R-01-09-13-15F12 - 9/13/2001l
RESOLUTION NO. R -01-09-13-15F12
WHEREAS, the City of Round Rock desires to acquire water from the
Brazos River Authority, and
WHEREAS, the City Council wishes to enter into a System Water
Availability Agreement for Colorado River Basin Water between Brazos
River Authority and City of Round Rock for the purchase of water from
the Colorado River Basin, 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 System Water Availability Agreement for Colorado
River Basin Water between Brazos River Authority and City of Round Rock
for the purchase of water from the Colorado River Basin, a copy of said
agreement 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 13th day of Septe • 001.
ATTEST:
•
DAME LAND, City Secretary
Hkl6r/JJE iniVT/NEL) A 551.
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RO��� A. STLUKA, irV , Mayor
City of Round Rock, Texas
SYSTEM WATER AVAILABILITY AGREEMENT
FOR COLORADO RIVER BASIN WATER
BETWEEN
BRAZOS RIVER AUTHORITY
AND
CITY OF ROUND ROCK
AGREEMENT made and entered into this the day of
2001, by and between BRAZOS RIVER AUTHORITY ("Authority"), a river
authority of the State of Texas, and CITY OF ROUND ROCK ("Purchaser") of
Williamson County, Texas.
1. RECITALS. Authority owns and operates various lakes in the
Brazos River Basin. Authority also has entered into contracts with the United
States of America by virtue of which it has obtained the right to utilize for water
supply purposes a portion of the usable storage space in various lakes owned
and operated by the United States Army Corps of Engineers. Authority is
authorized by the State of Texas to store State waters in the lakes owned by
Authority and various lakes owned and operated by the United States Army
Corps of Engineers in the Brazos River Basin, hereinafter collectively called the
"System", and to make such stored waters available for beneficial use.
Authority is authorized to operate the System as a hydrologic unit
pursuant to an order of the Texas Water Commission (now Texas Natural
Resource Conservation Commission "TNRCC") issued on July 23, 1964
("System Operation Order"). The Final Determination of All Claims of Water
Rights in the Brazos River Basin and the San Jacinto -Brazos Coastal Basin
Maintained by the Brazos River Authority, Fort Bend County W.C.I.D. No. 1 and
Galveston County Water Authority ("Final Determination") issued on June 26,
1985, by TNRCC clarified and amplified the System Operation Order. Under the
System Operation Order as adjudicated by the Final Determination, Authority is
authorized to operate the System as a hydrologic unit to more efficiently utilize
the reservoirs that make up the System to make water available to meet the
needs of Authority's customers.
Authority and Purchaser have entered into certain raw water contracts
(System Water Availability Agreement Between Brazos River Authority And City
of Round Rock - Lake Georgetown and System Water Availability Agreement
Between Brazos River Authority And City of Round Rock — Lake Stillhouse
Hollow) dated contemporaneously herewith pursuant to which Authority has
agreed to make available a total of 24,854 acre-feet of water per Fiscal Year from
the System.
Authority has also acquired the right to divert and use 25,000 acre-feet of
water per year from the Colorado River Basin made available from the Lower
Colorado River Authority (LCRA) under the "Water Sale Contract by and between
Lower Colorado River Authority and Brazos River Authority Purchaser", dated
October 2000 (LCRA Contract) pursuant to the terms of House Bill 1437 of the
76th Texas Legislative Session and codified under Section 27 of the LCRA
Enabling Act. It is from the 25,000 acre-foot of water per year from the Colorado
River Basin ( the "LCRA" Water") that Purchaser now wishes to contract for
Authority to make available 6,944 acre-feet of water per Calendar Year under
the terms and conditions herein provided.
2. DEFINITIONS.
a) The term "Agreement" means this agreement.
b) The term "Agreement Rates" means the "Agreement Water Rate",
the "Agreement Reserved Water Charge", and the "Agreement Inverted Block
Rate" for water purchased pursuant to this Agreement as more fully described in
Section 5, PRICING STRUCTURE, and in Section 7, UNCONDITIONAL
NATURE OF PAYMENT OBLIGATION; PRICE, below.
c) The term "Area of Use" means that certain area in Williamson
County that lies outside of the watershed of the Colorado River, but excludes
those municipalities which were customers of the Lower Colorado River Authority
as of May 20, 1997, and who are located in watersheds of both the Colorado and
Brazos Rivers.
d) The term "Authority" shall mean Brazos River Authority.
e) The term "Board" shall mean the Board of Directors of Brazos River
Authority.
f) The term "Credit for System Rate Recovery" or "CSRR" means the
credit described in Section 7. (c) of this Agreement.
g) The term "Cost Recovery Fee" or "CRF" means the fee described in
Section 7. (b) (3) of this Agreement.
h) The term "Federal Contracts" shall mean those contracts with the
United States of America whereby Authority has acquired, is acquiring, or may
acquire conservation storage capacity in Federal Reservoirs.
i) The term "Federal Reservoirs" shall include the following:
Aquilla Dam and Reservoir
Belton Dam and Reservoir
Georgetown Dam and Reservoir
Granger Dam and Reservoir
Proctor Dam and Reservoir
Somerville Dam and Reservoir
Stillhouse Hollow Dam and Reservoir
Whitney Dam and Reservoir
j) The term "Fiscal Year" shall mean Authority's fiscal year from
September 1 through August 31, or such other annual fiscal year period as
Authority may later determine.
k) The term "Highest Lawful Rate" shall mean the maximum rate
which Authority may charge on obligations payable under this Agreement without
2
violation of any applicable law or any applicable lawful regulation of any agency
of the State of Texas or of the United States having jurisdiction of the matter.
I) The term "Industrial Use" shall mean the use of water in processes
designed to convert materials of a lower order of value into forms having greater
usability and commercial value, including commercial feedlot operations,
commercial fish production, and the development of power by means other than
hydroelectric.
m) The term "Irrigation Use" shall mean the use of water for the
irrigation of crops, trees, and pastureland, including, but not limited to, golf
courses and parks which do not receive water through a municipal distribution
system.
n) The term "LCRA" means Lower Colorado River Authority.
o) The term "LCRA Contract" means the "Water Sale Contract by and
between Lower Colorado River Authority and Brazos River Authority, Purchaser"
dated October 2000.
p) The term "LCRA Rates" means the LCRA rates and charges for
sale of water for municipal purposes as delineated in Section II. B. of the LCRA
Contract.
q) The term "LCRA Water" means the 25,000 acre-feet of water per
year purchased by Brazos River Authority from LCRA pursuant to House Bill
1437 of the 76th Texas Legislative Session.
r) The term "Mining Use" shall mean the use of water for mining
processes including hydraulic use, drilling, washing sand and gravel, and oil field
repressurin
g.
s) The term "Municipal Use"
within a community or municipality and
commercial, or industrial purposes or for
parkways.
t) The term "Purchaser" shall mean City of Round Rock.
u) The term "System" shall mean Authority's Water Supply System
and shall include certain of Authority's facilities and properties insofar as they are
related to making water available from the System, to wit, as follows: Morris
Sheppard Dam and Possum Kingdom Reservoir, DeCordova Bend Dam and
Lake Granbury, Sterling C. Robertson Dam and Lake Limestone, Authority's
conservation storage in the Federal Reservoirs, and the LCRA Water obtained
pursuant to the LCRA Contract, together with aII future extensions,
improvements, enlargements, and additions to and replacements of the System,
and all replacements thereof whether from surface water supplies, groundwater,
or a combination thereof, specifically added to the System by resolution of the
Board; provided that, notwithstanding the foregoing, the term System shall not
include (i) any of Authority's facilities and properties not specifically included in
the System by the terms of this Agreement or not added by a subsequent
resolution of the Board, and (ii) any water supply, wastewater or other facilities
which have been or are declared not to be a part of the System and which may
be acquired or constructed by Authority with the proceeds from the issuance of
"Special Facilities Bonds," which are hereby defined as being special revenue
shall mean the use of potable water
its environs for domestic, recreational,
the watering of golf courses, parks and
3
obligations of Authority which are not secured by or payable from the revenues of
the System but which are secured by and payable solely from special contract
revenues or payments received from any persons or other legal entity or entities
in connection with such special facilities.
v) The term "System Agreements" means those certain raw water
contracts titled "System Water Availability Agreement Between Brazos River
Authority and City of Round Rock — Lake Georgetown" and "System Water
Availability Agreement Between Brazos River Authority and City of Round Rock —
Lake Stillhouse Hollow", dated contemporaneously with this Agreement herewith.
w) The term "System Operation Order" shall mean that certain order of
the TNRCC or its predecessor dated July 23, 1964, as adjudicated by order of
the TNRCC or its predecessor on June 26, 1985, in the Final Determination of all
Claims of Water Rights in the Brazos River Basin and the San Jacinto -Brazos
Coastal Basin Maintained by the Brazos River Authority, Fort Bend County
W.C.I.D. No. 1 and Galveston County Water Authority.
x) The term "System Rate" or "SR" shall mean the rate per acre-foot
of water established by Authority from time to time under its system -wide pricing
methodology.
y) The term "Total Annual Budgeted System Costs" shall mean the
amounts approved by Authority as estimated costs of the System in the annual
budgets adopted by Authority for a given Fiscal Year including, without limitation,
amounts budgeted to meet Annual System Operation and Maintenance
Expenses and Annual Capital Related Costs.
z) The term "Total System Billing Units" shall mean the total amount
of water (expressed in acre-feet) determined by Authority under accepted
engineering practice as necessary to be reserved from firm yield produced by
storage in the System to fulfill its commitments for which Authority receives
payment under long term (in excess of five years) water sales contracts with
Purchaser and Authority's other customers; provided, however, such term shall
not include amounts of water required by appropriate governmental authority to
be reserved in the System for use for bay and estuary purposes, in -stream uses,
or for other similar environmental, public, or other beneficial uses to the extent
Authority is not adequately compensated for any such requirement.
3. EFFECTIVE DATE. The effective date of this Agreement is
September 1, 2001.
4. AVAILABILITY OF WATER. While this Agreement remains in
force, Authority agrees to make available to Purchaser an amount of water not to
exceed 6,944 acre-feet of water per Calendar Year under the following
conditions:
a) Notwithstanding anything herein to the contrary, Authority's
obligation to make water available to Purchaser under this Agreement is subject
to, and limited by, the rights of Authority to obtain the LCRA Water pursuant to
the LCRA Contract. Purchaser acknowledges that Purchaser has received a
4
copy of the LCRA Contract and is familiar with the rights of Authority thereunder,
and the limitations on Authority's rights thereunder to obtain the LCRA Water.
b) Authority may interrupt or curtail the water supplied to Purchaser
under this Agreement to the extent Authority experiences interruption or
curtailment of water supplied to it under the LCRA Contract for any reason.
c) Water supplied under this Agreement shall only be used within the
Area of Use.
d) Purchaser acquires no property rights in the water made available
to it under this Agreement beyond the right to have the water made available to it
for diversion and use under the terms of this Agreement. This right of use
extends to direct reuse (flange to flange) of the water made available under this
Agreement. Purchaser represents, and Authority relies on such representation,
that all water to be made available by Authority under this Agreement to
Purchaser shall be used solely for municipal purposes.
5. PRICING STRUCTURE
a) The pricing structure for water rates under this Agreement is
dependent upon the pricing structure of water made available to the Authority
under the LCRA Contract unless or until the Authority's System Rate exceeds the
price derived from the formula provided for price calculation in Section 7, below.
At such time, the price under this Agreement shall be the Authority's System
Rate.
b) The LCRA Water is provided to Authority under the LCRA Contract
pursuant to the following pricing structure:
(1) The "Water Rate" for LCRA Water is charged for water
diverted and used during a calendar year. The current Water Rate is $105.00
per acre-foot of water per year.
(2) The "Reserved Water Charge" for LCRA Water is charged
for water under contract but not diverted and used during a calendar year. The
Reserved Water Charge is 50% of the Water Rate, or currently $52.50 per acre-
foot of water per year.
(3) The "Inverted Block Rate" for LCRA Water is charged for all
water used in excess of the total contractual amount and is currently $200.00 per
acre-foot of water per year.
(4) The "Conservation Charge" for LCRA Water is currently 25%
of the Water Rate, the Reserved Water Charge, or the Inverted Block Rate, as
applicable.
(5)
follows:
The current "Total LCRA Rates" for LCRA Water are as
(a) The "Total LCRA Water Rate" is the Water Rate + the
Conservation Charge, currently $131.25 an acre-foot.
(b) The "Total LCRA Reserved Water Charge" is the
Reserved Water Charge + the Conservation Charge, currently $65.63 an acre-
foot.
(c) The "Total LCRA Inverted Block Rate" is the Inverted
Block Rate + the Conservation Charge, currently $250.00 an acre-foot.
5
d) The Authority makes water available to Purchaser
under this Agreement pursuant to the following pricing structure:
"Agreement(1) The
Water
all water agreed to be made avai able u der hies Agee Agreement whether or notfor
diverted and used during a calendar year. The current Agreement Reserved
Water Charge is $49.22 per acre-foot of water per year, the calculation for which
is set out in Section 7.c., below.
The
that is diverted and used during acalendar year. Waterwater
heAgreement Water Rate
equals the Agreement Reserved Water Charge and is in addition to the
Agreement Reserved Water Charge.
3) The "Agreement Inverted Block Rate" for water
used in excess of the amount agreed to be made available under this
Agreement. The Agreement Inverted Block Rate equals the Total LCRA Inverted
Block Rate.
6. DATE AND PLACE OF PAYMENTS.
a) Payments to be made hereunder shall be made at
Authority's office in Waco, McLennan County, Texas. Authority contemplates
that by September 1 of each Fiscal Year it will have adopted budgets for
Authority for said Fiscal Year and established the System Rate and the
Agreement Rates for said Fiscal Year. Payments for each Fiscal Year may be
made under one of three payment options from which Purchaser will select at the
beginning of each Fiscal Year. The payment due at the beginning of each Fiscal
Year will be for the water agreed to be provided during the next calendar year,
and shall be based on the Agreement Reserved Water Charge. Annual
payments for water provided at the Agreement Reserved Water Charge shall be
made on or before September 15 each Fiscal Year. Quarterly payments shall be
made on or before September 15, December 15, March 15, and June 15 each
Fiscal Year. Monthly payments shall be made on or before the fifteenth of each
month each Fiscal Year. Quarterly payments or monthly payments shall include
a multiplier to be applied to the annual payment to allow Authority to recover
interest lost on any unpaid balance plus a service charge for administrative costs,
including but not limited to costs involving the billing, accounting, and collecting
for the quarterly or monthly payments. The multiplier to recover lost interest
revenue and the service charge for administrative costs shall be determined on
an annual basis and shall be just and reasonable. If the effective date of this
Agreement is other than January 1, the amount of water available to Purchaser
and the payment owed by Purchaser will be prorated for the remaining months of
the Calendar Year, 2001.
b) The charge for any water actually diverted and used during
the next calendar year will be billed to Purchaser on a monthly basis based on
actual diversion and usage for the previous month at the Agreement Water Rate.
c) Purchaser
b
water purchased pursuant e
to Agreement Reserved Water Charges y provovi )
for
ng
Authority notice of such election in writing within 60 days from the dateof
6
execution of this Agreement. In no instance shall the deferral terms extend
beyond the initial ten years of this Agreement.
If Purchaser selects deferred payment, the following structure will be used:
(1) Years 1-2; Purchaser will receive a credit of 50% of the
Agreement Reserved Water Charge.
(2) Years 3-4; Purchaser will receive a credit of 25% of the
Agreement Reserved Water Charge.
(3) Years 5-6; Purchaser will receive no deferral of the
Agreement Reserved Water Charge.
(4) Year 7; Purchaser will pay 125% of the Agreement Reserved
Water Charge.
(5) Years 8-9; Purchaser will pay 150% of the Agreement
Reserved Water Charge.
(6) Year 10; Purchaser will pay the remaining outstanding
deferred balance plus 100% of the current year's Agreement Reserved Water
Charge.
Notwithstanding anything herein to the contrary, in the event the differed
payments calculation yields a rate that is Tess than the then current Authority
System Rate, the full System Rate will be the rate charged for that Fiscal Year's
payment.
Unpaid balances will accumulate interest based on actual Authority
interest rates earned on the Authority's investments. The Authority's interest rate
will be the Authority's average annual portfolio yield plus 0.5 percent per annum
for administrative costs. Interest charges will be assessed on an annual basis
using simple interest, compounded annually.
7. UNCONDITIONAL NATURE OF PAYMENT OBLIGATION;
PRICE.
a) Purchaser unconditionally agrees to pay Authority in
accordance with the terms of this Agreement for the water agreed to be made
available to Purchaser from the LCRA Water pursuant to this Agreement.
b) The Agreement Rates are derived using the following
components:
(1) The Authority's System Rate (currently $26.00 per
acre-foot of water per year).
(2) The Total LCRA Water Rate, Total LCRA Reserved
Water Charge, or Total LCRA Inverted Block Rate (as defined in Section 5.b.(5),
above).
(3) The "Cost Recovery Fee" (the applicable Total LCRA
Rate minus the Authority's System Rate minus the Credit for System Rate
Recovery).
c) The "Credit for System Rate Recovery" (a 25% discount
from the Total LCRA Water Rate or the Total LCRA Reserved Water Rate, but
not from the Total LCRA Inverted Block Rate).The Agreement Reserved Water
7
Charge (ARWC) is the System Rate plus the Cost Recovery Fee. Using current
components, the Agreement Reserved Water Charge is derived as follows:
ARWC = SR + CRF
ARWC = $26.00 + (Total LCRA Reserved Water Charge — SR
- CSRR)
ARWC = $26.00 + ($65.63 - $26.00 - $16.41)
ARWC = $26.00 + $23.22
ARWC = $49.22
d) The Agreement Water Rate is equal to the Agreement
Reserved Water Charge, currently $49.22, and is in addition to the Agreement
Reserved Water Charge.
e) The Agreement Inverted Block Rate is equal to the Total
LCRA Inverted Block Rate, currently $250.00.
f) Authority may, and it specifically reserves the right to, revise
the Agreement Rates from time to time (usually prior to the start of each Fiscal
Year) to reflect changes in the System Rate and the LCRA Rates. Authority shall
not increase the Agreement Rates other than on a Fiscal Year basis except for
unforeseeable reasons of a serious and substantial nature. Such reasons
include Force Majeure, government legislation or regulation, permit
requirements, or changes in the LCRA Rates.
g) Notwithstanding anything herein to the contrary, in the event
the Agreement Rates calculation yields a rate that is Tess than the then current
Authority System Rate, the System Rate will be the Agreement Rates.
8. SOURCE OF PAYMENTS. The payments to be made hereunder
by Purchaser shall constitute operating expenses of Purchaser's water works
system or Purchaser's combined water works and sewer system. Purchaser
shall charge rates for services of its water works system or its combined water
works and sewer systems that will be sufficient to pay the operating and
maintenance expenses thereof, including the payments provided for hereunder,
and the interest on and principal of, as the same come due and mature,
obligations issued by Purchaser now or hereafter payable from the revenues of
said system or systems.
9. INTEREST ON PAST DUE PAYMENT; COLLECTION. In the
event of failure of Purchaser to make any payment to Authority provided to be
made in this Agreement at the time when same shall be due, the past due
payment shall bear interest at the lesser of the highest rate allowed by applicable
law or 18 percent per year. Regardless of any other provision contained in this
Agreement, Authority shall never be entitled to receive, collect, or apply as
interest under this Agreement any amount of money determined at a rate which
exceeds the Highest Lawful Rate. If Authority ever charges, receives, collects, or
applies as interest an amount in excess of that permitted by application of the
Highest Lawful Rate, then any such amount which would be excessive interest
shall be deemed a partial prepayment of amounts payable under this Agreement
which do not constitute interest and shall be treated hereunder as such; and if all
8
1�
other obligations payable under this Agreement shall have been paid in full, then
Authority shall refund the amount of such excessive interest.
10. REMEDIES FOR NONPAYMENT OR DEFAULT. Should
Purchaser fail to make any payment to Authority when due hereunder or
otherwise be in default under this Agreement, Authority at its sole option and in
addition to and without impairing any other remedy available to it on account of
the default, may elect to either (i) suspend its duty to make available water to
Purchaser under this Agreement or (ii) terminate this Agreement, by providing
written notice of such suspension or termination delivered to Purchaser on or
before 30 days before the date specified in said notice of suspension or
termination, provided that the nonpayment or other default with respect to which
notice of suspension or termination of this Agreement has been given, shall not
be cured by the date specified in such notice. Nothing in this Agreement shall be
construed in any manner so as to abridge, limit, or deprive either party hereunto
of any means which it would otherwise have of enforcing any right or remedy
either in law or in equity for breach of any of the provisions hereof.
11. REMEDIES FOR OVERUSE. Purchaser recognizes that any
diversion of water in excess of its contractual amount may impact Authority's
ability to make available water to Authority's other raw water customers.
Purchaser agrees that if for any reason it needs to exceed the contractual annual
amount of water to be made available to it under this Agreement, Purchaser will
give written notice to Authority 30 days in advance of the need for such additional
water and in such notice will state the reason for the additional need, the amount
of water needed to be made available, and the duration of the need. Authority, in
its sole discretion, may make all or a portion of the requested water available.
Should Authority determine that it can make all or a portion of the
requested water available without adversely impacting its ability to make water
available to its other customers, Purchaser agrees to pay for such water to be
made available in advance at a rate that is equal to the then current Agreement
Inverted Block Rate.
Should Purchaser fail to notify Authority of its need for additional water to
be made available, and exceed the contractual annual amount of water to be
made available to it, or should Purchaser, after notification of Authority and
Authority's determination that additional water is not available for Purchaser's
use, nonetheless exceed the contractual amount of water to be made available to
it, Authority may cancel this Agreement by providing written notice of such
cancellation delivered to Purchaser on or before thirty (30) days before the date
specified in said notice of cancellation.
Nothing in this Agreement shall be construed in any manner so as to
abridge, limit, or deprive either party hereunto of any means which it would
9
otherwise have of enforcing any right or remedy either in law or in equity for
breach of any of the provisions hereof.
12. FACILITIES. All new facilities that are located in the Area of Use
that are used to transport raw water that is purchased pursuant to this Agreement
exclusively may be owned and operated by LCRA, at its sole option. All new
facilities or all substantial expansions to facilities that are located in the Area of
Use that treat water or transport treated water that is purchased pursuant to this
Agreement and that are constructed by BRA or LCRA shall be Brazos -Colorado
Alliance projects. The LCRA may own, at its sole option, a portion of any such
facilities that is commensurate with the percentage that LCRA water (i.e., water
supplied under the LCRA Contract) bears to the total amount of water supplied
by BRA and LCRA for treatment or transportation by such facilities. For
example, if twenty-five percent (25%) of the water used at an Alliance facility is
supplied by LCRA under the LCRA Contract, the LCRA may own twenty-five
(25%) percent of that facility. All such facilities in the Area of Use, however, shall
be operated by BRA.
AH new facilities and all substantial expansions to facilities that are located
in the Area of Use that treat or transport treated water purchased pursuant to this
Agreement that are constructed by Purchaser may be owned and/or operated by
Purchaser if such ownership and/or operation is desired by Purchaser.
Purchaser acknowledges that the economics of scale and efficiencies of
use made possible by regionalization of water treatment facilities are highly
desirable. Purchaser, therefore, agrees to negotiate in good faith with BRA and
LCRA to maximize the potential for regionalization of water treatment and
transportation facilities, either new facilities or substantial expansion of facilities,
located in the Area of Use used to treat or transport water that is purchased
pursuant to this Agreement.
13. METERING. Purchaser agrees that, at its sole cost and expense, it
shall install, operate and maintain meters for the accurate measuring of all water
diverted by Purchaser under this Agreement in order to aid Authority in
accurately reporting actual water usage to the TNRCC as required by applicable
law or regulation. Such meter or meters shall be tested and calibrated for
accuracy by and at the expense of Purchaser once each fiscal year at intervals of
approximately 12 months, and a report of such test and calibration shall be
furnished to Authority. Authority shall be given at least two prior days notice of
the time of any test and calibration of Purchaser's meters, or any of them, and
Authority shall have the right to have a representative present at each test to
observe the test and any adjustments found thereby to be necessary. Authority
shall have the right to inspect and check the accuracy of Purchaser's meter or
meters at any time during usual business hours after not less than one nor more
than five (5) days notice. In the event any question arises at any time as to the
10
accuracy of any such meter, such meter shall be tested promptly upon demand
of Authority, the expense of such test to be borne by Authority if the meter is
found to be correct and by Purchaser if it is found to be incorrect. Readings
within 2% of accuracy, plus or minus, shall be considered correct. If, as a result
of any test, any meter is found to be registering inaccurately (Le., in excess of 2%
of accuracy, plus or minus), the readings of such meter shall be corrected at the
rate of its inaccuracy for any period which is definitely known and agreed upon,
but in case the period is not definitely known and agreed upon, then the shorter
of the following periods shall be used as the basis for correction:
a) a period extending back either 60 days from the date of demand for
the test or, if no demand for the test was made, 60 days from the date of the test;
or
b) a period extending back half of the time elapsed since the last
previous test;
and the records of readings shall be adjusted accordingly. Following each test of
a meter, Purchaser shall cause the same to be calibrated to register accurately.
14. REPORTING. Purchaser agrees that it will keep accurate records
of the daily readings from the meter or meters installed pursuant to Section 13.,
Metering, above. These records shall be subject to inspection by Authority at
reasonable times and places. Purchaser shall submit reports to Authority by the
10th day of each month showing the amount of water diverted under this
Agreement each day during the preceding month.
15. SYSTEM AGREEMENT. This Agreement does not affect the rights
and obligations of Authority and Purchaser under the System Agreements.
16. CONSERVATION OF WATER. It is the intent of the parties to this
Agreement to provide to the maximum extent practicable for the conservation of
water, and Purchaser agrees that it is a condition of this Agreement that it shall
maintain and operate its facilities in a manner that will prevent unnecessary
waste of water. Authority, in accordance with applicable law or regulation, may
from time to time adopt reasonable rules and regulations relating to water
conservation. Purchaser agrees to abide by the "Brazos River Authority Drought
Contingency Policy" adopted by the Board on January 16, 1989, or any
subsequent Drought Contingency Policy duly adopted by the Board and any
Drought Contingency Plans developed under the Drought Contingency Policy. If
required by applicable law or regulation or by Authority, Purchaser agrees to
implement a water conservation and drought management program in
accordance with a water conservation plan and that the water made available
and diverted by Purchaser pursuant to this Agreement will be used in accordance
with such conservation plan, and with the regulations of the Texas Natural
Resource Conservation Commission (or other appropriate regulating authority)
applicable to retail public utilities. Purchaser further agrees to make available its
water conservation and drought contingency programs to Authority and LCRA for
11
review. If required by applicable law or regulation Purchaser agrees that, in the
event Purchaser furnishes water or water services to a third party that in turn will
furnish the water or services to the ultimate consumer, the requirements relative
to water conservation shall be met through contractual agreements between
Purchaser and the third party providing for the establishment and implementation
of a water conservation program in compliance with such applicable law or
regulation.
If Purchaser fails to comply with its water conservation plan, Authority
may, at its sole option terminate this Agreement without recourse unless such
default is cured within thirty (30) or, if the nature of such default is not susceptible
to being cured within such thirty (30) day period, such longer period of time
during which Purchaser diligently prosecutes the cure of such default, not to
exceed ninety (90) days of Purchaser's receipt of written notice of such default.
17. WATER QUALITY. As a further condition of this Agreement,
Purchaser also agrees that it will comply with applicable water quality standards
of the State in the diversion, use, reuse, or discharge of water made available
hereunder. Should Purchaser be determined by any competent legal authority to
have degraded the quality of water of the State or to have violated any water
quality standard established by law or lawfully adopted regulation, and
subsequently fail to take action with reasonable diligence to correct such
deficiency as directed by competent legal authority, such failure shall constitute
an event of default under this Agreement.
Authority, in accordance with applicable law or regulation, may from time
to time adopt reasonable rules and regulations relating to water quality
protection. If required by applicable law or regulation or by Authority, Purchaser
agrees to implement appropriate water quality protection measures including,
without limitation, a non -point source water pollution abatement program in
accordance with a non -point source water pollution abatement plan.
18. WATER SURPLUS TO PURCHASER'S NEEDS. Purchaser may
not unilaterally cancel this Agreement or reduce the amounts of water agreed to
be made available to it and for which availability it is obligated to pay under the
terms of Sections 4. and 7., above, except as provided in Section 26, below.
Purchaser may not sell or make available to others the water agreed to be made
available to it under this Agreement, except in the case of municipal uses, as
potable treated water. However, should Purchaser determine that it has water
surplus to its anticipated needs from the water to be made available by Authority
under this Agreement, Purchaser may notify Authority as to the amount of water
no longer needed to be made available to it. Authority will use reasonable efforts
to find a third party who is able and willing to pay for such availability for a period
to the end of this Agreement. If Authority is successful in finding such a third
party suitable to it to acquire Purchaser's interest in its available surplus for a
period of time to the end of this Agreement, this Agreement will be amended to
12
reduce the amount of water to be made available to Purchaser by the amount of
availability paid for by such third party, and Purchaser will be relieved of the
obligation to make payments for such availability of water.
19. SHORTAGES. Authority makes no guarantee that any lakes or
other sources of supply in the Colorado River Basin will be maintained at any
specific level at any particular time. Purchaser bears all transportation losses
prior to final diversion. It is fully understood by the parties hereto that the level of
lakes or other sources of supply in the Colorado River Basin will vary as a result
of weather conditions beyond the control of Authority, and that this instrument is
merely an agreement to require Authority to make available water when and if
water is available to Authority under the Authority's LCRA Contract, and to allow
Purchaser to make withdrawals of the water subject to the general law on
distribution and allocation of water during shortages of supply.
Authority covenants that it will use its best reasonable efforts to maintain
and preserve its rights under the LCRA Contract. If for any reason the availability
of water to Authority under the LCRA Contract is restricted, impaired, or
otherwise limited, Authority agrees, and Purchaser covenants, that Authority may
fairly and equitably apportion and ration the available water supply from the
LCRA Contract among all its several customers receiving water from Authority as
a result of the LCRA Contract, including Purchaser.
20. FORCE MAJEURE. Notwithstanding anything herein to the
contrary, neither party hereto shall be under any liability or be deemed in default
with respect to its obligations under this Agreement for any failure to perform or
for delay in performing such party's obligations hereunder (except for the
obligation to pay money) where such failure or delay is due to force majeure,
while and to the extent that such performance is prevented by such cause. The
term force majeure means acts of God, fire, storm, flood, war, riots, sabotage,
drought, lack of availability of water due to sedimentation, low inflows of water to,
or lack of water supply in the System or from the Colorado River basin to be
made available under the LCRA Contract, strikes or other differences with labor
(whether or not within the power of the parties to settle same), decrees or orders
of the courts or other governmental authority, or other similar or dissimilar causes
not within the reasonable control of such party and not due to negligence of such
party. Each party shall use due diligence to resume performance of any
obligation suspended by force majeure at the earliest practicable time.
21. WAIVER. Any waiver at any time by any party of its rights with
respect to default under this Agreement shall not be deemed a waiver of such
rights with respect to any subsequent default or matter.
22. NOTICES AND CERTIFICATIONS. Notices and certifications
provided for in this Agreement shall be in writing. The same shall be delivered by
13
mailing certified mail, postage paid, return receipt requested, to the respective
parties at the following addresses:
Authority: Brazos River Authority
P.O. Box 7555
Waco, Texas 76714-7555
Telephone: (254) 776-1441
Fax: (254) 772-5780
Purchaser: City of Round Rock
221 East Main Street
Round Rock, Texas 78664
Telephone: (512) 218-5400
Fax: (512) 218-7097
Either party may change its address as shown above by written notice to
the other party. Notices shall be deemed to have been delivered on the business
day following their deposit in the United States mail, postage paid, and properly
addressed and certified.
23. OTHER REQUIREMENTS. This Agreement is subject to all
conditions, provisions, and limitations included in Authority's water rights from the
TNRCC and the System Order and the LCRA Contract. Further, this Agreement
is subject to all applicable Federal, State and local laws, and any applicable
ordinances, rules, orders and regulations of any local, State or Federal
governmental authority having jurisdiction. However, nothing contained in this
Agreement shall be construed as a waiver of any right to question or contest any
law, ordinance, order, rule, or regulation of any governmental authority.
24. SEVERABILITY. The provisions of this Agreement are severable,
and if for any reason any one or more of the provisions contained in this
Agreement shall be held to be invalid, illegal, or unenforceable in any respect,
the invalidity, illegality, or unenforceability shall not affect any other provisions of
this Agreement and this Agreement shall remain in effect and be construed as if
the invalid, illegal, or unenforceable provision had never been contained in the
Agreement.
25. ASSIGNMENT. This Agreement may be assigned by Purchaser
only with the written consent of Authority, which consent shall not be
unreasonably withheld or delayed. Only assignment of this entire Agreement will
be approved. Releases of lesser obligations must be authorized under Section
18., Water Surplus to Purchaser's Needs, above.
26. TERM OF AGREEMENT. The term of this Agreement shall begin
on the Effective Date, Section 3., and shall end on the fifty (50) year anniversary
of the Effective Date. If Authority is able to extend or renew its LCRA Contract,
14
Authority and Purchaser agree to negotiate in good faith regarding terms for
extension or renewal of this Agreement.
If purchaser is current on all payments due Authority under this
Agreement, Purchaser may terminate this contract, in whole or in part, on
February 15 of any year following the expiration of ten (10) years measured from
the Effective Date by providing six (6) months prior written notice to Authority,
that is by August 15 of the year preceding the February 15 termination date.
This Agreement shall be null and void in the event that the interbasin
transfer permit referenced in Section 3, above, is not issued by the TNRCC
within the two (2) years of the date of filing of the application for said interbasin
transfer permit.
CITY OF ROUND ROCK BRAZOS RIVER AUTHORITY
By: By:
Name: Phillip J. Ford
Title: General Manager
ATTEST:
w: \corr\field\rou rockswaacolriv&b ra#3.doc
ATTEST:
Assistant Secretary
15
DATE: September 7, 2001
SUBJECT: City Council Meeting — September 13, 2001
ITEM: 15.F.12. Consider a resolution authorizing the Mayor to execute a System Water
Availability Agreement for Colorado River Basin Water Between
Brazos River Authority and City of Round Rock, for the purchase of
water from the Colorado River Basin. The City is requesting a total of
6,944 acre-feet of water per Fiscal Year from the System. The Texas
Legislative allowed 25,000 acre-feet of water to be transferred from the
Colorado Basin to the Brazos Basin. This agreement will allow Round
Rock to access 6,944 acre-feet of that water.
Resource:
History:
Jim Nuse, Director of Public Works
The Texas Legislative allowed 25,000 acre-feet of water to be transferred from the
Colorado Basin to the Brazos Basin. This agreement will allow Round Rock to
access 6,944 acre-feet of that water.
Funding:
Cost: Reserve charge is $49.22/acre-foot.
Source of funds: Utility Fund -Operating Budget
Outside Resources: Brazos River Authority
Impact: This will guarantee water until 2050.
Benefit: This is a reliable low cost source of water.
Public Comment: N/A
Sponsor: N/A
EXECUTED
DOCUMENT
FOLLOWS
SYSTEM WATER AVAILABILITY AGREEMENT
FOR COLORADO RIVER BASIN WATER
BETWEEN
BRAZOS RIVER AUTHORITY
AND
CITY OF ROUND ROCK
AGREEMENT made and entered into this the Lith day of U€r. 66e -
2001,
6r2001, by and between BRAZOS RIVER AUTHORITY ("Authority"), a river
authority of the State of Texas, and CITY OF ROUND ROCK ("Purchaser") of
Williamson County, Texas.
1. RECITALS. Authority owns and operates various lakes in the
Brazos River Basin. Authority also has entered into contracts with the United
States of America by virtue of which it has obtained the right to utilize for water
supply purposes a portion of the usable storage space in various lakes owned
and operated by the United States Army Corps of Engineers. Authority is
authorized by the State of Texas to store State waters in the lakes owned by
Authority and various lakes owned and operated by the United States Army
Corps of Engineers in the Brazos River Basin, hereinafter collectively called the
"System", and to make such stored waters available for beneficial use.
Authority is authorized to operate the System as a hydrologic unit
pursuant to an order of the Texas Water Commission (now Texas Natural
Resource Conservation Commission "TNRCC") issued on July 23, 1964
("System Operation Order"). The Final Determination of All Claims of Water
Rights in the Brazos River Basin and the San Jacinto -Brazos Coastal Basin
Maintained by the Brazos River Authority, Fort Bend County W.C.I.D. No. 1 and
Galveston County Water Authority ("Final Determination") issued on June 26,
1985, by TNRCC clarified and amplified the System Operation Order. Under the
System Operation Order as adjudicated by the Final Determination, Authority is
authorized to operate the System as a hydrologic unit to more efficiently utilize
the reservoirs that make up the System to make water available to meet the
needs of Authority's customers.
Authority and Purchaser have entered into certain raw water contracts
(System Water Availability Agreement Between Brazos River Authority And City
of Round Rock - Lake Georgetown and System Water Availability Agreement
Between Brazos River Authority And City of Round Rock — Lake Stillhouse
Hollow) dated contemporaneously herewith pursuant to which Authority has
agreed to make available a total of 24,854 acre-feet of water per Fiscal Year from
the System.
Authority has also acquired the right to divert and use 25,000 acre-feet of
water per year from the Colorado River Basin made available from the Lower
Colorado River Authority (LCRA) under the "Water Sale Contract by and between
Lower Colorado River Authority and Brazos River Authority Purchaser", dated
October 2000 (LCRA Contract) pursuant to the terms of House Bill 1437 of the
76th Texas Legislative Session and codified under Section 27 of the LCRA
Enabling Act. It is from the 25,000 acre-foot of water per year from the Colorado
River Basin ( the "LCRA" Water") that Purchaser now wishes to contract for
Authority to make available 6,944 acre-feet of water per Calendar Year under
the terms and conditions herein provided.
2. DEFINITIONS.
a) The term "Agreement" means this agreement.
b) The term "Agreement Rates" means the "Agreement Water Rate",
the "Agreement Reserved Water Charge", and the "Agreement Inverted Block
Rate" for water purchased pursuant to this Agreement as more fully described in
Section 5, PRICING STRUCTURE, and in Section 7, UNCONDITIONAL
NATURE OF PAYMENT OBLIGATION; PRICE, below.
c) The term "Area of Use" means that certain area in Williamson
County that lies outside of the watershed of the Colorado River, but excludes
those municipalities which were customers of the Lower Colorado River Authority
as of May 20, 1997, and who are located in watersheds of both the Colorado and
Brazos Rivers.
d) The term "Authority" shall mean Brazos River Authority.
e) The term "Board" shall mean the Board of Directors of Brazos River
Authority.
f) The term "Credit for System Rate Recovery" or "CSRR" means the
credit described in Section 7. (c) of this Agreement.
g) The term "Cost Recovery Fee" or "CRF" means the fee described in
Section 7. (b) (3) of this Agreement.
h) The term "Federal Contracts" shall mean those contracts with the
United States of America whereby Authority has acquired, is acquiring, or may
acquire conservation storage capacity in Federal Reservoirs.
i) The term "Federal Reservoirs" shall include the following:
Aquilla Dam and Reservoir
Belton Dam and Reservoir
Georgetown Dam and Reservoir
Granger Dam and Reservoir
Proctor Dam and Reservoir
Somerville Dam and Reservoir
Stillhouse Hollow Dam and Reservoir
Whitney Dam and Reservoir
j) The term "Fiscal Year" shall mean Authority's fiscal year from
September 1 through August 31, or such other annual fiscal year period as
Authority may later determine.
k) The term "Highest Lawful Rate" shall mean the maximum rate
which Authority may charge on obligations payable under this Agreement without
2
Ji
violation of any applicable law or any applicable lawful regulation of any agency
of the State of Texas or of the United States having jurisdiction of the matter.
1) The term "Industrial Use" shall mean the use of water in processes
designed to convert materials of a lower order of value into forms having greater
usability and commercial value, including commercial feedlot operations,
commercial fish production, and the development of power by means other than
hydroelectric.
m) The term "Irrigation Use" shall mean the use of water for the
irrigation of crops, trees, and pastureland, including, but not limited to, golf
courses and parks which do not receive water through a municipal distribution
system.
n) The term "LCRA" means Lower Colorado River Authority.
o) The term "LCRA Contract" means the "Water Sale Contract by and
between Lower Colorado River Authority and Brazos River Authority, Purchaser"
dated October 2000.
p) The term "LCRA Rates" means the LCRA rates and charges for
sale of water for municipal purposes as delineated in Section II. B. of the LCRA
Contract.
q) The term "LCRA Water" means the 25,000 acre-feet of water per
year purchased by Brazos River Authority from LCRA pursuant to House Bill
1437 of the 76th Texas Legislative Session.
r) The term "Mining Use" shall mean the use of water for mining
processes including hydraulic use, drilling, washing sand and gravel, and oil field
repressuring.
s) The term "Municipal Use" shall mean the use of potable water
within a community or municipality and its environs for domestic, recreational,
commercial, or industrial purposes or for the watering of golf courses, parks and
parkways.
t) The term "Purchaser" shall mean City of Round Rock.
u) The term "System" shall mean Authority's Water Supply System
and shall include certain of Authority's facilities and properties insofar as they are
related to making water available from the System, to wit, as follows: Morris
Sheppard Dam and Possum Kingdom Reservoir, •DeCordova Bend Dam and
Lake Granbury, Sterling C. Robertson Dam and Lake Limestone, Authority's
conservation storage in the Federal Reservoirs, and the LCRA Water obtained
pursuant to the LCRA Contract, together with all future extensions,
improvements, enlargements, and additions to and replacements of the System,
and all replacements thereof whether from surface water supplies, groundwater,
or a combination thereof, specifically added to the System by resolution of the
Board; provided that, notwithstanding the foregoing, the term System shall not
include (1) any of Authority's facilities and properties not specifically included in
the System by the terms of this Agreement or not added by a subsequent
resolution of the Board, and (11) any water supply, wastewater or other facilities
which have been or are declared not to be a part of the System and which may
be acquired or constructed by Authority with the proceeds from the issuance of
"Special Facilities Bonds," which are hereby defined as being special revenue
3
obligations of Authority which are not secured by or payable from the revenues of
the System but which are secured by and payable solely from special contract
revenues or payments received from any persons or other legal entity or entities
inconnectionwith such special facilities.
v) The term "System Agreements" means those certain raw water
contracts titled "System Water Availability Agreement Between Brazos River
Authority and City of Round Rock — Lake Georgetown" and "System Water
Availability Agreement Between Brazos River Authority and City of Round Rock —
Lake Stillhouse Hollow", dated contemporaneously with this Agreement herewith.
w) The term "System Operation Order" shall mean that certain order of
the TNRCC or its predecessor dated July 23, 1964, as adjudicated by order of
the TNRCC or its predecessor on June 26, 1985, in the Final Determination of all
Claims of Water Rights in the Brazos River Basin and the San Jacinto -Brazos
Coastal Basin Maintained by the Brazos River Authority, Fort Bend County
W.C.I.D. No. 1 and Galveston County Water Authority.
x) The term "System Rate" or "SR" shall mean the rate per acre-foot
of water established by Authority from time to time under its system -wide pricing
methodology.
y) The term "Total Annual Budgeted System Costs" shall mean the
amounts approved by Authority as estimated costs of the System in the annual
budgets adopted by Authority for a given Fiscal Year including, without limitation,
amounts budgeted to meet Annual System Operation and Maintenance
Expenses and Annual Capital Related Costs.
z) The term "Total System Billing Units" shall mean the total amount
of water (expressed in acre-feet) determined by Authority under accepted
engineering practice as necessary to be reserved from firm yield produced by
storage in the System to fulfill its commitments for which Authority receives
payment under long term (in excess of five years) water sales contracts with
Purchaser and Authority's other customers; provided, however, such term shall
not include amounts of water required by appropriate governmental authority to
be reserved in the System for use for bay and estuary purposes, in -stream uses,
or for other similar environmental, public, or other beneficial uses to the extent
Authority is not adequately compensated for any such requirement.
3. EFFECTIVE DATE. The effective date of this Agreement is
September 1, 2001.
4. AVAILABILITY OF WATER. While this Agreement remains in
force, Authority agrees to make available to Purchaser an amount of water not to
exceed 6,944 acre-feet of water per Calendar Year under the following
conditions:
a) Notwithstanding anything herein to the contrary, Authority's
obligation to make water available to Purchaser under this Agreement is subject
to, and limited by, the rights of Authority to obtain the LCRA Water pursuant to
the LCRA Contract. Purchaser acknowledges that Purchaser has received a
4
copy of the LCRA Contract and is familiar with the rights of Authority thereunder,
and the limitations on Authority's rights thereunder to obtain the LCRA Water.
b) Authority may interrupt or curtail the water supplied to Purchaser
under this Agreement to the extent Authority experiences interruption or
curtailment of water supplied to it under the LCRA Contract for any reason.
c) Water supplied under this Agreement shall only be used within the
Area of Use.
d) Purchaser acquires no property rights in the water made available
to it under this Agreement beyond the right to have the water made available to it
for diversion and use under the terms of this Agreement. This right of use
extends to direct reuse (flange to flange) of the water made available under this
Agreement. Purchaser represents, and Authority relies on such representation,
that all water to be made available by Authority under this Agreement to
Purchaser shall be used solely for municipal purposes.
5. PRICING STRUCTURE
a) The pricing structure for water rates under this Agreement is
dependent upon the pricing structure of water made available to the Authority
under the LCRA Contract unless or until the Authority's System Rate exceeds the
price derived from the formula provided for price calculation in Section 7, below.
At such time, the price under this Agreement shall be the Authority's System
Rate.
b) The LCRA Water is provided to Authority under the LCRA Contract
pursuant to the following pricing structure:
(1) The "Water Rate" for LCRA Water is charged for water
diverted and used during a calendar year. The current Water Rate is $105.00
per acre-foot of water per year.
(2) The "Reserved Water Charge" for LCRA Water is charged
for water under contract but not diverted and used during a calendar year. The
Reserved Water Charge is 50% of the Water Rate, or currently $52.50 per acre-
foot of water per year.
(3) The "Inverted Block Rate" for LCRA Water is charged for all
water used in excess of the total contractual amount and is currently $200.00 per
acre-foot of water per year.
(4) The "Conservation Charge" for LCRA Water is currently 25%
of the Water Rate, the Reserved Water Charge, or the Inverted Block Rate, as
applicable.
(5) The current "Total LCRA Rates" for LCRA Water are as
follows:
(a) The "Total LCRA Water Rate" is the Water Rate + the
Conservation Charge, currently $131.25 an acre-foot.
(b) The "Total LORA Reserved Water Charge" is the
Reserved Water Charge + the Conservation Charge, currently $65.63 an acre-
foot.
(c) The "Total LCRA Inverted Block Rate" is the Inverted
Block Rate + the Conservation Charge, currently $250.00 an acre-foot.
5
d) The Authority makes water available to Purchaser
under this Agreement pursuant to the following pricing structure:
(1) The "Agreement Reserved Water Charge" for
all water agreed to be made available under this Agreement whether or not it is
diverted and used during a calendar year. The current Agreement Reserved
Water Charge is $49.22 per acre-foot of water per year, the calculation for which
is set out in Section 7.c., below.
(2) The "Agreement Water Rate" for only water
that is diverted and used during a calendar year. The Agreement Water Rate
equals the Agreement Reserved Water Charge and is in addition to the
Agreement Reserved Water Charge.
3) The "Agreement Inverted Block Rate" for water
used in excess of the amount agreed to be made available under this
Agreement. The Agreement Inverted Block Rate equals the Total LCRA Inverted
Block Rate.
6. DATE AND PLACE OF PAYMENTS.
a) Payments to be made hereunder shall be made at
Authority's office in Waco, McLennan County, Texas. Authority contemplates
that by September 1 of each Fiscal Year it will have adopted budgets for
Authority for said Fiscal Year and established the System Rate and the
Agreement Rates for said Fiscal Year. Payments for each Fiscal Year may be
made under one of three payment options from which Purchaser will select at the
beginning of each Fiscal Year. The payment due at the beginning of each Fiscal
Year will be for the water agreed to be provided during the next calendar year,
and shall be based on the Agreement Reserved Water Charge. Annual
payments for water provided at the Agreement Reserved Water Charge shall be
made on or before September 15 each Fiscal Year. Quarterly payments shall be
made on or before September 15, December 15, March 15, and June 15 each
Fiscal Year. Monthly payments shall be made on or before the fifteenth of each
month each Fiscal Year. Quarterly payments or monthly payments shall include
a multiplier to be applied to the annual payment to allow Authority to recover
interest lost on any unpaid balance plus a service charge for administrative costs,
including but not limited to costs involving the billing, accounting, and collecting
for the quarterly or monthly payments. The multiplier to recover lost interest
revenue and the service charge for administrative costs shall be determined on
an annual basis and shall be just and reasonable. If the effective date of this
Agreement is other than January 1, the amount of water available to Purchaser
and the payment owed by Purchaser will be prorated for the remaining months of
the Calendar Year, 2001.
b) The charge for any water actually diverted and used during
the next calendar year will be billed to Purchaser on a monthly basis based on
actual diversion and usage for the previous month at the Agreement Water Rate.
c) Purchaser may elect to defer payment of its obligations for
water purchased pursuant to Agreement Reserved Water Charges by providing
Authority notice of such election in writing within 60 days from the date of
6
execution of this Agreement. In no instance shall the deferral terms extend
beyond the initial ten years of this Agreement.
If Purchaser selects deferred payment, the following structure will be used:
(1) Years 1-2; Purchaser will receive a credit of 50% of the
Agreement Reserved Water Charge.
(2) Years 3-4; Purchaser will receive a credit of 25% of the
Agreement Reserved Water Charge.
(3) Years 5-6; Purchaser will receive no deferral of the
Agreement Reserved Water Charge.
(4) Year 7; Purchaser will pay 125% of the Agreement Reserved
Water Charge.
(5) Years 8-9; Purchaser will pay 150% of the Agreement
Reserved Water Charge.
(6) Year 10; Purchaser will pay the remaining outstanding
deferred balance plus 100% of the current year's Agreement Reserved Water
Charge.
Notwithstanding anything herein to the contrary, in the event the differed
payments calculation yields a rate that is less than the then current Authority
System Rate, the full System Rate will be the rate charged for that Fiscal Year's
payment.
Unpaid balances will accumulate interest based on actual Authority
interest rates earned on the Authority's investments. The Authority's interest rate
will be the Authority's average annual portfolio yield plus 0.5 percent per annum
for administrative costs. Interest charges will be assessed on an annual basis
using simple interest, compounded annually.
7. UNCONDITIONAL NATURE OF PAYMENT OBLIGATION;
PRICE.
a) Purchaser unconditionally agrees to pay Authority in
accordance with the terms of this Agreement for the water agreed to be made
available to Purchaser from the LCRA Water pursuant to this Agreement.
b) The Agreement Rates are derived using the following
components:
(1) The Authority's System Rate (currently $26.00 per
acre-foot of water per year).
(2) The Total LCRA Water Rate, Total LCRA Reserved
Water Charge, or Total LCRA Inverted Block Rate (as defined in Section 5.b.(5),
above).
(3) The "Cost Recovery Fee" (the applicable Total LCRA
Rate minus the Authority's System Rate minus the Credit for System Rate
Recovery).
c) The "Credit for System Rate Recovery" (a 25% discount
from the Total LCRA Water Rate or the Total LCRA Reserved Water Rate, but
not from the Total LCRA Inverted Block Rate).The Agreement Reserved Water
7
Charge (ARWC) is the System Rate plus the Cost Recovery Fee. Using current
components, the Agreement Reserved Water Charge is derived as follows:
ARWC = SR + CRF
ARWC = $26.00 + (Total LCRA Reserved Water Charge — SR
- CSRR)
ARWC = $26.00 + ($65.63 - $26.00 - $16.41)
ARWC = $26.00 + $23.22
ARWC = $49.22
d) The Agreement Water Rate is equal to the Agreement
Reserved Water Charge, currently $49.22, and is in addition to the Agreement
Reserved Water Charge.
e) The Agreement Inverted Block Rate is equal to the Total
LCRA Inverted Block Rate, currently $250.00.
f) Authority may, and it specifically reserves the right to, revise
the Agreement Rates from time to time (usually prior to the start of each Fiscal
Year) to reflect changes in the System Rate and the LCRA Rates. Authority shall
not increase the Agreement Rates other than on a Fiscal Year basis except for
unforeseeable reasons of a serious and substantial nature. Such reasons
include Force Majeure, government legislation or regulation, permit
requirements, or changes in the LCRA Rates.
g) Notwithstanding anything herein to the contrary, in the event
the Agreement Rates calculation yields a rate that is less than the then current
Authority System Rate, the System Rate will be the Agreement Rates.
8. SOURCE OF PAYMENTS. The payments to be made hereunder
by Purchaser shall constitute operating expenses of Purchaser's water works
system or Purchaser's combined water works and sewer system. Purchaser
shall charge rates for. services of its water works system or its combined water
works and sewer systems that will be sufficient to pay the operating and
maintenance expenses thereof, including the payments provided for hereunder,
and the interest on and principal of, as the same come due and mature,
obligations issued by Purchaser now or hereafter payable from the revenues of
said system or systems.
9. INTEREST ON PAST DUE PAYMENT; COLLECTION. In the
event of failure of Purchaser to make any payment to Authority provided to be
made in this Agreement at the time when same shall be due, the past due
payment shall bear interest at the lesser of the highest rate allowed by applicable
law or 18 percent per year. Regardless of any other provision contained in this
Agreement, Authority shall never be entitled to receive, collect, or apply as
interest under this Agreement any amount of money determined at a rate which
exceeds the Highest Lawful Rate. If Authority ever charges, receives, collects, or
applies as interest an amount in excess of that permitted by application of the
Highest Lawful Rate, then any such amount which would be excessive interest
shall be deemed a partial prepayment of amounts payable under this Agreement
which do not constitute interest and shall be treated hereunder as such; and if all
8
other obligations payable under this Agreement shall have been paid in full, then
Authority shall refund the amount of such excessive interest.
10. REMEDIES FOR NONPAYMENT OR DEFAULT. Should
Purchaser fail to make any payment to Authority when due hereunder or
otherwise be in default under this Agreement, Authority at its sole option and in
addition to and without impairing any other remedy available to it on account of
the default, may elect to either (i) suspend its duty to make available water to
Purchaser under this Agreement or (ii) terminate this Agreement, by providing
written notice of such suspension or termination delivered to Purchaser on or
before 30 days before the date specified in said notice of suspension or
termination, provided that the nonpayment or other default with respect to which
notice of suspension or termination of this Agreement has been given, shall not
be cured by the date specified in such notice. Nothing in this Agreement shall be
construed in any manner so as to abridge, limit, or deprive either party hereunto
of any means which it would otherwise have of enforcing any right or remedy
either in law or in equity for breach of any of the provisions hereof.
11. REMEDIES FOR OVERUSE. Purchaser recognizes that any
diversion of water in excess of its contractual amount may impact Authority's
ability to make available water to Authority's other raw water customers.
Purchaser agrees that if for any reason it needs to exceed the contractual annual
amount of water to be made available to it under this Agreement, Purchaser will
give written notice to Authority 30 days in advance of the need for such additional
water and in such notice will state the reason for the additional need, the amount
of water needed to be made available, and the duration of the need. Authority, in
its sole discretion, may make all or a portion of the requested water available.
Should Authority determine that it can make all or a portion of the
requested water available without adversely impacting its ability to make water
available to its other customers, Purchaser agrees to pay for such water to be
made available in advance at a rate that is equal to the then current Agreement
Inverted Block Rate.
Should Purchaser fail to notify Authority of its need for additional water to
be made available, and exceed the contractual annual amount of water to be
made available to it, or should Purchaser, after notification of Authority and
Authority's determination that additional water is not available for Purchaser's
use, nonetheless exceed the contractual amount of water to be made available to
it, Authority may cancel this Agreement by providing written notice of such
cancellation delivered to Purchaser on or before thirty (30) days before the date
specified in said notice of cancellation.
Nothing in this Agreement shall be construed in any manner so as to
abridge, limit, or deprive either party hereunto of any means which it would
9
otherwise have of enforcing any right or remedy either in law or in equity for
breach of any of the provisions hereof.
12. FACILITIES. All new facilities that are located in the Area of Use
that are used to transport raw water that is purchased pursuant to this Agreement
exclusively may be owned and operated by LCRA, at its sole option. All new
facilities or all substantial expansions to facilities that are located in the Area of
Use that treat water or transport treated water that is purchased pursuant to this
Agreement and that are constructed by BRA or LCRA shall be Brazos -Colorado
Alliance projects. The LCRA may own, at its sole option, a portion of any such
facilities that is commensurate with the percentage that LCRA water (i.e., water
supplied under the LCRA Contract) bears to the total amount of water supplied
by BRA and LCRA for treatment or transportation by such facilities. For
example, if twenty-five percent (25%) of the water used at an Alliance facility is
supplied by LCRA under the LCRA Contract, the LCRA may own twenty-five
(25%) percent of that facility. All such facilities in the Area of Use, however, shall
be operated by BRA.
All new facilities and all substantial expansions to facilities that are located
in the Area of Use that treat or transport treated water purchased pursuant to this
Agreement that are constructed by Purchaser may be owned and/or operated by
Purchaser if such ownership and/or operation is desired by Purchaser.
Purchaser acknowledges that the economics of scale and efficiencies of
use made possible by regionalization of water treatment facilities are highly
desirable. Purchaser, therefore, agrees to negotiate in good faith with BRA and
LCRA to maximize the potential for regionalization of water treatment and
transportation facilities, either new facilities or substantial expansion of facilities,
located in the Area of Use used to treat or transport water that is purchased
pursuant to this Agreement.
13. METERING. Purchaser agrees that, at its sole cost and expense, it
shall install, operate and maintain meters for the accurate measuring of all water
diverted by Purchaser under this Agreement in order to aid Authority in
accurately reporting actual water usage to the TNRCC as required by applicable
law or regulation. Such meter or meters shall be tested and calibrated for
accuracy by and at the expense of Purchaser once each fiscal year at intervals of
approximately 12 months, and a report of such test and calibration shall be
furnished to Authority. Authority shall be given at least two prior days notice of
the time of any test and calibration of Purchaser's meters, or any of them, and
Authority shall have the right to have a representative present at each test to
observe the test and any adjustments found thereby to be necessary. Authority
shall have the right to inspect and check the accuracy of Purchaser's meter or
meters at any time during usual business hours after not less than one nor more
than five (5) days notice. In the event any question arises at any time as to the
10
accuracy of any such meter, such meter shall be tested promptly upon demand
of Authority, the expense of such test to be borne by Authority if the meter is
found to be correct and by Purchaser if it is found to be incorrect. Readings
within 2% of accuracy, plus or minus, shall be considered correct. If, as a result
of any test, any meter is found to be registering inaccurately (i.e., in excess of 2%
of accuracy, plus or minus), the readings of such meter shall be corrected at the
rate of its inaccuracy for any period which is definitely known and agreed upon,
but in case the period is not definitely known and agreed upon, then the shorter
of the following periods shall be used as the basis for correction:
a) a period extending back either 60 days from the date of demand for
the test or, if no demand for the test was made, 60 days from the date of the test;
or
b) a period extending back half of the time elapsed since the last
previous test;
and the records of readings shall be adjusted accordingly. Following each test of
a meter, Purchaser shall cause the same to be calibrated to register accurately.
14. REPORTING. Purchaser agrees that it will keep accurate records
of the daily readings from the meter or meters installed pursuant to Section 13.,
Metering, above. These records shall be subject to inspection by Authority at
reasonable times and places. Purchaser shall submit reports to Authority by the
10th day of each month showing the amount of water diverted under this
Agreement each day during the preceding month.
15. SYSTEM AGREEMENT. This Agreement does not affect the rights
and obligations of Authority and Purchaser under the System Agreements.
16. CONSERVATION OF WATER. It is the intent of the parties to this
Agreement to provide to the maximum extent practicable for the conservation of
water, and Purchaser agrees that it is a condition of this Agreement that it shall
maintain and operate its facilities in a manner that will prevent unnecessary
waste of water. Authority, in accordance with applicable law or regulation, may
from time to time adopt reasonable rules and regulations relating to water
conservation. Purchaser agrees to abide by the "Brazos River Authority Drought
Contingency Policy" adopted by the Board on January 16, 1989, or any
subsequent Drought Contingency Policy duly adopted by the Board and any
Drought Contingency Plans developed under the Drought Contingency Policy. If
required by applicable law or regulation or by Authority, Purchaser agrees to
implement a water conservation and drought management program in
accordance with a water conservation plan and that the water made available
and diverted by Purchaser pursuant to this Agreement will be used in accordance
with such conservation plan, and with the regulations of the Texas Natural
Resource Conservation Commission (or other appropriate regulating authority)
applicable to retail public utilities. Purchaser further agrees to make available its
water conservation and drought contingency programs to Authority and LCRA for
11
review. If required by applicable law or regulation Purchaser agrees that, in the
event Purchaser furnishes water or water services to a third party that in turn will
furnish the water or services to the ultimate consumer, the requirements relative
to water conservation shall be met through contractual agreements between
Purchaser and the third party providing for the establishment and implementation
of a water conservation program in compliance with such applicable law or
regulation.
If Purchaser fails to comply with its water conservation plan, Authority
may, at its sole option terminate this Agreement without recourse unless such
default is cured within thirty (30) or, if the nature of such default is not susceptible
to being cured within such thirty (30) day period, such longer period of time
during which Purchaser diligently prosecutes the cure of such default, not to
exceed ninety (90) days of Purchaser's receipt of written notice of such default.
17. WATER QUALITY. As a further condition of this Agreement,
Purchaser also agrees that it will comply with applicable water quality standards
of the State in the diversion, use, reuse, or discharge of water made available
hereunder. Should Purchaser be determined by any competent legal authority to
have degraded the quality of water of the State or to have violated any water
quality standard established by law or lawfully adopted regulation, and
subsequently fail to take action with reasonable diligence to correct such
deficiency as directed by competent legal authority, such failure shall constitute
an event of default under this Agreement.
Authority, in accordance with applicable law or regulation, may from time
to time adopt reasonable rules and regulations relating to water quality
protection. If required by applicable law or regulation or by Authority, Purchaser
agrees to implement appropriate water quality protection measures including,
without limitation, a non -point source water pollution abatement program in
accordance with a non -point source water pollution abatement plan.
18. WATER SURPLUS TO PURCHASER'S NEEDS. Purchaser may
not unilaterally cancel this Agreement or reduce the amounts of water agreed to
be made available to it and for which availability it is obligated to pay under the
terms of Sections 4. and 7., above, except as provided in Section 26, below.
Purchaser may not sell or make available to others the water agreed to be made
available to it under this Agreement, except in the case of municipal uses, as
potable treated water. However, should Purchaser determine that it has water
surplus to its anticipated needs from the water to be made available by Authority
under this Agreement, Purchaser may notify Authority as to the amount of water
no longer needed to be made available to it. Authority will use reasonable efforts
to find a third party who is able and willing to pay for such availability for a period
to the end of this Agreement. If Authority is successful in finding such a third
party suitable to it to acquire Purchaser's interest in its available surplus for a
period of time to the end of this Agreement, this Agreement will be amended to
12
reduce the amount of water to be made available to Purchaser by the amount of
availability paid for by such third party, and Purchaser will be relieved of the
obligation to make payments for such availability of water.
19. SHORTAGES. Authority makes no guarantee that any lakes or
other sources of supply in the Colorado River Basin will be maintained at any
specific level at any particular time. Purchaser bears all transportation losses
prior to final diversion. It is fully understood by the parties hereto that the level of
lakes or other sources of supply in the Colorado River Basin will vary as a result
of weather conditions beyond the control of Authority, and that this instrument is
merely an agreement to require Authority to make available water when and if
water is available to Authority under the Authority's LCRA Contract, and to allow
Purchaser to make withdrawals of the water subject to the general law on
distribution and allocation of water during shortages of supply.
Authority covenants that it will use its best reasonable efforts to maintain
and preserve its rights under the LCRA Contract. If for any reason the availability
of water to Authority under the LCRA Contract is restricted, impaired, or
otherwise limited, Authority agrees, and Purchaser covenants, that Authority may
fairly and equitably apportion and ration the available water supply from the
LCRA Contract among all its several customers receiving water from Authority as
a result of the LCRA Contract, including Purchaser.
20. FORCE MAJEURE. Notwithstanding anything herein to the
contrary, neither party hereto shall be under any liability or be deemed in default
with respect to its obligations under this Agreement for any failure to perform or
for delay in performing such party's obligations hereunder (except for the
obligation to pay money) where such failure or delay is due to force majeure,
while and to the extent that such performance is prevented by such cause. The
term force majeure means acts of God, fire, storm, flood, war, riots, sabotage,
drought, lack of availability of water due to sedimentation, low inflows of water to,
or lack of water supply in the System or from the Colorado River basin to be
made available under the LCRA Contract, strikes or other differences with labor
(whether or not within the power of the parties to settle same), decrees or orders
of the courts or other governmental authority, or other similar or dissimilar causes
not within the reasonable control of such party and not due to negligence of such
party. Each party shall use due diligence to resume performance of any
obligation suspended by force majeure at the earliest practicable time.
21. WAIVER. Any waiver at any time by any party of its rights with
respect to default under this Agreement shall not be deemed a waiver of such
rights with respect to any subsequent default or matter.
22. NOTICES AND CERTIFICATIONS. Notices and certifications
provided for in this Agreement shall be in writing. The same shall be delivered by
13
mailing certified mail, postage paid, return receipt requested, to the respective
parties at the following addresses:
Authority:
Purchaser:
Brazos River Authority
P.O. Box 7555
Waco, Texas 76714-7555
Telephone: (254) 776-1441
Fax: (254) 772-5780
City of Round Rock
221 East Main Street
Round Rock, Texas 78664
Telephone: (512) 218-5400
Fax: (512) 218-7097
Either party may change its address as shown above by written notice to
the other party. Notices shall be deemed to have been delivered on the business
day following their deposit in the United States mail, postage paid, and properly
addressed and certified.
23. OTHER REQUIREMENTS. This Agreement is subject to all
conditions, provisions, and limitations included in Authority's water rights from the
TNRCC and the System Order and the LORA Contract. Further, this Agreement
is subject to all applicable Federal, State and local laws, and any applicable
ordinances, rules, orders and regulations of any local, State or Federal
governmental authority having jurisdiction. However, nothing contained in this
Agreement shall be construed as a waiver of any right to question or contest any
law, ordinance, order, rule, or regulation of any govemmentai authority.
24. SEVERABILITY. The provisions of this Agreement are severable,
and if for any reason any one or more of the provisions contained in this
Agreement shall be held to be invalid, illegal, or unenforceable in any respect,
the invalidity, illegality, or unenforceability shall not affect any other provisions of
this Agreement and this Agreement shall remain in effect and be construed as if
the invalid, illegal, or unenforceable provision had never been contained in the
Ag reement.
25. ASSIGNMENT. This Agreement may be assigned by Purchaser
only with the written consent of Authority, which consent shall not be
unreasonably withheld or delayed. Only assignment of this entire Agreement will
be approved. Releases of lesser obligations must be authorized under Section
18., Water Surplus to Purchaser's Needs, above.
26. TERM OF AGREEMENT. The term of this Agreement shall begin
on the Effective Date, Section 3., and shall end on the fifty (50) year anniversary
of the Effective Date. If Authority is able to extend or renew its LCRA Contract,
14
Authority and Purchaser agree to negotiate in good faith regarding terms for
extension or renewal of this Agreement.
If purchaser is current on all payments due Authority under this
Agreement, Purchaser may terminate this contract, in whole or in part, on
February 15 of any year following the expiration of ten (10) years measured from
the Effective Date by providing six (6) months prior written notice to Authority,
that is by August 15 of the year preceding the February 15 termination date.
This Agreement shall be null and void in the event that the interbasin
transfer permit referenced in Section 3, above, is not issued by the TNRCC
within the two (2) years of the date of filing of the application for said interbasin
transfer permit.
CITY OF ROUND ROCK
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BRAZOS RIVER AUTHORITY
By: \�n
ka).1k. Phillip J. Ford
ATTEST:
w:\coalfield\rourockswaacolriv&bra#3.doc
15
General Manager
ATTEST:
Assistant Secretary