning of Section
395.001(6), Texas Local Government Code) and the decision as to whether to impose any impact
fees (within the meaning of Section 395.001(4), Texas Local Government Code) is exclusively
that of such Customer.
Section 7.03. CUSTOMER RATES, FEES AND CHARGES. BRA and LCRA acknowl-
edge that each Customer has the right under applicable law to assess, charge and collect such
Customer impact fees, capital recovery fees, connection fees, meter fees, or other service fees,
rates, taxes or other charges as it will deem appropriate. They will not construe this Agreement
to require (except as provided otherwise in this Section), limit or restrict the governmental power
of any Customer to implement the same. Each Customer will be solely responsible for the proper
exercise of its governmental power to assess and collect such fees and charges and for ensuring
that all fees, taxes, rates and charges Customer elects to charge are in compliance with applicable
law. Each Customer agrees to establish and collect such rates and charges for its waterworks and
sanitary sewer services to be supplied by its system as will make possible the prompt payment of
all expenses of operating and maintaining its system including the payments committed hereunder,
and the prompt payment of the principal of and interest on its obligations, if any, payable from
the revenues of its waterworks and sanitary sewer systems.
Section 7.04. USE OF PUBLIC PROPERTY. By these presents, each Customer, to the
extent capable under existing law, authorizes use by BRA and LCRA of streets and general utility
or sewer easements of the Customer for construction, operation and maintenance of Phases I and
II of the System, so long as such use is in compliance with the terms of any easement utilized by
BRA and LCRA and does not interfere with any lawful use by the Customer and subject to all of
the Customer's ordinances, rules and regulations respecting the manner of such use and restoration
of lands, pavement or improvements resulting from exercise of the rights provided in this section.
including the cost of relocation of any facilities located within any such easement as an expense
36
of the System. BRA and LCRA will cooperate with each Customer in the timing, planning and
installation of the System to be constructed and installed hereunder.
Section 7.05. FORCE MAJEURE. In case 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
if such party shall give notice and full particulars of such "Force Majeure" in writing to the other
parties within a reasonable time after occurrence of the event or cause relied on, the obligation
of the party giving such notice, so far as it is affected by such Force Majeure, with the exception
of the obligation to pay Capital Charges, shall be suspended during the continuance of the inability
then 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 public enemy. orders
of any kind of the United States or the State of Texas or any civil or military authority, insurrec-
tions, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods,
washouts, droughts, arrests, restraint of government and people, civil disturbances, explosions,
breakage or accidents to machinery, pipelines or canals, partial or entire failure of water supply
and inability on the part of such Customer to provide water necessary for operation of its water
and wastewater system hereunder or of BRA and LCRA to receive Wastewater on account of any
other causes not reasonably within the control of the party claiming such inability. It is
understood and agreed that the settlement of strikes and lockouts shall be entirely within the
discretion 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 the settlement of strikes and
lockouts by acceding to the demands of the opposing party or parties when such settlement is
unfavorable in the judgment of the party having the difficulty.
Section 7.06. INSURANCE. BRA and /or LCRA will carry fire, casualty, public liability
and other insurance for purposes and in amounts which would ordinarily be carried by a privately
owned utility company owning and operating facilities similar to the System, except that BRA and
LCRA need not carry liability insurance except to insure against risk of Toss due to claims for
which they can, in the opinion of their respective legal counsels, be liable under law or judicial
decision. Such provisions will be so designed as to afford protection not only for the owners of
the Bonds but to assure and facilitate, to the extent feasible and practicable, the restoration of
damaged or destroyed properties and to minimize the interruption of service to the Customers and
others. Provided, however, nothing herein shall prevent BRA and /or LCRA from providing such
insurance through self- insurance, self - insurance pools or similar methods.
Section 7.07. GOVERNMENTAL REGULATION. This Agreement shall be subject to
all valid rules, 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. In each instance herein where reference
is made to a federal or State regulation, it is the intention of the parties that at any given time the
then current edition of any such federal or State regulation shall apply. BRA, LCRA and the
Customers agree that their obligations under this Agreement shall include compliance with the
requirements made under said laws, and any rules and regulations issued pursuant thereto. New
37
standards shall be adopted by BRA and LCRA which are in compliance with applicable State and
federal laws and any valid rules and regulations issued pursuant thereto.
Section 7.08. CUSTOMER COOPERATION TO ASSURE REGULATORY
COMPLIANCE. Since BRA and LCRA must comply with all federal, state and local
requirements to obtain permits, grants and assistance for system construction, studies, etc., each
Customer will cooperate with BRA and LCRA in good faith at all times to assure compliance with
any such governmental requirements where noncompliance or non - cooperation by the Customer
may subject BRA and LCRA to penalties, loss of grants or other funds, or other adverse
regulatory action. In making the determinations called for herein, BRA and LCRA covenant that
such determinations will be made only after informing the Technical Review Committee, after
detailed studies of statistical data available as to the need and feasibility have been made, and after
consulting with engineers and financial advisors. Each Customer will be kept advised at all times
of planning and implementing Required Improvements. In that regard, each Customer agrees to
adopt and enforce, and to provide in its wholesale contracts with its water customers in the future
that they shall adopt and enforce, an appropriate water conservation and /or drought management
plan as required by the Texas Water Development Board as a result of its loan of funds to LCRA
for construction and acquisition of the System.
Section 7.09. CONTRACTS WITH OTHERS IN RELATION TO SYSTEM.
(a) Each Customer shall have the right to enter into contracts with other persons
natural or corporate, private or public, to receive Wastewater from such persons. Each
Customer covenants that it will advise BRA and LCRA of all such written contracts and
will, if requested by BRA or LCRA, furnish BRA and LCRA with a list of all customers
other than retail, residential customers. Initially, within thirty (30) days after execution
of this Agreement, and thereafter for each calendar year during the tenure hereof, each
Customer will send to LCRA and BRA by January 15 of each year an annual report
containing the following data about each Customer's customers that the System ultimately
serves:
(1) actual number of connections as of the end of the calendar year;
(2) number of new wastewater connections made in the previous
calendar year;
(3) classification, by number and percentage, of accounts according to
the following:
(i) residential;
(ii) multi- family;
(iii) business /commercial; and
(iv) other; and
38
(4) if business or commercial connections, a copy of any Customer
industrial waste discharge permit issued to such premises.
(b) BRA and LCRA shall have the right to enter into agreements with other
persons so long as such agreements do not prevent BRA or LCRA from meeting their
obligations to provide service to the Customers from the System in accordance with this
Agreement.
Section 7.10. NON - INFRINGEMENT. Notwithstanding anything in Section 7.09, the
Customers, BRA and LCRA agree that they will not provide or enter into an agreement to provide
wastewater service directly or indirectly within another Customer's corporate limits or
extraterritorial jurisdiction as the same may exist from time to time unless the other Customer
consents. For purposes of this section, LCRA's "corporate limits or extraterritorial jurisdiction"
shall mean that part of Austin's corporate limits and extraterritorial jurisdiction in the Brushy
Creek watershed.
Section 7.11. SALE OR TRANSFER OF SYSTEM; CUSTOMERS' RIGHT OF FIRST
REFUSAL.
(a) As the System will constitute a portion of the LCRA System, LCRA has
covenanted in the Bond Resolution and in the resolutions authorizing and governing the
outstanding LCRA Debt that it will not sell, lease or otherwise dispose of the System (or
any other LCRA System properties) required, in the reasonable judgment of the LCRA
Board of Directors, for the efficient operations of the LCRA System and the sale or
disposal of which would cause a breach of LCRA's covenants to secure its outstanding
LCRA Debt. The Customers acknowledge that any transfer or sale of the System to the
Customers will require the LCRA Board of Directors to determine that the System is no
longer required as described above, and further, that the System is no longer necessary or
convenient or of beneficial use to the business of LCRA. The approval of any such
transfer or sale shall be in the sole discretion of the LCRA Board of Directors at the time -
of any such proposed transfer or sale.
(b) Should LCRA or BRA desire to transfer the System or any portion thereof
to any other person (other than a subsidiary or affiliate of LCRA or BRA), it shall first
give one hundred eighty (180) days written notice to the Customers setting forth the terms
of the proposed transfer. The Customers collectively, shall have the right of first refusal
at any time during said one hundred eighty (180) day period to enter into an agreement
with LCRA or BRA to purchase the System or portion thereof proposed to be transferred
on the same terms as the proposed transfer.
Section 7.12. LCRA RIGHT OF FIRST REFUSAL TO PURCHASE CEDAR PARK
TREATMENT PLANT. Cedar Park hereby grants to LCRA a right of first refusal to purchase
the Cedar Park Treatment Plant during the term of this Agreement. If, during the term of this
Agreement, Cedar Park desires to transfer the Cedar Park Treatment Plant or any portion thereof
to any other person (other than a subsidiary or affiliate of Cedar Park), it shall first give one
39
hundred eighty (180) days written notice to LCRA setting forth the terms of the proposed transfer.
LCRA shall have the right of first refusal at any time during said one hundred (180) day period
to enter into an agreement with Cedar Park to purchase the Cedar Park Treatment Plant or portion
thereof proposed to be transferred on the same terms as the proposed transfer.
Section 7.13. EXPANSION OF CEDAR PARK TREATMENT PLANT. Cedar Park
agrees not to expand the Cedar Park Treatment Plant during the term of this Agreement, provided
that all Wastewater capacity required by Cedar Park (i) is available from the System (including
any Expansions) more economically than a plant expansion and (ii) can be provided in the System
within the timeframe required by Cedar Park. Economics and timing will be determined by Cedar
Park, in its sole discretion. If Cedar Park determines that the conditions set forth in (i) or (ii)
above cannot be met, Cedar Park will have the right to expand the Cedar Park Treatment Plant
within the limits of and pursuant to the existing permit for that plant and the other Customers,
LCRA and BRA agree not to oppose or resist that expansion in any way. Cedar Park will further
have the right to continue to operate the Cedar Park Treatment Plant and, in the event of
annexation of Block House Municipal Utility District, the Block House Creek treatment plant, and
to maintain in effect and to renew the existing discharge permits for those plants, TNRCC Permit
No. TX0085740 and NPDES Permit No. 12308 -001 for the Cedar Park Treatment Plant, and
TNRCC Permit No. 13031-001 and NPDES Permit No. TX 0101397 for the Block House Creek
treatment plant. The other Customers, LCRA and BRA agree not to oppose or resist in any way
(i) renewal of those permits or (ii) amendments which would make the permit parameters more
stringent.
Section 7.14. ANNUAL REPORT OF SYSTEM AND AUDITS. BRA and LCRA shall
cause to be prepared an annual report of the System each year. Such report shall contain such
matters and information as may be considered necessary and useful by BRA, LCRA and the
Technical Review Committee. A copy of the annual report and BRA's and LCRA's annual audits
and accompanying management letters shall be promptly provided to each other and to each
Customer, and the Technical Review Committee.
Section 7.15. NO ADDITIONAL WAIVER IMPLIED. No waiver or waivers of any
breach or default (or any breaches or defaults) by any party hereto of any term, covenant,
conditions, or liability hereunder, or of performance by the other parties of any duty or obligation
hereunder, shall be deemed or construed to be a waiver of subsequent breaches or defaults of any
kind, under any circumstances.
Section 7.16. ADDRESSES AND NOTICE. Unless otherwise provided in this
Agreement, any notice, communication, request, reply, or advice (herein severally and
collectively, for convenience, called "Notice ") herein provided or permitted to be given, made or
accepted by any party to the others must be in writing and may be given or be served by
depositing the same in the United States mail postpaid and registered or certified and addressed
to the party to be notified, with return receipt requested, or by delivering the same to an officer
of such party, or by telecopier, when appropriate, addressed to the party to be notified. Notice
deposited in the mail in the manner hereinabove described shall be conclusively deemed to be
effective, unless otherwise stated in this Agreement, from and after the expiration of four (4) days
40
after it is so deposited. Notice given in any other manner shall be effective only if and when
received by the party to be notified. For the purpose of notice, the addresses of the parties shall,
until changed as hereinafter provided, be as follows:
If to LCRA, to:
If to BRA, to:
If to Round Rock, to:
If to Cedar Park, to:
Mr. Mark Rose
General Manager
Lower Colorado River Authority
P. O. Box 220
3701 Lake Austin Boulevard
Austin, Texas 78767
Fax No. (512) 473 - 3298
Mr. Roy Roberts
General Manager
Brazos River Authority
PO Box 7555
4400 Cobbs Drive
Waco, Texas 78710
Fax No. (817) 772 -5780
Mr. Robert Bennett
City Manager
City of Round Rock
221 East Main
Round Rock, Texas 78664
Fax No. (512) 218 -7097
Mr. Don Birkner
City Manager
City of Cedar Park
P. O. Box 1090
600 North Bell Blvd.
Cedar Park, Texas 78613 -1090
Fax No. (512) 258 -6083
41
The parties shall have the right from time to time and at any time to change their respective
addresses and each shall have the right to specify as its address any other address by at least fifteen
(15) days written notice to the other parties.
Section 7.17. MODIFICATION. Except as otherwise provided in Section 2.02, this
Agreement shall be subject to change or modification only with the mutual consent of the
governing bodies of each of the parties hereto, which consent shall not be unreasonably withheld
or delayed, but the parties recognize that the Bond Resolution may contain covenants by BRA or
LCRA not to consent to certain changes or modifications of this Agreement.
Section 7.18. ASSIGNABILITY. This Agreement shall not be assignable by any party
without the prior written consent of the other parties, which consent shall not be unreasonably
withheld or delayed.
Section 7.19. SEVERABILITY. The provisions of this Agreement are severable, and if
any provision or part of this Agreement or the application thereof to any person or circumstance
shall ever be held by any court of competent jurisdiction to be invalid or unconstitutional for any
reason, the remainder of this Agreement and the application of such provision or part of this
Agreement to other persons or circumstances shall not be affected thereby.
Section 7.20. MERGER. Other than the other contracts mentioned herein, this Agreement
constitutes the entire agreement between the parties relative to the subject matter thereof. Except
as noted in the previous sentence, there have been and are no agreements, covenants,
representations or warranties between the parties other than those expressly stated herein or
expressly provided for herein.
Section 7.21. VENUE. Venue for any action arising hereunder will be in Williamson
County, Texas.
Section 7.22. NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement,
express or implied, is intended to confer upon any person or entity, other than the parties hereto,
any rights, benefits, or remedies under or by reason of this Agreement.
ARTICLE VIII
NEGOTIATION AND MEDIATION OF DISPIJTES
Section 8.01. AGREEMENT REGARDING REMEDIES. The parties agree that their
respective obligations under this Agreement are unique and recognize that LCRA or BRA may be
issuing its Bonds to acquire, construct, expand, improve or replace the System and may pledge
the revenues from this Agreement to secure payment of principal of, premium, if any, and interest
on the Bonds. The failure by any party to perform its obligations under this Agreement would
not be capable of being appropriately remedied by award of damages to any other affected party
to this Agreement and in any event, such damages would be difficult, if not impossible, to
determine because of the unique nature of the parties' obligations to each other hereunder.
Further, the parties agree that the remedy of termination of this Agreement by any party is
42
inappropriate and not in the public interest. Therefore, the parties agree that they shall be entitled,
and limited, to the remedies of specific performance, mandamus and injunction in the event of any
breach of any obligation by any party under this Agreement. The parties hereby waive any
requirement that they be required to provide any bond or other surety in order to obtain any of
the agreed upon remedies.
Section 8.02. AGREEMENT TO NEGOTIATE FIRST TO RESOLVE ISSUES. The
parties agree to attempt first to resolve disputes concerning this Agreement amicably by promptly
entering into negotiations in good faith. The parties agree that they will not refer any dispute to
another dispute resolution procedure including mediation or litigation until they have first made
reasonable and good faith efforts to settle their differences by joint negotiations conducted in a
timely manner.
Section 8.03. AGREEMENT TO MEDIATE. If any dispute cannot be resolved through
good faith negotiation, then the parties shall endeavor to resolve the dispute by mediation as
provided herein.
Section 8.04. PRESENTATION OF WRITTEN CLAIM REGARDING DISPUTES NOT
RESOLVED BY NEGOTIATION. In the event that a dispute is not resolved as a result of such
negotiations, either party may at any time give formal written notice to the other of a "claim."
A "claim" as used herein means a demand or assertion by one of the parties (the "claimant ")
seeking, as a matter of right, adjustment or interpretation of contract terms, the payment of
money, an extension of time for performance or other relief with respect to the terms of this
Agreement or any other dispute or matter in question among the parties arising out of or related
to this Agreement. Such notice shall be in writing. After such notice is given, the dispute
resolution procedure provided for below shall immediately enter into effect.
Section 8.05. PERFORMANCE DURING MEDIATION. The claimant shall continue
with performance under this Agreement pending mediation of the dispute.
Section 8.06. APPOINTMENT OF MEDIATOR. Promptly following the making of a
written claim by any party, the parties will consult with one another to agree on the appointment
of a mediator acceptable to all parties. The mediator shall have experience in matters of the kind
giving rise to the claim. If within five (5) business days the parties are unable to agree on the
appointment of a mediator, then any party may request the appointment of a mediator by the
Center for Public Policy Dispute Resolution at the University of Texas at Austin School of Law.
The parties shall endeavor to secure such appointment from the Center for Public Policy Dispute
Resolution within ten (10) business days after the request for same is made. The parties agree to
utilize the mediator appointed by the Center unless they ultimately reach agreement on an
alternative selection and give notice to the Center that another selection has been made by
agreement.
Section 8.07. RULES FOR MEDIATION. The parties agree to the following stipulations
concerning the conduct of the mediation:
43
(a) The mediator shall be impartial among the parties and shall have no conflict of
interest.
(b) The mediator shall not have any past, present or anticipated financial interest in the
Agreement or the System except for the payment for services as mediator nor shall the mediator
have been previously employed or acted as a consultant, attorney, employee, engineer, architect,
contractor or subcontractor of any party nor have any present or anticipated future engagement
of the kind described. Before the engagement of the mediator is finalized, the mediator shall
provide to the parties a disclosure statement containing a resume of experience, a description of
past, present or anticipated future relationships to the System and the parties, their engineers,
contractors, subcontractors, attorneys, architects, or consultants.
(c) The mediation shall be held at a time and location mutually agreeable to the parties
and the mediator provided, however, that the mediation shall commence no later than fifteen (15)
business days following the confirmation of appointment.
(d) At least five (5) business days prior to the mediation, the claimant shall submit to
the parties and the mediator a statement of the claimant's position, the issues that need to be
resolved and a summary of the arguments supporting the claimant's position. At least two (2)
business days prior to the mediation, the responding parties shall submit their written response to
the claimant's statement and provide a summary of their arguments in response.
(e) If the parties agree that independent expert or technical advice would be helpful in
facilitating a negotiated resolution of the dispute, the mediator may make arrangements to obtain
such advice, and may, with the agreement of the parties, make arrangements for an independent
expert to render a non - binding advisory opinion with respect to any technical matters in dispute
after hearing the contentions of the parties with respect thereto. The expenses of obtaining such
independent advice or advisory opinion shall be borne equally by the parties.
(f) No party shall engage in any private interview, discussion or argument with the
mediator concerning the subject matter of the mediation.
(g) The fees of the mediator and any other costs of administering the mediation shall
be borne equally by the parties unless otherwise agreed among them in writing.
(li) The mediator may promote settlement in any manner the mediator believes
appropriate at one or several mediation sessions as agreed to by the parties. The mediation shall
continue only so long as desired by the parties and with the consent of all of them.
(i) Mediation sessions shall be private unless otherwise required by law. Persons other
than the representatives of the parties may attend mediation sessions only with the permission of
all parties and the consent of the mediator.
44
(j) All communications made in the course of the mediation process including any
advice or advisory opinions rendered shall be confidential in accordance with V.T.C.A. Civil
Practice and Remedies Code, Section 154.073.
Section 8.08. EXCEPTION. Notwithstanding the foregoing provisions of Sections 8.02-
8.07, the parties agree that those provisions shall not be applicable in emergency situations.
ARTICLE IX
EFFECTIVE DATE AND TERM OF AGREEMENT
Section 9.01. EFFECTIVE DATE. This Agreement shall become effective upon
execution by BRA, LCRA and all Customers and such fact shall be communicated in writing to
the Customers by BRA and LCRA. This Agreement shall constitute the sole and only contract
between the Customers and BRA and LCRA regarding Wastewater disposal services and the
Customers hereby recognize and affirm their responsibility to make the payments required hereun-
der.
Section 9.02. TERM OF AGREEMENT. This Agreement shall continue in force and
effect from the effective date hereof for a period of forty (40) years, and thereafter shall continue
in effect until any Bonds, or Bonds issued to refund same, if any, have been paid in full. The
Customers shall have the right to the continued performance of services provided hereunder for
the useful life of the System to the extent of their respective Reserved Capacities after amortization
of LCRA's and BRA'S investment in the System, upon payment of just and reasonable charges
by the Customers.
Section 9.03. EFFECT ON CERTAIN PRIOR AGREEMENTS. The parties recognize
that LCRA, BRA and Round Rock have previously entered into those two certain agreements
dated July 12, 1996, entitled "Wastewater Disposal Contract" and "Supplemental Agreement"
pursuant to which LCRA and BRA commenced Wastewater service to Round Rock from certain
initial System Components. The parties agree that one of the purposes, and the effect, of this
Agreement is to amend and replace those two prior agreements which are hereby terminated.
45
IN WITNESS WHEREOF, the parties hereto acting under authority of their respective
governing bodies have caused this Agreement to be duly executed in several counterparts, each
of which shall constitute an original, all as of the day of , 1997.
ATTEST:
By:
Name:
Title:
ATTEST:
By:
Name:
Title:
BRAZOS RIVER AUTHORITY
By:
Name: Roy Roberts
Title: General Manager
LOWER OLORADO RIVER AUTHORITY
46
Manager, Water & Hydroelectric Company
ATTEST:
By:
• Name:
Title:
ATTEST:
By:
Name: JOA NNE L 4WD
Title: e / ,sEC2ETf+ -\/
Icra\brushy \bralcrl9.agt
Xeolob
CITY OF CEDAR PARK
By:
Dorthey Duckett
Mayor
CITY OF ROUND ROCK
By:
47
Charles Culpep
Mayor
OWNERSHIP AND RESERVED CAPACITY
Original Revised
Ciy of Austin Austin Cedar Park LCRa
Cumpenen :: Reserved Capacity Capacity C4 Unity Capacity
Contracs 1. 2 and 2 (48' - 60r Interceptors) 100% 30% 70% 0%
tEx:stine easements. permits. plans and records only)
Contract 4 (Onion Branch Lift Station) 100% 100% 0% 0%
Conmscr 5 - Phase I (16' Force Main) 100% 100% 0% 0%
Contrac: 5 - Phase 1(24' Gravy Line)' 67% 67% 0% 33%
Contract 5 - Phase 11 r24" Gravity Line)' 67% 67% 0% 33 70
Contract 5 - Phase II (anbuilt segment) 100% 100% 0% 0%
Contract 6 (60' wastewater line) 62.2% 44,4% 17.85 37.3%
(5.Csting easements, pemtits. plane and records only)
Contact 6.; (60' gravity line) 70% 50% 20% 30%
(Round Rock retained initial 10.1 % of the' 22.5 mgd capacity
therefore ultimate capacuy division i5 Austin 44A4%. Cedar
ra :k 17.78%, and LCRA 37.78%)
Contact 8A, BB (Davis Spring Lift Station 30' wastewater interceptor) 100% 100% 0% 05
Contract 9 (36' wastewater line) 0% 0% 0% • 100%
Contract 9 (60' wastewater line. with same provsionS as Contract 6A) 70% 44.4% 17.8% 37.8%
Cc -cars 27. 20A and 2. (60" and 66' wastewater interceptor, 85% 50% 35%
78' anne1 and a wastewater imcrneptor. Existing easements,
permits, plans and records only)
Contract 40 (Lake C nek Lift Station and 48' wastewater line) 100% 100% 0% 0%
Contact 54 (36' force main. E4is:ing easements, pennies. 100% 100% 0% 0%
plans and records only)
Old Cracac: 10 WWTP (Superseded Plans and records for 100% 100% 0% 0%
at andened 10 MGD WW 11 P concept only)
WWT? Design - WCD
WWTP Design, (11.4 MGD First Phase of Regional System
Trea rent Plat. based on }IDR Inter(ocal percentages)
w N? Con'aron F c itie
?68i9.5 /SP.A75SP:15• t.'.Uteb'97 I
EXHIBIT A
50% 39% 11% 50%
36% 28% 8% 64%
0% 0% 0 % 100%
Regicnal System Plant Siva (Austin Tract Only) 100% 52% 48% 0%
Treatment Pant Site (Round Rock Tract Only) 0% 0% 0%
100%
Wastewater Dia.:Sarge Permit 50% 50% 0% 50%
' Joint Wastewater Lines Components
?6?89. ?! 15s1; :040x7!
Up
Stream
Manhole
Down
Stream
Manhole
Total
Accumulative
Population
LCRA
8$
x
Total
Accumulative
Population
City of Cedar
Park
%Of
Total
Total
Accumulative
Population
City of Round
Rode
%Of
Taal
Total
Accumulative
Population
Bmshy Creek
and Fein Bluff
MUD'. •
%Of
Total
Trial Accumulative
Population
B9
B8
0
0.0%
47,513
1000%
0
00%
0
0.0%
47,513
B8
B7
6,832
11.3%
53,385
88.7%
0
0.0%
0
0.0%
60,217
B7
B6
10,346
15.2%
57,502
84 8%
0
0.0%
0
0.0%
67,848
B6
B5
11,673
166%
58,652
834%
0
0.0%
0
0.0%
70,325
B5
84
14,417
13.7%
88,958
847%
0
0.056
1,687
1 6%
105,062
B4
B3
14,417
120%
88,958
7405:
0
00%
• 16,793
140%
120,168
B3
B2
14,917
107%
88,958
658%
11,603
86%
20,146
14.9%
135,124
B2
B1
14,417
10.6%
88,958
65 25:
12,992
9.556
20,146
14 8•6
136,513
BI
TI
14,417
100%
88,958
61 896
20,332
14.196
20,146
14.0%
143,853
TI
T2
14,417
100%
88,958
61 8%
20,332
14.1%
20,146
14.0%
143,853
T2
T3
14,417
8.7%
88,958
336%
42,294
25.5%
20,146
122%
165,815
T3
T4
14,417
8.3%
88,958
51256
50,092
28.9%
20,146
11.6%
173,613
T4
T5
14,417
7.3%
88,958
45396
72,860
37.1:6
20,146
10.3%
196,381
T5
T6
14,417
7.1%
88,958
43 70.
79,940
39 356
20,146
9.9%
203,461
T6
T7
14.417
6956
88,958
42 P.
86,692
41.2%
20,146
96%
210,213
T7
T8
14,417
6 6 °.6
88,958
40 5%
96,072
43 8°.
20,146
9.2%
219,593
T8
T9
14,417
6 6%
88,958
405%
96,072
43.8%
20,146
9 2%
219,593
Exhibit B
Capacity Reservations: Upstream and Downstream Collection Systems
(without Lake Creek flows)
` These Capacity Reser%coons are set aside for the City of Rou Id Rock fo the duration of the Interlocal Agreement' for Interim 11 asteu'ater
T ran. partatron
and Treatment between the City of Round Rock and the City of Austin dated September 19, 1996, thereafter, these Capacity Reservations will be set
aside
for LCRA.
Page 1
Exhibit B
Allocation of Annual Project Requirements: Upstream and Downstream Collection Systems
(without Lake Creek flows)
2036 Contractual Flows Upstream
Customer Population GPCD * fJ 000 gals Allocator (in %)
LCRA 11,755 100 429,058 11.45
City of Cedar Park 83,281 85 2,583,793 68.94
Brushy Creek and Fern Bluff MUD's ** 20.146 100 735.329 19.61
Total 115,182 3,748,180 100.00
2036 Contractual Flows Downstream
Customer Population GPCD * ( 1.000 gals Allocator (in %)
LCRA 11,755 100 429,058 3.83
City of Cedar Park 83,281 85 2,583,793 23.04
City of Round Rock 146,126 140 7,467,039 66.58
Brushy Creek and Fern Bluff MUD's ** 20 146 100 735.329 6.55
Total 261,308 11,215,219 100.00
* GPCD = Gallons Per Capita per Day
* * These Capacity Reservations are set aside for the City of Round Rock for the duration of the Gnerlocal Agreement fin
Inlerint Wastewater transportation and treatment between the City of Round Rock and the City of Austin dated
September 19, 1996, thereafter, these Capacity Reservations will be set aside for LCRA.
Page 2
Up stream
Manhole
Down
Stream
Manhole
Taal
ActtumuWiv
a Population
LCRA
%Of
Total
Total
Accumulative
Population
City of Cedar
Park
%Of
Total
Total
Accumulative
Population
City of Round
Rock
%Of
Total
Total
Accumulative
Population
Brushy Creek
and Blulr
MUD's Fem °
%Of
Total
Total lake
Creek
Population
x�
Total
Accumulative
Population
89
138
0
0.0%
47,513
1000%
0
0 0%
0
0.0%
0
00%
47,313
88
B7
6,832
11396
53,385
8873:
0
0 0%
0
0.0%
0
00%
60,217
B7
B6
10,346
15.2%
57,502
848%
0
0.0%
0
0.0%
0
00%
67,848
136
135
11,673
16.6%
58,652
83 4%
0
0 0%
0
0 0%
0
0.096
70,325
B5
B4
14,417
13.7396
80,958
847::
0
0.0%
1,687
1651
0
0096
105,062
B4
B3
14,417
12.035
88,958
740%
0
0.0%
16,793
140%
0
0.0196
120,168
B3
132
14,417
107::
88,958
65.8 96
11,603
8.6%
20,146
149%
0
00%
135,124
B2
BI
14,417
1063.
88,958
6529.
12,992
9.596
20,146
148%
0
00 °.5
136,513
131
TI
14,417
7.1 °.
88,958
43.9%
20,332
10.0:5
20,146
9.9%
58,832
29.0%
202,685
TI
T2
14,417
7.1°.
88,958
439%
20,332
1003.
20,146
9.9%
58,832
29.0%
202,685
T2
T3
14,417
6.4 °.
88,958
3966.
42,294
18.8%
20,146
90%
58,832
262%
224,647
T3
T4
14,417
62°.
88,958
3833.
50,092
21.6%
20,146
8.7%
38,832
25.3%
232,445
T4
T5
14,417
56 °.
88,958
3499.
72,860
285°5
20,146
7.9%
58,832
23.1%
255,213
T5
T6
14,417
5.5
88,958
33.9%
79,940
3059.
20,146
77°3.
58,832
22.4%
262,293
T6
T7
14,417
5.4 °.
88,958
33 1°.
86,692
32.2%
20,146
75%
58,832
219%
269,045
T7
T8
14,417
5.2 °.
88,958
320•.
96,072
34.59e
20,146
7.2%
58,832
21 Ise
278,425
T8
T9
14,417
5.2 °.
88,958
320 °.
96,072
34.53.
20,146
7,2%
58,832
21.1°%
278,425
Exhibit B
Capacity Reservations: Upstream and Downstream Collection System
(with Lake Creek flows)
• These Capacity Re ervations are set aside for the City of Round Rock for the duration of the Inrerlacal.lgreetnent jar Interim Wastewater Transporration
and "!Treatment between the City of Round Rock and the City of Austin dated September 19, 1996; thereafter, these Capacity Reservations will be set aside
for LCRA
Page 3
Exhibit B
Allocation of Annual Project Requirements: Upstream and Downstream Collection Systems
(with Lake Creek flows)
2036 Contractual Flows Upstream
Customer Population GPCD * (1.000 gals) Allocator (in %)
LCRA 11,755 100 429,058 11.45
City of Cedar Park 83,281 85 2,583,793 68.94
Brushy Creek and Fern Bluff MUD's ** 20.146 100 735.329 19.61
Total 115,182 3,748,180 100.00
2036 Contractual Flows Downstream
Customer Population CiPCD * (1.000 gals) Allocator (in °/%)
LCRA 11,755 100 429,058 3.21
City of Cedar Park 83,281 85 2,583,793 19 34
City of Round Rock 146,126 140 7,467,039 55.88
Brushy Creek and Fern Bluff MUD's ** 20,146 100 735,329 5.50
Lake Creek 58 832 100 2.147.368 16.07
Total 320,140 13,362,587 100.00
* GPCD = Gallons Per Capita per Day
** These Capacity Reservations are set aside for the City of Round Rock for the duration of the Interlocal Agreement jiff
Interim Wastewater Transportation and Treatment between the City of Round Rock and the City of Austin dated
September 19, 1996; thereafter, these Capacity Reservations will be set aside for LCRA.
Page 4
Exhibit B
Capacity Reservations and Allocation of Annual Project Requirements: Treatment Facilities
Reserved Capacity/
Contractual Flows Treatment Facility
Customer (in MGD) Allocator (in %)
LCRA 0.30 2.0
City of Cedar Park 2.50 16.9
City of Round Rock 10.50 70.9
Brushy Creek and Fern BIuffMUD's * _L,511 _]Q,2_
Total 14.80 100.0
* These Capacity Reservations are set aside for the City of Round Rock for the duration of the Interlo al Agreement for
Interim Wastewater transportation and Treatment between the City of Round Rock and the City of Austin dated
September 19, 1996; thereafter, these Capacity Reservations will be set aside for LCRA
Page 5
Prohibited discharges include:
EXHIBIT C
CITY OF ROUND ROCK
LIST OF INADMISSIBLE WASTES
In accordance with the provisions of Section 4.04 of the contract for Sewerage Service
between the Brazos River Authority (Authority) and each contracting City of the Brushy
Creek Regional Sewerage System, the following List of Inadmissible Wastes specifying
materials that can not be discharged to the sewer system and concentrations for
substances which should not be exceeded in discharges to the system, is promulgated by
the Authority as of , 199 .
The following list constitutes the pollutant allocations and local limits established under
the Brushy Creek Regional Sewerage System Pretreatment Program specifying both
numerical concentration limits and prohibited substances for discharge to the System of
toxic or regulated pollutants which could cause interference with the operation of the
treatment plant or cause a violation of the Authority's State or Federal discharge permit
provisions. Under the provisions of Section 4.04, each Contracting City agrees to limit
discharges to the System in accordance with the following list:
1. Wastewater having a temperature that would result in the total combined influent
to the treatment plant to exceed a temperature of 104 degrees Fahrenheit or 32.2
degrees Celsius.
2. Wastewater having a pH value lower than 5.0 or higher than 10.5 or which will
cause structural damage to the System.
3. Wastewater containing gasoline, benzene, naphtha, fuel oil, or other flammable or
explosive liquids, solids, gases, or any material that will result in the presence of
toxic gases, vapors or fumes within the System in quantities which may cause
acute worker health and safety problems.
4. Wastewater containing oil and grease or any grease, fats, waxes, oil, plastic or
other substances that will solidify or become discernibly viscous at any
temperature between 32 degrees Fahrenheit and 90 degrees Fahrenheit so as to
cause obstruction in the collection system or at the treatment plant.
List of Inadmissible Wastes I City of Round Rock
t: \p re treat\brushy \rr -1 iw96.doc
5. Wastewater with a radioactive content greater than allowable by applicable
provisions of the Texas Radiation Control Act, Article 4590 (1), Revised Civil
Statutes of Texas, and Texas Regulations for Control of Radiation issued
thereunder.
6. Wastewater with a dissolved hydrogen sulfide concentration greater than 1.0
milligrams per liter.
7. Wastewater containing corrosive constituents, that have a damaging or corrosive
effect on system components..
8. Any hazardous wastes prohibited by regulatory agencies.
9. Any trucked or hauled pollutants except at discharge points designated by the
BRA and with the written consent of the City or BRA.
10. Wastewater, which alone or in conjunction with other wastewater, causes the
wastewater entering any entry .point into the system to exceed a five -day
Biochemical Oxygen Demand (BOD), concentration of300 milligrams per liter or
a Total Suspended Solids (TSS), concentration of 400 milligrams per liter, shall
be subject to surcharge on the basis of actual increased operating costs so long as
the pollutant is not causing interference with the operation of the Authority's State
or Federal discharge permit provisions, and as long as said pollutants are deemed
acceptable by the Authority. Authority shall determine the cost of treatment for
pollutants received from all customers and determine additional treatment costs
for excessive pollutants to be surcharged.
11. Wastewater with concentrations of toxic pollutants, including heavy metals and
other pollutants designated under the System Pretreatment Program, which will
alone or in conjunction with other wastewaters cause the treatment plant influent
to contain in excess of:
Pollutant
System Headworks Limit
Ibs /day 24 hour Composite
(mv./L'
Cadmium 5.6712 0.2
Chloroform 113.4240 4.0
Chromium (Total) 482.0520 17.0
Copper 99.2460 3.5
Ethyl Benzene 453.6960 16.0
Lead 14.1780 0.5
Naphthalene 425.3400 15.0
Nickel 127.6020 4.5
Silver 1.9849 0.1
List of Inadmissible Wastes 2 City of Round Rock
t: \pre treat \bru shy \rr -1 i w96.doc
Tetrachloroethylene 141.7800 5.0
Toluene 39.9840 14.0
Zinc 107.7528 3.8
12. The combined volume of all wastewaters discharged by the City of Round Rock
shall no contain the following listed pollutants in excess of the listed loading
without prior written approval from the Authority.
POLLUTANT
City of Round Rock
POLLUTANT ALLOCATION
lbs /dav
Cadmium 5.6712
Chloroform 113.4240
Chromium (Total) 482.0520
Copper 99.2460
Ethyl Benzene 453.6960
Lead 14.1780
Naphthalene 425.3400
Nickel 127.6020
Silver 1.9849
Tetrachloroethylene 141.7800
Toluene 396.9840
Zinc 107.7528
The Authority will periodically monitor for those pollutants at the City of Round
Rock point -of -entry. Should the analysis indicate any of the pollutants listed are
approaching or exceeding the System Head Works Limit, the City shall determine
the source of the pollutant and require the generator to reduce or cease discharge
of the pollutant and/or commence monitoring of the pollutant as required in the
Brushy Creek Regional Sewerage System Pretreatment Program.
List of Inadmissible Wastes 3 City of Round Rock
t: \pretreat \brushy\rr -1 iw96.doc
SECTION 1. Definitions.
below:
EXHIBIT D
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the "Agreement), dated as of
1997, is executed and delivered by the Lower Colorado River Authority (the "Issuer ") and
(the "Disclosure Party ") in connection with the issuance,
from time to time, of the Issuer's "municipal securities," with respect to which the Disclosure
Party is an "obligated person," as such terms are applied within the meaning of the Rule (the
"Bonds "). For good and valuable consideration, the Issuer and the Disclosure Party covenant and
agree as follows:
As used in this Agreement, the following terms have the meanings ascribed to such terms
"MSRB" means the Municipal Securities Rulemaldng Board and any successor to its duties.
" NRMSIR" means each person whom the SEC or its staff has determined to be a nationally
recognized municipal securities information repository within the meaning of the Rule from time
to time.
"Rule" means SEC Rule 15c2 -12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission and any successor
to its duties.
"SID" means any entity designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
SECTION 2. Annual Reports; Obligations of Disclosure Parry.
The Disclosure Party undertakes to and shall provide annually to each NRMSIR and any
SID, within six months after the end of each of its fiscal year ending on or after January 1, 1996,
financial information and operating data with respect to the Disclosure Party as specified and
included in Appendix B of any final official statement relating to Bonds. Any financial statements
so to be provided shall be (1) prepared in accordance with the accounting principles described in
the notes to the financial statements as specified and included in Appendix B of any final official
statement relating to Bonds, or such other accounting principles as the Disclosure Party may be
required to employ from time to time pursuant to state law or regulation, and (2) audited, if the
Disclosure Party commissions an audit of such statements and the audit is completed within the
period during which it must be provided. If the audit of such financial statements is not complete
within such period, then the Disclosure Party shall provide unaudited financial statements for the
applicable fiscal year to each NRMSIR and any SID within the period during which it must be
provided and the audited financial statements, when and if the audit report on such statements
becomes available.
If the Disclosure Party changes its fiscal year, it will notify the Issuer, each NRMSIR and
any SID in writing of the change (and of the date of the new fiscal year end) prior to the next date
by which the Disclosure Party otherwise would be required to provide financial information and
operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be incorporated by specific reference to any
document or specific part thereby (including an official statement or other offering document, if
it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID
or filed with the SEC.
The Disclosure Party shall, within ten (10) business days of the filings of the annual
reports, notify the Issuer in writing that the filings have been made.
Further, the Disclosure Party shall provide (1) in a timely manner, notice of any failure
by the Disclosure Party to provide annual financial statements and operating data in accordance
with Section 2 hereof to each NRMSIR and each SID and (2) within ten (10) business days of the
Disclosure Party's obtaining actual knowledge of the occurrence of any of the events enumerated
in 3(a) below, notice to the Issuer of such event.
SECTION 3. Material Event Notices.
(a) The following are the events with respect to Bonds that the Issuer agrees to disclose
in a timely manner pursuant to the terms hereof, if the Issuer determines, pursuant to subsection
(b) below, that such events are "material" under applicable federal securities laws and regulations•
promulgated thereunder.
(1) Principal and interest payment delinquencies;
(2) Non - payment related defaults;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions or events affecting the tax- exempt status of the
security;
Page 2 of 6
(7) Modifications to rights of securities holders;
(8) Bond calls;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the
securities; and
(11) Rating changes.
(b) Whenever the Issuer obtains knowledge of the occurrence of one of the above
events, whether because of a notice from the Disclosure Party pursuant to subsection (d) or
otherwise, the Issuer shall, in a timely manner, determine if such event would constitute material
information for bondholders and beneficial owners of Bonds.
(c) If the Issuer determines that the occurrence of one of the above events is material
within the meaning of applicable federal securities laws and regulations promulgated thereunder.
the Issuer shall promptly file a notice of such occurrence with each NRMSIR or the MSRB and
each SID.
SECTION 4. Limitations, Disclaimers, and Amendments.
The Issuer and the Disclosure Party shall be obligated to observe and perform the
covenants specified in this Agreement for so long as, but only for so long as, the Disclosure Party
remains an "obligated person" with respect to Bonds within the meaning of the Rule, except that
the Disclosure Party in any event will give notice of any deposit made that causes Bonds no longer
to be outstanding.
The provisions of this Agreement are for the sole benefit of (and may be enforced by) the
bondholders and beneficial owners of Bonds and the parties to this Agreement, and nothing in this
Agreement, express or implied, shall give any benefit or any legal or equitable right, remedy, or
claim hereunder to any other person. The Issuer and the Disclosure Party undertake to provide
only the financial information, operating data, financial statements, and notices which each has
expressly agreed to provide pursuant to this Agreement and do not hereby undertake to provide
any other information that may be relevant or material to a complete presentation of the issuer's
or the Disclosure Party's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Agreement or otherwise, except as expressly
provided herein. Neither the Issuer nor the Disclosure Party make any representation or warranty
concerning such information or its usefulness to a decision to invest in or sell Bonds at any future
date.
UNDER NO CIRCUMSTANCES SHALL THE ISSUER OR THE DISCLOSURE
PARTY BE LIABLE TO THE BONDHOLDER OR BENEFICIAL OWNER OF ANY BOND
Page 3 of 6
OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN
WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER OR THE DISCLOSURE
PARTY, RESPECTIVELY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART,
OF ANY COVENANT SPECIFIED IN THIS AGREEMENT, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT
OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR
SPECIFIC PERFORMANCE.
No default by the Issuer or the Disclosure Party in observing or performing their respective
obligations under this Agreement shall comprise a breach of or default under any resolution of the
Issuer authorizing the issuance of Bonds, or any contract relating thereto, for purposes of any
other provision of this Agreement.
Nothing in this Agreement is intended or shall act to disclaim, waive, or otherwise limit
the duties of the Issuer or the Disclosure Party under federal and state securities laws.
The provisions of this Agreement may be amended by the Issuer or the Disclosure Party
from time to time to adapt to changed circumstances that arise from a change in legal
requirements, a change in law, or a change in the identity, nature, status, or type of operations
of the Issuer or the Disclosure Party, but only if (I) the provisions of this Agreement, as so
amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering
of Bonds in compliance with the Rule, taking into account any amendments or interpretations of
the Rule since such offering as well as such changed circumstances and (2) either (a) the
bondholders or beneficial owners of a majority in aggregate principal amount (or any greater
amount required by any other provision of this Agreement that authorizes such an amendment)
of outstanding Bonds consent to such amendment or (b) an entity that is unaffiliated with the
Issuer or the Disclosure Party (such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interest of the bondholders and beneficial owners of
Bonds and is permitted by the terms of the Agreement. If the Issuer or the Disclosure Party so
amend the provisions of this Agreement in connection with the financial or operating data which
it is required to disclose under Section 2 hereof, the Disclosure Party shall provide a notice of
such amendment to be filed in accordance with Section 3(b) hereof, together with an explanation,
in narrative form, of the reason for the amendment and the impact of any change in the type of
financial information or operating data to be so provided. The Issuer or the Disclosure Party may
also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or
repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment that
such provisions of the Rule are invalid, but only if and to the extent that the provisions of this
sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the
primary offering of Bonds.
SECTION 5. Miscellaneous.
A. Representations.
Page 4 of6
Each of the parties hereto represents and warrants to each other party that it has (i) duly
authorized the execution and delivery of this Agreement by the officers of such party whose
signatures appear on the execution pages hereto, (ii) that it has all requisite power and authority
to execute, deliver and perform this Agreement under applicable law and any resolutions or other
actions of such party now in effect, (iii) that the execution and delivery of' this Agreement, and
performance of the terms hereof, does not and will not violate any law, regulation, ruling,
decision, order, indenture, decree, agreement or instrument by which such party is bound, and
(iv) such party is not aware of any litigation or proceeding pending, or, to the best of such party's
knowledge, threatened, contesting or questioning its existence, or its power and authority to enter
into this Agreement, or its due authorization, execution and delivery of this Agreement, or
otherwise contesting or questioning the issuance of Bonds.
B. Governing raw
This Agreement shall be governed by and interpreted in accordance with the laws of the
State of Texas and applicable federal law.
C. Severahility
If any provision hereof shall be held invalid or unenforceable by a court of competent
jurisdiction, the remaining provisions hereof shall survive and continue in full force and effect.
D. Cnrnmterpartc.
This Agreement may be executed in one or more counterparts, each and all of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Issuer and the Disclosure Party have each caused their duly
authorized officers to execute this Agreement as of the day and year first above written.
ATTEST:
Secretary, Board of Directors
Page 5 of 6
LOWER COLORADO RIVER AUTHORITY
President, Board of Directors
ATTEST:
Title:
Page 6 of 6
By:
Title:
DATE: April 21, 1997
SUBJECT: City Council Meeting, April 24, 1997
ITEM: 10A Consider a resolution authorizing the Mayor to execute a revised
Wastewater Disposal Contract.
STAFF RESOURCE PERSON: Jim Nuse
STAFF RECOMMENDATION:
A presentation was made at the last Council meeting, nothing has been changed.
BY MFSSFNIiFR
Mr. Stephan Sheets
Sheets & Crossfield, P.C.
309 E. Main Street
Round Rock, Texas 78664 -5246
Dear Steve:
LAW OFFICES OF
Ronald J. Freeman
301 Congress, Suite 1400
Austin, Texas 78701
Phone (512) 469 - 5484 Fax (512) 469 - 9015
April 18, 1997
Re: Brushy Creek Regional Wastewater System
This letter confirms our telephone conversation yesterday. As I indicated to you on the
phone, I am enclosing with this letter four duplicate originals of the new, revised "Wastewater
Disposal Contract" which has been approved by LCRA and the City Council of Cedar Park (at
Cedar Park's April 10, 1997 council meeting). Joe Beal has executed the new contract on behalf
of LCRA. Cedar Park's Mayor is authorized to execute the agreement after Austin has signed the
Agreement for Conveyance of Interests and Temporary Pass - Through Wastewater Service between
Austin and Cedar Park whereby Cedar Park would obtain the right to acquire certain regional
system assets from Austin. In the meantime, I would like for you to have the Round Rock City
Council approve the new Wastewater Disposal Contract and have the Mayor sign it. It is my
understanding that will be considered at Round Rock's City Council meeting on April 24.
Assuming the Council approves the contract and authorizes the Mayor to sign it, would
you please have the Mayor sign all four originals and put them in overnight mail to Mike Field
at the Brazos River Authority.' Mike tells me that BRA will consider the new Wastewater
Disposal Contract at BRA's meeting on April 28. Assuming BRA approves the new Wastewater
Disposal Contract, Mike will have Roy Roberts execute the four originals you deliver to him. I
would then ask that Mike put all four originals back in overnight mail to me. Assuming I can get
the new four originals on either April 29 or April 30, I would then be in a position to get the
Mayor of Cedar Park's signature on them at that time if the Mayor is ready and authorized to sign
them.
This letter confirms my understanding as indicated to you on the phone that unless and
until all four parties have executed the new Wastewater Disposal Contract, it is not effective for
any purpose. Rather, pending final execution of the new Wastewater Disposal Contract by all
four parties, Round Rock, LCRA and BRA will continue to be governed by the provisions of the
earlier Wastewater Disposal Contract among them dated July 12, 1996.
F T COURIER
0 TEXAS, X A S, I N C.
DATE; /
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07$649
CONSIGNEE CO
RETURN FILE NARKED COPY
RETURN SIGNED DOG
P.O. Box 913 • Austin, Texas 78767 �•
512 - 443 -6886
FROM
RONALD J. FREEMAN
TO(CONSIGNEE) ,.
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PIECES
ADDRESS
301 CONGRESS #1400
ADDRESS
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Mr. Stephan Sheets
April 18, 1997
Page 2
If you need any additional information, please contact me. I am sending copies of this
letter to the persons indicated below for their information.
RJF:jjs
Enclosures
cc: David Kultgen (letter only)
Mike Field (letter only)
Tom Clark (letter only)
Leonard Smith (letter only)
Sue Littlefield (letter only)
Don Birkner (letter only)
Sam Roberts (letter only)
Bob Bennett (letter only)
Jim Nuse (letter only)
Joe Beal (letter only)
Jim Clarno (letter only)
Angie Taylor - Rubottom (letter only)
John Rubottom (letter only)
Nancy Matchus (letter only)
Mike Erdmann (letter only)
Randy Goss (letter only)
Very truly yours,
Ronald J. Freeman
PHONE (512) 469 -5484
FAX (512) 469 -9015
Mr. Joe Beal
LCRA
P. 0. Box 220
Austin, Texas 78767
Dear Joe:
LAW OFFICES OF
RONALD J. FREEMAN
301 Congress, Suite 1400
Austin, Texas 78701
April 11, 1997
Re: Brushy Creek Regional Wastewater System
e -mail 7XWATERRES@aol.com
(512) 422 -3765 MOBILE
Pursuant to your request, I am sending copies of this letter and the referenced enclosures
to the people indicated below in order to advise them of the final changes to the (i) Wastewater
Disposal Contract and (ii) Agreement for Assignment of Contract Rights as approved by the Cedar
Park City Council last night. The documents which are enclosed to evidence and effect these
changes are:
A copy of my April 10, 1997 letter to Sue Littlefield which contains as an attachment to
it blacklined copies of pages 15, 20 and 40 of the Wastewater Disposal Contract and pages
1 and 2 of the Agreement for Assignment of Contract Rights showing the changes
approved by Cedar Park; and clean copies of the (i) Wastewater Disposal Contract and (ii)
Agreement for Assignment of Contract Rights incorporating these changes.
Cedar Park approved these contracts last night. LCRA has already approved negotiation and
execution of the contracts. It is my understanding that BRA and Round Rock will approve the
Wastewater Disposal Contract at their meetings later this month.
During this time period, I will be circulating multiple originals of these contracts, as
appropriate, so that each of the signatories will be able to have one original version of its
contract(s) when executed by all parties. It is my contemplation that the contract(s) will be fully
executed before the end of the month. We anticipate that LCRA will then be in a position to
accept assignment of Cedar Park's rights to acquire assets from Austin and to close on the
acquisition of those assets by April 30 as is contemplated in the enclosed changes to the
Agreement for Assignment of Contract Rights.
7
Mr. Joe Beal
April 11, 1997
Page 2
If anyone receiving a copy of this needs any additional information, please call me.
RJF:jjs
Enclosures
cc: Sam Roberts (letter only)
Sue Littlefield (letter only)
Leonard Smith (letter only)
Randy Goss (enclosure)
Mike Erdmann (enclosure)
Nancy Matchus (enclosure)
Jim Nuse (enclosure)
David Kautz (enclosure)
Steve Sheets (enclosure)
Jimmie Griffith (enclosure)
Mike Taylor (enclosure)
Mark Dietz (enclosure)
Tom Clark (enclosure)
Tom Ray (enclosure)
Mike Field (enclosure)
David Kultgen (enclosure)
Joe Beal (enclosure)
Jim Clamo (enclosure)
Angie Taylor - Rubottom (enclosure)
Bill Leisering (enclosure)
Brady Edwards (enclosure)
Carin Hutchins (enclosure)
Neil Haverlah (enclosure)
Glen Taylor (enclosure)
Tom Mason (enclosure)
John Rubottom (enclosure)
Karen Friese (enclosure)
Charles Jennings (enclosure)
Rick Porter (enclosure)
Very truly yours,
GAO,
Ronald J. Freeman
Ms. Sue Littlefield
Strasburger & Price, L.L.P.
600 Congress Avenue
2600 One American Center
Austin, Texas 78701 -3248
RJF /jjs
Enclosures
cc: Leonard Smith (w /blacklined changes)
Steve Sheets (w /blacklined changes)
Jim Clarno (w /blacklined changes)
LAW OFFICES OF
Ronald J. Freeman
301 Congress, Suite 1400
Austin, Texas 78701
Phone (512) 469 -5484 Fax (512) 469 -9015
April 10, 1997
Re: Brushy Creek Regional Wastewater System
Dear Sue:
As requested, enclosed are the following documents:
1. A revised, clean copy of the Wastewater Disposal Contract;
2. A revised, clean copy of the Agreement for Assignment of Contract Rights;
3. A copy of Exhibit B, the Interlocal Agreement for Assumption of Obligations and
Division of Assets of the Brushy Creek Regional Wastewater Disposal System, and
for Interim Operation and Maintenance of Joint Wastewater Lines; and
4. Blacklined pages of changes to 1 and 2 above.
I will bring execution copies with me tonight. Please let me know if you need anything
further. •
Very truly yours,
Ronald J. Freeman
(h) Construction Duties. LCRA will acquire and construct the System in
accordance with accepted good business and engineering practices and in accordance with
requirements of the Clean Water Act and the Texas Water Code, as amended, and as said
laws may be amended in the future, and any rules and regulations issued and to be issued
by appropriate agencies in the administration of said laws. LCRA will prepare plans and
specifications for the System Component(s) to be constructed in Phase I as soon as possible
and proceed to take all other action necessary to acquire or construct the System Compo-
nent(s). After all such regulatory approvals have been obtained, LCRA shall proceed, as
appropriate, to advertise for bids for construction of the remainder of the System
Component(s). Upon receipt of such bids, LCRA shall tabulate the bids and notify BRA,
the Customers and the Technical Review Committee of the bids which have been received
and shall recommend approval of the Lowest and best bid for the construction of the
System Component(s). LCRA shall also notify BRA, the Customers and Technical
Review Committee, based on such lowest and best bid, of the estimated Project Costs of
the System Component(s) and the Funding Date for such Project Costs. LCRA may accept
the Lowest and best bid for the construction of the System Component(s). In determining
whether or not to accept any such bid, LCRA shall consider advice and recommendations
of BRA, the Customers and the Technical Review Committee, but the decision as to its
acceptance shall be within the sole discretion of LCRA. Thereafter, LCRA will diligently
construct the System Component(s).
Section 2.02. ALLIANCE MODIFICATIONS. BRA and LCRA may jointly modify their
respective responsibilities to each other under this Agreement without approval of the Customers
to the extent that such modification does not adversely affect the Customers and the Customers
and Technical Review Committee are provided prior written notice of such modifications.
Section 2.03. ACQUISITION AND CONSTRUCTION OF PHASE I OF THE SYSTEM.
(a) Acquisition of Existing Assets. LCRA and the Customers agree to proceed
as expeditiously as possible to consummate the remaining transactions contemplated in the
RR/Alliance Acquisition Contract and the CP /Alliance Acquisition Contract. The parties
anticipate that the Initial Funding for each of these contracts is, respectively, October 11,
1996, and April 30. 1997.
(b) Construction of Remainder of Phase I of the System. Promptly after
execution and delivery of this Agreement by all parties, LCRA shall, and upon execution
of this Agreement by one or more Customers LCRA may, prepare plans and specifications
for the remainder of Phase I as soon as possible and proceed to take all other action
necessary to acquire or construct the remainder of Phase I of the System. LCRA will use
diligent efforts to complete construction of line segments B3 to B5 of Phase I of the
System within eighteen (18) months after the Initial Funding of the purchase of the Cedar
Park Regional System Assets, and the remaining portions of Phase 1v. ithin twenty -four
(24) months of that initial Funding. These deadlines are excusable only for reasons of
15
Section 2.07. CONSTRUCTION OF REQUIRED IMPROVEMEiNTS. At such time as
LCRA or BRA shall determine that construction of Required Improvements is necessary in order
for the System to be able o treat and dispose of Wastewater expected to be delivered to it without
violation of applicable permits or in order to avoid violation(s) of permits or other regulatory
requirements related to the System, the party making the determination shall give forty -five (45)
days prior written notice and opportunity to comment to the other and each Customer and to the
Technical Review Committee of its intention to proceed with construction of such Required
Improvements. Thereafter, the Required Improvements will be constructed by LCRA as otherwise
provided for Expansions and in accordance with the requirements of Section 2.01(h), to the extent
applicable.
Section 2.08. LCRA RIGHT TO RESERVED CAPACITY. LCRA shall be considered
a "Customer" for all purposes of this Agreement for that part of the Reserved Capacity referenced
in Section 4.01 and shown in Exhibit B as being reserved for LCRA. The pa-.ies recognize and
contemplate, however, Austin's joining the System in the future and acquiring LCRA's Reserved
Capacity at that time. Ia that regard, the parties agree to reasonably cooperate to try to obtain
.Austin's agreement to enter into an agreement with the parties hereto substantially the same in all
material respects to this Agreement and any corresponding agreement in which LCRA would
purchase regional wastewa:er system asset, In addition, LCRA may sell a'! or any part of its
Reserved Capacity to any other entity or may use its Reserved Capacity for any other lawful
purpose. In the event LCRA sells all or any part of its Reserved Capacity to another entity under
an agreement substantial!': similar to this Agreement, BRA and the other Customers agree that
LCRA will be released from, 211, or an appropriate part, of its obligations as a Customer with
respect to the sold Reserved Capacity provided the other entity assumes such re:eased obligations.
LCRA shall provide writ:ea notice to BRA and the other Customers, signed by LCRA and the
party to whom the Resew Capacity is being transferred, specifying the amount of transferred
Reserved Capacity and the affected System Component(s), and providing that the parties otherwise '
ratify and confirm their pr:- ex'.sting obligations un this Agreement. No such transfer shall be
effective until and unless s::ch notice is provided.
Section 2.09. DEPOSITS ON FUNDING DATES. After LCRA or BRA as appropriate,
obtains all funds related to Funding on the Funding Date for Phase I, Phase II or any Expansion
of the System, LCRA or BRA, as appropriate, shall deposit all of said funds into the construction
fund or reserve funds provided in any applicable Bond Resolution and the one -half of one percent
(1/2%) of Project Costs necessary to fund the Repair and Replacement Reserve Fund. Upon the
first to occur of the Initial Fundings, BRA shall deposit the agreed amoun: of money into the
Operation and Maintenance Reserve Fund which shall be maintained by is as a part of the
enterprise fund to be established on its books and records and identified in its financial statements,
in connection with the operation of the System.
20
hundred eighty (180) days written notice to LCRA setting forth the terms of the proposed transfer.
LCRA shall have the right of first refusal at any time during said one hundred (180) day period
to enter into an agreement with Cedar Park to purchase the Cedar Park Treatment Plant or portion
thereof proposed to be transferred on the same terms as the proposed transfer.
Section 7.13. EXPANSION OF CEDAR PARK TREATMENT PLANT. Cedar Park
agr not to expand the Cedar Park Treatment Plant during the term of this Agreement, provided
that all Wastewater capacity required by Cedar Park (i) is available from the System (including
any Expansions) more economically than a plant expansion and (ii) can be provided in the System
within the timeframe required by Cedar Park. Economics and timing will be determined by Cedar
Park, in its sole discretion. If Cedar Park deterrnines that the conditions set forth in (i) or (ii)
above cannot be met, Cedar Park will have the right to expand the Cedar Park Treatment Plant
within the limits of and pursuant to the existing permit for that plant and the other Customers,
LCRA and BRA agree not to oppose or resist that expansion in any way. Cedar Park will further
have the right to continue to operate the Cedar Park Treatment Plant and, in the event of
annexation of Block House Municipal Utility District, the Block House Creek treatment plant, and
to maintain in effect and to renew the existing discharge permits for those plants, TNRCC Permit
No. TX0085740 and NPDES Permit No. 12308 -001 for the Cedar Park Trea:ment Plant, and
TNRCC Permit No. 13031-001 and NPDES Permit No. TX 0101397 for the Bock House Creek
treatment plant. The other Customers, LCRA and BRA agree not to oppose or resist in any way
(i) renewal of those permits or (ii) amendments which would make the perm'.: parameters more
stringent.
Section 7.14. A_NN'UAL. REPORT OF SY STEM AND AUDITS. BR? and LCRA shall
cause to be prepared an annual report of the System each year. Such report shall contain such
matters and information as may be considered necessary and useful by BRA. LCRA and the
T Review Committee. A copy of the annual report and BRA's and LCRA's annual audits
and accompanying management letters shall be promptly provided to each other and to each
Customer, and the Technical Review Committee.
Section 7.15. NO ADDITIONAL WAIVER IMPLIED. No waiver or waivers of any
breach or default (or any breaches or defaults) by any party hereto of any term, covenant,
conditions, or liability hereunder, or of performance by the other parties of any duty or obligation
hereunder, shall be deemed or construed to be a waiver of subsequent breaches or defaults of any
kind, under any circumstances.
Section 7.16. ADDRESSES AND NOTICE. Unless otherwise provided in this
Agreement, any notice. communication, .request, reply, or advice (herein severally and
collectively, for convenience. called "Notice ") herein provided or permitted to be given, made or
accepted by any party to the others must be in writing and may be given or be served by
depositing the same in the United States mail postpaid and registered or certified and addressed
to the party to be notified, with return receipt requested, or by delivering the same to an officer
of such party, or by telecopier, when appropriate, addressed to the party to be notified. Notice
deposited in the mail in the manner hereinabove described shall be conclusively deemed to be
effective, unless otherwise stated in this Agreement. from and after the expiration of four (4) days
40
AGREEMENT FOR ASSIGNMENT OF CONTRACT RIGHTS
THIS AGREEMENT FOR ASSIGNMENT OF CONTRACT RIGHTS (the "Agreement ")
is made and entered into as of the 10th day of 1997 (the "Effective Date "), by and between
the LOWER COLORADO RIVER AUTHORITY, a conservation and reclamation district and
political subdivision of the State of Texas ( "Assignee "), and the CITY OF CEDAR PARK, a
Texas municipal corporation ( "Assignor ").
A. Assignor is a party to that certain "Agreement for Conveyance of Interests and
Temporary Pass - Through Wastewater Service" (the "Contract ") between Assignor and the City of
Austin, Texas ( "Austin ") „,aoproved by the City Council of Assignor on April 10, 1997, a copy
of which is attached as Exhibit A.
B. Assignor desires to assign to Assignee and Assignee desires to accept from
Assignor the Contract upon the terms and conditions more particularly set forth in this Agreement.
C. Contemporaneously with entering into this Agreement, Assigner and Assignor have
also entered into that certain "Wastewater Disposal Contract” together with the City of Round
Rock and the Brazos River Authority (the "Wastewater Disposal Contract "). Assignor has also
previously entered into that certain "Settlement Agreement" dated January, 1996, between
Assignor and the City of Austin (the "Transfer Agreement "). Assignor is entering into the
Contract pursuant to the Transfer Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged:
ARTICLE I
AGRFFMFNT TO ASSIGN CONTRACT RIGHTS
Section 1.1. Cooperation. Assignor agrees to diligently pursue implementation of the
Transfer Agreement. In that regard, Assignor and Assignee agree to cooperate to implement the
closing under the Contract.
Section 1.2. Agreement. Within five (5) days after the effective date of this Agreement,
Assignor agrees to transfer, assign and set over the Contract to Assignee without recourse upon
Assignor, and Assignee agrees to accept the assignment and assume and perform all obligations
, scOntrtsassignm,n, upd
RFCITA1.S
AGRF,F.MFNT
Assignor, and Assignee agrees to accept the assignment and assume and perform all obligations
of Assignor thereunder, except that Assignor will retain the obligation to pay S380,345.82 of the
consideration to be paid to Austin under the contract in exchange for conveyance of the Project
assets described in Exhibits B and C of the Contract.
Section 2.1. Notic.q. All notices and other communications hereunder shall be in
writing and shall be delivered by hand delivery, expedited courier delivery or mailed (if mailed,
by registered or certified mail, return receipt requested, postage prepaid) addressed as follows,
and shall be effective upon actual delivery if delivered by hand or by expedited courier delivery
or, if mailed, three days after deposit in the United States mail:
wwsyscontnsa ssignment. wpd
(a) If to Assignee, to:
(b)
Joseph J. Beal, P.E.
Manager, WaterCo
LCRA
P. 0. Box 220
Austin, Texas 78767 -0220
(512) 473 -3586
Fax: (512) 473 -3551
With a copy to:
Ronald J. Freeman
Law Offices of Ronald J. Freeman
301 Congress Avenue, Suite 1400
Austin, Texas 78701
Fax: (512) 469 -9015
If to Assignor, to:
ARTICLE II
(1FNFRAT PROVISIONS
Mr. Don Birkner
City Manager
City of Cedar Park
P. 0. Box 1090
600 North Bell Blvd.
Cedar Park, TX 78613 -1090
Fax: (512) 258 -6083
2
BY MFSSF.NGFR
Mr. Stephan Sheets
Sheets & Crossfield, P.C.
309 E. Main Street
Round Rock, Texas 78664 -5246
Dear Steve:
LAW OFFICES OF
Ronald J. Freeman
301 Congress, Suite 1400
Austin, Texas 78701
Phone (512) 469 -5484 Fax (512) 469 -9015
April 18, 1997
Re: Brushy Creek Regional Wastewater System
RECEIVED APR 2 11997
This letter confirms our telephone conversation yesterday. As I indicated to ou on the
phone, I am enclosing with this letter four duplicate originals of the new, revised " astewate
Disposal Contract" which has been approved by LCRA and the City Council of Ced. Park
Cedar Park's April 10, 1997 council meeting). Joe Beal has executed the new co . t n b- alf
of LCRA. Cedar Park's Mayor is authorized to execute the agreement after Austin h.. ' : n: -. the
Agreement for Conveyance of Interests and Temporary Pass - Through Wastewater Servic tween
Austin and Cedar Park whereby Cedar Park would obtain the right to acquire certain :.'onal
system assets from Austin. In the meantime, I would like for you to have the Round Roc City
Council approve the new Wastewater Disposal Contract and have the Mayor sign it. It is my
understanding that will be considered at Round Rock's City Council meeting on April 24.
Assuming the Council approves the contract and authorizes the Mayor to sign it, would
please have the Mayor sign all - lour originals and put them in overrT ght maiLto_Mike Pieta
at the Brazos River Authority. Mike tells me that BRA will consider the new Wastewater
bisposal Contract at BRA's meeting on April 28. Assuming BRA approves the new Wastewater
D sposai Contract, fv i3 cke will have Roy Roberts execute the four originals you deliver to him. I
would then ask that Mike put all four originals back in overnight mail to me. Assuming I can get
the new four originals on either April 29 or April 30, I would then be in a position to get the
Mayor of Cedar Park's signature on them at that time if the Mayor is ready and authorized to sign
them.
This letter confirms my understanding as indicated to you on the phone that unless and
until all four parties have executed the new Wastewater Disposal Contract, it is not effective for
any purpose. Rather, pending final execution of the new Wastewater Disposal Contract by all
four parties, Round Rock, LCRA and BRA will continue to be governed by the provisions of the
earlier Wastewater Disposal Contract among them dated July 12, 1996. .
•
Mr. Stephan Sheets
April 18, 1997
Page 2
If you need any additional information, please contact me. I am sending copies of this
letter to the persons indicated below for their information.
RJF:jjs
Enclosures
cc: David Kultgen (letter only)
Mike Field (letter only)
Tom Clark (letter only)
Leonard Smith (letter only)
Sue Littlefield (letter only)
Don Birkner (letter only)
Sam Roberts (letter only)
UBRaennett_( etter only)
Jim Nuse (letter only)
Joe Beal (letter only)
Jim Clarno (letter only)
Angie Taylor - Rubottom (letter only)
John Rubottom (letter only)
Nancy Matchus (letter only)
Mike Erdmann (letter only)
Randy Goss (letter only)
Very truly yours,
fY n_
Ronald J. Freeman
AGREEMENT FOR ASSIGNMENT OF CONTRACT RIGHTS
COPY
THIS AGREEMENT FOR ASSIGNMENT OF CONTRACT RIGHTS (the "Agreement")
is made and entered into as of the 10th day of April, 1997 (the "Effective Date "), by and between
the LOWER COLORADO RIVER AUTHORITY, a conservation and reclamation district and
political subdivision of the State of Texas ( "Assignee "), and the CITY OF CEDAR PARK, a
Texas municipal corporation ( "Assignor ").
RECITALS
A. Assignor is a party to that certain "Agreement for Conveyance of Interests and
Temporary Pass - Through Wastewater Service" (the "Contract") between Assignor and the City of
Austin, Texas ( "Austin "), approved by the City Council of Assignor on April 10, 1997. a copy
of which is attached as Exhibit A.
B. Assignor desires to assign to Assignee and Assignee desires to accept from
Assignor the Contract upon the terms and conditions more particularly set forth in this Agreement.
C. Contemporaneously with entering into this Agreement, Assignee and Assignor have
also entered into that certain "Wastewater Disposal Contract" together with the City of Round
Rock and the Brazos River Authority (the "Wastewater Disposal Contract "). Assignor has also
previously entered into that certain "Settlement Agreement" dated January, 1996, between
Assignor and the City of Austin (the "Transfer Agreement "). Assignor is entering into the
Contract pursuant to the Transfer Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged:
Section 1.1. Cooperation Assignor agrees to diligently pursue implementation of the
Transfer Agreement. In that regard, Assignor and Assignee agree to cooperate to implement the
closing under the Contract.
Section 1.2. Agreement Within five (5) days after the effective date of this Agreement.
Assignor agrees to transfer, assign and set over the Contract to Assignee without recourse upon
wwsyscontrtsassignment.wpd
AGREEMENT
ARTICLE I
AGREFMENT TO ASSIGN CONTRACT RIGHTS
Assignor, and Assignee agrees to accept the assignment and assume and perform all obligations
of Assignor thereunder, except that Assignor will retain the obligation to pay $380,345.82 of the
consideration to be paid to Austin under the contract in exchange for conveyance of the Project
assets described in Exhibits B and C of the Contract.
Section 2.1. Notice All notices and other communications hereunder shalt be in
writing and shall be delivered by hand delivery, expedited courier delivery or mailed (if mailed,
by registered or certified mail, return receipt requested, postage prepaid) addressed as follows.
and shall be effective upon actual delivery if delivered by hand or by expedited courier delivery
or, if mailed, three days after deposit in the United States mail:
(b)
ww.ykomm.,.ignmem.wpd
(a) If to Assignee, to:
ARTICLE II
(;FNERAL PROVISIONS
Joseph J. Beal, P.E.
Manager, WaterCo
LCRA
P. O. Box 220
Austin, Texas 78767 -0220
(512) 473 -3586
Fax: (512) 473 -3551
With a copy to:
Ronald J. Freeman
Law Offices of Ronald J. Freeman
301 Congress Avenue, Suite 1400
Austin, Texas 78701
Fax: (512) 469 -9015
If to Assignor; to:
Mr. Don Birkner
City Manager
City of Cedar Park
P. O. Box 1090
600 North Bell Blvd.
Cedar Park, TX 78613-1090
Fax: (512) 258 -6083
2
With a copy to:
Sue Littlefield
Strasburger & Price, L.L.P.
600 Congress Avenue
2600 One American Center
Austin, Texas 78701
Phone: (512) 499 -3600
Fax: (512) 499 -3660; and
Mr. Leonard Smith
823 Congress
P. O. Box 684633
Austin, Texas 78768
Phone: (512) 474 -6707
Fax: (512) 474 -6706
Any party may change its address for receiving notice by giving notice of a new address in the
manner herein provided; however, if mailed, notice of such new address will be effective only
upon actual receipt by the other party.
Section 2.2. Headings Descriptive headings are for convenience only and shall nut
control or affect the meaning or construction of any provision of this Agreement.
Section 2.3. Assignment. Assignments of this Agreement by the parties are prohibited
without the prior written consent of the other party, which consent shall not be unreasonably
withheld or delayed. This Agreement shall be binding upon and inure to the benefit of the parties
thereto, their successors and assigns.
Section 2.4. (ioveming-Law and Forum. THIS AGREEMENT SHALL BE '
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE
OF TEXAS AND THE OBLIGATIONS OF THE PARTIES HERETO ARE AND SHALL BE
PERFORMABLE IN THE COUNTY WHEREIN THE PROPERTY IS LOCATED. BY
EXECUTING THIS AGREEMENT, EACH PARTY HERETO EXPRESSLY (a) CONSENTS
AND SUBMITS TO PERSONAL JURISDICTION AND VENUE CONSISTENT WITH THE
PREVIOUS SENTENCE, (b) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW.
ALL CLAIMS AND DEFENSES THAT SUCH JURISDICTION AND VENUE ARE NOT
PROPER OR CONVENIENT, AND (c) CONSENTS TO THE SERVICE OF PROCESS IN
ANY MANNER AUTHORIZED BY TEXAS LAW.
Section 2.5. No Oral Modification This Agreement may not be modified or amended.
except by an agreement in writing signed by both the Assignor and the Assignee.
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Section 2.6. No Oral Waiver. The parties may waive any of the conditions contained
herein or any of the obligations of the other party hereunder, but any such waiver shall be
effective only if in writing and signed by the party waiving such conditions or obligations.
Section 2.7. Time of Essence Time is of the essence of this Agreement.
Section 2.8. Total Agreement. This Agreement, including the Exhibits hereto,
constitutes the entire agreement among the parties pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings of the parties in
connection therewith. No representation, warranty, covenant, agreement or condition not
expressed in this Agreement shall be binding upon the parties hereto or shall affect or be effective
to interpret, change or restrict the provisions of this Agreement.
Section 2 9 partial Invalidity. If any clause or provision of this Agreement is or should
ever be held to be illegal, invalid, or unenforceable under any present or future law applicable to
the terms hereof, then and in that event, it is the intention of the parties hereto that the remainder
of this Agreement shall not be affected thereby, and that in lieu of each such clause or provision
of this Agreement that is illegal, invalid, or unenforceable, there be added as part of this
Agreement a clause or provision as similar in terms to such illegal, invalid, or unenforceable
clause or provision as may be possible and be legal, valid, and enforceable such that the intention
of the parties is effected as closely as is possible.
Section 2.10. Counterpart Execution. To facilitate execution, this Agreement may be
executed in as many counterparts as may be convenient or required. It shall not be necessary that
the signature of all persons required to bind any party, appear on each counterpart. All
counterparts shall collectively constitute a single instrument. It shall not be necessary in making
proof of this Agreement to produce or account for more than a single counterpart containing the
respective signatures of, or on behalf of, each of the parties hereto.
Section 2.11. Holidays. In the event that the date upon which any duties or obligations
hereunder to be performed shall occur upon a Saturday, Sunday or legal holiday, then, in such
event, the due date for performance of any duty or obligation shall thereupon be automatically
extended to the next succeeding business day.
Section 2.12. Effective Date The Effective Date of this Agreement shall be the date set
forth on the first page hereof.
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