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R-06-05-11-13C1 - 5/11/2006RESOLUTION NO. R-06-05-11-13 C 1 WHEREAS, the City has previously entered into a Consent Agreement with Merion 100, L.P. for the creation of Walsh Ranch Municipal Utility District ("Distric"), and WHEREAS, the District desires to obtain water and wastewater service from the City, 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 Water and Wastewater Agreement with Walsh Ranch Municipal Utility District, a copy of same being attached hereto as Exhibit "A" and incorporated herein for all purposes. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. RESOLVED this llth day of May, 2006 AT ST.: W L, ayor Ci of Roun. Rock, Texas CHRISTINE R. MARTINEZ, City(/Secretary @PFDesktop\::ODMA/WORLDOX/O:/WDOX/RESOLUTI/R60511C1.WPD/sc WALSH RANCH MUNICIPAL UTILITY DISTRICT WATER AND WASTEWATER AGREEMENT STATE OF TEXAS § COUNTY OF WILLIAMSON § KNOW ALL MEN AT THESE PRESENTS: This Agreement is made and entered into as of the date last herein written by and between the CITY OF ROUND ROCK, TEXAS ("City"), a home rule municipality located in Williamson County, Texas and the WALSH RANCH MUNICIPAL UTILITY DISTRICT ("District"), a conservation and reclamation district created pursuant to Article XVI, Section 59 of the Texas Constitution and operating under the provisions of Chapter 54 of the Texas Water Code. WITNESSETH: WHEREAS, the City owns and operates a water treatment and distribution system serving territory within the City's extraterritorial jurisdiction as well as within the boundaries of the City; and WHEREAS, the City owns wastewater collection facilities serving territory within the City's extraterritorial jurisdiction as well as within the boundaries of the City; and WHEREAS, the District consists of approximately 99.52 acres; and WHEREAS, the District desires to obtain access to the City' s water supply and wastewater collection systems in order to provide a dependable supply of potable water and environmentally sound wastewater treatment services for the residents of the District; more economically than constructing independent water supply and wastewater treatment facilities; and WHEREAS, the District will be authorized by Chapter 54 of the Texas Water Code to purchase, construct and acquire, within or without its boundaries, works, improvements, and facilities helpful or necessary to supply water for municipal uses, domestic uses, and commercial purposes and to collect, transport, and dispose of wastewater; and WHEREAS, the District has determined that it is appropriate to provide the residents of the District with the services set forth in this Agreement; and WHEREAS, the City has determined that it is appropriate to provide the services set forth in this Agreement within said area in order to protect the health and welfare of present and future residents of the District and portions of the City in proximity thereto; NOW, THEREFORE, for and in consideration of the premises and the mutual obligations and benefits herein contained, the parties hereby agree as follows: 1 EXHIBIT SECTION I Definitions 1.01 The terms and expressions used in this Agreement, unless the context clearly indicates otherwise, shall have meanings as follows: a. "Board" and "Board of Directors" means the Board of Directors of the District. b. "Bonds" means the bonds, notes or other obligations issued or incurred by the District for acquiring the Project or reimbursing or paying a Project Cost, whether in one or more series or issues. None of the bonds shall have a maturity which exceeds 20 years from the date of the first issue of bonds. c. "Bond Resolution" means any resolution, order or indenture of the Board of Directors 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. d. "Consent Agreement" means the agreement approved by the City of Round Rock, Merion 100, L.P. and the Walsh Ranch MUD, in Resolution No. R -05-10-13-10H5. e. "Director" means the City of Round Rock Director of Water and Wastewater Utilities f. "Force Majeure" means acts of God, strikes, lockouts, or other industrial disturbances, acts of public enemy, orders of any kind of the Government of the United States or the State of Texas or any civil or military authority other than the parties to this Agreement, insurrection, riots, epidemics, landslides, lightning, earthquake, fires, hurricanes, storms, floods, washouts, droughts, arrests, restraint of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipelines, or canals, or other causes not reasonably within the control of the party claiming inability. g. "Impact Fees" means the amounts charged by the City to pay for the portion of the capital costs of the City's central water supply and water treatment and wastewater central treatment and disposal system necessary to provide fresh water supply and wastewater collection, treatment, and disposal services to the District. h. "Living Unit Equivalent" shall mean 350 gallons per day for wastewater and 450 gallons per day for potable water, determined as follows for the respective uses indicated: Single Family 1.0 LUE per unit Public Schools Building Area x 6 x Land Area in Acres = LUEs Land Area 2 i. "Ordinances" means ordinances of the City of Round Rock as they may, from time to time be amended. j. "Project" means the water mains, appurtenances, wastewater lines, force mains and other related facilities more fully described in the utility schematics included with the previously - approved Concept Plan and previously accepted construction plans. "Project Costs" includes all construction or acquisition costs, lease costs, capitalized or accrued interest, easement acquisition expenses, insurance premiums, studies, permits, licenses and other costs incident or attributable to the Project. SECTION II Impact Fees 2.01 All water and wastewater Impact Fees are due and payable as stated in the Consent Agreement approved by the City in Resolution No. R -05-10-13-10H5. SECTION III Project Acquisition 3.01 Subject to the limitations set forth herein, the District will finance and acquire the Project. 3.02 The proceeds from the sale of the Bonds may be used to pay all of the District's expenses and costs in connection with the Project and the Bonds, including, without limitation, all engineering, financing, legal, printing, easement acquisition and other expenses incurred in connection with the issuance, sale, and delivery of the Bonds. 3.03 The District may enter into such contracts as are necessary to provide for purchase and construction of the entire Project, and said contracts shall be approved and executed as required by the laws and regulations applicable to municipal utility districts and shall be awarded by competitive bidding as directed by the State. 3.04 If, by reason of Force Majeure, any party hereto shall be rendered unable, wholly or in part, to carry out its obligations under this Agreement, then such party shall give notice and full particulars of such Force Majeure in writing to the other party within a reasonable time after occurrence of the event or cause relied upon, and the obligation of the party giving such notice, so far as it is affected by such Force Majeure, shall be suspended during the continuance of the inability then claimed, except as hereinafter provided; but for no longer period, and any such party shall endeavor to remove or overcome such inability with all reasonable dispatch. 3 SECTION IV Water Services 4.01 The City shall sell and deliver water to the boundaries of the District, for commercial and domestic uses, to be supplied from the City's water distribution system as extended by the District pursuant to this Agreement. The exact point or points of delivery of water to the District shall be agreed upon by the Director. The City presently has or will obtain an adequate water supply with which to provide service to the District; provided, however, that the supply of water to the District may be reasonably limited by the City on the same basis and to the same extent as the supply of water to any other customers within the City. Retail water service within the District shall be provided by the District to individual customers. Water meters for customers of the District shall be purchased by the District at the District's cost, and pursuant to City's specifications. The District shall promote compliance with the City's water conservation ordinances, as amended from time to time. The City shall be the sole source of potable water to the District and the District shall not seek to develop its own potable wells or alternate supplies, except in the event that the City is no longer able to provide potable water service as contemplated hereby. The District shall reduce water consumption in compliance with the City's Water Conservation/Drought Management Plan when activated by the City. The District may not sell or deliver Water to any customer, except the Round Rock ISD, outside the boundaries of the District without the City's approval. 4.02 The sale of water shall be by master meter or meters at all connections to the City water distribution system. The initial rate to be charged by the City to the District for water supplied under this Agreement shall be $2.51 per 1,000 gallons. The District agrees that the rates set by the City and charged to the District may be reviewed and/or amended annually based on a cost of service study performed by the City. The City shall be entitled to include a reasonable rate of return for said rates. In the future, the wholesale rate may consist of two components, a demand charge and a volumetric charge. 4.03 Metering equipment related facilities, a meter vault, and standard -type devices required for properly measuring the quantity of water delivered to the District, shall be installed at each point of delivery of water to the District by the City, at the District's cost. The City shall approve the meter facilities prior to installation. The District, at its expense, shall install and provide the vault and install the meter. The City, at the District's expense, shall operate and maintain the metering equipment, including annual calibrations. Any meter registering not more than three percent (3%) above or below the test result shall be deemed to be accurate. If any meter fails to register for any period, the amount of water furnished during such period shall be deemed to be the amount of water delivered during the corresponding period immediately preceding such failure, subject to reasonable adjustments for seasonal and climatic considerations, unless the City and the District otherwise agree. The metering equipment shall be read once each City billing cycle. 4.04 The District agrees to pay the City in accordance with the ordinances of the City of Round Rock and to bill users of potable water within the District and to set and maintain tax rates and water rates sufficient to pay the following: a. To pay for water delivered by the City pursuant to this Agreement at rates and in amounts equal to or greater than that hereinafter set forth. 4 b. For all operation and maintenance expenses in an amount sufficient enough to meet such expenses as they come due. c. For debt service, in combination with other District Funds, on any Bonds issued by the District in an amount deemed appropriate by the Board of Directors. 4.05 The District agrees to supply the City with a copy of each action by the District setting water rates pursuant to Paragraph 4.04 within seven (7) days of such action. SECTION V Wastewater Collection Treatment Services 5.01 The City shall collect and transport wastewater generated by, and not to exceed 331 living unit equivalents from the boundaries of the District, through its system, to the City's wastewater treatment facilities. The exact point or points of delivery of wastewater to the City shall be agreed upon by the Director. The City presently has or will obtain adequate wastewater treatment facilities with which to provide service to the District. Retail wastewater collection service within the District shall be provided by the District to individual customers. The District shall adopt an order prohibiting industrial waste from entering its collection system. The City shall be the sole source of wastewater treatment services for the District and the District shall not seek to develop its own sanitary treatment capacity or alternate source of services, except in the event that the City is no longer able to provide wastewater treatment service as contemplated hereby. 5.02 The initial rate to be charged by the City to the District for wastewater supplied under this Agreement shall be $3.52 per 1,000 gallons. Thereafter, unless the District and the City agree otherwise, the City will bill the District for Wastewater on the basis of 70% of the District's then current monthly water bill. After the District is 50% built -out, the District shall have the option of installing, or the City may install at Districts expense a master meter, complying with the terms set out in this Agreement. The District agrees that the rates set by the City and charged to the District may be reviewed and/or amended annually based on a cost of service study performed by the City. The City shall be entitled to include a reasonable rate of return for said rates. In the future, the wholesale rate may consist of two components, a demand charge and a volumetric charge. 5.03 If the District elects to install a meter as stated in Section 5.02, above, metering equipment related facilities, a meter vault, and standard -type devices required for properly measuring the quantity of wastewater delivered to the District shall be installed at each point of delivery of wastewater to the District by the City, at the District's cost. The City shall approve the meter facilities prior to installation. The District, at its expense, shall install and provide the vault and install the meter, which shall be supplied by the City. The City, at the District's expense, shall operate and maintain the metering equipment, including annual calibrations. Any meter registering not more than three percent (3%) above or below the test result shall be deemed to be accurate. If any meter fails to register for any period, the amount of wastewater furnished during such period shall be deemed to be the amount of wastewater delivered during the corresponding period immediately preceding such failure, subject to reasonable adjustments for seasonal and climatic considerations, 5 unless the City and the District otherwise agree. The metering equipment shall be read once each City billing cycle. 5.04 The District agrees to pay the City in accordance with the ordinances of the City of Round Rock and to bill users of wastewater treatment services within the District and to set and maintain tax rates and wastewater rates sufficient to pay the following: a. To pay for wastewater treatment services provided by the City pursuant to this Agreement at rates and in amounts equal to or greater than that hereinafter set forth. b. For all operation and maintenance expenses in an amount sufficient enough to meet such expenses as they come due. c. For debt service, in combination with other District Funds, on any Bonds issued by the District in an amount deemed appropriate by the Board of Directors. 5.05 The District agrees to supply the City with a copy of each action by the District setting sewer rates pursuant to Paragraph 5.04 within seven (7) days of such action. SECTION VI Governmental Approvals 6.01 Plans and specifications of all District facilities shall be subject to approval by the City of Round Rock. SECTION VII Miscellaneous 7.01 The City shall not be liable to the District or any customer of the District for the failure of the City to provide water or wastewater treatment service where the failure results from Force Majeure. 7.02 This Agreement and the acquisition of the Project, shall be subject to all valid rules, regulations and laws applicable thereto, past or promulgated by the United States of America, the State of Texas, or any State or Federal governmental or regulatory body having lawful jurisdiction. 7.03 The Contract shall be for the sole and exclusive benefit of the City and the District and shall not be construed to confirm any benefit or right upon any other parties. 7.04 This Agreement may be amended by consent of all the parties. 7.05 The provisions of this Contract are severable, and if any word, phrase, clause, sentence, paragraph, section or other 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 shall be construed as if such invalid provision was not contained herein. 6 7.06 This Agreement shall be in force and effect until the District is annexed by the City, at which time this Agreement shall terminate, provided that in no event shall the terms of this Contract exceed forty (40) years. 7.07 This Agreement may be executed by the City prior to the creation of the District and shall be binding upon the City for a period of one (1) year, pending creation and confirmation of the District. Upon said creation and approval of this Contract by the Board of Directors of the District, it shall thereafter be binding upon all parties in accordance with its terms. 7.08 The above and foregoing agreement, including the exhibits which are attached hereto and made a part hereof, contain the entire agreement between the parties hereto and shall in no way be conditioned, modified, or supplemented except by written agreement executed by both parties. 7.09 The City reserves the right to conduct reasonable inspections of the construction of all portions of the Project outside the District's boundaries which will be owned and operated upon completion by the City. The District or its assigns will be responsible for reimbursing the City the costs of such inspection. 7.10 All other fees required by the City of Round Rock, including but not limited to, oversize fees, shall be paid as required by its ordinances and the Consent Agreement. IN WITNESS WHEREOF, the City, and the District, acting under the authority of their respective governing bodies, have caused multiple copies of this Agreement to be duly executed each of which to be of equal dignity, all as of the day of , 2006. (The rest of this page is blank) 7 ATTEST: CHRISTINE R. MARTINEZ, City Secretary CITY OF ROUND ROCK, TEXAS By: NYLE MAXWELL, Mayor WALSH MUNIC By: CH L UTILITY DISTRICT Printed Name: Title: DATE: May 5, 2006 SUBJECT: City Council Meeting - May 11 2006 ITEM: 13.C.1. Consider a resolution authorizing the Mayor to execute an Agreement with Walsh Ranch Municipal Utility District for Water & Wastewater Service. Department: Finance / Water and Wastewater Utilities Staff Person: Cindy Demers, Finance Director Tom Clark, Utilities Director Justification: On August 11, 2005 (Resolution No. R-05-08-11-1162) the City entered into a Development Agreement with Merion 100, L.P. The agreement requires a Wholesale water and wastewater rate agreement be developed and executed. This Agreement establishes rates and rate methodology for water and wastewater service that will be provided to the MUD by the City. Funding: Cost: N/A Source of funds: N/A Outside Resources: Merion 100, L.P. Background Information: The Walsh Ranch Municipal Utility District agreement for Water and Wastewater Service establishes rates and rate methodology for water and wastewater service that will be provided to the MUD by the City. The initial rate for water will be $2.51 per 1,000 gallons and the rate for wastewater will be $3.52 per 1,000 gallons. These rates will be recalculated on a regular basis to reflect the City's cost to serve the MUD. Public Comment: N/A EXECUTED DOCUMENTS FOLLOW WALSH RANCH MUNICIPAL UTILITY DISTRICT WATER AND WASTEWATER AGREEMENT STATE OF TEXAS KNOW ALL MEN AT THESE PRESENTS: COUNTY OF WILLIAMSON This Agreement is made and entered into as of the date last herein written by and between the CITY OF ROUND ROCK, TEXAS ("City"), a home rule municipality located in Williamson County, Texas and the WALSH RANCH MUNICIPAL UTILITY DISTRICT ("District"), a conservation and reclamation district created pursuant to Article XVI, Section 59 of the Texas Constitution and operating under the provisions of Chapter 54 of the Texas Water Code. WITNESSETH: WHEREAS, the City owns and operates a water treatment and distribution system serving territory within the City's extraterritorial jurisdiction as well as within the boundaries of the City; and WHEREAS, the City owns wastewater collection facilities serving territory within the City's extraterritorial jurisdiction as well as within the boundaries of the City; and WHEREAS, the District consists of approximately 99.52 acres; and WHEREAS, the District desires to obtain access to the City's water supply and wastewater collection systems in order to provide a dependable supply of potable water and environmentally sound wastewater treatment services for the residents of the District; more economically than constructing independent water supply and wastewater treatment facilities; and WHEREAS, the District will be authorized by Chapter 54 of the Texas Water Code to purchase, construct and acquire, within or without its boundaries, works, improvements, and facilities helpful or necessary to supply water for municipal uses, domestic uses, and commercial purposes and to collect, transport, and dispose of wastewater; and WHEREAS, the District has determined that it is appropriate to provide the residents of the District with the services set forth in this Agreement; and WHEREAS, the City has determined that it is appropriate to provide the services set forth in this Agreement within said area in order to protect the health and welfare of present and future residents of the District and portions of the City in proximity thereto; NOW, THEREFORE, for and in consideration of the premises and the mutual obligations and benefits herein contained, the parties hereby agree as follows: R. oe-og N-1301 SECTION I Definitions 1.01 The terms and expressions used in this Agreement, unless the context clearly indicates otherwise, shall have meanings as follows: a. "Board" and "Board of Directors" means the Board of Directors of the District. b. "Bonds" means the bonds, notes or other obligations issued or incurred by the District for acquiring the Project or reimbursing or paying a Project Cost, whether in one or more series or issues. None of the bonds shall have a maturity which exceeds 20 years from the date of the first issue of bonds. c. "Bond Resolution" means any resolution, order or indenture of the Board of Directors 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. d. "Consent Agreement" means the agreement approved by the City of Round Rock, Merion 100, L.P. and the Walsh Ranch MUD, in Resolution No. R -05-10-13-10H5. e. "Director" means the City of Round Rock Director of Water and Wastewater Utilities f. "Force Majeure" means acts of God, strikes, lockouts, or other industrial disturbances, acts of public enemy, orders of any kind of the Government of the United States or the State of Texas or any civil or military authority other than the parties to this Agreement, insurrection, riots, epidemics, landslides, lightning, earthquake, fires, hurricanes, storms, floods, washouts, droughts, arrests, restraint of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipelines, or canals, or other causes not reasonably within the control of the party claiming inability. g. "Impact Fees" means the amounts charged by the City to pay for the portion of the capital costs of the City's central water supply and water treatment and wastewater central treatment and disposal system necessary to provide fresh water supply and wastewater collection, treatment, and disposal services to the District. h. "Living Unit Equivalent" shall mean 350 gallons per day for wastewater and 450 gallons per day for potable water, determined as follows for the respective uses indicated: Single Family 1.0 LUE per unit Public Schools Building Area x 6 x Land Area in Acres = LUEs Land Area 2 i. "Ordinances" means ordinances of the City of Round Rock as they may, from time to time be amended. j. "Project" means the water mains, appurtenances, wastewater lines, force mains and other related facilities more fully described in the utility schematics included with the previously - approved Concept Plan and previously accepted construction plans. "Project Costs" includes all construction or acquisition costs, lease costs, capitalized or accrued interest, easement acquisition expenses, insurance premiums, studies, permits, licenses and other costs incident or attributable to the Project. SECTION II Impact Fees 2.01 All water and wastewater Impact Fees are due and payable as stated in the Consent Agreement approved by the City in Resolution No. R -05-10-13-10H5. SECTION III Project Acquisition 3.01 Subject to the limitations set forth herein, the District will finance and acquire the Project. 3.02 The proceeds from the sale of the Bonds may be used to pay all of the District's expenses and costs in connection with the Project and the Bonds, including, without limitation, all engineering, financing, legal, printing, easement acquisition and other expenses incurred in connection with the issuance, sale, and delivery of the Bonds. 3.03 The District may enter into such contracts as are necessary to provide for purchase and construction of the entire Project, and said contracts shall be approved and executed as required by the laws and regulations applicable to municipal utility districts and shall be awarded by competitive bidding as directed by the State. 3.04 If, by reason of Force Majeure, any party hereto shall be rendered unable, wholly or in part, to carry out its obligations under this Agreement, then such party shall give notice and full particulars of such Force Majeure in writing to the other party within a reasonable time after occurrence of the event or cause relied upon, and the obligation of the party giving such notice, so far as it is affected by such Force Majeure, shall be suspended during the continuance of the inability then claimed, except as hereinafter provided; but for no longer period, and any such party shall endeavor to remove or overcome such inability with all reasonable dispatch. 3 SECTION IV Water Services 4.01 The City shall sell and deliver water to the boundaries of the District, for commercial and domestic uses, to be supplied from the City's water distribution system as extended by the District pursuant to this Agreement. The exact point or points of delivery of water to the District shall be agreed upon by the Director. The City presently has or will obtain an adequate water supply with which to provide service to the District; provided, however, that the supply of water to the District may be reasonably limited by the City on the same basis and to the same extent as the supply of water to any other customers within the City. Retail water service within the District shall be provided by the District to individual customers. Water meters for customers of the District shall be purchased by the District at the District's cost, and pursuant to City's specifications. The District shall promote compliance with the City's water conservation ordinances, as amended from time to time. The City shall be the sole source of potable water to the District and the District shall not seek to develop its own potable wells or alternate supplies, except in the event that the City is no longer able to provide potable water service as contemplated hereby. The District shall reduce water consumption in compliance with the City's Water Conservation/Drought Management Plan when activated by the City. The District may not sell or deliver Water to any customer, except the Round Rock ISD, outside the boundaries of the District without the City's approval. 4.02 The sale of water shall be by master meter or meters at all connections to the City water distribution system. The initial rate to be charged by the City to the District for water supplied under this Agreement shall be $2.51 per 1,000 gallons. The District agrees that the rates set by the City and charged to the District may be reviewed and/or amended annually based on a cost of service study performed by the City. The City shall be entitled to include a reasonable rate of return for said rates. In the future, the wholesale rate may consist of two components, a demand charge and a volumetric charge. 4.03 Metering equipment related facilities, a meter vault, and standard -type devices required for properly measuring the quantity of water delivered to the District, shall be installed at each point of delivery of water to the District by the City, at the District's cost. The City shall approve the meter facilities prior to installation. The District, at its expense, shall install and provide the vault and install the meter. The City, at the District's expense, shall operate and maintain the metering equipment, including annual calibrations. Any meter registering not more than three percent (3%) above or below the test result shall be deemed to be accurate. If any meter fails to register for any period, the amount of water furnished during such period shall be deemed to be the amount of water delivered during the corresponding period immediately preceding such failure, subject to reasonable adjustments for seasonal and climatic considerations, unless the City and the District otherwise agree. The metering equipment shall be read once each City billing cycle. 4.04 The District agrees to pay the City in accordance with the ordinances of the City of Round Rock and to bill users of potable water within the District and to set and maintain tax rates and water rates sufficient to pay the following: a. To pay for water delivered by the City pursuant to this Agreement at rates and in amounts equal to or greater than that hereinafter set forth. 4 b. For all operation and maintenance expenses in an amount sufficient enough to meet such expenses as they come due. c. For debt service, in combination with other District Funds, on any Bonds issued by the District in an amount deemed appropriate by the Board of Directors. 4.05 The District agrees to supply the City with a copy of each action by the District setting water rates pursuant to Paragraph 4.04 within seven (7) days of such action. SECTION V Wastewater Collection Treatment Services 5.01 The City shall collect and transport wastewater generated by, and not to exceed 331 living unit equivalents from the boundaries of the District, through its system, to the City's wastewater treatment facilities. The exact point or points of delivery of wastewater to the City shall be agreed upon by the Director. The City presently has or will obtain adequate wastewater treatment facilities with which to provide service to the District. Retail wastewater collection service within the District shall be provided by the District to individual customers. The District shall adopt an order prohibiting industrial waste from entering its collection system. The City shall be the sole source of wastewater treatment services for the District and the District shall not seek to develop its own sanitary treatment capacity or alternate source of services, except in the event that the City is no longer able to provide wastewater treatment service as contemplated hereby. 5.02 The initial rate to be charged by the City to the District for wastewater supplied under this Agreement shall be $3.52 per 1,000 gallons. Thereafter, unless the District and the City agree otherwise, the City will bill the District for Wastewater on the basis of 70% of the District's then current monthly water bill. After the District is 50% built -out, the District shall have the option of installing, or the City may install at Districts expense a master meter, complying with the terms set out in this Agreement. The District agrees that the rates set by the City and charged to the District may be reviewed and/or amended annually based on a cost of service study performed by the City. The City shall be entitled to include a reasonable rate of return for said rates. In the future, the wholesale rate may consist of two components, a demand charge and a volumetric charge. 5.03 If the District elects to install a meter as stated in Section 5.02, above, metering equipment related facilities, a meter vault, and standard -type devices required for properly measuring the quantity of wastewater delivered to the District shall be installed at each point of delivery of wastewater to the District by the City, at the District's cost. The City shall approve the meter facilities prior to installation. The District, at its expense, shall install and provide the vault and install the meter, which shall be supplied by the City. The City, at the District's expense, shall operate and maintain the metering equipment, including annual calibrations. Any meter registering not more than three percent (3%) above or below the test result shall be deemed to be accurate. If any meter fails to register for any period, the amount of wastewater furnished during such period shall be deemed to be the amount of wastewater delivered during the corresponding period immediately preceding such failure, subject to reasonable adjustments for seasonal and climatic considerations, 5 unless the City and the District otherwise agree. The metering equipment shall be read once each City billing cycle. 5.04 The District agrees to pay the City in accordance with the ordinances of the City of Round Rock and to bill users of wastewater treatment services within the District and to set and maintain tax rates and wastewater rates sufficient to pay the following: a. To pay for wastewater treatment services provided by the City pursuant to this Agreement at rates and in amounts equal to or greater than that hereinafter set forth. b. For all operation and maintenance expenses in an amount sufficient enough to meet such expenses as they come due. c. For debt service, in combination with other District Funds, on any Bonds issued by the District in an amount deemed appropriate by the Board of Directors. 5.05 The District agrees to supply the City with a copy of each action by the District setting sewer rates pursuant to Paragraph 5.04 within seven (7) days of such action. SECTION VI Governmental Approvals 6.01 Plans and specifications of all District facilities shall be subject to approval by the City of Round Rock. SECTION VII Miscellaneous 7.01 The City shall not be liable to the District or any customer of the District for the failure of the City to provide water or wastewater treatment service where the failure results from Force Majeure. 7.02 This Agreement and the acquisition of the Project, shall be subject to all valid rules, regulations and laws applicable thereto, past or promulgated by the United States of America, the State of Texas, or any State or Federal governmental or regulatory body having lawful jurisdiction. 7.03 The Contract shall be for the sole and exclusive benefit of the City and the District and shall not be construed to confirm any benefit or right upon any other parties. 7.04 This Agreement may be amended by consent of all the parties. 7.05 The provisions of this Contract are severable, and if any word, phrase, clause, sentence, paragraph, section or other 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 shall be construed as if such invalid provision was not contained herein. 6 7.06 This Agreement shall be in force and effect until the District is annexed by the City, at which time this Agreement shall terminate, provided that in no event shall the terms of this Contract exceed forty (40) years. 7.07 This Agreement may be executed by the City prior to the creation of the District and shall be binding upon the City for a period of one (1) District. Upon said creation and approval of this Contract by the Board , pending of Directorsion cnof the tDi Dion istrict, shall thereafter be binding upon all parties in accordance with its terms. t, it 7.08 The above and foregoing agreement, including the exhibits which are attached hereto and made a part hereof, contain the entire agreement between the parties hereto and shall in no way be conditioned, modified, or supplemented except by written agreement executed by both parties. 7.09 The City reserves the right to conduct reasonable inspections of the construction of all portions of the Project outside the District's boundaries which will be owned and operated upon completion by the City. The District or its assigns will be responsible for reimbursing the City the costs of such inspection. 7.10 All other fees required by the City of Round Rock, including but not limited to, oversize fees, shall be paid as required by its ordinances and the Consent Agreement. IN WITNESS WHEREOF, the City, and the District, acting under the authority of their respective governing bodies, have caused multiple copies of this A eement to be duly executed each of which to be of equal dignity, all as of the Jr_ day of 2006. (The rest of this page is blank) 7 ATTEST: OkuitkitoR.AoAtvor, CHRISTINE R. MARTINEZ, City Secretary CITY OF ROUND ROCK, TEXAS B MAXWELL, Mayor WALSHRNCH MUNICIP L UTILITY DISTRICT By: r'� (��i �'� 0 a Printed Name: Title: