R-00-09-14-10B2 - 9/14/2000 RESOLUTION NO. R-00-09-14-10132
WHEREAS, on July 7, 1996, the City of Round Rock ("City") ,
the Lower Colorado River Authority ("LCRA" ) , and the Brazos River
Authority ("BRA" ) entered into that certain "Wastewater Disposal
Contract" and "Supplemental Agreement" for the purpose of the
implementation of a regional wastewaer collection, treatment and
disposal system for the upper Brushy Creek drainage basin, and
WHEREAS, on July 18, 1997, LORA, BRA, the City and the City
of Cedar Park ("Cedar Park" ) entered into a revised "Wastewater
Disposal Contract" which superseded, replaced and terminated the
above described 1996 contract, and
WHEREAS, the City of Austin now desires to become a customer
of the regional wastewater collection and treatment system and the
City, Cedar Park, LORA, and BRA desire that Austin become a
customer, and
WHEREAS, a revised Wastewater Disposal Contract has been
prepared whereby Austin becomes a customer, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS,
That the Mayor is hereby authorized and directed to execute on
behalf of the City a revised Wastewater Disposal Contract among the
City, Cedar Park, Austin, LORA and BRA, a copy of said Contract
being attached hereto as Exhibit "A" .
K:\WPDOCS\RESOLUTI\R00919B2.WPD/818
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, and the Act .
RESOLVED this 14th day of Septe 2000 .
J 14,
ROBERT A. STLUKA, Jil, Mayor
City of Round Rock, Texas
ATTEST:
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la F-, Lua
JfNNE LAND, City Secretary
0
2
EXHIBIT
DRAFT August 28, 2000
WASTEWATER DISPOSAL CONTRACT
dated
September 20, 2000
among
BRAZOS RIVER AUTHORITY
LOWER COLORADO RIVER AUTHORITY
CITY OF ROUND ROCK
CITY OF CEDAR PARK
CITY OF AUSTIN
DRAFT August 28, 2000
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITION OF TERMS. 4
Section 1.02. INTERPRETATION. 14
ARTICLE II
DESIGN, ACQUISITION AND
CONSTRUCTION OF SYSTEM BY THE ALLIANCE
Section 2.01. ALLIANCE RESPONSIBILITIES. 14
Section 2.02. ALLIANCE MODIFICATIONS. 17
Section 2.03. ACQUISITION AND CONSTRUCTION OF
PHASE I OF THE SYSTEM. 17
Section 2.04. CONSTRUCTION OF PHASE II 17
Section 2.05. EXPANSIONS BEYOND PHASE II. 18
Section 2.06. CONSTRUCTION OF REQUIRED IMPROVEMENTS. 19
Section 2.07. LCRA RIGHT TO RESERVED CAPACITY 19
Section 2.08. DEPOSITS ON FUNDING DATES 20
ARTICLE III
OPERATION OF SYSTEM BY BRA
Section 3.01. OPERATION 20
Section 3.02. COMPETITIVE BIDS. 21
Section 3.03. PAYMENTS TO BRA FOR OPERATION OF SYSTEM. 22
Section 3.04. OPERATION & MAINTENANCE MANAGEMENT FEE. 22
Section 3.05. COOPERATION DURING MAINTENANCE
OR EMERGENCY. 22
ARTICLE IV
RESERVED CAPACITY AND DISCHARGE-OF WASTEWATER
Section 4.01. DISCHARGE QUANTITIES. 22
Section 4.02. POINT(S) OF ENTRY. 23
Section 4.03. RATE AND QUANTITY AT POINT(S) OF ENTRY. 23
Section 4.04. DISCHARGE QUALITY. 24
Section 4.05. REGULATIONS 25
Section 4.06. INDUSTRIAL WASTES 25
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DRAFT August 28, 2000
Section 4.07% SYSTEM LIMITATIONS. 25
Section 4.08. RESPONSIBILITY FOR TREATMENT
AND DISPOSAL OF WASTEWATER. 26
Section 4.09. METERING. 26
Section 4.10. UNIT OF MEASUREMENT. 27
ARTICLE V
SYSTEM BUDGETS AND CHARGES
Section 5.01. ESTABLISHING BUDGETS AND CHARGES. 27
Section 5.02. CUSTOMER DISPUTES. 29
Section 5.03. CHANGES FROM NEW CUSTOMERS, EMERGENCIES
AND LEGAL ACTION. 30
Section 5.04. CAPITAL CHARGES; UNCONDITIONAL
PAYMENT OBLIGATION. 30
Section 5.05. FLOW CHARGES 32
Section 5.06. HOW, WHEN AND WHERE PAYMENTS ARE TO BE MADE 33
Section 5.07. DEFAULT. 33
Section 5.08. CAPITAL MANAGEMENT FEE. 34
ARTICLE VI
TECHNICAL REVIEW COMMITTEE
Section 6.01. COMPOSITION OF TECHNICAL REVIEW COMMITTEE. 34
Section 6.02. RESPONSIBILITY OF TECHNICAL REVIEW COMMITTEE 34
Section 6.03. COMPOSITION OF FINANCIAL REVIEW COMMITTEE 36
Section 6.04. RESPONSIBILITY OF FINANCIAL REVIEW COMMITTEE 36
ARTICLE VII
GENERAL PROVISIONS
Section 7.01. NO TAX OBLIGATION OF CUSTOMERS. 37
Section 7.02. PAYMENTS TO CONSTITUTE
OPERATING EXPENSES OF CUSTOMER. 37
Section 7.03. CUSTOMER RATES, FEES AND CHARGES. 37
Section 7.04. USE OF PUBLIC PROPERTY. 38
Section 7.05. FORCE MAJEURE. 38
Section 7.06. INSURANCE. 38
Section 7.07. GOVERNMENTAL REGULATION. 39
Section 7.08. CUSTOMER COOPERATION TO ASSURE
REGULATORY COMPLIANCE. 39
Section 7.09. CONTRACTS WITH OTHERS IN RELATION TO SYSTEM. 39
Section 7.10. NON-INFRINGEMENT. 41
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DRAFT August 28, 2000
Section 7.11. SALE OR TRANSFER OF SYSTEM; CUSTOMERS'
RIGHT OF FIRST REFUSAL. 41
Section 7.12. LCRA RIGHT OF FIRST REFUSAL TO
PURCHASE CEDAR PARK TREATMENT PLANT. 41
Section 7.13. EXCEPTIONS TO SOLE SOURCE REQUIREMENT. 42
Section 7.14. ANNUAL REPORT OF SYSTEM AND AUDITS. 42
Section 7.15. NO ADDITIONAL WAIVER IMPLIED. 43
Section 7.16. ADDRESSES AND NOTICE. 43
Section 7.17. MODIFICATION. 44
Section 7.18. ASSIGNABILITY. 44
Section 7.19. SEVERABILITY. 44
Section 7.20. MERGER. 44
Section 7.21. VENUE 45
Section 7.22. NO THIRD PARTY BENEFICIARIES 45
Section 7.23. REUSE OF TREATED EFFLUENT FROM THE SYSTEM 45
ARTICLE VIII
NEGOTIATION AND MEDIATION OF DISPUTES
Section 8.01. AGREEMENT REGARDING REMEDIES. 46
Section 8.02. AGREEMENT TO NEGOTIATE FIRST TO RESOLVE ISSUES.
46
Section 8.03. AGREEMENT TO MEDIATE. 46
Section 8.04. PRESENTATION OF WRITTEN CLAIM REGARDING
DISPUTES NOT RESOLVED BY NEGOTIATION. 46
Section 8.05. PERFORMANCE DURING MEDIATION. 46
Section 8.06. APPOINTMENT OF MEDIATOR. 47
Section 8.07. RULES FOR MEDIATION. 47
Section 8.08. EXCEPTION. 48
ARTICLE IX
EFFECTIVE DATE AND TERM OF AGREEMENT
Section 9.01. EFFECTIVE DATE. 48
Section 9.02. TERM OF AGREEMENT. 48
Section 9.03. EFFECT ON CERTAIN PRIOR AGREEMENTS. 48
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DRAFT August 28, 2000
WASTEWATER DISPOSAL CONTRACT
This agreement (the "Agreement") is entered into between the Brazos River Authority
("BRA"), the Lower Colorado River Authority ("LCRA") acting together pursuant to the
Brazos-Colorado Water Alliance (the "Alliance"), the City of Round Rock ("Round Rock")
the City of Cedar Park ("Cedar Park") and the City of Austin ("Austin"). Round Rock,
Cedar Park and Austin, together with LCRA, are hereafter collectively referred to as the
Customers.
RECITALS
LCRA and BRA have recognized that there are areas in the vicinity of the boundaries
of the Colorado and Brazos River Basins in which each can provide services which can be
better provided if they cooperate and pool resources.
Pursuant to such recognition, they have entered into an Alliance to implement such
cooperation and pooling of resources, including financial and engineering resources and BRA's
experience in the operation of regional sewerage systems.
The Alliance is not a separate entity, but a cooperative effort and dedication of
resources of LCRA and BRA.
The undertakings of each of LCRA and BRA provided for in this Agreement are in
furtherance of the purposes of the Alliance and are, in that sense, activities of the Alliance.
Because the Alliance is not a separate entity, the undertakings of each of LCRA and
BRA in this Agreement, though in furtherance of the purposes of the Alliance, are
undertakings of the party specified as making same and are, in no sense, undertakings of the
other, so that each of LCRA and BRA shall be solely responsible for its own undertakings
provided in this Agreement and neither LCRA nor BRA shall be responsible for the
performance by the other of its undertakings provided herein.
Austin, Round Rock and Brushy Creek Water Control and Improvement District No. 1
(the "WCID") entered into a certain "Wastewater Disposal Agreement", as amended (the
"Wastewater Disposal Agreement"), setting forth terms and conditions of those parties to
participate in the joint financing, construction, operation and maintenance of the WCID's
system (the "WCID System") intended to provide wastewater transportation and treatment
services for that portion of the Brushy Creek watershed located within the respective corporate
limits and/or extraterritorial jurisdictions of Austin and Round Rock.
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DRAFT August 28, 2000
Pursuant to the Wastewater Disposal Agreement, the WCID acquired or constructed in
its name for the benefit and at the expense of Austin and Round Rock, engineering studies and
plans of the proposed WCID System, a wastewater discharge permit, designation of the WCID
as the regional provider of wastewater services for a portion of the Brushy Creek watershed,
portions of the proposed wastewater collection and transportation components of the WCID
System and certain easements and property rights appurtenant thereto.
Additionally, Austin and Round Rock transferred to the custody and control of the
WCID certain funds, equipment and other assets for use with the WCID System.
Austin and Round Rock also respectively acquired or constructed or determined to use
in their own names certain land, wastewater facilities and property rights in contemplation of
the later use by or dedication of same to the WCID.
By virtue of that certain "Agreement for Termination of Brushy Creek Regional
Wastewater Disposal Agreement" effective September 19, 1994, as amended on September 18,
1995 and March 19, 1996 (the "Termination Agreement"), Austin, Round Rock and the WCID
set forth terms and conditions for termination of the Wastewater Disposal Agreement, for
transfer of all WCID System assets acquired or constructed by the WCID to Austin and Round
Rock, jointly or severally, and for assumption by Austin and Round Rock of all WCID System
obligations, liabilities and responsibilities.
Austin, Round Rock and the WCID have implemented the Termination Agreement
which resulted in Austin and Round Rock owning, jointly or severally, all of the assets
formerly held by the WCID as part of the WCID System.
Each Customer desires to accomplish the implementation of a regional wastewater
collection, treatment and disposal system for the benefit of the Customers.
LCRA and BRA, acting in furtherance of the purposes of the Alliance, agree to utilize
their collective financial, engineering and operational resources and expertise to assist in the
implementation of the regional wastewater collection, treatment and disposal system (hereafter,
the "System").
On July 7, 1996, LCRA, BRA and Round Rock entered into that certain "Wastewater
Disposal Contract" and "Supplemental Agreement" (collectively, the "RR/Alliance Wastewater
Disposal Contract"), and LCRA and Round Rock entered into that certain "Agreement for
Acquisition of Wastewater System Assets (the "RR/Alliance Acquisition Contract").
On July 18, 1997, LCRA, BRA, Round Rock and Cedar Park entered into that certain
"Wastewater Disposal Contract" (the "CP/RR/Alliance Wastewater Disposal Contract") which
superseded, replaced and terminated the RR/Alliance Wastewater Disposal Contract.
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DRAFT August 28, 2000
Subsequent to implementation of the Termination Agreement, LCRA has acquired
Round Rock's interests in the assets formerly held by the WCID as part of the WCID System
and the East Plant and West Plant (as hereafter defined).
LCRA is in the process of purchasing additional wastewater assets from Round Rock
pursuant to the RR/Alliance Acquisition Agreement.
Cedar Park, simultaneously with its execution of the CP/RR/Alliance Wastewater
Disposal Contract, entered into that certain "Agreement for Conveyance of Interests and
Temporary Pass-Through Wastewater Service" with Austin to acquire an undivided interest in
certain of the assets owned by Austin as a result of implementation of the Termination
Agreement and Austin's participation in efforts to implement the WCID System (the
"Austin/Cedar Park Transfer Agreement").
Cedar Park subsequently assigned to LCRA Cedar Park's interests in the Austin/Cedar
Park Transfer Agreement and LCRA acquired the assets to be transferred by Austin pursuant
to the Austin/Cedar Park Transfer Agreement as provided in that certain "Agreement for
Assignment of Contract Rights" between LCRA and Cedar Park to be used by BRA and
LCRA, in furtherance of the purposes of the Alliance, in connection with and to be part of the
System.
Austin now desires to become a Customer of the System and BRA, LCRA and the
other Customers desire that it become a Customer of the System under the terms and
conditions provided for in this Agreement.
LCRA is willing to become a Customer of the System in order to provide wholesale
wastewater services to Brushy Creek Municipal Utility District and Fern Bluff Municipal
Utility District pursuant to separate contracts entered into between LCRA, BRA and each of
said districts, respectively, and to possibly serve Leander and Hutto as permitted by that
Section.
LCRA, contemporaneously with entering into this Agreement, has entered into that
certain "Agreement for Acquisition of Wastewater System Assets (Brushy Creek)" to acquire
further undivided interests in certain of the assets more particularly described on Exhibit A
owned by Austin as a result of the Termination Agreement and Austin's participation in efforts
to implement the WCID System (the "Austin/Alliance Acquisition Contract").
The Customers desire to discharge wastewater from their wastewater collection systems
into the System in order to serve the wastewater needs of the Customers, to achieve efficien-
cies of cost and operation and to protect and preserve the environment of the Brushy Creek
watershed.
LCRA, acting in furtherance of the purposes of the Alliance, is willing to acquire,
construct, improve and expand the System, as,described in the Engineering Report, to receive
wastewater from the Customers' wastewater collection systems.
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DRAFT August 28, 2000
In that connection, LCRA is willing to provide engineering, technical and other
assistance for the System and to advance financial assistance by providing that the System will
be part of the "LCRA System" as now or hereafter defined in the resolutions authorizing and
governing LCRA's Revenue Bonds and LCRA's Commercial Paper Notes (collectively, the
"LCRA Debt").
BRA, acting in furtherance of the purposes of the Alliance, is willing to operate and
maintain the System in order to receive wastewater from the Customers' wastewater collection
systems and to treat and dispose of such wastewater.
BRA, LCRA and the Customers are authorized to make this Agreement under the
provisions of Chapters 30 and 49, Texas Water Code; Section 791.026, Texas Government
Code; and other applicable provisions of state law.
In consideration of the mutual covenants and agreements herein contained, LCRA and
BRA, each acting in furtherance of the purposes of the Alliance, and the Customers agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITION OF TERMS. Terms and expressions as used in this
Agreement, unless the context clearly shows otherwise, shall have the following meanings:
(a) "Accumulated Coverage" means the amounts, together with interest
earnings thereon, received by LCRA or BRA from the portion of the Capital Charges
consisting of the coverage requirements specified in subsection (iii) of the definition of
Bond Costs herein.
(b) "Agreement" means this agreement.
(c) "Alliance Acquisition Contracts" means, collectively, the
Austin/Alliance Acquisition Contract, the CP/Alliance Acquisition contract and the
RR/Alliance Acquisition Contract.
(d) "Annual Operation and Maintenance Expense Requirement" means the
annual amount budgeted, as provided in Article V, for all Operation and Maintenance
Expenses during any Fiscal Year. The Annual Operation and Maintenance Expense
Requirement does not include any portion of the Annual Project Requirement.
(e) "Annual Project Requirement" means the annual amount budgeted, as
provided in Article V, for the capital related costs of the System, including, without
limitation, that year's Bond Costs, any LIF Advance Costs, and the Capital
Management Fee. The Annual Project Requirement does not include any portion of the
Annual Operation and Maintenance Expense Requirement.
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DRAFT August 28, 2000
(f) "Annual Project Requirement - Downstream Collection System" means
that portion of the Annual Project Requirement attributable to the Downstream
Collection System in accordance with the provisions of Section 5.04.
(g) "Annual Project Requirement - Treatment Facilities" means that portion
of the Annual Project Requirement attributable to the Treatment Facilities in accordance
with the provisions of Section 5.04.
(h) "Annual Project Requirement - Upstream Collection System" means that
portion of the Annual Project Requirement attributable to the Upstream Collection
System in accordance with the provisions of Section 5.04.
(i) "Austin" means the City of Austin.
0) "Austin/Alliance Acquisition Contract" means that certain "Agreement
for Acquisition of Wastewater System Assets (Brushy Creek)" entered into
contemporaneously with this Agreement between Austin and LCRA relating to the
acquisition of additional undivided interests in certain assets of Austin by LCRA.
(k) "Austin/Cedar Park Transfer Agreement" means that certain "Agreement
for Conveyance of Interests and Temporary Pass-Through Wastewater Service" entered
into on or about July 18, 1997, between Austin and Cedar Park relating to the
acquisition of an undivided interest in certain assets of Austin by Cedar Park,
transferred to LCRA.
(1) 'Bond" means any bond, note or other evidence of indebtedness to be
issued by LCRA or BRA pursuant to this Agreement to provide temporary, interim or
permanent financing for the acquisition, construction, expansion, extension,
enlargement, improvement, repair or decommissioning of the System, whether one or
more issues, or any bond issued to refund the same, or issued for any purpose
necessary to acquire, construct, expand, extend, enlarge, improve or repair the System,
but does not include any other bonds of LCRA or BRA issued heretofore or hereafter
for any other LCRA or BRA purpose.
(m) 'Bond Costs" means
(i) the payments due with respect to Bonds, including
(aa) the principal, redemption premium, if any, and the
interest, if any, attributable to Bonds, issued by LCRA or BRA as such
become due during any Fiscal Year, whether at maturity or at
redemption prior to maturity, less interest to be paid out of Bond
proceeds as permitted by the Bond Resolution, plus
(bb) the amounts, if any, required to be deposited to restore
any deficiency in any Debt Service Reserve Fund for the Bonds in
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DRAFT August 28, 2000
accordance with (x) the provisions of the Bond Resolution, or (y) to the
maximum extent of the average annual debt service on all outstanding
Bonds issued after the effective date of this Agreement attributable to the
System at any given time, any LCRA or BRA policies covering financial
management, insurance, risk management, investment and other policy
matters representing LCRA's or BRA's general financial and business
policies implemented through and in accordance with LCRA's or BRA's
plans for financial and business operations, as such resolutions and
policies may be amended from time to time as therein permitted; plus
(ii) any amounts required to pay charges, fees or expenses of any
trustee, paying agent or registrar for the Bonds; plus
(iii) the larger of
(1) the amount necessary to provide for any required coverage
on any outstanding Bonds and any additional Bonds proposed to be
issued within a time ending no later than twelve Months after the end of
the Fiscal Year for which the Bond Costs are budgeted, or
(2) the amount necessary to provide the coverage specified
below, which amount the parties agree is appropriate and reasonable in
any event to prudently finance the System:
((a)) FY 2000: eight percent (8%) of that
year's principal and interest on any outstanding Bonds; and
((b)) FY 2001 and beyond: ten percent (10%) of that
year's principal and interest on any outstanding Bonds.
(n) "Bond Issuance Costs" means all reasonable costs associated with the
authorization, issuance, sale and delivery of the Bonds, including all legal, financial
advisory, engineering, rating, credit enhancement and similar fees related thereto,
expenses of printing the Bonds, expenses to retain a trustee, paying agent or registrar
for the Bonds, advertising expenses, capitalized interest and all other out-of-pocket
expenses directly related to the authorization, issuance, sale and delivery of the Bonds.
(o) "Bond Resolution" means any resolution of the Board of Directors of
LCRA or BRA authorizing the issuance of Bonds and providing for their security and
payment as such resolution may be amended from time to time as therein permitted;
without limitation, "Bond Resolution" shall include any trust indenture pursuant to
which the Bonds are issued.
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DRAFT August 28, 2000
(p) "Capital Charge" means the amount to be paid each Month calculated in
accordance with Section 5.04 of this Agreement and owed by each of the Customers to
pay for the Annual Project Requirement.
(q) "Capital Management Fee" means the fee to be paid pursuant to Section
5.08 of this Agreement.
(r) "Cedar Park" means the City of Cedar Park.
(s) "Cedar Park Treatment Plant" means Cedar Park's existing 2.5 MGD
wastewater treatment plant located at 900 Brushy Creek Road, and any expansions
thereto as permitted in Section 7.13 of this Agreement.
(t) "Commission" means the Texas Natural Resource Conservation
Commission or its successor agency.
(u) "Contract 6A Wastewater Interceptor Line"means the portion of the
Downstream Collection System currently existing and acquired or to be acquired by
LCRA as part of the Regional System Assets and referred to in the Engineering Report as
being part of"Contract 6A".
(v) "Contractual Flow" means, for any particular Customer, the amount of
Wastewater projected to be discharged by that Customer in a particular year (initially,
in the amounts set forth in Exhibit B) or such other amount as may be required or
permitted to be established pursuant to Section 5.04.
(w) "CP/Alliance Acquisition Contract" means that certain "Agreement for
Assignment of Contract Rights" between Cedar Park and LCRA providing for the
transfer by Cedar Park to LCRA of Cedar Park's rights and obligations in the
Austin/Cedar Park Transfer Agreement.
(x) "CP/RR/Alliance Wastewater Disposal Contract" means that certain
"Wastewater Disposal Contract" dated July 18, 1997, by and among Cedar Park,
Round Rock, BRA, and LCRA.
(y) "Customers" means Round Rock, Cedar Park, Austin and LCRA.
(z) "Debt Service Reserve Fund" means a reserve fund available to pay on a
timely basis the principal of and interest on any Bonds to the extent revenues pledged to
the payment of the Bonds are insufficient to do so.
(aa) "Downstream Collection System" means that portion of the System
consisting of the System's interceptor line from Node K downstream to the East Plant,
as described in the Engineering Report.
DRAFT August 28, 2000
(bb) "East Plant" means the plant purchased by LCRA which was formerly
Round Rock's 3.6 MGD wastewater treatment plant and appurtenances as described in
the Engineering Report and any improvements or expansions thereto.
(cc) "Engineering Report" means the report prepared by PBS&J, on behalf of
LORA, entitled BRA/LORA Alliance Brushy Creek Regional Wastewater System
Engineering Report, dated August, 2000, hereby incorporated herein by reference,
which describes the System Components currently contemplated, the estimated
construction costs, the proposed construction schedule and other pertinent matters; and
any further supplements or amendments thereto as contemplated herein.
(dd) "EPA" means the United States Environmental Protection Agency.
(ee) "Expansion" means any System Components which constitute an
expansion, extension or enlargement of the facilities comprising Phase I and II of the
System, or of other facilities, so as to increase, extend or enlarge the System to provide
additional capacity or service capability.
(ff) "Financial Review Committee" means the committee provided for in
Section 6.03 of this Agreement.
(gg) "Fiscal Year" means the twelve (12) Month period beginning October 1
of each year.
(hh) "Flow Charge" means the amount to be paid each Month by each
Customer calculated in accordance with Section 5.05 of this Agreement.
(ii) "Funding" means the receipt from time to time by LCRA or BRA of the
funds necessary to pay the Project Costs.
0j) "Funding Date" means the date or dates on which a Funding occurs.
(kk) "Initial Funding(s)" means the Funding(s) necessary to accomplish
implementation of the Alliance Acquisition Contracts and the construction of the
remainder of Phase I of the System.
(11) "Initial Funding Date(s)" means the dates of the Initial Funding(s).
(mm) "LCRA Debt" means LCRA's System Revenue Bonds, LCRA's
Commercial Paper Notes, any indebtedness issued to refund same or any other
indebtedness hereafter issued by LCRA for the LCRA System.
(nn) "LCRA System" means the properties or interests therein owned by
LCRA and now or hereafter defined as the LCRA "System" in the resolutions
authorizing and governing the LCRA Debt.
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DRAFT August 28, 2000
(oo) "LIF" means, collectively, the various LCRA Internal Funds from which
LCRA System improvements may be constructed, all as created with respect to the
LCRA System in the resolutions authorizing and creating the LCRA Debt.
(pp) "LIF Advance" means a payment for any Project Cost by LCRA from
the LIF, other than payments from Accumulated Coverage.
(qq) "LIF Advance Costs" means the annual payments due from the
Customers with respect to an LIF Advance, which amount shall consist of repayment of
principal amounts advanced and carrying costs thereon amortized over a period
substantially the same as if such amounts had been borrowed at the then current market
interest rate and for a term of years by a governmental entity similar to LCRA and with
a similar credit rating based on the Delnhus Hanover CoMoration's Range of Yield
Curve ' yield for credits and obligations not exceeding thirty (30) year maturities (or, if
the Delphus Hanover Corporation Range of Yield Curves' yield does not exist, then a
comparable index) for a project similar to that being financed for the System, and
coverage calculated in the manner set forth in the definition of Bond Costs.
(rr) "List of Inadmissible Wastes" means the list of wastes not permitted to
be discharged into the System pursuant to applicable federal and state requirements.
(ss) "Month" means a calendar month.
(tt) "Operation and Maintenance Expense" means all direct and indirect costs
(other than those incurred as a result of the gross negligence or willful misconduct of
LCRA or BRA) of operation, maintenance, repair, rehabilitation, replacement and
decommissioning of the System and of facilities owned either by one or more
Customers or LCRA pursuant to the provisions of Article H below incurred by BRA or
LCRA to the extent not (i) paid from the Repair and Replacement Reserve Fund, (ii)
paid from the Operation and Maintenance Reserve Fund, or (iii) repayable as part of
Annual Project Requirement, including, but not limited to:
(1) costs of maintaining any permits or licenses necessary to own,
operate and maintain the System;
(2) costs (other than those incurred as a result of the gross negligence
or willful misconduct of LCRA or BRA) such as, but not limited to, costs of
labor, materials, utilities, supervision, engineering, accounting, auditing, legal
and professional services, insurance, personnel, data processing and purchasing;
(3) expenses of BRA, LCRA and the Technical Review Committee
and Financial Review Committee in fulfilling the Technical Review
Committee's and Financial Review Committee's responsibilities;
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DRAFT August 28, 2000
(4) BRA's and LCRA's costs of complying with this Agreement,
including, but not limited to, its remedy and mediation provisions;
(5) such other costs or expenses as may be imposed upon LCRA or
BRA in connection with fulfillment of their obligations under this Agreement
because of laws, regulations or requirements of the State of Texas, the United
States, or of any agency or governmental subdivision of the State of Texas or
any agency of the United States having jurisdiction;
(6) costs of any other tools, supplies, inventory, services and
equipment, together with administrative costs not otherwise included in this
definition necessary for proper operation and maintenance of the System;
(7) payments made by LCRA or BRA in satisfaction of judgments
resulting from or settlement of claims not covered by the insurance maintained
by LCRA or BRA or not paid by one particular Customer arising in connection
with the ownership, operation or maintenance of the System;
(8) any and all expenses incurred by LCRA or BRA in connection
with any litigation or administrative proceedings of any nature whatsoever
concerning the System or LCRA's or BRA's responsibilities hereunder to any
person, entity or party hereto;
(9) the cost of restoration of the Operation and Maintenance Reserve
Fund after expenditures are made therefrom with any such replenishment
amounts to be amortized over a reasonable period of time at a reasonable
carrying cost; and
(10) the Operation & Maintenance Management Fee.
Depreciation shall not be considered an item of Operation and Maintenance Expense.
Operation and Maintenance Expenses shall not include any Project Costs.
(uu) "Operation and Maintenance Management Fee" means a-fee of five
percent (5%) of the amounts (other than that portion of the Annual Operation and
Maintenance Expense Requirement consisting of the Operation & Maintenance
Management Fee and fines imposed by governmental regulatory authorities) budgeted
for the Annual Operation and Maintenance Expense Requirement each year.
(vv) "Operation and Maintenance Reserve Fund" means the fund in an
amount adjusted annually to equal one-sixth (1/6) of the Annual Operation and
Maintenance Expense Requirement in order to provide moneys to operate and maintain
the System in the event current revenues of the System are insufficient to meet the
Operation and Maintenance Expenses of the System or pending receipt of payments
from Customers required hereunder.
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DRAFT August 28, 2000
(ww) "Phase I of the System" means the facilities described as such in the
Engineering Report.
(xx) "Phase II of the System" means the facilities described as such in the
Engineering Report.
(yy) "Point of Entry" means a point at which Wastewater enters the System.
(zz) "Project Costs" means all acquisition, construction, reconstruction,
rehabilitation, replacement and decommissioning costs as those terms are generally
understood in standard accounting practice as applied to projects of the nature of the
System and Bond Issuance Costs, if Bonds are issued to pay the Project Costs; and
without limiting the generality of the foregoing, the term shall include the cost of any
Required Improvements; the costs of obtaining all licenses and permits; purchase of
equipment, property, rights in property, costs of land, easements and rights-of-way,
including damages to land and property; engineering, inspections, administrative,
auditing, legal expenses incurred in connection with the planning, development,
acquisition, construction, reconstruction or decommissioning of the System; tools and
equipment required for the operation and maintenance of the System; costs of the same
nature for any expansion, extension, enlargement, improvement, rehabilitation or
replacement of the System; the costs of establishing and replenishing the Repair and
Replacement Reserve Fund and any Debt Service Reserve Fund for the Bonds; legal
and other expenses incurred by LCRA or BRA in accomplishing the acquisition or
construction of the System (other than those incurred as a result of the gross negligence
or willful misconduct of LCRA or BRA), including all expenses incurred by LCRA or
BRA in connection with any litigation or administrative proceedings of any nature
whatsoever concerning the acquisition, construction, reconstruction or decommissioning
of System or responsibilities of LCRA or BRA hereunder to any person, entity or party
hereto. Project Costs will not include any Operation and Maintenance Expenses.
(aaa) "Regional System Assets" means the assets obtained or to be obtained
for the System pursuant to the Alliance Acquisition Contracts.
(bbb) "Repair and Replacement Reserve Fund" means the fund, to be
established initially by LCRA, in an amount of not to exceed one-half of one percent
(.5%) of the Project Costs expended at any given time or such other amount as LCRA
and BRA, with the approval of the Technical Review Committee, may jointly determine
to be appropriate given the age, condition and size of the System, and additional similar
funds established by BRA or LCRA.
(ccc) "Required Improvement" means any improvement, betterment, enlarge-
ment, addition, repair, rehabilitation or replacement to any System Component (i)
required to be installed or constructed by applicable governmental law, rule, regulation,
order or similar requirement or (ii) needed to maintain the capability of the System to
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DRAFT August 28, 2000
perform its intended function of providing adequate Wastewater service to the
Customers in accordance with their rights under this Agreement.
(ddd) "Reserved Capacity" means the total quantity of Wastewater that a
Customer is entitled to deliver into any System Component during a specified period of
time pursuant to this Agreement, or, alternatively, the percentage of capacity of a
System Component that a Customer is entitled to utilize in any System Component
pursuant to this Agreement, all as set forth in Exhibit B.
(eee) "Round Rock" means the City of Round Rock.
(fff) "RR/Alliance Acquisition Contract" means that certain "Agreement for
Acquisition of Wastewater System Assets" between Round Rock and LCRA.
(ggg) "RR/Alliance Wastewater Disposal Contract" means that certain
"Wastewater Disposal Contract" and "Supplemental Agreement" dated July 7, 1996,
among Round Rock, LCRA and BRA as described in the recitals hereto.
(hhh) "Service Area" means the following:
(1) For Round Rock, the area within its corporate limits or
extraterritorial jurisdiction as the same exist from time to time save and except
areas in the LCRA Service Area as provided below;
(2) For Cedar Park, the area within its corporate limits or
extraterritorial jurisdiction as the same exist from time to time;
(3) For Austin, that part of the area both (i) within its corporate
limits or extraterritorial jurisdiction as the same exist from time to time and (ii)
which is within the Brushy Creek watershed or other areas depicted on Figure 1-
1 of the Engineering Report, save and except areas in the LCRA Service Area
as defined below;
(4) For LCRA, the area presently served by Fern Bluff Municipal
Utility District and Brushy Creek Municipal Utility District (which includes
their district boundaries and certain out-of-district tracts served by Brushy Creek
Municipal Utility District) as shown in Figure 1-1 of the Engineering Report;
and
(5) For the Surplus Reserved Capacity for Leander, that area both (i)
within Leander's corporate limits and extraterritorial jurisdiction as the same
exist from time to time and (ii) within the Brushy Creek watershed.
At the present time, for any particular Customer, the current Service Area for that Customer is
shown in Figure 1 of the Engineering Report.
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DRAFT August 28, 2000
(iii) "Significant Industrial Users" has the meaning for that term as defined
by 40 CFR 403.3(t).
Ojj) "Surplus Reserved Capacity for Leander" means the excess Reserved
Capacity in various System Components contemplated to be needed to serve the
Leander Service Area in the future as described in Appendix 2 of the Engineering
Report.
(kkk) "System" means all of the facilities constructed or acquired by LCRA or
BRA for receiving, measuring, transporting, treating and disposing of Wastewater from
the Customers in Phases I and II of the System as described in the Engineering Report,
together with any Expansions or Required Improvements added by LCRA or BRA
pursuant to this Agreement.
(111) "System Component" means a specified facility comprising part of the
System and listed as a System Component in the Engineering Report.
(mmm) "Technical Review Committee" means the committee created by Article
VI of this Agreement.
(nnn) "Termination Agreement" means that certain "Agreement for Termination
of Brushy Creek Regional Wastewater Disposal Agreement" dated effective Septem-
ber 19, 1994, and amended on September 18, 1995, and March 19, 1996, between
Austin, Round Rock and the WCID, setting forth the terms and conditions for termina-
tion of the Wastewater Disposal Agreement and providing for certain other matters.
(000) "Treatment Facilities" means any wastewater treatment and disposal
facilities acquired or constructed by LCRA or BRA to comprise a part of the System,
together with any extensions, improvements, expansions, betterments, rehabilitations or
replacements thereof.
(ppp) "Total Reserved Capacity" means the sum of the Reserved Capacities of
all Customers in a particular System Component pursuant to this Agreement as set forth
in Exhibit B.
(qqq) "Upstream Collection System" means that portion of the System
consisting of the System's interceptor line from Node K upstream, as described in the
Engineering Report.
(rrr) "Wastewater" means liquid and water-carried waste discharged from
sanitary conveniences of dwellings, business buildings, institutions and the like
including garbage which has been shredded to such degree that all particles will be
carried freely under flow conditions normally prevailing in public sewers, with no
particle greater than one-half(1/2) inch in any dimension and the liquid wastes from
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DRAFT August 28, 2000
industrial processes, and includes any infiltration water that has migrated from the
ground into the System.
(sss) "Wastewater Disposal Agreement" means the prior Wastewater Disposal
Agreement, as amended, among Austin, Round Rock and the WCID.
(ttt) "WCID" means the Brushy Creek Water Control and Improvement
District No. 1 of Williamson and Milam Counties.
(uuu) "WCID System" means the former regional wastewater transportation
and treatment system of the WCID.
(vvv) "West Plant" means the plant purchased by LCRA which was formerly
Round Rock's 3.0 MGD wastewater treatment plant and appurtenances as described in
the Engineering Report.
Section 1.02. INTERPRETATION. Terms used in this Agreement with initial letters
capitalized and not otherwise defined in this Agreement have the meanings assigned to them in
Section 1.01. Except where the context otherwise requires, words imparting the singular
number shall include the plural number and vice versa. Reference to any document means that
document as amended or supplemented from time to time. Reference to any party or
governmental regulatory agency means that entity and its successors and assigns.
ARTICLE II
DESIGN, ACQUISITION AND
CONSTRUCTION OF SYSTEM BY THE ALLIANCE
Section 2.01. ALLIANCE RESPONSIBILITIES.
(a) General. The System will be used for receiving, transporting, treating and
disposing of Wastewater for the Customers. LCRA will design, acquire, construct,
expand, extend, enlarge, improve and repair the System. BRA will operate and
maintain the System, together with any facilities owned either by one or more
Customers or by LCRA pursuant to this Article II and provide inspection during
construction by LCRA.
(b) System Acquisition and Construction. The System shall be implemented
as described in the Engineering Report. LCRA shall exercise due diligence to complete
acquisition and construction of the System as set forth in the Engineering Report and
this Agreement. The Engineering Report may be amended and updated from time to
time, with the unanimous approval of the Technical Review Committee, as provided in
6.02(1), to reflect final design and construction changes in the System and to reflect
further actions and understandings of the parties pursuant to this Agreement. A copy of
all amendments and updates to the Engineering Report will be provided promptly to the
Customers.
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DRAFT August 28, 2000
(c) Permits and Approvals. LCRA shall obtain and hold all permits and
approvals required for acquisition, construction and ownership of System. LCRA and
BRA jointly shall hold all permits and approvals for operation of the System granting to
each party the legal authority to operate the System. If, by virtue of regulatory, legal,
financial or other requirements, it is necessary or appropriate that any permit or
approval should be held jointly in order for LCRA to own facilities operated by BRA,
LCRA and BRA agree to fully cooperate with each other in efforts to obtain, hold and
comply with such permits or approvals.
(d) Payment of Project Costs. LCRA agrees that the System will be part of
the LCRA System and that LCRA will pay all Project Costs from sources utilized by
LCRA for financing the LCRA System and in a manner which is financially prudent for
both the LCRA System and the System. Such payment may be made from the proceeds
of Bonds, from an LIF Advance, or from Accumulated Coverage. Subject to the
provisions of the Bond Resolutions or the resolutions authorizing and governing the
LCRA Debt, LCRA and BRA agree that Accumulated Coverage shall inure to the
benefit of the System and be used by LCRA or BRA solely for the purpose of paying
.future Project Costs. LCRA will inform the Technical Review Committee and the
Financial Review Committee of the source(s) of funds to be used to pay Project Costs,
of the amortization and carrying costs, and the anticipated effect of same on the Annual
Project Requirement. Funds in the Repair and Replacement Reserve Funds shall be
used, when appropriate, to pay for repairs and replacements of the System Components
in order to minimize the need for budget adjustments. LCRA shall use diligent efforts
so that Project Costs incurred by LCRA and ultimately repaid by the Customers are
reasonable and justified.
(e) Construction by LORA. Except in the case of Expansions which LCRA
shall elect not to construct, all planning and construction provided to be done
under this Agreement shall be done and paid for by LCRA as a Project Cost. In
all cases where construction is to be done by LCRA, preliminary engineering
memoranda, modifications and updates to the Engineering Report, all plans and
specifications and substantive change orders therefor shall be submitted to BRA
and the Technical Review Committee for comments and suggestions sufficiently
in advance of the time when bids for the planned work are to be taken to allow
BRA and the Technical Review Committee to make a thorough review thereof
and all comments and suggestions from BRA and the Technical Review
Committee shall be given serious consideration by LCRA and its engineers.
BRA shall be the onsite inspector on the premises where construction is to be
done by LCRA and shall report its findings to LCRA as owner. Such inspector
shall have access to the work as it progresses and shall comment on and make
suggestions with respect to such work. All such comments and suggestions shall
be given serious consideration by LCRA and its engineers. The cost of such
inspector and his work shall be deemed a Project Cost.
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DRAFT August 28, 2000
(f) Construction by BRA. If LCRA should ever elect not to construct and
pay for any Expansion, BRA may proceed to construct and pay for it. In the case of
construction by BRA, LCRA and the Technical Review Committee shall have the same
rights and privileges accorded to BRA and the Technical Review Committee,
respectively, by the preceding subsection (e), except that BRA shall remain as the
onsite inspector. Further, BRA shall have the same construction duties as set forth in
subsection (h) below for LCRA. All facilities so constructed and all assets acquired by
BRA in any such Expansion shall be part of the System which shall continue to be
owned by LCRA. The Repair and Replacement Fund and any similar funds required in
connection with Expansions shall be provided by LCRA, except that any such similar
fund required in connection with construction to be done and paid for by BRA shall be
provided by BRA.
(g) BRA and LCRA Distinct Obligations. Neither BRA nor LCRA shall
ever have any liability to the other or to any Customer arising out of failure of the other
to construct or any defect in any construction done by the other. Bonds issued for
construction shall be those of the entity which is to do the construction, as above
provided, and neither BRA nor LCRA shall ever have any liability for the payment of
indebtedness evidenced by or provided in Bonds issued by the other.
(h) Construction Duties. LCRA will acquire and construct the System in
accordance with accepted good business and engineering practices and in accordance
with requirements of the Clean Water Act and the Texas Water Code, as amended, and
as said laws may be amended in the future, and any rules and regulations issued and to
be issued by appropriate agencies in the administration of said laws. LCRA will
prepare plans and specifications for the System Component(s) remaining to be
constructed in Phase I as soon as possible and proceed to take all other action necessary
to acquire or construct such System Component(s). After all such regulatory approvals
have been obtained, LCRA shall proceed, as appropriate, to advertise for bids for
construction of the remainder of the System Component(s). Upon receipt of such bids,
LCRA shall tabulate the bids and notify BRA, the Customers and the Technical Review
Committee of the bids which have been received and shall recommend approval of the
lowest and best bid for the construction of the System Component(s). LCRA shall also
notify BRA, the Customers and Technical Review Committee, based on such lowest
and best bid, of the estimated Project Costs of the System Component(s) and the
Funding Date for such Project Costs. LCRA may accept the lowest and best bid for the
construction of the System Component(s). In determining whether or not to accept any
such bid, LCRA shall consider advice and recommendations of BRA, the Customers
and the Technical Review Committee, but the decision as to its acceptance shall be
within the sole discretion of LCRA. Thereafter, LCRA will diligently construct the
System Component(s).
Section 2.02. ALLIANCE MODIFICATIONS. BRA and LCRA may jointly modify
their respective responsibilities to each other under this Agreement without approval of the
Customers to the extent that such modification does not adversely affect the Customers and the
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DRAFT August 28, 2000
Customers and Technical Review Committee are provided prior written notice of such
modifications.
Section 2.03. ACQUISITION AND CONSTRUCTION OF PHASE I OF THE
SYSTEM.
(a) Acquisition of Existing Assets. LCRA and the Customers agree to
proceed as expeditiously as possible to consummate any remaining transactions contem-
plated in the Alliance Acquisition Contracts.
(b) Construction of Phase I of the System. Construction of Phase I of the
System by LCRA is now substantially complete and it is operational.
(c) Notwithstanding anything in this Agreement to the contrary, the parties
agree that until the time that all of Phase II of the System is completed, Cedar Park
shall be entitled to a minimum of .5 MGD (on a thirty day average) of Reserved
Capacity in the Onion Branch Lift Station (obtained from Austin as part of the Regional
System Assets) and related Downstream Collection System Components of the System.
If, for whatever reason, .5 MGD of capacity is not available for Cedar Park's use in the
Onion Branch Lift Station and related facilities, then LCRA, with the advice of the
Technical Review Committee, shall construct or acquire alternative System
Components or services (either interim or permanent) to provide adequate and timely
service to Cedar Park in the amount of at least .5 MGD as provided herein.
Section 2.04. CONSTRUCTION OF PHASE II . When appropriate to provide for
continued service to the Customers, LCRA shall proceed diligently with design and
construction of Phase II of the System. Austin has requested that LCRA construct the
Downstream Collection System portion of Phase II of the System with Reserved Capacity for
anticipated future wastewater flows from a portion of Austin's Lake Creek watershed. The
Customers' Reserved Capacities, therefore, are as set forth in Exhibit B. LCRA has
commenced preliminary design of Phase II of the System to provide continuous and adequate
service to the Customers from the System. LCRA shall have commenced construction of all or
any necessary portions of Phase II of the System to provide continuous and adequate service to
the Customers from the System at the earlier of(i) such time as any Customer's flow over any
three (3) consecutive Months at the "Onion Branch Lift Station" shall average more than fifty
(50) percent of the Customer's Reserved Capacity in the "Onion Branch Lift Station" or (ii)
Cedar Park's discharges from the Cedar Park Treatment Plant for any three (3) consecutive
Months are at least ninety (90) percent of the permitted capacity of the Cedar Park Treatment
Plant. LCRA shall have completed construction of the Upstream Collection System portion of
Phase II of the System within twelve (12) Months after commencement of construction of same
and the Downstream Collection System portion of Phase II of the System within twenty-four
(24) Months after commencement of construction of same. If LCRA fails to complete Phase II
within the required time as provided in this section, (i) LCRA, with the advice and approval of
the Technical Review Committee, shall construct or acquire alternative System Components or
services (either interim or permanent) to provide adequate and timely service to the Customers,
or (ii) the Customer whose flows have necessitated the commencement of construction of
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DRAFT August 28, 2000
Phase II of the System will have the right (but not the obligation) to construct Phase II of the
System using any funds available to it. If it elects to do so, it shall be entitled to retain
ownership of any portion of Phase II which it constructs entirely and will have no obligation to
sell, transfer or assign any interest in any portion of Phase H of the System it owns to LCRA.
In such event, such Customer will be entitled to utilize, on a non-exclusive basis, any
easements that have been obtained by LCRA or BRA for Phase 1I of the System without any
charge. The parties shall cooperate to document any such non-exclusive rights, if necessary.
Section 2.05. EXPANSIONS BEYOND PHASE 11.
(a) Requests for Expansions. Any Customer may request that an Expansion of
the System be made by LCRA. When the actual flow of Wastewater from a Customer
reaches seventy-five percent (75%) of the Reserved Capacity of that Customer in a
System Component, that Customer shall be deemed to have requested LCRA to
commence planning and design for an appropriate Expansion, unless the Customer's
anticipated growth does not warrant making the Expansion. When the actual flow of
Wastewater from a Customer reaches ninety percent (90%) of the Reserved Capacity of
that Customer in a System Component, that Customer shall be deemed to have
requested commencement of construction of an appropriate Expansion by LCRA,
unless the Customer's anticipated growth does not warrant making the Expansion.
Except as provided in Section 7.13, during the term of this Agreement, the Customers
agree to request Expansions for all of their Wastewater service needs in their respective
Service Areas. Any request shall be filed with LCRA and BRA in writing, with copies
to the Technical Review Committee and each other Customer.
(b) Construction by LCRA, BRA. Should any Customer request in writing, or
be deemed to have requested, an Expansion, LCRA and BRA shall notify such
Customer and the other Customers and the Technical Review Committee in writing
within forty-five (45) days as to whether either is willing to construct the Expansion. If
LCRA or BRA constructs the Expansion, upon completion of construction the
Expansion will be part of the System, the Reserved Capacity of the Expansion will be
reserved for the Customer and the Annual Project Requirement attributable to the
Expansion shall be charged to the Customer in its Capital Charge. In the event more
than one Customer participates in an Expansion, the Reserved Capacity and Annual
Project Requirement shall be divided pro rata between the participating Customers.
(c) Construction by Customer(s). If neither LCRA nor BRA is willing to
construct the Expansion, the requesting Customer may construct the Expansion. LCRA
and BRA will fully cooperate with the constructing Customer(s) in efforts to obtain
necessary governmental and regulatory approvals and permits and will use their best
efforts to provide assistance in this regard, which shall be paid for solely by the
requesting Customer(s), shall be owned by it, and shall not be part of the System.
(d) General. In any event, the preparation of plans and specifications, and the
receipt and acceptance of bids for construction shall be subject to the same requirements
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DRAFT August 28, 2000
contained in this Article II in regard to advertisement for and award of bids for
construction and for notice thereof to parties. Such plans and specifications shall be
subject to approval of LCRA and BRA, which shall not be unreasonably withheld or
delayed. Such construction shall be under the supervision of LCRA and onsite
inspection shall be provided by BRA.
(e) Approval or Review by Technical Review Committee. Expansions of
Treatment Facilities or the parallel line to the Contract 6A Wastewater Interceptor Line
by LCRA must be reviewed by the Technical Review Committee prior to construction
but need not receive approval of the Technical Review Committee. Expansions of
other System Components by LCRA must receive the unanimous approval of the
Technical Review Committee prior to construction by LCRA.
Section 2.06. CONSTRUCTION OF REQUIRED IMPROVEMENTS. At such time
as LCRA or BRA shall determine that construction of Required Improvements is necessary in
order for the System to be able to treat and dispose of Wastewater expected to be delivered to
it without violation of applicable permits or in order to avoid violation(s) of permits or other
regulatory requirements related to the System, the party making the determination shall give
forty-five (45) days prior written notice and opportunity to comment to the other and each
Customer and to the Technical Review Committee of its intention to proceed with construction
of such Required Improvements. Thereafter, the Required Improvements will be constructed
by LCRA as otherwise provided for Expansions and in accordance with the requirements of
Section 2.01(h), to the extent applicable.
Section 2.07. LCRA RIGHT TO RESERVED CAPACITY . LCRA shall be
considered a "Customer" for all purposes of this Agreement for that part of the Reserved
Capacity referenced in Section 4.01 and shown in Exhibit B as being reserved for LCRA.
LCRA may use its Reserved Capacity to serve the LCRA Service Area. In addition, LCRA
may add Reserved Capacity at the East Plant, at its sole expense, to serve area in Hutto's city
limits or extraterritorial jurisdiction; provided, however, prior to adding Reserved Capacity at
the East Plant for Hutto, LCRA will first give the Customers sixty days notice thereof and
lease or otherwise acquire any Reserved Capacity in the East Plant of a Customer willing to
sell or lease its Reserved Capacity at that Customer's cost for Hutto in order to avoid or delay
having to construct additional Reserved Capacity at the East Plant for Hutto. The parties
recognize and contemplate, however, Leander's joining the System in the future and acquiring
the Surplus Reserved Capacity for Leander to serve the Leander Service Area at that time. In
that regard, the parties agree to reasonably cooperate to try to obtain Leander's agreement to
enter into an agreement with the parties to receive service from the System as provided in
Section 7.09(c) hereof.
Section 2.08. DEPOSITS ON FUNDING DATES . After LCRA or BRA, as
appropriate, obtains all funds related to Funding on the Funding Date for Phase I, Phase II or
any Expansion of the System, LCRA or BRA, as appropriate, shall deposit all of said funds
into the construction fund or reserve funds provided in any applicable Bond Resolution and the
one-half of one percent (1/2%) of Project Costs necessary to fund the Repair and Replacement
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DRAFT August 28, 2000
Reserve Fund. Upon the first to occur of the Initial Fundings, BRA shall deposit the agreed
amount of money into the Operation and Maintenance Reserve Fund which shall be maintained
by it as a part of the enterprise fund to be established on its books and records and identified in
its financial statements, in connection with the operation of the System.
ARTICLE III
OPERATION OF SYSTEM BY BRA
Section 3.01. OPERATION .
(a) General. The System, together with any facilities owned either by one or more
Customers or LCRA pursuant to Article II of this Agreement, shall be operated by BRA;
provided that LCRA will provide certain management, bookkeeping, billing and similar
services for the System. As the transactions in which LCRA is acquiring the assets of the
System are closed, possession of the assets being acquired by LCRA for use in operation of the
System shall be made available to BRA. Possession of facilities to be constructed by LCRA in
connection with the remainder of the System shall be made available to BRA as same become
useful in operation of the System. BRA will operate the System, together with any facilities
owned either by one or more Customers or LCRA pursuant to Article II of this Agreement, in
accordance with accepted good business and engineering practices and in accordance with
requirements of the Clean Water Act and the Texas Water Code, as amended, and as said laws
may be amended in the future, and any rules and regulations issued and to be issued by
appropriate agencies in the administration of said laws. BRA's obligation for operation of
facilities delivered to its possession under the provisions of this Agreement shall begin after a
reasonable transition period to allow orderly transfer of operational responsibility from
previous operators, in the case of existing facilities, and orderly start up in the case of newly
constructed facilities.
(b) Initiation of Service to Customers. LCRA and BRA have commenced operation
of the System and service to Round Rock and Cedar Park already. The obligation of BRA to
provide service to Austin and LCRA is conditioned upon consummation of the Austin/Alliance
Acquisition Contract in accordance with the provisions thereof.
Section 3.02. COMPETITIVE BIDS. Costs to Customers for Operation and
Maintenance Expenses shall be of primary importance to BRA. BRA shall use diligent efforts
so that Operation and Maintenance Expenses incurred by BRA and ultimately repaid by the
Customers are reasonable and justified. If specifically requested to do so by the Technical
Review Committee, BRA shall seek competitive bids or proposals from others to provide day-
to-day operation of the System or any Component thereof for specific periods not to exceed
five (5) years in length at the following times:
(a) (i) If the System or such component is being operated for the owner
under contract with a private operator when BRA assumes management under this
Agreement, prior to termination of the private operator; or
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DRAFT August 28, 2000
(ii) If the System or such component is not being operated for the owner by
a private operator under contract at the time when BRA assumes management, prior to
assumption of operation by BRA; and
(b) At the end of every period of operation by a private operator or at the
end of five (5) years of operation by BRA.
Before competitive bids or proposals are taken, BRA shall make a written estimate of
the cost of the process of taking bids or proposals and shall furnish such written estimate to the
Technical Review Committee. BRA will proceed with the steps necessary to take competitive
bids or proposals only after written approval of such estimate from the Technical Review
Committee. Provided that such written approval is obtained, the cost of the process of taking
such competitive bids or proposals shall be and become an Operation and Maintenance
Expense. When competitive bids or proposals are taken pursuant to this Section 3.02, BRA
may submit its own proposal for the day-to-day operation of the System or such component
thereof with its own employees. Promptly after such competitive bids or proposals are
received, same shall be submitted to the Technical Review Committee for evaluation. The
Technical Review Committee shall provide to the Board of Directors of BRA its advice as to
which of the bids or proposals will result in the most efficient and cost effective service to the
Customers. After receiving and considering such advice, the Board of Directors shall
determine which of such bids or proposals shall be accepted. The determination shall be based
on the Board's reasonable judgment as to which will result in the most efficient and cost
effective service to the Customers. If the bid to be accepted is from a bidder other than BRA
itself, BRA shall contract with the bidder on the basis of the bid for day-to-day operation of the
System or such component for a period established by BRA not to exceed five years. If it is
that of BRA itself, BRA shall conduct day-to-day operation of the System or such component
on the basis of its own bid until the next occasion on which competitive bids or proposals are
taken under this Section 3.02.
Section 3.03. PAYMENTS TO BRA FOR OPERATION OF SYSTEM. Pursuant to
the understanding between BRA and LCRA, acting in furtherance of the purposes of the
Alliance, BRA's portion of the Annual Operation and Maintenance Expense Requirement of
the System, including the Operation & Maintenance Management Fee shall be remitted to BRA
by LCRA within a time ending at the later of one working day after the due date of Flow
Charges or one day after receipt of the Flow Charges by LCRA.
Section 3.04. OPERATION & MAINTENANCE MANAGEMENT FEE. The
Operation & Maintenance Management Fee shall constitute a regional fee which BRA expects
to utilize in furtherance of its efforts to continue to provide additional services to residents of
the Brazos River Basin; provided that LCRA may retain for its use the portion of the Operation
& Maintenance Management Fee related to Operation and Maintenance Expenses paid by
LCRA.
Section 3.05. COOPERATION DURING MAINTENANCE OR EMERGENCY.
Customers will cooperate with BRA during periods of an emergency or required maintenance
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DRAFT August 28, 2000
of the System and, if necessary, will discontinue, cycle, test, inspect, or otherwise operate and
maintain their wastewater facilities at their expense in a manner determined by BRA to be
necessary to the safe and efficient completion of repairs or the replacement of the System's
facilities, the restoration of service, and the protection of the public health, safety, and welfare.
BRA will attempt to provide the Customers reasonable notice under the circumstance of the
actions to be undertaken by BRA and cooperate to try to minimize inconvenience to the
Customers.
ARTICLE IV
RESERVED CAPACITY AND DISCHARGE OF WASTEWATER
Section 4.01. DISCHARGE QUANTITIES.
(a) Initial Reserved Capacities. (i) Except as provided below in subsection
(a)(ii), each Customer, respectively, shall have the exclusive right to discharge
Wastewater into the System to the extent, and by utilizing, its Reserved Capacity in
each System Component as described in Exhibit B. No Reserved Capacity may be
allocated to or used by anyone other than the Customer on whose behalf that capacity
has been reserved, unless the affected Customer specifically agrees in writing to the
allocation or use.
(ii) Notwithstanding the above two sentences, it is specifically
recognized by the parties hereto that the portion of the Regional System Assets
contemplated to be acquired by LCRA at the Initial Fundings may be
insufficient to permit LCRA, after the Initial Fundings, to enable all of the
customers to have access to all of their respective Reserved Capacities in that
portion of the Contract 6A Wastewater Interceptor Line. The parties agree that
any Customer may discharge its Wastewater through the Contract 6A
Wastewater Interceptor Line in amounts up to its respective Reserved Capacity
in said line and so long as the total Reserved Capacity of the Contract 6A
Wastewater Interceptor Line of all Customers is not exceeded.
(b) Transfer of Reserved Capacity. Any Customer may transfer any portion
of its Reserved Capacity in one or more System Components to another Customer,
BRA, LCRA, or another entity in exchange for such consideration as the parties to
such transfer shall deem appropriate. The parties making any such transfer shall
provide written notice to LCRA, BRA and the other Customers, signed by the parties
accomplishing the transfer, specifying the amount of transferred Reserved Capacity and
the affected System Component(s), and providing that the parties otherwise ratify and
confirm their pre-existing obligations under this Agreement. No such transfer shall be
effective until and unless such notice is provided. A transfer of Reserved Capacity
shall not change any payment or other obligations of the Customers, BRA or LCRA,
unless agreed to by all parties hereto.
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(c) Documentation of Transferred Reserved Capacity In System Compo-
nents. In the event that Reserved Capacity is transferred LCRA shall cause a written
addition to be made to Exhibit B describing such transfer and setting forth the revised
Reserved Capacity of each Customer in such new System Component(s).
(d) Notice of Use of Reserved Capacity. At least once each year, BRA shall
notify the Technical Review Committee of the level of usage by each Customer of its
Reserved Capacity in each System Component if BRA has such information. BRA,
LCRA or any Customer may, but none shall have any duty to, enforce or restrict the
discharge of Wastewater by any Customer to its Reserved Capacity.
Section 4.02. POINT(S) OF ENTRY. The parties recognize that at this time they are
unable to designate specific Points of Entry for each Customer. Each Customer shall discharge
its Wastewater at a Point or Points of Entry to be designated for each Customer in an
amendment to the Engineering Report to be mutually agreed upon by BRA, LCRA and any
Customer utilizing such Point of Entry as design of the System progresses. It shall be the sole
responsibility of each Customer to convey its Wastewater to the Point or Points of Entry.
Section 4.03. RATE AND QUANTITY AT POINT(S) OF ENTRY. The rate and
quantity of Wastewater discharged into the System at the Point or Points of Entry by each
Customer shall be metered unless otherwise agreed by all parties to this Agreement. BRA,
LCRA and the Customers will cooperate in good faith to design the Points of Entry to be at
appropriate sizes and in appropriate locations to receive the Customers' Reserved Capacities.
Each Point of Entry shall be designed to accept discharges at a maximum rate to be agreed
upon by BRA, LCRA and the Customers as design of the System progresses and stated in an
amendment to the Engineering Report, and no Customer shall ever make discharges into the
System at such Point of Entry at a rate exceeding such agreed design rate.
Section 4.04. DISCHARGE QUALITY. The Customers shall have the right to
discharge Wastewater into the System meeting the requirements of quality as set forth in this
Article and not containing wastes identified in the List of Inadmissible Wastes attached as
Exhibit C of this Agreement.
(a) General Requirements. In order to permit BRA to properly treat and
dispose of the Customers' Wastewater; to protect the public health; and to permit
cooperation with other agencies which have requirements for the protection of the
physical, chemical, and bacteriological quality of public water and water courses, each
Customer agrees to prohibit discharge into the System at unauthorized points of entry
or at rates of flow or of quality not herein specified as admissible.
(b) Admissible Wastes. Discharges into the System shall consist only of
waste which the System is capable of handling:
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(1) so that the effluent and sludge from the System meets the current
legal standards of the EPA, the Commission or any governmental body having
legal authority to set standards for such effluents;
(2) without causing damage to the System which would result in
increased maintenance costs;
(3) without causing excessive treatment costs; and
(4) which meets the requirements of the EPA Pretreatment Regula-
tions, 40 CFR Part 403, the Customer's applicable ordinances and the EPA-
approved pretreatment program for the System.
(c) Inadmissible Wastes. A List of Inadmissible Wastes promulgated by
BRA is attached hereto as Exhibit C. EPA and the Commission periodically modify
standards on prohibited discharges; therefore, revisions to, additions to or deletions
from the items listed in this Section will become necessary to comply with these latest
standards. It is the intention of this Agreement that prohibited discharge requirements
be reviewed periodically by BRA and that Exhibit C be revised by BRA in accordance
with the latest standards of EPA, the Commission or federal or state agency having
regulatory authority over the discharges made to the System. Exhibit C may also be
revised on the basis of changes in the treatment process or the general character of
Wastewater received at the treatment works or indicated in the monitoring data
collected pursuant to the System pretreatment program. Any required revisions shall be
made by BRA only after notice and opportunity to comment has been provided to
LCRA, the Customers and the Technical Review Committee and shall become effective
upon written notice thereof being given to LCRA, the Customers and the Technical
Review Committee. Each Customer shall be responsible for integrating such changes
into its local sewer use ordinances and notifying all affected users of the change.
Section 4.05. REGULATIONS . Discharges to the System shall be governed by the
requirements set forth in the EPA pretreatment regulations, Commission pretreatment
regulations, the List of Inadmissible Wastes, the System pretreatment program and the
Customers' respective sewer use ordinances.
Periodically, BRA will promulgate a new List of Inadmissible Wastes, Exhibit C, of
this Agreement, in response to changes in federal or state requirements, changes in the
treatment process, or the general character of the wastewater received at the treatment works,
as described in Section 4.04(c) above. The List of Inadmissible Wastes will contain pollutant
allocations to each Customer. Each Customer is responsible for developing specific local
limits from the pollutant allocations and enforcing these limits through the Customers'
ordinances and sewer use permits.
Section 4.06. INDUSTRIAL WASTES . Each Customer agrees to implement and
enforce the System pretreatment program for all areas receiving sanitary sewer service from
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the Customer. Each Customer also covenants that it will have in effect and will enforce a
sewer use ordinance in accordance with EPA and Commission regulations or regulations of
other governmental agencies having lawful jurisdiction to set standards for waste discharges.
Furthermore, each Customer shall, at any reasonable time upon request by BRA, produce
pretreatment program records for review.
Each Customer also agrees that no new Significant Industrial User shall be allowed to
connect to the Customer's sewer system without prior notification being given by the Customer
to BRA of the intent to connect. The Customer will provide BRA with a copy of the draft
sewer use permit and permit application at the time such notification is given. All Significant
Industrial Users that are customers of a Customer and located outside the Customer's city
limits will also be required to obtain a sewer use permit.
BRA will be responsible for treatment plant monitoring and reporting as required by the
EPA and the Commission. All additional responsibilities not mentioned in this Agreement are
outlined in the EPA-approved System pretreatment program which may be amended from time
to time.
Section 4.07. SYSTEM LIMITATIONS. LCRA and BRA shall be obligated to
receive into the System at the Points of Entry only Wastewater meeting the quantity limits and
quality requirements of the Article IV of this Agreement; provided, however, (i) the total
quantity of Wastewater discharged into the System shall never exceed the amount which the
System is capable of receiving, treating, and disposing, and (ii) no discharge will be made into
the System which would cause it to be overloaded or be in violation of its permits from the
State of Texas and/or the United States of America.
Section 4.08. RESPONSIBILITY FOR TREATMENT AND DISPOSAL OF WASTE-
WATER. Responsibility for the reception, transportation, delivery and disposal of all
Wastewater discharged hereunder shall remain with each Customer to the Points of Entry, and
upon passing through the Points of Entry, responsibility shall, except as provided below, pass
to BRA, which shall be responsible for the proper reception, transportation, treatment and
disposal of all such Wastewater, meeting the applicable state and federal quality requirements
received by it at the Points of Entry. Responsibility for proper reception, transportation,
treatment and disposal of Wastewater received by BRA at the Points of Entry which does not
meet the applicable quality standards shall remain with the Customer delivering same and any
expenses incurred by BRA in receiving, transporting, treating and disposing of such non-
compliant Wastewater shall be charged directly to the Customer by BRA.
Section 4.09. METERING. The provisions of Section 4.09 shall apply unless
otherwise agreed to by LCRA and BRA and approved by the unanimous vote of the Technical
Review Committee, in which event, a substitute for this Section 4.09 shall be provided to the
Customers by LCRA and BRA. LCRA will furnish and install as a Project Cost, and BRA
will operate and maintain at its expense, as an Operation and Maintenance Expense, at each
Point of Entry the necessary equipment and devices of standard type for measuring properly all
Wastewater to be discharged under this Agreement as such devices are specified in the
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DRAFT August 28, 2000
Engineering Report. Such meters and other equipment shall remain the property of LCRA and
constitute a portion of the System. The Customers shall have access to such metering
equipment at all reasonable times for inspection and examination. The reading, calibration and
adjustment of meters shall be done by employees or agents of BRA after two (2) working days
notice to the Customers and in the presence of a representative of any Customer if requested by
the Customer. All readings of meters will be entered upon proper books of record or in
computer records maintained by BRA and a copy or printout of said readings supplied to the
Customers and LCRA. Upon written request any Customer may have access to said record
books or computer printouts during reasonable business hours.
BRA shall calibrate the meters at least once in each year of operation. BRA shall
provide reasonable notice of at least two (2) days to the Customers of a calibration and provide
the Customers an opportunity to observe the calibration. Not more than three (3) times in each
year of operation, BRA shall calibrate the meters, if requested in writing by the affected
Customer, in the presence of a representative of the requesting party. Such parties shall jointly
observe any adjustments which are made to the meters in case any adjustment is found to be
necessary. If, for any reason, any meters are out of service or out of repair, or if, upon any
test, the percentage of inaccuracy of any meter is found to be in excess of five percent (5%),
registration thereof shall be corrected for a period of time extending back to the time when
such inaccuracy began, if such time is ascertainable, and if not ascertainable, then for a period
extending back one-half(1/2) of the time elapsed since the date of the last calibration, but in no
event further back than a period of six (6) Months. Any Customer may, at its option and its
own expense, install and operate a check meter to check each meter operated by BRA, but the
measurement for the purpose of this Agreement shall be solely by LCRA's meters, except
during any period when a check meter may be used under specific written consent by BRA.
All such check meters shall be of standard make and shall be subject at all reasonable times to
inspection and examination by any employee or agent of BRA, but the reading, calibration and
adjustment thereof shall be made only by the Customer installing same.
Section 4.10. UNIT OF MEASUREMENT. The unit of measurement for Wastewater
delivered hereunder shall be one thousand (1,000) gallons, U.S. Standard Liquid Measure.
ARTICLE V
SYSTEM BUDGETS AND CHARGES
Section 5.01. ESTABLISHING BUDGETS AND CHARGES.
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(a) Initial Proposals. As soon as reasonably possible during the first partial
Fiscal Year and not less than one hundred twenty (120) days before commencement of
each Fiscal Year thereafter while this Agreement is in effect, BRA shall furnish to
LCRA a detailed estimate of expenses or costs projected to be incurred by it in the next
ensuing Fiscal Year which it deems properly includable in the Annual Project
Requirement for such next following Fiscal Year and LCRA shall furnish to BRA a
detailed estimate of expenses or costs projected to be incurred by it in such next ensuing
Fiscal Year which it deems properly includable in the Annual Operation and
Maintenance Expense Requirement for such next following Fiscal Year. Copies will be
provided to the Technical Review Committee and Financial Review Committee. As
soon as reasonably possible during the first partial Fiscal Year and not less than ninety
(90) days before commencement of each Fiscal Year thereafter while this Agreement is
in effect, LCRA and BRA, respectively, shall cause to be prepared and filed with each
other, the Technical Review Committee, the Financial Review Committee and each
Customer the tentative budgets for Annual Project Requirement and Annual Operation
and Maintenance Expense Requirement and corresponding proposed Capital Charges
and Flow Charges for the System for the next ensuing Fiscal Year.
(b) Approval of Budget if No Protest. If no protest or request for a hearing on
such tentative budgets and proposed Capital Charges and Flow Charges is presented
within thirty (30) days after such filing of the tentative budgets and proposed Capital
Charges and Flow Charges, the tentative budgets and proposed Capital Charges and
Flow Charges for the System, when adopted by LCRA's and BRA's Boards of
Directors, respectively, shall be deemed to be in effect for all purposes for the next
ensuing Fiscal Year.
(c) Procedures for Protested Budget. If a protest or request for a hearing is
duly filed, it shall be the duty of BRA and/or LCRA to fix a date and time for a hearing
on the tentative budget or budgets and proposed Capital Charges and/or Flow Charges
to be conducted in a manner to enable interested persons to communicate such
information as they shall desire to present and such views as they shall desire to express
to the Board of Directors of the entity at whose budget the protest or request is
directed. The party filing such protest, the Technical Review Committee, the Financial
Review Committee and all Customers shall be advised in writing of the time and place
of such hearing. After consideration of the information and comments produced at such
hearing, the Boards of Directors of BRA and/or LCRA may adopt the budget or
budgets and proposed Capital Charges and/or Flow Charges or make such amendments
thereof as may seem proper. The budget or budgets and proposed Capital Charges
and/or Flow Charges thus approved by the Boards of Directors of BRA and LCRA
shall be deemed to be in effect for the next ensuing Fiscal Year.
(d) General. Subject to the provisions of the resolutions authorizing LCRA
Debt, all interest income earned by the investment of any funds created in the Bond
Resolution or any other funds related to the System (with exception of the Operation
and Maintenance Reserve Fund funded by BRA) shall inure to the benefit of the System
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DRAFT August 28, 2000
and be taken into account in determining the budgets. BRA and LCRA shall consult
with each other regarding the use of the Repair and Replacement Fund and LCRA shall
use the moneys from the Repair and Replacement Fund to pay costs of repairs or
replacements of the System which are such that they should be spread over a number of
years rather than included as a part of the Operation and Maintenance Expense in a
single year. Any such duties and responsibilities performed in response to this
Agreement not specifically described herein as the role of LCRA or BRA shall be
decided by the two parties as they occur and the related costs thereof included in
Project Costs or Operation and Maintenance Expense, as applicable.
(e) BRA and LCRA Relations. To the extent applicable law delegates to LCRA
or BRA (the "mandated entity") the responsibility and authority to approve the budget
or budgets or the Capital Charge or Flow Charge, but the other of LCRA or BRA (the
"other entity") actually establishes and submits to the other said proposed budget or
charge, then failure to protest or request a hearing within the timeframes provided
above shall be deemed to be approval by the mandated entity of the proposed budget or
charge adopted by the other entity. Otherwise, to the extent that the mandated entity
reasonably determines that the budget or charge finally adopted by the other entity
requires modifications, then ultimate authority to make modifications to said budget or
charge shall lie with the mandated entity which shall promptly make any such
modifications to the budget or charge as reasonably required and notify the other entity
and all Customers of same, which shall be effective upon receipt. Copies of the
approved budgets and a schedule of a projected Capital Charges and Flow Charges shall
be provided to the Customers promptly. Should LCRA be the mandated entity with
respect to any item of Operation and Maintenance Expense budgeted by BRA to be paid
by BRA and should it effectively exercise its rights as the mandated entity to make any
modification in the amount of such item budgeted by BRA, BRA may, upon ninety (90)
days written notice to LCRA, Customers, the Technical Review Committee and the
Financial Review Committee, surrender and transfer to LCRA its rights and obligations
with respect to Operation and Maintenance of System pursuant to this Agreement.
Upon the delivery of such notice, LCRA shall, at the expiration of such ninety (90) day
period, succeed to the rights and obligations provided herein for operation and
maintenance of the System by BRA and BRA shall have no further rights or obligations
hereunder, except that its rights with respect to collection of Capital Charges resulting
from Project Costs theretofore incurred by BRA shall not be affected and LCRA shall
pay it for all Operation and Maintenance Expense incurred by it up to and including the
time of termination of its rights and obligations provided herein, together with the costs
incurred by it in effecting termination, which termination costs shall constitute
Operation and Maintenance Expense.
(f) Just and Reasonable Charges. The parties agree that the Annual Project
Requirement, Annual Operation and Maintenance Expense Requirement, Capital
Charges and Flow Charges shall be just and reasonable. The parties further agree that
the use of the Year 2037 Contractual Flows to allocate the Annual Project Requirement
for the Upstream Collection System and Downstream Collection System is a just and
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reasonable method of cost allocation. In stipulating that this method for allocating the
Annual Project Requirement for the Upstream Collection System and Downstream
Collection System is a just and reasonable method of cost allocation; the parties are not
stipulating in advance that any or all later applications of this method by LCRA or BRA
in making particular allocations of the Annual Project Requirement for the Upstream
Collection System and Downstream Collection System are correct,just and reasonable
or otherwise in accordance with the provisions of this Agreement.
Section 5.02. CUSTOMER DISPUTES. The Customers retain such rights as they
may possess under applicable law to seek review of the reasonableness of LCRA's or BRA's
charges under this Agreement by the Commission. If a Customer at any time disputes the
amount to be paid by it under this Agreement, such Customer shall nevertheless promptly
make the payment or payments determined by BRA and LCRA. If it is subsequently
determined by agreement, administrative agency or court decision that such disputed payments
made by the Customer should be changed, BRA and LCRA shall promptly revise and reallo-
cate the charges among all Customers then being served by BRA and LCRA in such manner
that the Customers will pay amounts which cumulatively permit BRA and LCRA to receive the
entire amount of the Annual Project Requirement and the Annual Operation and Maintenance
Expense Requirement permitted hereunder as the same may be modified by final effective
order of an administrative agency or court of appropriate jurisdiction; provided, however,
nothing herein shall ever be construed to prevent LCRA or BRA from recovering from the
Customers the amount required to meet the Annual Project Requirement hereunder. If the
Capital Charges or Flow Charges are redetermined as herein provided, BRA and LCRA will
promptly furnish each Customer with an updated schedule of monthly payments reflecting such
redetermination.
Section 5.03. CHANGES FROM NEW CUSTOMERS, EMERGENCIES AND
LEGAL ACTION. LCRA and BRA may adopt amendments to the budgets or the Capital
Charges or Flow Charges by following a process similar to that provided above for the
establishment of such matters initially if, during a Fiscal Year:
(i) new customers are added to the System by agreement of the
Customers, BRA and LCRA;
(ii) unanticipated emergency Project Costs or Operation and Mainte-
nance Expenses are experienced; or
(iii) an adjustment is necessitated by regulatory requirement.
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Section 5.04. CAPITAL CHARGES; UNCONDITIONAL PAYMENT
OBLIGATION.
(a) General. On or before the first day of each Month, every Customer
shall pay its Capital Charge. During the term of this Agreement, the Capital Charge
for each Customer to be paid each Month shall be determined by allocating among the
Customers one-twelfth (1/12) of the Annual Project Requirement in the manner set
forth in subsection (b) below, which the Customers, LCRA and BRA believe is a
reasonable basis upon which to allocate said costs. Notwithstanding anything in this
Agreement to the contrary, in all circumstances, the sum of the Capital Charges paid by
all Customers shall equal one hundred percent (100%) of the Annual Project
Requirement.
(b) Allocation of Annual Project Requirement. The Annual Project
Requirement will be allocated among Customers in two steps:
(i) The Annual Project Requirement will be functionalized between
Treatment Facilities, Downstream Collection System and Upstream Collection
System in proportion to LCRA's and BRA's cumulative Project Costs in each.
LCRA's continuing property records will be used for cost functionalization.
Project Costs not directly attributable to one of the three categories will be
functionalized among the three categories in proportion to the Project Costs
directly functionalized to those categories.
(ii) (A) The Annual Project Requirement - Treatment Facilities
will be allocated among the Customers in proportion to the Customers'
Reserved Capacities (as shown in Exhibit B). The resulting proportions of the
Annual Project Requirement to be allocated to each Customer for each year are
also shown on that Exhibit B. The resulting percentages are also shown on that
Exhibit.
(B) The Annual Project Requirement - Downstream Collection
System will be allocated among the Customers in proportion to their Contractual
Flows in Year 2037 as shown on Exhibit B. The resulting percentages are also
shown on that Exhibit.
(C) The Annual Project Requirement - Upstream Collection
System will be allocated between the Customers in proportion to the Customers'
Contractual Flows into only the Upstream Collection System in year 2037 as
shown on Exhibit B. The resulting percentages are also shown on that Exhibit.
(c) Recognizing that LCRA or BRA will pledge the revenues of the System,
together with, in the case of LCRA, other revenues of the LCRA System, to pay,
secure and finance the issuance of Bonds, it is hereby agreed that upon the effective
date of this Agreement, each Customer shall be unconditionally obligated to pay the
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DRAFT August 28, 2000
Capital Charge and Flow Charge regardless of whether or not such Customer actually
discharges Wastewater hereunder, whether due to Force Majeure or otherwise. Each
Customer agrees that its obligation to pay the Capital Charge and Flow Charge shall be
absolute and unconditional, irrespective of any rights of set-off, diminution, abatement,
recoupment or counterclaim the Customer might otherwise have against BRA or LCRA
or any other person, and the Customer covenants not to seek and hereby waives, to the
extent permitted by applicable law, the benefits of any rights which it may have at any
time to any stay or extension of time for performance or to terminate, cancel or limit its
liability to pay the Capital Charge and Flow Charge. Each Customer hereby agrees
that the holders from time to time of the Bonds shall be entitled to rely upon the
agreement of the Customer to pay the Capital Charge and Flow Charge regardless of
the validity of the remainder of this Agreement or any other agreement. Each
Customer agrees, if requested to do so by LCRA or BRA, as appropriate, to execute a
separate agreement with LORA, the owners of the Bonds or a trustee acting on behalf
of the owners of the Bonds evidencing its unconditional obligation, to pay the Capital
Charge and Flow Charge to enable LCRA or BRA, as appropriate, to pay debt service
on the Bonds issued by LCRA or BRA for the System. Such additional agreements
shall in all respects be consistent with the requirements of this Agreement regarding the
payment of the Capital Charge and Flow Charge by the Customer.
(d) The preceding paragraph shall not be construed to release BRA or LCRA
from the performance of any of their undertakings contained in this Agreement or,
except to the extent provided in this section, prevent or restrict any Customer from
asserting any rights which it may have against BRA, LCRA or any other person under
this Agreement or under any provision of law or prevent or restrict such Customer, at
its own cost and expense, from prosecuting or defending any action or proceeding
against or by third parties or taking any other action to secure or protect its rights under
this Agreement.
(e) The parties recognize the unique status of development of Cedar Park's
utility system which is not as developed as that of Round Rock. Because of this, all
parties have agreed to cooperate to attempt to structure repayment of the Project Costs
in the first five years of this Agreement so as to minimize the potential for unplanned
retail rate adjustments by Cedar Park. Accordingly, LCRA agrees to use diligent and
prudent efforts to amortize the Project Costs for Phases I and 11 of the System in a
manner and over a period that results in total costs of regional service to Cedar Park in
the next two full years of the project in amounts no more than:
FY 2001 $850,000
FY 2002 $1,100,000
(f) Each Customer recognizes that the Bonds issued by LCRA or BRA, as
appropriate, for the System will be supported by the pledge, directly or indirectly, of
the payment of the Capital Charges and Flow Charge by the Customers under the terms
of the Agreement and, therefore, that each Customer is an "obligated person" as that
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term is applied within the meaning of Securities Exchange Commission Rule 15c2-12.
In order to enable LCRA or BRA, as appropriate, to issue the Bonds and comply with
applicable securities laws, each Customer agrees to execute, and by signing this
Agreement approves and authorizes the execution of, if requested by BRA and LCRA,
a continuing disclosure agreement in form and substance substantially as provided in
Exhibit D hereto.
Section 5.05. FLOW CHARGES . Each Customer shall be required to pay each
Month a Flow Charge for use in meeting that Month's portion of the Annual Operation and
Maintenance Expense Requirement. Subject to, and in accordance with, the provisions of
Sections 5.01 and 5.02, (i) before the Initial Funding Date and (ii) before the first day of each
Fiscal Year thereafter, BRA shall estimate and Budget the Annual Operation and Maintenance
Expense Requirement for the period between Initial Funding Date and.August 31, 2000, in the
case of that period, and for the following Fiscal Year in the case of each subsequent Fiscal
Year. In the case of each annual Operation and Maintenance Expense budget made after the
availability of the annual report required by the provisions of Section 7.14, below, covering a
Fiscal Year during which Flow Charges from any Customer have been payable hereunder, the
amount estimated for the following Fiscal Year per the sentence next preceding shall be
adjusted upward or downward, as appropriate, to account for difference between actual
Operation and Maintenance Expense as reflected by the annual report and that estimated for the
previously reported period. The monthly Flow Charge for each Customer for the period for
which the estimate is made shall be 1/12th (or in the case of the initial Fiscal Year, the fraction
obtained by dividing 1 by the number of complete Months between the Initial Funding Date
and August 31, 2000) of the amount calculated by multiplying the actual flows of Wastewater
from such party's collector system into the System during the twelve (12) Month period ending
on April 30 preceding the beginning of the Fiscal Year for which the calculation is being
made, expressed in thousands of gallons, by the quotient obtained by dividing the estimated
Annual Operation and Maintenance Expense Requirement for the period for which the
calculation is being made, expressed in dollars, by the actual flows into System, also expressed
in thousands of gallons, from the collector systems of all Customers during the twelve (12)
Month period ending on such April 30. In the initial Fiscal Year of service, the allocation of
the Operation and Maintenance Expenses among the Customers shall be based on projected
flows as follows: Austin - 13,140,000 gallons, Cedar Park - 1,000,000 gallons, Round Rock-
2,551,038,000 gallons, and LCRA - 445,428,000 gallons.
Section 5.06. HOW, WHEN AND WHERE PAYMENTS ARE TO BE MADE .
Delivery to the Customers of the final budgets for a Fiscal Year, together with the schedule of
resulting Capital Charges and Flow Charges, shall constitute the invoice for same for the entire
Fiscal Year. Payment of all Capital Charges and Flow Charges required to be paid by
Customers under the provisions of this Agreement shall be made to LCRA. LCRA and the
individual(s) acting for it in receiving payment of such charges shall receive the portion of each
payment received consisting of Capital Charges owing to BRA as agent for BRA. Receipt of
such payments by LCRA as agent for BRA shall completely discharge any liability of
Customer to BRA for such payments. All such funds so received as agent shall be disbursed to
BRA in accordance with Section 3.03, and the duties of the agent shall be completely
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discharged by such disbursement. All charges payable for any Month shall be due and payable
in Travis County, Texas, on or before the fust day of such Month. Past due payments shall
bear interest from the date due until paid at the lower of ten percent (10%) per annum or the
highest lawful rate in the State of Texas.
Section 5.07. DEFAULT.
(a) Monetary Defaults by Customers. In the event any Customer defaults in
the payment of the Capital Charge or Flow Charge required hereunder, BRA and
LCRA shall immediately give notice of such default to such Customer and other
Customers; provided, however, that nothing in this section shall prevent any Customer
from paying under protest any amount alleged as owed by BRA or LCRA or prevent
BRA or LCRA from accepting any payment even if less than the amount alleged by
BRA or LCRA as owed by the Customer. Payment or receipt of any such disputed
amount shall not be construed as a waiver of any right of the party making or receiving
such disputed amount to contest such matter and to demand payment or receipt of a
different amount. Thereafter, the defaulting Customer shall take all appropriate steps to
correct such default and shall correct such default within ten (10) days after receipt of
such notice. Any past due amount shall be paid, together with interest at the lesser of
ten percent (10%) per annum or the maximum legal rate of interest then in effect.
(b) Other Defaults by Customers, BRA and LCRA. In the event that any
Customer or BRA or LCRA defaults in the performance of any of their respective
obligations under this Agreement, other than the obligation to make payments of the
Capital Charge or Flow Charge, any of the non-defaulting parties, after giving
reasonable notice of the default and opportunity to cure same, may exercise any remedy
provided below in Article VIII.
Section 5.08. CAPITAL MANAGEMENT FEE.
It is agreed among the parties that, in addition to all other compensation or reimburse-
ment authorized and required to be made by the Customers as otherwise provided in this
Agreement, LCRA, or BRA as appropriate, shall receive a fee in the total aggregate amount
from all Customers of five percent (5%) of the portion of the Annual Project Requirement
(exclusive of that portion of the Annual Project Requirement consisting of the Capital
Management Fee and coverage as described in subsection (iii) of the definition of Bond Costs)
to compensate LCRA for agreeing to include the System in the LCRA System and for the
increased responsibility, financial risk and regulatory risk borne by LCRA, or BRA as
appropriate, in fulfilling its management obligations under this Agreement. Such fee shall be
included in the Annual Project Requirement to be recovered through the Capital Charges paid
by the Customers of the System. Money received by LCRA, or BRA as appropriate, from
such fee may be used for any lawful purpose. Provided further, however, that if BRA pays the
Project Costs which result in receipt of Annual Project Requirement repayments by the
Customers, that part of the five percent (5%) Capital Management Fee shall be remitted by
LCRA to BRA.
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ARTICLE VI
TECHNICAL REVIEW COMMITTEE
Section 6.01. COMPOSITION OF TECHNICAL REVIEW COMMITTEE. There is
hereby created an Technical Review Committee to be composed of the following:
(a) Two representatives appointed by Cedar Park;
(b) Two representatives appointed by Round Rock;
(c) Two representatives appointed by Austin;
(d) One representative appointed by BRA; and
(e) One representative appointed by LCRA.
The governing bodies of each party to this Agreement shall each appoint their
representatives (and alternate representatives to serve in the absence of the Customers'
representatives) to the Technical Review Committee promptly after execution of this
Agreement, and shall immediately notify the other parties of such appointment. Each
representative (or alternate representative) of a party shall serve at the will of the governing
body which the person represents. Upon the death, resignation or revocation of the power of
such representative (or alternate representative), the governing body of the appropriate entity
shall promptly appoint a new representative (or alternate representative) to the Technical
Review Committee.
Section 6.02. RESPONSIBILITY OF TECHNICAL REVIEW COMMITTEE . The
Technical Review Committee shall represent the individual and collective interests of
Customers and shall consult with and advise BRA and LCRA, through their respective General
Managers or designated representatives, with regard to the following matters pertaining to the
System:
(a) The proposed amount, timing, maturity schedule and similar matters
related to the issuance of Bonds maturing over a period in excess of one year or
refunding thereof or the structuring of any LIF Advance and the timing of any Funding
Date(s), including having a meeting of the Financial Review Committee to review such
matters at least sixty (60) days prior to the sale of the Bonds and meetings of the
Technical Review Committee to review such matters at least thirty (30) days prior to
sale of the Bonds and ten (10) days prior to implementing any material changes to such
matters previously reviewed by the Technical Review Committee;
(b) The operation and maintenance of the System;
(c) The addition of new customers to the System and the terms and
conditions of the agreements with such new customers consistent with the provisions of
this Agreement;
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(d) Review of the budgets, prior to submission to the Boards of Directors of
BRA or LCRA;
(e) Review of the annual reports of the System;
(f) Improvements to and Expansions of the System;
(g) Review of the funding and use of the Operation and Maintenance
Reserve Fund and the Repair and Replacement Reserve Fund;
(h) Consideration of whether BRA should solicit proposals or bids for
operation of the System;
(i) Review and provide recommendations regarding proposals for operation
of the System;
0) Review and make suggestions regarding proposals submitted to LCRA
and BRA for engineering services related to the System;
(k) Review bids received for construction of System Components;
(1) Changes to the Engineering Report; and
(m) Any other pertinent matters relating to the management of the System.
Changes to the Engineering Report and Expansions consisting of System Components other
than Treatment Facilities and the parallel line to the Contract 6A Wastewater Interceptor Line
shall not be made without unanimous approval by the Technical Review Committee. The
Technical Review Committee shall meet at regular intervals to review progress of construction
of the System and the ongoing operation of the System. The Technical Review Committee
shall have access to and may inspect at any reasonable time all physical elements of the System
and all records and accounts of BRA and LCRA pertaining to the System. The Technical
Review Committee shall be diligent, prompt and timely in reviewing and commenting on
matters submitted to it. The Customers recognize that the activities of the Technical Review
Committee are an important function of the operation of the System and authorize payment of
all expenses and charges associated therewith.
Section 6.03. COMPOSITION OF FINANCIAL REVIEW COMMITTEE . There is
hereby created a Financial Review Committee to be composed of the following:
(a) One representative appointed by Cedar Park;
(b) One representative appointed by Round Rock;
(c) One representative appointed by Austin;
(d) One representative from LCRA; and
(e) One representative from BRA.
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The Technical Review Committee representatives of the Customers shall each appoint
their representatives (and alternate representatives to serve in the absence of the Customers'
representatives) to the Financial Review Committee promptly after execution of this
Agreement. Each representative (or alternate representative) of a Customer shall serve at the
will of the Technical Review Committee which the person represents. Upon the death,
resignation or revocation of the power of such representative (or alternate representative), the
Technical Review committee of the appropriate entity shall promptly appoint a new
representative (or alternate representative) to the Financial Review Committee.
Section 6.04. RESPONSIBILITY OF FINANCIAL REVIEW COMMITTEE . The
Financial Review Committee shall represent the individual and collective interests of
Customers and shall consult with and advise the Technical Review Committee with regard to
the following matters pertaining to the System:
(a) Review of the Engineering Report and pro-forma cash flow projections
prepared by BRA and LCRA and provide input as to the assumptions contained therein;
(b) Prepare a written recommendation to the Technical Review committee
regarding assumptions; funding of the capital projects; timing and structure of Bonds,
LIF, or any other obligations of the System, prior to implementation of same; and
refunding thereof, and
(c) Any other project as assigned by the Technical Review Committee.
The Financial Review Committee shall meet at regular intervals to review progress of
construction of the system and the ongoing operation of the System. The Financial Review
Committee shall have access to and may inspect at any reasonable time all physical elements of
the System and all records and accounts of BRA and LCRA pertaining to the System. The
Financial Review committee shall be diligent, prompt and timely in reviewing and commenting
on matters submitted to it. The Customers recognize that the activities of the Financial Review
Committee are an important function of the operation of the System and authorize payment of
all expenses and charges associated therewith.
ARTICLE VII
GENERAL PROM IONS
Section 7.01. NO TAX OBLIGATION OF CUSTOMERS. Unless otherwise
specifically provided in writing by subsequent agreement between BRA and LCRA and any
Customer, neither BRA nor LCRA shall ever have the right to demand payment by a Customer
of any obligation assumed or imposed on it under and by virtue of this Agreement from funds
raised or to be raised by taxation, it being expressly understood by the parties hereto that all
payments due by the Customers hereunder are to be made from the revenues and income
received by each Customer from its waterworks and sanitary sewer systems.
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Section 7.02. PAYMENTS TO CONSTITUTE OPERATING EXPENSES OF
CUSTOMER. Each Customer represents and covenants that the services to be obtained
pursuant to this Agreement are essential and necessary to the operation by the Customer of its
own wastewater facilities and the provision of sanitary sewer services to its constituents, and
that all payments to be made hereunder by it will constitute reasonable and necessary operating
expenses of the Customer's waterworks and sanitary sewer systems, within the meaning of
Section 1502.056, Texas Government Code, to the extent applicable to a Customer, and the
provisions of all ordinances or resolutions, as appropriate, authorizing the issuance of all bonds
of the Customer which are payable from revenues of the Customer's waterworks and sanitary
sewer systems. The parties acknowledge that, to the extent each Customer has Reserved
Capacity in any System Component, LCRA and BRA intend to own and operate the System as
capital improvements on behalf of that Customer within the meaning of Section 395.001(1),
Texas Local Government Code. The parties understand and agree that the decision as to
whether the capital improvements constructed or acquired by LCRA and BRA on behalf of a
Customer are used to serve new development (within the meaning of Section 395.001(6),
Texas Local Government Code) and the decision as to whether to impose any impact fees
(within the meaning of Section 395.001(4), Texas Local Government Code) is exclusively that
of such Customer.
Section 7.03. CUSTOMER RATES, FEES AND CHARGES. BRA and LCRA
acknowledge that each Customer has the right under applicable law to assess, charge and
collect such Customer impact fees, capital recovery fees, connection fees, meter fees, or other
service fees, rates, taxes or other charges as it will deem appropriate. They will not construe
this Agreement to require (except as provided otherwise in this Section), limit or restrict the
governmental power of any Customer to implement the same. Each Customer will be solely
responsible for the proper exercise of its governmental power to assess and collect such fees
and charges and for ensuring that all fees, taxes, rates and charges Customer elects to charge
are in compliance with applicable law. Each Customer agrees to establish and collect such
rates and charges for its waterworks and sanitary sewer services to be supplied by its system as
will make possible the prompt payment of all expenses of operating and maintaining its system
including the payments committed hereunder, and the prompt payment of the principal of and
interest on its obligations, if any, payable from the revenues of its waterworks and sanitary
sewer systems.
Section 7.04. USE OF PUBLIC PROPERTY. By these presents, each Customer, to
the extent capable under existing Iaw, authorizes use by BRA and LCRA of streets and general
utility or sewer easements of the Customer for construction, operation and maintenance of
Phases I and II of the System, so long as such use is in compliance with the terms of any
easement utilized by BRA and LCRA and does not interfere with any lawful use by the
Customer and subject to all of the Customer's ordinances, rules and regulations respecting the
manner of such use and restoration of lands, pavement or improvements resulting from
exercise of the rights provided in this section, including the cost of relocation of any facilities
located within any such easement as an expense of the System. BRA and LCRA will cooperate
with each Customer in the timing, planning and installation of the System to be constructed and
installed hereunder.
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Section 7.05. FORCE MAJEURE. In case by reason of "Force Majeure" any party
hereto shall be rendered unable wholly or in part to carry out its obligations under this
Agreement, then if such party shall give notice and full particulars of such "Force Majeure" in
writing to the other parties within a reasonable time after occurrence of the event or cause
relied on, the obligation of the party giving such notice, so far as it is affected by such Force
Majeure, with the exception of the obligation to pay Capital Charges, shall be suspended
during the continuance of the inability then claimed, but for no longer period, and any such
party shall endeavor to remove or overcome such inability with all reasonable dispatch. The
term "Force Majeure" as employed herein shall mean acts of God, strikes, lockouts or other
industrial disturbances, acts of public enemy, orders of any kind of the United States or the
State of Texas or any civil or military authority, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrests, restraint
of government and people, civil disturbances, explosions, breakage or accidents to machinery,
pipelines or canals, partial or entire failure of water supply and inability on the part of such
Customer to provide water necessary for operation of its water and wastewater system
hereunder or of BRA and LCRA to receive Wastewater on account of any other causes not
reasonably within the control of the party claiming such inability. It is understood and agreed
that the settlement of strikes and lockouts shall be entirely within the discretion of the party
having the difficulty and that the above requirement that any Force Majeure shall be remedied
with all reasonable dispatch shall not require the settlement of strikes and lockouts by acceding
to the demands of the opposing party or parties when such settlement is unfavorable in the
judgment of the party having the difficulty.
Section 7.06. INSURANCE. BRA and/or LCRA will carry fire, casualty, public
liability and other insurance for purposes and in amounts which would ordinarily be carried by
a privately owned utility company owning and operating facilities similar to the System, except
that BRA and LCRA need not carry liability insurance except to insure against risk of loss due
to claims for which they can, in the opinion of their respective legal counsels, be liable under
law or judicial decision. Such provisions will be so designed as to afford protection not only
for the owners of the Bonds but to assure and facilitate, to the extent feasible and practicable,
the restoration of damaged or destroyed properties and to minimize the interruption of service
to the Customers and others. Provided, however, nothing herein shall prevent BRA and/or
LCRA from providing such insurance through self-insurance, self-insurance pools or similar
methods.
Section 7.07. GOVERNMENTAL REGULATION. This Agreement shall be subject
to all valid rules, regulations and laws applicable hereto passed or promulgated by the United
States of America, the State of Texas or any governmental body or agency having lawful
jurisdiction or any authorized representative or agency of any of them. In each instance herein
where reference is made to a federal or State regulation, it is the intention of the parties that at
any given time the then current edition of any such federal or State regulation shall apply.
BRA, LCRA and the Customers agree that their obligations under this Agreement shall include
compliance with the requirements made under said laws, and any rules and regulations issued
pursuant thereto. New standards shall be adopted by BRA and LCRA which are in compliance
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DRAFT August 28, 2000
with applicable State and federal laws and any valid rules and regulations issued pursuant
thereto.
Section 7.08. CUSTOMER COOPERATION TO ASSURE REGULATORY
COMPLIANCE. Since BRA and LCRA must comply with all federal, state and local
requirements to obtain permits, grants and assistance for system construction, studies, etc.,
each Customer will cooperate with BRA and LCRA in good faith at all times to assure
compliance with any such governmental requirements where noncompliance or non-
cooperation by the Customer may subject BRA and LCRA to penalties, loss of grants or other
funds, or other adverse regulatory action. In making the determinations called for herein,
BRA and LCRA covenant that such determinations will be made only after informing the
Technical Review Committee, after detailed studies of statistical data available as to the need
and feasibility have been made, and after consulting with engineers and financial advisors.
Each Customer will be kept advised at all times of planning and implementing Required
Improvements. In that regard, each Customer agrees to adopt and enforce, and to provide in
its wholesale contracts with its water customers in the future that they shall adopt and enforce,
an appropriate water conservation and/or drought management plan as required by the Texas
Water Development Board as a result of its loan of funds to LCRA for construction and
acquisition of the System.
Section 7.09. CONTRACTS WITH OTHERS IN RELATION TO SYSTEM.
(a) Each Customer shall have the right to enter into contracts with other
persons natural or corporate, private or public, to receive Wastewater from such
persons. Each Customer covenants that it will advise BRA and LCRA of all such
written contracts and will, if requested by BRA or LCRA, furnish BRA and LCRA
with a list of all customers other than retail, residential customers. Initially, within
thirty (30) days after execution of this Agreement, and thereafter for each calendar year
during the tenure hereof, each Customer will send to LCRA and BRA by January 15 of
each year an annual report containing the following data about each Customer's
customers that the System ultimately serves:
(1) actual number of connections as of the end of the calendar year;
(2) number of new wastewater connections made in the previous
calendar year;
(3) classification, by number and percentage, of accounts according
to the following:
(i) residential;
(ii) multi-family;
(iii) business/commercial; and
(iv) other; and
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(4) if business or commercial connections, a copy of any Customer
industrial waste discharge permit issued to such premises.
(b) BRA and LCRA shall have the right to enter into agreements with other
persons so long as such agreements do not prevent BRA or LCRA from meeting their
obligations to provide service to the Customers from the System in accordance with this
Agreement.
(c) The parties recognize and acknowledge that the System contains Surplus
Reserved Capacity for Leander, which is not needed to meet the requirements of the
Customers. The Engineering Report will identify the Surplus Reserved Capacity for
Leander in each System component. The parties agree that the Surplus Reserved
Capacity for Leander should be utilized, if possible, to provide service to areas within
the Leander Service Area. In that regard, the parties further agree as follows:
(1) to jointly and creatively pursue efforts to obtain an agreement
from Leander to receive service from the System. LCRA and BRA are
encouraged and directed to enter into negotiations in that regard. LCRA and
BRA shall keep the Technical Review Committee reasonably and timely
informed of the status and progress of those negotiations.
(2) LCRA and BRA may enter into any agreement they desire with
Leander regarding wastewater service to the Leander Service Area; provided,
however, LCRA and BRA shall not operate, manage, finance or own a
wastewater treatment system providing service to Leander in an amount
exceeding 2.25 million gallons per day unless all of the Customers otherwise
agree in writing.
(3) Should LCRA acquire the Leander wastewater treatment plant
(up to a maximum of 2.25 million gallons per day), the parties agree that that
plant may become part of the System if each of the Customers agrees thereto in
writing.
(4) As provided in the Engineering Report, the System will be
constructed at a size sufficient to provide for the Leander Reserved Capacity.
Section 7.10. NON-INFRINGEMENT. Notwithstanding anything in Section 7.09,
the Customers, BRA and LCRA agree that they will not provide or enter into an agreement to
provide wastewater service directly or indirectly to another Customer's Service Area unless the
Customer in whose Service Area the service is to be provided consents which consent may be
granted or denied in the sole and complete discretion of the Customer in whose Service Area
the service is to be provided.
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Section 7.11. SALE OR TRANSFER OF SYSTEM; CUSTOMERS' RIGHT OF
FIRST REFUSAL.
(a) As the System will constitute a portion of the LCRA System, LCRA has
covenanted in the Bond Resolution and in the resolutions authorizing and governing the
outstanding LCRA Debt that it will not sell, lease or otherwise dispose of the System
(or any other LCRA System properties) required, in the reasonable judgment of the
LCRA Board of Directors, for the efficient operations of the LCRA System and the sale
or disposal of which would cause a breach of LCRA's covenants to secure its
outstanding LCRA Debt. The Customers acknowledge that any transfer or sale of the
System to the Customers will require the LCRA Board of Directors to determine that
the System is no longer required as described above, and further, that the System is no
longer necessary or convenient or of beneficial use to the business of LCRA. The
approval of any such transfer or sale shall be in the sole discretion of the LCRA Board
of Directors at the time of any such proposed transfer or sale.
(b) Should LCRA or BRA desire to transfer the System or any portion
thereof to any other person (other than a subsidiary or affiliate of LCRA or BRA), it
shall first give one hundred eighty (180) days written notice to the Customers setting
forth the terms of the proposed transfer. The Customers collectively, shall have the
right of first refusal at any time during said one hundred eighty (180) day period to
enter into an agreement with LCRA or BRA to purchase the System or portion thereof
proposed to be transferred on the same terms as the proposed transfer.
Section 7.12. LCRA RIGHT OF FIRST REFUSAL TO PURCHASE CEDAR PARK
TREATMENT PLANT. Cedar Park hereby grants to LCRA a right of first refusal to
purchase the Cedar Park Treatment Plant during the:term of this Agreement. If, during the
term of this Agreement, Cedar Park desires to transfer the Cedar Park Treatment Plant or any
portion thereof to any other person (other than a subsidiary or affiliate of Cedar Park), it shall
first give one hundred eighty (180) days written notice to LCRA setting forth the terms of the
proposed transfer. LCRA shall have the right of first refusal at any time during said one
hundred (180) day period to enter into an agreement with Cedar Park to purchase the Cedar
Park Treatment Plant or portion thereof proposed to be transferred on the same terms as the
proposed transfer. If LCRA buys the Cedar Park Treatment Plant during the term of this
Agreement, it shall become part of the System and shall be operated by BRA.
Section 7.13. EXCEPTIONS TO SOLE SOURCE REQUIREMENT.
Notwithstanding the provisions of Section 2.05(a) to the contrary, Cedar Park and Austin may
obtain service by construction of their own facilities for their respective Service Areas to the
following extent:
(a) Cedar Park agrees not to expand the Cedar Park Treatment Plant during the
term of this Agreement, provided that all Wastewater capacity required by Cedar Park (i) is
available from the System (including any Expansions) more economically than a plant
expansion and (ii) can be provided in the System within the timeframe required by Cedar Park.
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Economics and timing will be determined by Cedar Park, in its sole discretion. If Cedar Park
determines that the conditions set forth in (i) or (ii) above cannot be met, Cedar Park will have
the right to expand the Cedar Park Treatment Plant within the limits of and pursuant to the
existing permit for that plant and the other Customers, LCRA and BRA agree not to oppose or
resist that expansion in any way. Cedar Park will further have the right to continue to operate
the Cedar Park Treatment Plant and, in the event of annexation of Block House Municipal
Utility District, the Block House Creek treatment plant, and to maintain in effect and to renew
the existing discharge permits for those plants, TNRCC Permit No. TX0085740 and NPDES
Permit No. 12308-001 for the Cedar Park Treatment Plant, and TNRCC Permit No. 13031-
001 and NPDES Permit No. TX 0101397 for the Block House Creek treatment plant. The
other Customers, LCRA and BRA agree not to oppose or resist in any way (i) renewal of those
permits or (ii) amendments which would make the permit parameters more stringent.
(b) Austin presently provides Wastewater service to that portion of its Service Area
west of Parmer Lane by means of a lift station and force main which divert the Wastewater
flows to Austin's Walnut Creek Treatment Plant. Austin may continue to provide Wastewater
service in that manner for that area or, at Austin's sole discretion, it may provide Wastewater
service to such area through the System in accordance with the terms of this Agreement.
Section 7.14. ANNUAL REPORT OF SYSTEM AND AUDITS. BRA and LCRA
shall cause to be prepared an annual report of the System each year. Such report shall contain
such matters and information as may be considered necessary and useful by BRA, LCRA, the
Technical Review Committee and the Financial Review Committee. A copy of the annual
report and BRA's and LCRA's annual audits and accompanying management letters shall be
promptly provided to each other and to each Customer, the Technical Review Committee and
the Financial Review Committee.
Section 7.15. NO ADDITIONAL WAIVER IMPLIED. No waiver or waivers of any
breach or default (or any breaches or defaults) by any party hereto of any term, covenant,
conditions, or liability hereunder, or of performance by the other parties of any duty or
obligation hereunder, shall be deemed or construed to be a waiver of subsequent breaches or
defaults of any kind, under any circumstances.
Section 7.16. ADDRESSES AND NOTICE. Unless otherwise provided in this
Agreement, any notice, communication, request, reply, or advice (herein severally and
collectively, for convenience, called "Notice") herein provided or permitted to be given, made
or accepted by any party to the others must be in writing and may be given or be served by
depositing the same in the United States mail postpaid and registered or certified and addressed
to the party to be notified, with return receipt requested, or by delivering the same to an officer
of such party, or by telecopier, when appropriate, addressed to the party to be notified. Notice
deposited in the mail in the manner hereinabove described shall be conclusively deemed to be
effective, unless otherwise stated in this Agreement, from and after the expiration of four (4)
days after it is so deposited. Notice given in any other manner shall be effective only if and
when received by the party to be notified. For the purpose of notice, the addresses of the
parties shall, until changed as hereinafter provided, be as follows:
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If to LCRA, to:
General Manager
Lower Colorado River Authority
P. O. Box 220
3701 Lake Austin Boulevard
Austin, Texas 78767
Fax No. (512) 473-3298
If to BRA, to:
General Manager
Brazos River Authority
PO Box 7555
Waco, Texas 76714-7555
Fax No. (254) 772-5780
If to Round Rock, to:
City Manager
City of Round Rock
221 East Main
Round Rock, Texas 78664
Fax No. (512) 218-7097
If to Cedar Park, to:
City Manager
City of Cedar Park
600 North Bell Blvd.
Cedar Park, Texas 78613
Fax No. (512) 258-6083
If to Austin, to:
City Manager
City of Austin
P. O. Box 1088
Austin, Texas 78767-1088
Fax No. (512) 499-2374
The parties shall have the right from time to time and at any time to change their respective
addresses and each shall have the right to specify as its address any other address by at least
fifteen (15) days written notice to the other parties.
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Section 7.17. MODIFICATION. Except as otherwise provided in Section 2.02, this
Agreement shall be subject to change or modification only with the mutual consent of the
governing bodies of each of the parties hereto, which consent shall not be unreasonably
withheld or delayed, but the parties recognize that the Bond Resolution may contain covenants
by BRA or LCRA not to consent to certain changes or modifications of this Agreement.
Section 7.18. ASSIGNABILITY. This Agreement shall not be assignable by any
party without the prior written consent of the other parties, which consent shall not be
unreasonably withheld or delayed.
Section 7.19. SEVERABILITY. The provisions of this Agreement are severable, and
if any provision or part of this Agreement or the application thereof to any person or
circumstance shall ever be held by any court of competent jurisdiction to be invalid or
unconstitutional for any reason, the remainder of this Agreement and the application of such
provision or part of this Agreement to other persons or circumstances shall not be affected
thereby.
Section 7.20. MERGER. Other than the other contracts mentioned herein, this
Agreement constitutes the entire agreement between the parties relative to the subject matter
thereof. Except as noted in the previous sentence, there have been and are no agreements,
covenants, representations or warranties between the parties other than those expressly stated
herein or expressly provided for herein.
Section 7.21. VENUE . Venue for any action arising hereunder will be in Williamson
County, Texas.
Section 7.22. NO THIRD PARTY BENEFICIARIES . Nothing in this Agreement,
express or implied, is intended to confer upon any person or entity, other than the parties
hereto, any rights, benefits, or remedies under or by reason of this Agreement.
Section 7.23. REUSE OF TREATED EFFLUENT FROM THE SYSTEM . Any
Customer may utilize treated effluent from the System in accordance with this Section. There
will be no charge by LCRA or BRA for the treated effluent; however, each Customer will be
responsible for paying for all capital and operational costs associated with its respective use for
any treated effluent reuse facilities. Each Customer's allowable withdrawal rates of treated
effluent at any given time shall be in proportion to each Customer's Reserved Capacity in
System Treatment Facilities as a percent of the total Reserved Capacity of all Customers in the
System Treatment Facilities. The Technical Review Committee shall be kept apprised
routinely by LCRA and BRA, and any other Customer, regarding actions taken or
contemplated to be taken in regard to use of treated effluent, including without limitation,
plans, engineering reports and similar information verifying compliance with the provisions of
this Section. All reuse facilities shall be constructed by the Customer for whose benefit the
reuse facilities are intended, except that LCRA or BRA shall, at the Customer's expense,
construct reuse facilities on System property. Reuse facilities may be constructed on System
property provided that LCRA and BRA agree and provided further that the location of the
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facilities will not impair the ability of System facilities to be constructed in the future. Unless
otherwise agreed by LCRA and BRA with the unanimous approval of the Technical Review
Committee, title to any reuse facilities located on System property shall be dedicated to LCRA
and BRA for ownership and operation, but responsibility for, construction costs and operation
and maintenance costs of same and the right to the use of said facilities shall remain with the
Customer or Customers for whose benefit the reuse facilities exist. Round Rock's service area
for treated effluent shall be Round Rock's Service Area. Cedar Park's service area for treated
effluent shall be Cedar Park's Service Area and areas outside of Round Rock's, Cedar Park's,
Austin's and LCRA's Service Areas. Austin's service area for treated effluent shall be
Austin's Service Area and areas outside of Round Rock's, Cedar Park's, Austin's, and
LCRA's Service Area. LCRA/BRA's service area for treated effluent shall be LCRA's
Service Area and areas outside of Round Rock's, Cedar Park's, Austin's and LCRA/BRA's
Service Areas. Round Rock agrees to allow Cedar Park to oversize Round Rock's reuse
delivery system to allow delivery of 1 MGD to Cedar Park's Service Area adjacent to FM
1431, provided that Cedar Park shall pay its pro rata share of the capital and operations costs
of Round Rock's reuse delivery system based on the capacity in Round Rock's reuse delivery
system. BRA and all Customers agree to not object to any future water right bed and banks
permit requests filed by any Customer or BRA for delivery of treated effluent from the East
Plant.
ARTICLE VIII
NEGOTIATION AND MEDIATION OF DISPUTES
Section 8.01. AGREEMENT REGARDING REMEDIES. The parties agree that
their respective obligations under this Agreement are unique and recognize that LCRA or BRA
may be issuing its Bonds to acquire, construct, expand, improve or replace the System and
may pledge the revenues from this Agreement to secure payment of principal of, premium, if
any, and interest on the Bonds. The failure by any party to perform its obligations under this
Agreement would not be capable of being appropriately remedied by award of damages to any
other affected party to this Agreement and in any event, such damages would be difficult, if
not impossible, to determine because of the unique nature of the parties' obligations to each
other hereunder. Further, the parties agree that the remedy of termination of this Agreement
by any party is inappropriate and not in the public interest. Therefore, the parties agree that
they shall be entitled, and limited, to the remedies of specific performance, mandamus and
injunction in the event of any breach of any obligation by any party under this Agreement.
The parties hereby waive any requirement that they be required to provide any bond or other
surety in order to obtain any of the agreed upon remedies.
Section 8.02. AGREEMENT TO NEGOTIATE FIRST TO RESOLVE ISSUES. The
parties agree to attempt first to resolve disputes concerning this Agreement amicably by
promptly entering into negotiations in good faith. The parties agree that they will not refer any
dispute to another dispute resolution procedure including mediation or litigation until they have
first made reasonable and good faith efforts to settle their differences by joint negotiations
conducted in a timely manner.
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Section 8.03. AGREEMENT TO MEDIATE. If any dispute cannot be resolved
through good faith negotiation, then the parties shall endeavor to resolve the dispute by
mediation as provided herein.
Section 8.04. PRESENTATION OF WRITTEN CLAIM REGARDING DISPUTES
NOT RESOLVED BY NEGOTIATION. In the event that a dispute is not resolved as a result
of such negotiations, either party may at any time give formal written notice to the other of a
"claim." A "claim" as used herein means a demand or assertion by one of the parties (the
"claimant") seeking, as a matter of right, adjustment or interpretation of contract terms, the
payment of money, an extension of time for performance or other relief with respect to the
terms of this Agreement or any other dispute or matter in question among the parties arising
out of or related to this Agreement. Such notice shall be in writing. After such notice is
given, the dispute resolution procedure provided for below shall immediately enter into effect.
Section 8.05. PERFORMANCE DURING MEDIATION. The claimant shall
continue with performance under this Agreement pending mediation of the dispute.
Section 8.06. APPOINTMENT OF MEDIATOR. Promptly following the making of
a written claim by any party, the parties will consult with one another to agree on the
appointment of a mediator acceptable to all parties. The mediator shall have experience in
matters of the kind giving rise to the claim. If within five (5) business days the parties are
unable to agree on the appointment of a mediator, then any party may request the appointment
of a mediator by the Center for Public Policy Dispute Resolution at the University of Texas at
Austin School of Law. The parties shall endeavor to secure such appointment from the Center
for Public Policy Dispute Resolution within ten (10) business days after the request for same is
made. The parties agree to utilize the mediator appointed by the Center unless they ultimately
reach agreement on an alternative selection and give notice to the Center that another selection
has been made by agreement.
Section 8.07. RULES FOR MEDIATION. The parties agree to the following
stipulations concerning the conduct of the mediation:
(a) The mediator shall be impartial among the parties and shall have no conflict of
interest.
(b) The mediator shall not have any past, present or anticipated financial interest in
the Agreement or the System except for the payment for services as mediator nor shall the
mediator have been previously employed or acted as a consultant, attorney, employee,
engineer, architect, contractor or subcontractor of any party nor have any present or
anticipated future engagement of the kind described. Before the engagement of the mediator is
finalized, the mediator shall provide to the parties a disclosure statement containing a resume
of experience, a description of past, present or anticipated future relationships to the System
and the parties, their engineers, contractors, subcontractors, attorneys, architects, or
consultants.
46
DRAFT August 28, 2000
(c) The mediation shall be held at a time and location mutually agreeable to the
parties and the mediator provided, however, that the mediation shall commence no later than
fifteen (15) business days following the confirmation of appointment.
(d) At least five (5) business days prior to the mediation, the claimant shall submit
to the parties and the mediator a statement of the claimant's position, the issues that need to be
resolved and a summary of the arguments supporting the claimant's position. At least two (2)
business days prior to the mediation, the responding parties shall submit their written response
to the claimant's statement and provide a summary of their arguments in response.
(e) If the parties agree that independent expert or technical advice would be helpful
in facilitating a negotiated resolution of the dispute, the mediator may make arrangements to
obtain such advice, and may, with the agreement of the parties, make arrangements for an
independent expert to render a non-binding advisory opinion with respect to any technical
matters in dispute after hearing the contentions of the parties with respect thereto. The
expenses of obtaining such independent advice or advisory opinion shall be borne equally by
the parties.
(f) No party shall engage in any private interview, discussion or argument with the
mediator concerning the subject matter of the mediation.
(g) The fees of the mediator and any other costs of administering the mediation
shall be borne equally by the parties unless otherwise agreed among them in writing.
(h) The mediator may promote settlement in any manner the mediator believes
appropriate at one or several mediation sessions as agreed to by the parties. The mediation
shall continue only so long as desired by the parties and with the consent of all of them.
(i) Mediation sessions shall be private unless otherwise required by law. Persons
other than the representatives of the parties may attend mediation sessions only with the
permission of all parties and the consent of the mediator.
0) All communications made in the course of the mediation process including any
advice or advisory opinions rendered shall be confidential in accordance with V.T.C.A. Civil
Practice and Remedies Code, Section 154.073.
Section 8.08. EXCEPTION. Notwithstanding the foregoing provisions of Sections
8.02-8.07, the parties agree that those provisions shall not be applicable in emergency
situations.
47
DRAFT August 28, 2000
ARTICLE IX
EFFECTIVE DATE AND TERM OFAGREEMENT
Section 9.01. EFFECTIVE DATE. This Agreement shall become effective upon
execution by BRA, LCRA and all Customers and such fact shall be communicated in writing to
the Customers by BRA and LCRA. This Agreement shall constitute the sole and only contract
between the Customers and BRA and LCRA regarding Wastewater disposal services and the
Customers hereby recognize and affirm their responsibility to make the payments required
hereunder.
Section 9.02. TERM OF AGREEMENT. This Agreement shall continue in force and
effect from the effective date hereof for a period of forty (40) years, and thereafter shall
continue in effect until any Bonds, or Bonds issued to refund same, if any, have been paid in
full. The Customers shall have the right to the continued performance of services provided
hereunder for the useful life of the System to the extent of their respective Reserved Capacities
after amortization of LCRA's and BRA's investment in the System, upon payment of just and
reasonable charges by the Customers.
Section 9.03. EFFECT ON CERTAIN PRIOR AGREEMENTS. The parties
recognize that LCRA, BRA, Cedar Park and Round Rock have previously entered into that
certain agreement dated July 18, 1997, entitled "Wastewater Disposal Contract" pursuant to
which LCRA and BRA agreed to provide Wastewater service to Cedar Park and Round Rock.
The parties agree that one of the purposes, and the effect, of this Agreement is to amend and
replace that prior agreement which is hereby terminated; provided, however, the parties to that
agreement further recognize that they will separately agree among themselves at a future time
for any matters arising out of their respective rights and obligations pursuant to Section 5.05 of
that agreement.
48
DRAFT August 28, 2000
IN WITNESS WHEREOF, the parties hereto acting under authority of their respective
governing bodies have caused this Agreement to be duly executed in several counterparts, each
of which shall constitute an original, all as of the day of ,
2000.
BRAZOS RIVER AUTHORITY
By:
Name: Gary Gwyn
Title: General Manager
ATTEST:
By:
Name:
Title:
LOWER COLORADO RIVER AUTHORITY
By:
Name: Paul Thornhill, P.E.
Title: Manager, WaterCo
ATTEST:
By:
Name:
Title:
CITY OF ROUND ROCK
By:
Robert Stluka
Mayor
ATTEST:
Name:
Title: City Secretary
49
DRAFT August 28, 2000
CITY OF CEDAR PARK
By:
Bob Young
Mayor
ATTEST:
By:
Name:
Title:
CITY OF AUSTIN
By:
Kirk Watson
Mayor
ATTEST:
By:
Name:
Title:
brlcra35agt.wpd
50
EXHIBIT A
to the
WASTEWATER DISPOSAL CONTRACT
BRUSHY CREEK REGIONAL WASTEWATER SYSTEM
Regional System Assets
City of Austin Less Depreciation
Asset Descrip ion Total CostAllocation' (1996-2000) Acquisition Cost
Contracts 1, 2 & 3 $416,768 $125,030 $0 $125,030
Contracts 4 & 5-I (LS & 16" FM) 773,328 773,328 -515,552 257,776
Contract 54I (24" Gravity Line) 104,303 69,883 -6,988 62,895
Contract 54I 609,426 408,315 -40,832 367,484
Contract 6a 2,692,667 1,346,334 -134,633 1,211,701
Contract 6 117,412 52,131 0 52,131
Contracts 20, 20a & 21 1,219,009 609,505 0 609,505
WWTP Planning (HDR) 182,190 71,054 0 71,054
WWTP Design (HDR) 772,092 216,186 0 216,186
Land at WWTP 720.666 374,747 0 374,747
Total $7,607,861 $4,046,513 -$698,005 $3,348,508
Adjustment for Capital Charges Carried by LCRA on Austin's Behalf (FY97 - FY00) Z -$190,897
Net Acquisition Cost
$3,157,611
1
NOTES:
1. From the following existing agreements:
"Agreement for Termination of Brushy Creek Regional Wastewater Disposal Agreement"
"Round Rock/LCRA Alliance Acquisition Contract"
"Austin/Cedar Park Transfer Agreement"
2. a) For closing that occurs on any day other than August 31, 2000 which is after July 1, 2000 and prior to January 1, 2001
the Adjustment for Capital Charges Carried by LCRA on Austin's Behalf will be calculated as follows:
$185,115 x (1 + 0.06/12)°
where n = the number of months and partial months after July 2000 up to six months.
b) For closing that occurs after January 1, 2001 the Adjustment for Capital Charges Carried by LCRA on Austin's Behalf
will be the sum of(a) above and that portion of any principal and interest payments made on any outstanding Bonds or LIF
between December 31, 2000 and the date of closing allocated to LCRA on Austin's behalf x (1 + 0.06/12)n where n = the
number of months and partial months between January 2001 and the closing date.
2
EXHIBIT B
to the
WASTEWATER DISPOSAL CONTRACT
BRUSHY CREEK REGIONAL WASTEWATER SYSTEM
Capacity Reservations: Upstream and Downstream Collection System
Based on Peak Wet Weather Flows
Expressed in %
Round Cedar
Nle Rock Park Au in LCRA
A 0.00 100.00 0.00 0.00
B 0.00 100.00 0.00 0.00
C 0.00 90.78 9.22 0.00
D 0.00 90.90 9.10 0.00
E 0.00 87.30 12.70 0.00
F 0.00 86.11 13.89 0.00
G 0.00 83.38 16.62 0.00
H 0.00 87.16 12.84 0.00
1 0.00 86.09 12.68 1.23
J 0.00 82.66 12.18 5.16
K 9.95 72.73 10.73 6.59
L 11.01 71.88 10.60 6.51
M 10.78 45.23 35.60 8.39
N 20.02 40.27 31.71 8.00
O 22.86 38.84 30.59 7.71
P 30.13 35.16 27.73 6.98
Q 32.12 34.17 26.94 6.77
R 33.90 33.26 26.25 6.59
S 35.21 32.61 25.72 6.46
Node from Figure 1-1 of Engineering Report
i
EXHIBIT B
to the
WASTEWATER DISPOSAL CONTRACT
BRUSHY CREEK REGIONAL WASTEWATER SYSTEM
Allocation of Annual Project Requirements: Upstream and Downstream Collection System
Upstream Collection Sy is em•
2037 Contractual Flows Upstream
Customer Population GPCD (gal/day) Allocator (in %)
City of Round Rock 0 140 0 0.00
City of Cedar Park 83,281 85 7,078,885 67.95
City of Austin 12,004 100 1,200,400 11.52
LCRA 21,388 100 2,138.800 20.53
Total 116,673 10,418,085 100.00
Downstream Collection System:
2037 Contractual Flows Downstream
Customer Population GPCD al/da Allocator (in %Z
City of Round Rock 142,896 140 20,005,440 54.75
City of Cedar Park 83,281 85 7,078,885 19.37
City of Austin 70,836 100 7,083,600 19.39
LCRA 23,703 100 2.370.300 6.49
Total 320,716 36,538,225 100.00
GPCD = Gallons Per Capita per Day
2
EXHIBIT B
to the
WASTEWATER DISPOSAL CONTRACT
BRUSHY CREEK REGIONAL WASTEWATER SYSTEM
Capacity Reservations and Allocation of Annual Project Requirements: Treatment Facilities
Reserved Capacity/
Contractual Flows Treatment
u to (MGD) Allocator (in %)
City of Round Rock 9.60 64.86
City of Cedar Park 2.50 16.89
City of Austin 0.30 2.03
LCRA 2.40 16.22
Total 14.80 100.00
MGD = Million Gallons per Day
3
EXHIBIT C
to the
WASTEWATER DISPOSAL CONTRACT
BRUSHY CREEK REGIONAL WASTEWATER SYSTEM
April _, 2000
LIST OF INADMISSIBLE WASTES
In accordance with the provisions of Section 4.04 of the Wastewater Disposal Contract
between the Brazos River Authority ("BRA"), the Lower Colorado River Authority
("LCRA"), the City of Round Rock, the City of Cedar Park and the City of Austin, the
following List of Inadmissible Wastes specifying materials that can not be discharged to the
sewer system and concentrations for substances which should not be exceeded in discharges to
the system, is promulgated by the BRA as of April _, 2000.
The following list constitutes the pollutant allocations and local limits established under the
Brushy Creek Regional Wastewater System Pretreatment Program specifying both numerical
concentration limits and prohibited substances for discharge to the System of toxic or regulated
pollutants which could cause interference with the operation of the treatment plant or cause a
violation of the BRA/LCRA's State or Federal discharge permit provisions. Under the
provisions of Section 4.04, each Customer agrees to limit discharges to the System in
accordance with the following list:
Prohibited discharges include:
1. Wastewater having a temperature that would result in the total combined influent to the
treatment plant to exceed a temperature of 104 degrees Fahrenheit or 32.2 degrees
Celsius.
2. Wastewater having a pH value lower than 5.0 or higher than 10.5 or which will cause
structural damage to the System.
3. Wastewater containing gasoline, benzene, naphtha, fuel oil, or other flammable or
explosive liquids, solids, gases, or any material that will result in the presence of toxic
gases, vapors or fumes within the System in quantities which may cause acute worker
health and safety problems.
4. Wastewater containing oil and grease or any grease, fats, waxes, oil, plastic or other
substances that will solidify or become discernibly viscous at any temperature between
32 degrees Fahrenheit and 90 degrees Fahrenheit so as to cause obstruction in the
collection system or at the treatment plant.
5. Wastewater with a radioactive content greater than allowable by applicable provisions
of the Texas Radiation Control Act, Article 4590 (f), Revised Civil Statutes of Texas,
and Texas Regulations for Control of Radiation issued thereunder.
6. Wastewater with a dissolved hydrogen sulfide concentration greater than 1.0 milligrams
per liter.
7. Wastewater containing corrosive constituents, that have a damaging or corrosive effect
on system components.
8. Any hazardous wastes prohibited by regulatory agencies.
9. Any trucked or hauled pollutants except at discharge points designated by the BRA and
with the written consent of the Customer or BRA.
10. Wastewater, which alone or in conjunction with other wastewater, causes the
wastewater entering any entry point into the system to exceed a five-day Biochemical
Oxygen Demand (BOD), concentration of 300 milligrams per liter or a Total Suspended
Solids (TSS), concentration of 400 milligrams per liter, shall be subject to surcharge on
the basis of actual increased operating costs so long as the pollutant is not causing
interference with the operation of the BRA/LCRA's State or Federal discharge permit
provisions, and as long as said pollutants are deemed acceptable by the BRA. BRA
shall determine the cost of treatment for pollutants received from all Customers and
determine additional treatment costs for excessive pollutants to be surcharged.
11. Wastewater with concentrations of toxic pollutants, including heavy metals and other
pollutants designated under the System Pretreatment Program, which will alone or in
conjunction with other wastewater cause the treatment plant influent to contain in
excess of:
Pollutant System Headworks Limit
lbs/day- 24 hour Composite
(mg/L)
Cadmium 5.6712 0.2
Chloroform 113.4240 4.0
Chromium (Total) 482.0520 17.0
Copper 99.2460 3.5
Ethyl Benzene 453.6960 16.0
Lead 14.1780 0.5
Naphthalene 425.3400 15.0
Nickel 127.6020 4.5
Silver 1.9849 0.1
Tetrachloroethylene 141.7800 5.0
Toluene 39.9840 14.0
Zinc 107.7528 3.8
2
12. The combined volume of all wastewater discharged by the Customers shall not contain
the following listed pollutants in excess of the listed loading without prior written
approval from the BRA.
POLLUTANT POLLUTANT ALLOCATION in lbs/dam
Round Rock Cedar Park Austin LCRA Total
Cadmium 3.6785 0.9579 0.1150 0.9196 5.6710
Chloroform 73.5723 19.1595 2.2991 18.3931 113.4240
Chromium (Total) 312.6824 81.4277 9.7713 78.1706 482.0520
Copper 64.3758 16.7645 2.0117 16.0939 99.2460
Ethyl Benzene 294.2893 76.6378 9.1965 73.5723 453.6960
Lead 9.1965 2.3949 0.2874 2.2991 14.1780
Naphthalene 275.8962 71.8480 8.6218 68.9741 425.3400
Nickel 82.7689 21.5544 2.5865 20.6922 127.6020
Silver 1.2875 0.3353 0.0402 0.3219 1.9849
Tetrachloroethylene 91.9654 23.9493 2.8739 22.9914 141.7800
Toluene 257.5031 64.0581 8.0470 64.3758 396.9840
Zinc 69.8937 18.2015 2.1842 17.4734 107.7528
The BRA will periodically monitor for those pollutants at selected Customer's Points of Entry.
Should the analysis indicate any of the pollutants listed are approaching or exceeding the
System Head Works Limit, the Customer(s) shall determine the source of the pollutant and
require the generator(s) to reduce or cease discharge of the pollutant and/or commence
monitoring of the pollutant as required in the Brushy Creek Regional Wastewater System
Pretreatment Program.
3
EXHIBIT D
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the "Agreement), dated as of ,
2000, is executed and delivered by the Lower Colorado River Authority (the "Issuer") and
(the "Disclosure Party") in connection with the
issuance, from time to time, of the Issuer's "municipal securities," with respect to which the
Disclosure Party is an "obligated person," as such terms are applied within the meaning of the
Rule (the "Bonds"). For good and valuable consideration, the Issuer and the Disclosure Party
covenant and agree as follows:
SECTION 1. Definitions.
As used in this Agreement, the following terms have the meanings ascribed to such
terms below:
"MSRB" means the Municipal Securities Rulemaking Board and any successor to its
duties.
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the
Rule from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission and any successor
to its duties.
"SID" means any entity designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
SECTION 2. Annual Reports; Obligations of Disclosure Parry.
The Disclosure Party undertakes to and shall provide annually to each NRMSIR and
any SID, within six months after the end of each of its fiscal year ending on or after January 1,
1996, financial information and operating data with respect to the Disclosure Party as specified
and included in Appendix B of any final official statement relating to Bonds. Any financial
statements so to be provided shall be (1) prepared in accordance with the accounting principles
described in the notes to the financial statements as specified and included in Appendix B of
any final official statement relating to Bonds, or such other accounting principles as the
Disclosure Party may be required to employ from time to time pursuant to state law or
regulation, and (2) audited, if the Disclosure Party commissions an audit of such statements
and the audit is completed within the period during which it must be provided. If the audit of
such financial statements is not complete within such period, then the Disclosure Party shall
provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any
SID within the period during which it must be provided and the audited financial statements,
when and if the audit report on such statements becomes available.
If the Disclosure Party changes its fiscal year, it will notify the Issuer, each NRMSIR
and any SID in writing of the change (and of the date of the new fiscal year end) prior to the
next date by which the Disclosure Party otherwise would be required to provide financial
information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section
may be set forth in full in one or more documents or may be incorporated by specific reference
to any document or specific part thereby (including an official statement or other offering
document, if it is available from the MSRB) that theretofore has been provided to each
NRMSIR and any SID or filed with the SEC.
The Disclosure Party shall, within ten (10) business days of the filings of the annual
reports, notify the Issuer in writing that the filings have been made.
Further, the Disclosure Party shall provide (1) in a timely manner, notice of any failure
by the Disclosure Party to provide annual financial statements and operating data in accordance
with Section 2 hereof to each NRMSIR and each SID and (2) within ten (10) business days of
the Disclosure Party's obtaining actual knowledge of the occurrence of any of the events
enumerated in 3(a) below, notice to the Issuer of such event.
SECTION 3. Material Event Notices.
(a) The following are the events with respect to Bonds that the Issuer agrees to
disclose in a timely manner pursuant to the terms hereof, if the Issuer determines, pursuant to
subsection (b) below, that such events are "material" under applicable federal securities laws
and regulations promulgated thereunder.
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults;
(3) Unscheduled draws on debt service reserves reflecting financial
difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial
difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions or events affecting the tax-exempt status of the
security;
(7) Modifications to rights of securities holders;
(8) Bond calls;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the
securities; and
(11) Rating changes.
(b) Whenever the Issuer obtains knowledge of the occurrence of one of the above
events, whether because of a notice from the Disclosure Party pursuant to subsection (d) or
otherwise, the Issuer shall, in a timely manner, determine if such event would constitute
material information for bondholders and beneficial owners of Bonds.
(c) If the Issuer determines that the occurrence of one of the above events is
material within the meaning of applicable federal securities laws and regulations promulgated
thereunder, the Issuer shall promptly file a notice of such occurrence with each NRMSIR or
the MSRB and each SID.
SECTION 4. Limitations, Disclaimers, and Amendments.
The Issuer and the Disclosure Party shall be obligated to observe and perform the
covenants specified in this Agreement for so long as, but only for so long as, the Disclosure
Party remains an "obligated person" with respect to Bonds within the meaning of the Rule,
except that the Disclosure Party in any event will give notice of any deposit made that causes
Bonds no longer to be outstanding.
The provisions of this Agreement are for the sole benefit of (and may be enforced by)
the bondholders and beneficial owners of Bonds and the parties to this Agreement, and nothing
in this Agreement, express or implied, shall give any benefit or any legal or equitable right,
remedy, or claim hereunder to any other person. The Issuer and the Disclosure Party
undertake to provide only the financial information, operating data, financial statements, and
notices which each has expressly agreed to provide pursuant to this Agreement and do not
hereby undertake to provide any other information that may be relevant or material to a
complete presentation of the Issuer's or the Disclosure Party's financial results, condition, or
prospects or hereby undertake to update any information provided in accordance with this
Agreement or otherwise, except as expressly provided herein. Neither the Issuer nor the
Disclosure Party make any representation or warranty concerning such information or its
usefulness to a decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE ISSUER OR THE DISCLOSURE
PARTY BE LIABLE TO THE BONDHOLDER OR BENEFICIAL OWNER OF ANY BOND
OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN
WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER OR THE DISCLOSURE
PARTY, RESPECTIVELY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS
PART, OF ANY COVENANT SPECIFIED IN THIS AGREEMENT, BUT EVERY RIGHT
AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON
ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR
MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the Issuer or the Disclosure Party in observing or performing their
respective obligations under this Agreement shall comprise a breach of or default under any
resolution of the Issuer authorizing the issuance of Bonds, or any contract relating thereto, for
purposes of any other provision of this Agreement.
Nothing in this Agreement is intended or shall act to disclaim, waive, or otherwise limit
the duties of the Issuer or the Disclosure Party under federal and state securities laws.
The provisions of this Agreement may be amended by the Issuer or the Disclosure
Party from time to time to adapt to changed circumstances that arise from a change in legal
requirements, a change in law, or a change in the identity, nature, status, or type of operations
of the Issuer or the Disclosure Party, but only if (1) the provisions of this Agreement, as so
amended, would have permitted an underwriter to purchase or sell Bonds in the primary
offering of Bonds in compliance with the Rule, taking into account any amendments or
interpretations of the Rule since such offering as well as such changed circumstances and
(2) either (a) the bondholders or beneficial owners of a majority in aggregate principal amount
(or any greater amount required by any other provision of this Agreement that authorizes such
an amendment) of outstanding Bonds consent to such amendment or (b) an entity that is
unaffiliated with the Issuer or the Disclosure Party (such as nationally recognized bond
counsel) determines that such amendment will not materially impair the interest of the
bondholders and beneficial owners of Bonds and is permitted by the terms of the Agreement.
If the Issuer or the Disclosure Party so amend the provisions of this Agreement in connection
with the financial or operating data which it is required to disclose under Section 2 hereof, the
Disclosure Party shall provide a notice of such amendment to be filed in accordance with
Section 3(b) hereof, together with an explanation, in narrative form, of the reason for the
amendment and the impact of any change in the type of financial information or operating data
to be so provided. The Issuer or the Disclosure Party may also amend or repeal the provisions
of this continuing disclosure agreement if the SEC amends or repeals the applicable provision
of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are
invalid, but only if and to the extent that the provisions of this sentence would not prevent an
underwriter from lawfully purchasing or selling Bonds in the primary offering of Bonds.
SECTION 5. Miscellaneous.
A. Representations.
Each of the parties hereto represents and warrants to each other party that it has (i) duly
authorized the execution and delivery of this Agreement by the officers of such party whose
signatures appear on the execution pages hereto, (ii) that it has all requisite power and
authority to execute, deliver and perform this Agreement under applicable law and any
resolutions or other actions of such party now in effect, (iii) that the execution and delivery of
this Agreement, and performance of the terms hereof, does not and will not violate any law,
regulation, ruling, decision, order, indenture, decree, agreement or instrument by which such
party is bound, and (iv) such party is not aware of any litigation or proceeding pending, or, to
the best of such party's knowledge, threatened, contesting or questioning its existence, or its
power and authority to enter into this Agreement, or its due authorization, execution and
delivery of this Agreement, or otherwise contesting or questioning the issuance of Bonds.
B. Governing Law.
This Agreement shall be governed by and interpreted in accordance with the laws of the
State of Texas and applicable federal law.
C. Severability.
If any provision hereof shall be held invalid or unenforceable by a court of competent
jurisdiction, the remaining provisions hereof shall survive and continue in full force and effect.
D. Counterparts.
This Agreement may be executed in one or more counterparts, each and all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Issuer and the Disclosure Party have each caused their
duly authorized officers to execute this Agreement as of the day and year first above written.
LOWER COLORADO RIVER
AUTHORITY
President, Board of Directors
ATTEST:
Secretary, Board of Directors
By:
Title:
ATTEST:
Title:
DATE: September 8,2000
SUBJECT: City Council Meeting— September 14, 2000
ITEM: 10.13.2. Consider a resolution authorizing the Mayor to execute the
Wastewater Disposal Contract between the Brazos River Authority,
Lower Colorado River Authority, City of Cedar Park and City of
Austin. Staff Resource Person: Jim Nuse,Public Works Director.
EXECUTED
DOCUMENT
FOLLOWS
LOWER COLORADO WATER ALLIANCE BRAZOS
RIVER AUTHORITY RIVER AUTHORITY
October 3, 2000
Mr. Robert Bennett, City Manager
City of Round Rock
221 East Main Street
Round Rock,Texas 78664
Mr. Don Birkner, City Manager
City of Cedar Park
600 North Bell
Cedar Park, Texas 78613
Mr. Jesus Garza, City Manager
City of Austin
P. O. Box 1088
Austin, Texas 78767-1088
Subject: Final System Budget for FY 2001
Brushy Creek Regional Wastewater System
Dear Sirs:
As you may be aware, after more than three years of negotiation, the City of Austin has
joined the Brushy Creek Regional Wastewater System. The new Wastewater Disposal
Agreement between the City of Round Rock, the City of Cedar Park, the City of Austin,
the BRA and the LCRA is planned to be executed later this week to be effective October 1,
2000.
Pursuant to Section 5.01 (a) of the new agreement, I have attached a copy of the System
Budget titled"Alliance Brushy Creek Regional Wastewater System Fiscal Year 2001
Budget—Final Draft." Both the LCRA and BRA Boards of Directors have approved the
attached budget. In addition, I have attached a two-page worksheet that shows the
allocation of the Annual Operation and Maintenance Expense Requirement and the Annual
Project Requirement to all of the regional participants. The first month of the fiscal year
(September)has already been invoiced under the old agreement to which the City of
Austin was not a party. The remaining months of the fiscal year will be invoiced under the
new agreement. At the bottom of page 2 of the allocation worksheet you will find the total
amount due from each regional participant for each remaining month of the fiscal year.
Joseph J.Beal,P.E.,General Manager Gary Gwyn,General Manager
Lower Colorado River Authority rnN Brazos River Authordy
_ P.O.Box 2120*Austin,Texas 78767-0220 P.O.Box 7555•Waco,Texas 76714 7555
THE POWER TO MAKE A DIFFERENCE. (512)473-3586•FAX(512)473-3520 (254)776-1441•FAX(254)772-5180 44
www.kro.org www.brozos.org
Page 2
October 3, 2000
The monthly billing and payment cycle has also changed under the new agreement.
Pursuant to Section 5.06 payment is now due on the first day of the month. However, for
the first month only of the new agreement,payment will be due on October 16. Separate
invoices have been sent to each city with the exact amount and the date due.
Please feel free to contact me at 512-473-3334,with any questions you may have
concerning this budget or the customer allocations.
Sincerely,
Janet Jo Stephenson
Financial Rate Consultant
Attachment
Cc: David Kautz, City of Round Rock
Jim Nuse, City of Round Rock
Steve Sheets, City of Round Rock
Sam Roberts, City of Cedar Park
Wes Vela, City of Cedar Park
Leonard Smith, City of Cedar Park
Kathy Garland, City of Austin
Mike Erdmann, City of Austin
John Tresnicky, City of Austin
Susan Morgan, BRA
Tom Clark,BRA
Chris Lippe, City of Austin
LOWER COLORADO RIVER AUTHORITY WATER ALLIANCE BRAZOS RIVER AUTHORITY
Alliance Brushy Creek Regional Wastewater System
Fiscal Year 2001 Budget - Final Draft
(a) 9/12/00 3:52PM
Final Draft -
FY 2000 FY 2001
Budget Budget
Operation and Maintenance Expenses
BRA O&M exaenses
Operations salaries $ 306,705 $ 313,408
Operations benefits 70,423 77,648
Materials &supplies 115,185 118,482
Repairs& maintenance 42,462 49,234
Rental expense 9,713 71,400
Utilities 354,822 334,035
Land fill disposal expense 206,608 228,340
Travel 2,460 1,407
Outside services 47,101 36,470
Employee development 10,800 10,935
Regulatory expense 68,751 60,099
Capital outlay 29,910 31,815
BRA- Direct labor charges 85,757 114,367
BRA-Water Treatment Div. - 30,380
BRA- Indirect labor-charges - _
General & administrative 174,072 142,628
Total BRA O&M 1,524,769 1,620,648
BRA Revenue from others _
BRA Under(Over)Recovery - (96,876)
BRA Interest due on advances from O&M Reserve Fund - 25,407
Total BRA O&M- Net 1,524,769 1,549,179
LCRA O&M expenses
Labor 71,000 73,130
Property insurance 8,418 4,500
Outside services (legal &accounting) 12,000 13,000
Materials &supplies - 2,000
Utilities 36,000 -
Other 500 500
Total LCRA O&M 127,918 93,130
Payment to Brushy Creek MUD for South Plant Flows 81,656
O&M Manaaement Fee (5%)
BRA 76,238 81,032
LCRA 6,396 4,657
Total O&M management fee 82,634 85,689
Annual O&M Expense Requirement $ 1,735,321 $ 1,809,654
O&M Under(Oyer)Recovery 130,960 47,924
Annual O&M Expense Requirement-net of O&M Recovery $ 1,866,281 $ 1,857,579
1
Revised 9/12/00 BRA/LCRA Regional WW System FY 01 Customer Charge Derivation
Monthly Allocation
Annual Total Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Annual O&M Budget+Interest Due
on O&M Reserve Fund+Payment to
BCMUD $1,906,530 $152,073 $159,496 $159,496 $159,496 $159,496 $159,496 $159,496 $159,496 $159,496 $159,496 $159,496 $159,496
Projected Flow(1000 qw ma)
Round Rode 2,749,882 229,157 229,157 229,157 229,157 229,157 229,157 229,157 229,157 229,157 229,157 229,157 229,157
Fem Bluff MUD 170,638 14,220 14,220 14,220 14,220 14,220 14,220 14,220 14,220 14,220 14,220 14,220 14,220
Brushy Creek MUD North 26,134 2,178 2,178 2,178 2,178 2,178 2,178 2,178 2,178 2,178 2,178 2,178 2,178
Brushy Creek MUD South OBLS 237,281 10,836 20,586 20,586 20,586 20,586 20,586 20,586 20,586 20,586 20,586 20,586 20,586
Cedar Park 1,000 83 83 83 83 83 83 83 83 83 83 83 83
Austin(Brushy Creek) 13,140 0 1,195 1,195 1,195 1,195 1,195 1,195 1,195 1,195 1,195 1,195 1,195
Total 3,198,075 256,474 267,418 267,418 267,418 267,418 267,418 267,418 267,418 267,418 267,418 267,418 267,418
Allocation of O&M Budget&Interest
on Reserve Fund
Round Rock $1,639,310 $135,876 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676
Fern Bluff MUD $101,724 $8,431 $8,481 $8,481 $8,481 $8,481 $8,481 $8,481 $8,481 $8,481 $8,481 $8,481 $8,481
Brushy Creek MUD North $15,579 $1,291 $1,299 $1,299 $1,299 $1,299 $1,299 $1,299 $1,299 $1,299 $1,299 $1,299 $1,299
Brushy Creek MUD South $141,484 $6,425 $12,278 $12,278 $12,278 $12,278 $12,278 $12,278 $12,278 $12,278 $12,278 $12,278 $12,278
Cedar Park $596 $49 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50
Austin(Brushy Creek) $7,837 $0 $712 $712 $712 $712 $712 $712 $712 $712 $712 $712 $712
Total $1,906,530 $152,073 $159,496 $159,496 $159,496 $159,496 $159,496 $159,496 $159,496 $159,496 $159,496 $159,496 $159,496
Total Flow Charges
Round Rock
Round Rode $135,876 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676
Fern Bluff MUD $8,431 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Brushy Creek MUD North $1,291 $0 $0 $0 $0 $0 $o $0 $0 $0 $0 $0
Brushy Creek MUD South $6,425 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Round Rode $1,655,458 $152,023 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676 $136,676
las: FY99 Over-recovery ($48,951) ($4,079) ($4,079) ($4,079) ($4,079) ($4,079) ($4,079) ($4,079) ($4,079) ($4,079) ($4,079) ($4,079)
($4,079)
Total Round Rock $1,806,507 $147,944 $132,597 $132,597 $132,597 $132,597 $132,597 $132,597 $132,597 $132,597 $132,597 $132,597 $132,597
Cedar Park $590 $49 $56 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50
Austin $7,837 $0 $712 $712 $712 $712 $712 $712 $712 $712 $712 $712 $712
LCRA
Total LCRA $242,639 $0 $22,058 $22,058 $22,058 $22,058 $22,058 $22,058 $22,058 $22,058 $22,058 $22,058 $22,058
Total Annual O&M Expense Requirement $1,857,579
10/0212000 - fy0191200/FY01 Charges Page 1 of 2
Revised 9/12/00 BRA/LCRA Regional WW System FY 01 Customer Charge Derivation
Monthly Allocation 10
Annual Total Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Annual Project Requirement
FY 01 Debt Service
1st TWDa Bwowkv $2,015,378
2nd TWDa eonowirp $350,555
FY 97,98,99 OF(per RM Smftmg July 99) $223,900
FY 2000 OF(Per Ebel Souesvea July 99) $0
FY 2001 OF Qnterest Only per Fkst SouVwng May 00) $492,929
Total Debt Service $3,082,762
i
Coverage $246,621
Capital Management Fee $164,138
Total Annual Project Requirement • $3,483,520
Allocation of Annual Project Requirement
Round Rock $1,575,908 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326
Fern Bluff MUD $94,195 $7,850 $7,850 $7,850 $7,850 $7,850 $7,850 $7,850 $7,850 $7,850 $7,850 $7,850 $7,850
Brushy Creek MUD North $60,020 $5,002 $5,002 $5,002 $5,002 $5,002 $5,002 $5,002 $5,002 $5,002 $5,002 $5,002 $5,002
Brushy Creek MUD South $381,766 $31,814 $31,814 $31,814 $31,814 $31,814 $31,814 $31,814 $31,814 $31,814 $31,814 $31,814 $31,814
Cedar Park $1,087,358 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613
Austin(Brushy Creek&Lake Creek) $284,275 $0 $25,843 $25,843 $25,843 $25,843 $25,843 $25,843 $25,843 $25,843 $25,843 $25,843 $25,843
Total $3,483,520 $266,604 $292,447 $292,447 $292,447 $292,447 $292,447 $292,447 $292,447 $292,447 $292,447 $292,447 $292,447
Total Capital Charges
Round Rock
Round Rock $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326
Fero Bluff MUD $7,850 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Brushy Creek MUD North $5,002 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Brushy Creek MUD South $31,814 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Round Rock $1,620,573 $175,991 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326 $131,326
Cedar Park $1,087,356 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613 $90,613
Austin $284,275 $0 $25,843 $25,843 $25,843 $25,843 $25,843 $25,843 $25,843 $25,843 $25,843 $25,843 $25,843
LCRA
Total LCRA $491,315 $0 $44,665 $44,665 $44,665 $44,665 $44,665 $44,665 $44,665 $44,665 $44,665 $44,665 $44,665
Total Annual Project Requirement $3,483,520
Total Annual Charges
Round Rock $3,227,080 $323,935 $263,922 $263,922 $263,922 $263,922 $263,922 $263,922 $263,922 $263,922 $263,922 $263,922 $263,922
Cedar Park $1,087,954 $90,663 $90,663 $90,663 $90,663 $90,663 $90,663 $90,663 $90,663 $90,663 $90,663 $90,663 $90,663
Austin $292,112 $0 $26,556 $26,556 $26,556 $26,656 $26,556 $26,556 $26,556 $26,556 $26,556 $26,556 $26,556
LCRA $733,954 $0 $66,723 $66,723 $66,723 $66,723 $66,723 $66,723 $66,723 $66,723 $66,723 $66,723 $66,723
10/02/2000 fy0191200/FY01 Charges Page 2 of 2
WASTEWATER DISPOSAL CONTRACT
dated
October 1, 2000
among
BRAZOS RIVER AUTHORITY
LOWER COLORADO RIVER AUTHORITY
CITY OF ROUND ROCK
CITY OF CEDAR PARK
CITY OF AUSTIN
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITION OF TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.02. INTERPRETATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE II
DESIGN, ACQUISITION AND
CONSTRUCTION OF SYSTEM BY THE ALLIAN F
Section 2.01. ALLIANCE RESPONSIBILITIES. . . . . . . . . . . . . . . . . . . . . 14
Section 2.02. ALLIANCE MODIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.03. ACQUISITION AND CONSTRUCTION OF
PHASE I OF THE SYSTEM. . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.04. CONSTRUCTION OF PHASE II . . . . . . . . . . . . . . . . . . . . . 17
Section 2.05. EXPANSIONS BEYOND PHASE H. . . . . . . . . . . . . . . . . . . . 17
Section 2.06. CONSTRUCTION OF REQUIRED IMPROVEMENTS. . . . . . . 18
Section 2.07. LCRA RIGHT TO RESERVED CAPACITY . . . . . . . . . . . . . . 19
Section 2.08. DEPOSITS ON FUNDING DATES . . . . . . . . . . . . . . . . . . . . 19
ARTICLE III
OPERATION OF SYSTEM BY BRA
Section 3.01. OPERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.02. COMPETITIVE BIDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.03. PAYMENTS TO BRA FOR OPERATION OF SYSTEM. . . . . . . 21
Section 3.04. OPERATION & MAINTENANCE MANAGEMENT FEE. . . . . . 21
Section 3.05. COOPERATION DURING MAINTENANCE
OR EMERGENCY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IV
RESERVED CAPACITY AND DISCHARGE OF WASTEWATER
Section 4.01. DISCHARGE QUANTITIES. . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 4.02. POINT(S) OF ENTRY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 4.03. RATE AND QUANTITY AT POINTS) OF ENTRY. . . . . . . . . 23
Section 4.04. DISCHARGE QUALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
i
Section 4.05. REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.06. INDUSTRIAL WASTES . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.07. SYSTEM LMTATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.08. RESPONSIBILITY FOR TREATMENT
AND DISPOSAL OF WASTEWATER. . . . . . . . . . . . . . . . . . 25
Section 4.09. METERING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.10. UNIT OF MEASUREMENT. . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE V
SYSTEM BUDGETS AND CHARGES
Section 5.01. ESTABLISHING BUDGETS AND CHARGES. . . . . . . . . . . . . 26
Section 5.02. CUSTOMER DISPUTES. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.03. CHANGES FROM NEW CUSTOMERS, EMERGENCIES
AND LEGAL ACTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.04. CAPITAL CHARGES; UNCONDITIONAL
PAYMENT OBLIGATION. . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.05. FLOW CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.06. HOW, WHEN AND WHERE PAYMENTS ARE TO BE MADE . 31
Section 5.07. DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.08. CAPITAL MANAGEMENT FEE. . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VI
TECHNICAL REVIEW COMMITTEE
Section 6.01. COMPOSITION OF TECHNICAL REVIEW COMMITTEE. . . . 33
Section 6.02. RESPONSIBILITY OF TECHNICAL REVIEW COMMITTEE . . 33
Section 6.03. COMPOSITION OF FINANCIAL REVIEW COMMITTEE . . . . 34
Section 6.04. RESPONSIBILITY OF FINANCIAL REVIEW COMMITTEE . . 35
ARTICLE VII
GENERAL PROVISIONS
Section 7.01. NO TAX OBLIGATION OF CUSTOMERS. . . . . . . . . . . . . . . 35
Section 7.02. PAYMENTS TO CONSTITUTE OPERATING
EXPENSES OF CUSTOMER. . . . . . . . . . . . . . . . . . . . . . . . 36
Section 7.03. CUSTOMER RATES, FEES AND CHARGES. . . . . . . . . . . . . 36
Section 7.04. USE OF PUBLIC PROPERTY. . . . . . . . . . . . . . . . . . . . . . . 36
Section 7.05. FORCE MAJEURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 7.06. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.07. GOVERNMENTAL REGULATION. . . . . . . . . . . . . . . . . . . . 37
Section 7.08. CUSTOMER COOPERATION TO
ASSURE REGULATORY COMPLIANCE. . . . . . . . . . . . . . . . 37
ll
Section 7.09. CONTRACTS WITH OTHERS IN RELATION TO SYSTEM. . . 38
Section 7.10. NON-INFRINGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.11. SALE OR TRANSFER OF SYSTEM; CUSTOMERS'
RIGHT OF FIRST REFUSAL. . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.12. LCRA RIGHT OF FIRST REFUSAL TO PURCHASE
CEDAR PARK TREATMENT PLANT. . . . . . . . . . . . . . . . . . 40
Section 7.13. EXCEPTIONS TO SOLE SOURCE REQUIREMENT. . . . . . . . 40
Section 7.14. ANNUAL REPORT OF SYSTEM AND AUDITS. . . . . . . . . . . 41
Section 7.15. NO ADDITIONAL WAIVER IMPLIED. . . . . . . . . . . . . . . . . 41
Section 7.16. ADDRESSES AND NOTICE. . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.17. MODIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.18. ASSIGNABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.19. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 7.20. MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Section 7.21. VENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 7.22. NO THIRD PARTY BENEFICIARIES . . . . . . . . . . . . . . . . . . 43
Section 7.23. REUSE OF TREATED EFFLUENT FROM THE SYSTEM . . . . 43
ARTICLE VIII
NEGOTIATION AND MEDIATION OF DISPUTES
Section 8.01. AGREEMENT REGARDING REMEDIES. . . . . . . . . . . . . . . . 44
Section 8.02. AGREEMENT TO NEGOTIATE FIRST TO RESOLVE ISSUES. 44
Section 8.03. AGREEMENT TO MEDIATE. . . . . . . . . . . . . . . . . . . . . . . . 44
Section 8.04. PRESENTATION OF WRITTEN CLAIM REGARDING
DISPUTES NOT RESOLVED BY NEGOTIATION. . . . . . . . . . 44
Section 8.05. PERFORMANCE DURING MEDIATION. . . . . . . . . . . . . . . . 45
Section 8.06. APPOINTMENT OF MEDIATOR. . . . . . . . . . . . . . . . . . . . . 45
Section 8.07. RULES FOR MEDIATION. . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 8.08. EXCEPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE IX
EFFECTIVE DATE AND TERM OF AGREEMENT
Section 9.01. EFFECTIVE DATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.02. TERM OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.03. EFFECT ON CERTAIN PRIOR AGREEMENTS. . . . . . . . . . . 47
iii
WASTEWATER DISPOSAL CONTRACT
This agreement (the "Agreement") is entered into between the Brazos River Authority
("BRA"), the Lower Colorado River Authority("LCRA")acting together pursuant to the Brazos-
Colorado Water Alliance(the "Alliance"), the City of Round Rock("Round Rock"), the City of
Cedar Park ("Cedar Park") and the City of Austin ("Austin"). Round Rock, Cedar Park and
Austin, together with LORA, are hereafter collectively referred to as the "Customers."
RECITALS
LCRA and BRA have recognized that there are areas in the vicinity of the boundaries of
the Colorado and Brazos River Basins in which each can provide services which can be better
provided if they cooperate and pool resources.
Pursuant to such recognition, they have entered into an Alliance to implement such
cooperation and pooling of resources, including financial and engineering resources and BRA's
experience in the operation of regional sewerage systems.
The Alliance is not a separate entity, but a cooperative effort and dedication of resources
of LCRA and BRA.
The undertakings of each-of LCRA and BRA provided for in this Agreement are in
furtherance of the purposes of the Alliance and are, in that sense, activities of the Alliance.
Because the Alliance is not a separate entity, the undertakings of each of LCRA and BRA
in this Agreement, though in furtherance of the purposes of the Alliance, are undertakings of the
party specified as making same and are, in no sense, undertakings of the other, so that each of
LCRA and BRA shall be solely responsible for its own undertakings provided in this Agreement
and neither LCRA nor BRA shall be responsible for the performance by the other of its
undertakings provided herein.
Austin,Round Rock and Brushy Creek Water Control and Improvement District No. 1 (the
"WCID")entered into a certain "Wastewater Disposal Agreement", as amended(the"Wastewater
Disposal Agreement"), setting forth terms and conditions of those parties to participate in the joint
financing, construction, operation and maintenance of the WCID's system (the "WCID System")
intended to provide wastewater transportation and treatment services for that portion of the Brushy
Creek watershed located within the respective corporate limits and/or extraterritorial jurisdictions
of Austin and Round Rock.
Pursuant to the Wastewater Disposal Agreement, the WCID acquired or constructed in its
name for the benefit and at the expense of Austin and Round Rock, engineering studies and plans
of the proposed WCID System, a wastewater discharge permit, designation of the WCID as the
regional provider of wastewater services for a portion of the Brushy Creek watershed, portions
of the proposed wastewater collection and transportation components of the WCID System and
certain easements and property rights appurtenant thereto.
Additionally, Austin and Round Rock transferred to the custody and control of the WCID
certain funds, equipment and other assets for use with the WCID System.
Austin and Round Rock also respectively acquired or constructed or determined to use in
their own names certain land, wastewater facilities and property rights in contemplation of the
later use by or dedication of same to the WCID.
By virtue of that certain "Agreement for Termination of Brushy Creek Regional
Wastewater Disposal Agreement" effective September 19, 1994, as amended on September 18,
1995 and March 19, 1996 (the "Termination Agreement"), Austin, Round Rock and the WCID
set forth terms and conditions for termination of the Wastewater Disposal Agreement, for transfer
of all WCID System assets acquired or constructed by the WCID to Austin and Round Rock,
jointly or severally, and for assumption by Austin and Round Rock of all WCID System
obligations, liabilities and responsibilities.
Austin, Round Rock and the WCID have implemented the Termination Agreement which
resulted in Austin and Round Rock owning, jointly or severally, all of the assets formerly held
by the WCID as part of the WCID System.
Each Customer desires to accomplish the implementation of a regional wastewater
collection, treatment and disposal system for the benefit of the Customers.
LCRA and BRA, acting in furtherance of the purposes of the Alliance, agree to utilize their
collective financial, engineering and operational resources and expertise to assist in the
implementation of the regional wastewater collection, treatment and disposal system (hereafter,
the "System").
On July 7, 1996, LCRA, BRA and Round Rock entered into that certain "Wastewater
Disposal Contract" and "Supplemental Agreement" (collectively, the "RR/Alliance Wastewater
Disposal Contract"), and LCRA and Round Rock entered into that certain "Agreement for
Acquisition of Wastewater System Assets (the "RR/Alliance Acquisition Contract").
On July 18, 1997, LCRA, BRA, Round Rock and Cedar Park entered into that certain
"Wastewater Disposal Contract" (the "CP/RR/Alliance Wastewater Disposal Contract") which
superseded, replaced and terminated the RR/Alliance Wastewater Disposal Contract.
Subsequent to implementation of the Termination Agreement, LORA has acquired Round
Rock's interests in the assets formerly held by the WCIDas part of the WCID System and the East
Plant and West Plant (as hereafter defined).
LCRA is in the process of purchasing additional wastewater assets from Round Rock
pursuant to the RR/Alliance Acquisition Agreement.
Cedar Park,simultaneously with its execution of the CP/RR/Alliance Wastewater Disposal
Contract, entered into that certain "Agreement for Conveyance of Interests and Temporary Pass-
2
Through Wastewater Service" with Austin to acquire an undivided interest in certain of the assets
owned by Austin as a result of implementation of the Termination Agreement and Austin's
participation in efforts to implement the WCID System (the "Austin/Cedar Park Transfer
Agreement").
Cedar Park subsequently assigned to LCRA Cedar Park's interests in the Austin/Cedar
Park Transfer Agreement and LCRA acquired the assets to be transferred by Austin pursuant to
the Austin/Cedar Park Transfer Agreement as provided in that certain "Agreement for Assignment
of Contract Rights" between LCRA and Cedar Park to be used by BRA and LCRA, in furtherance
of the purposes of the Alliance, in connection with and to be part of the System.
Austin now desires to become a Customer of the System and BRA, LCRA and the other
Customers desire that it become a Customer of the System under the terms and conditions
provided for in this Agreement.
LCRA is willing to become a Customer of the System in order to provide wholesale
wastewater services to Brushy Creek Municipal Utility District and Fern Bluff Municipal Utility
District pursuant to separate contracts entered into between LCRA,BRA and each of said districts,
respectively, and to possibly serve Leander and Hutto as permitted by that Section.
LCRA,contemporaneously with entering into this Agreement, has entered into that certain
"Agreement for Acquisition of Wastewater System Assets (Brushy Creek)" to acquire further
undivided interests in certain of the assets more particularly described on Exhibit A owned by
Austin as a result of the Termination Agreement and Austin's participation in efforts to implement
the WCID System (the "Austin/Alliance.Acquisition Contract").
The Customers desire to discharge wastewater from their wastewater collection systems
into the System in order to serve the wastewater needs of the Customers, to achieve efficiencies
of cost and operation and to protect and preserve the environment of the Brushy Creek watershed.
LCRA, acting in furtherance of the purposes of the Alliance, is willing to acquire,
construct, improve and expand the System, as described in the Engineering Report, to receive
wastewater from the Customers' wastewater collection systems.
In that connection, LCRA is willing to provide engineering, technical and other assistance
for the System and to advance financial assistance by providing that the System will be part of the
"LCRA System"as now or hereafter defined in the resolutions authorizing and governing LCRA's
Revenue Bonds and LCRA's Commercial Paper Notes (collectively, the "LCRA Debt").
BRA, acting in furtherance of the purposes of the Alliance, is willing to operate and
maintain the System in order to receive wastewater from the Customers' wastewater collection
systems and to treat and dispose of such wastewater..
3
BRA, LCRA and the Customers are authorized to make this Agreement under the
provisions of Chapters 30 and 49, Texas Water Code;Section 791.026, Texas Government Code;
and other applicable provisions of state law.
In consideration of the mutual covenants and_agreements herein contained, LCRA and
BRA, each acting in furtherance of the purposes of the Alliance, and the Customers agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITION OF TERMS. Terms and expressions as used in this
Agreement, unless the context clearly shows otherwise, shall have the following meanings:
(a) "Accumulated Coverage" means the amounts, together with interest
earnings thereon, received by LCRA or BRA from the portion of the Capital Charges
consisting of the coverage requirements specified in subsection (iii) of the definition of
Bond Costs herein.
(b) "Agreement" means this agreement.
(c) "Alliance Acquisition Contracts" means, collectively, the Austin/Alliance
Acquisition Contract, the CP/Alliance Acquisition Contract and the RR/Alliance
Acquisition Contract.
(d) "Annual Operation and Maintenance Expense Requirement" means the
annual amount budgeted, as provided in Article V, for all Operation and Maintenance
Expenses during any Fiscal Year. The Annual Operation and Maintenance Expense
Requirement does not include any portion of the Annual Project Requirement.
(e) "Annual Project Requirement" means the annual amount budgeted by LCRA
or BRA, as provided in Article V, for the capital related costs of the System to be incurred
by LCRA or BRA,including, without limitation,.that year's Bond Costs,any LIF Advance
Costs, and the Capital Management Fee. The Annual Project Requirement does not
include any portion of the Annual Operation and Maintenance Expense Requirement.
(f) "Annual Project Requirement-Downstream Collection System" means that
portion of the Annual Project Requirement attributable to the Downstream Collection
System in accordance with the provisions of Section 5.04.
(g) "Annual Project Requirement-Treatment Facilities" means that portion of
the Annual Project Requirement attributable to the Treatment Facilities in accordance with
the provisions of Section 5.04.
4
(h) "Annual Project Requirement - Upstream Collection System" means that
portion of the Annual Project Requirement attributable to the Upstream Collection System
in accordance with the provisions of Section 5.04.
(i) "Austin" means the City of Austin.
0) "Austin/Alliance Acquisition Contract" means that certain "Agreement for
Acquisition of Wastewater System Assets(Brushy Creek)"entered into contemporaneously
with this Agreement between Austin and LCRA relating to the acquisition of additional
undivided interests in certain assets of Austin by LCRA.
(k) "Austin/Cedar Park Transfer Agreement" means that certain "Agreement
for Conveyance of Interests and Temporary Pass-Through Wastewater Service" entered
into on or about July 18, 1997, between Austin and Cedar Park relating to the acquisition
of an undivided interest in certain assets of Austin by Cedar Park, transferred to LCRA.
(1) "Bond" means any bond, note or other evidence of indebtedness to be issued
by LCRA or BRA pursuant to this Agreement to provide temporary, interim or permanent
financing for the acquisition, construction, expansion, extension, enlargement,
improvement, repair or decommissioning of the System, whether one or more issues, or
any bond issued to refund the same, or issued for any purpose necessary to acquire,
construct,expand,extend,enlarge, improve or repair the System,but does not include any
other bonds of LCRA or BRA issued heretofore or hereafter for any other LCRA or BRA
purpose.
(m) "Bond Costs" means
(i) the payments due with respect to Bonds, including
(aa) the principal, redemption premium, if any, and the interest,
if any, attributable to Bonds, issued by LCRA or BRA as such become due
during any Fiscal Year, whether at maturity or at redemption prior to
maturity, less interest to be paid out of Bond proceeds as permitted by the
Bond Resolution, plus
(bb) the amounts, if any, required to be deposited to restore any
deficiency in any reasonably appropriate Debt Service Reserve Fund for
any Bonds issued after the effective date of this Agreement in accordance
with (x) the provisions of the Bond Resolution, or (y) to the maximum
extent of one half of the average annual debt service on all outstanding
Bonds issued after the effective date of this Agreement attributable to the
System at any given time, any LCRA or BRA policies covering financial
management, insurance, risk management, investment and other policy
matters representing LCRA's or BRA's general financial and business
policies implemented through and in accordance with LCRA's or BRA's
5
plans for financial and business operations, as such resolutions and policies
may be amended from time to time as therein permitted; plus
(ii) any amounts required to pay charges, fees or expenses of any
trustee, paying agent or registrar for the Bonds; plus
(iii) the larger of
(1) the amount necessary to provide for any required coverage
on any outstanding Bonds and any additional Bonds proposed to be issued
within a time ending no later than twelve Months after the end of the Fiscal
Year for which the Bond Costs are budgeted, or
(2) the amount necessary to provide the coverage specified
below, which amount the parties agree is appropriate and reasonable in any
event to prudently finance the System:
((a)) FY 2000: eight percent (8%)of that year's principal
and interest on any outstanding Bonds; and
((b)) FY 2001 and beyond: ten percent (10%) of that
year's principal and interest.on any outstanding Bonds.
(n) "Bond Issuance Costs" means all reasonable costs associated with the
authorization, issuance, sale and delivery of the Bonds, including all legal, financial
advisory, engineering, rating, credit enhancement and similar fees related thereto,
expenses of printing the Bonds, expenses to retain a trustee, paying agent or registrar for
the Bonds, advertising expenses, capitalized interest and all other out-of-pocket expenses
directly related to the authorization, issuance, sale and delivery of the Bonds.
(o) "Bond Resolution" means any resolution of the Board of Directors of LCRA
or BRA authorizing the issuance of Bonds and providing for their security and payment
as such resolution may be amended from time to time as therein permitted; without
limitation, "Bond Resolution" shall include any trust indenture pursuant to which the
Bonds are issued.
(p) "Capital Charge" means the amount to be paid each Month calculated in
accordance with Section 5.04 of this Agreement and owed by each of the Customers to pay
for the Annual Project Requirement.
(q) "Capital Management Fee" means the fee to be paid pursuant to Section
5.08 of this Agreement.
(r) "Cedar Park" means the City of Cedar Park.
6
(s) "Cedar Park Treatment Plant" means Cedar Park's existing 2.5 MGD
wastewater treatment plant located at 900 Brushy Creek Road, and any expansions thereto
as permitted in Section 7.13 of this Agreement.
(t) "Commission"means the Texas Natural Resource Conservation Commission
or its successor agency.
(u) "Contract 6A Wastewater Interceptor Line" means the portion of the
Downstream Collection System currently existing and acquired or to be acquired by LCRA
as part of the Regional System Assets and referred to in the Engineering Report as being part
of"Contract 6A".
(v) "Contractual Flow" means, for any particular Customer, the amount of
Wastewater projected to be discharged by that Customer in a particular year (initially, in
the amounts set forth in Exhibit B)or such other amount as may be required or permitted
to be established pursuant to Section 5.04.
(w) "CP/Alliance Acquisition Contract" means that certain "Agreement for
Assignment of Contract Rights"between Cedar Park and LCRA providing for the transfer
by Cedar Park to LCRA of Cedar Park's rights and obligations in the Austin/Cedar Park
Transfer Agreement.
(x) "CP/RR/Alliance Wastewater Disposal Contract" means that certain
"Wastewater Disposal Contract" dated July 18, 1997, by and among Cedar Park, Round
Rock, BRA, and LCRA.
(y) "Customers" means Round Rock, Cedar Park, Austin and LCRA.
(z) "Debt Service Reserve Fund" means a reserve fund available to pay on a
timely basis the principal of and interest on any Bonds to the extent revenues pledged to
the payment of the Bonds are insufficient to do so.
(aa) "Downstream Collection System" means that portion of the System
consisting of the System's interceptor line from Node K downstream to the East Plant, as
described in the Engineering Report.
(bb) "East Plant" means the plant purchased by LCRA which was formerly
Round Rock's 3.6 MGD wastewater treatment plant and appurtenances as described in the
Engineering Report and any improvements or expansions thereto.
(cc) "Engineering Report" means the report prepared by PBS&J, on behalf of
LCRA, entitled BRA/LCRA Alliance Brushy Creek Regional Wastewater System
Engineering Report,dated October,2000, hereby incorporated herein by reference,which
describes the System Components currently contemplated,the estimated construction costs,
7
the proposed construction schedule and other pertinent matters; and any further supplements or
amendments thereto as contemplated herein.
(dd) "EPA" means the United States Environmental Protection Agency.
(ee) "Expansion" means any System Components which constitute an expansion,
extension or enlargement of the facilities comprising Phase I and II of the System, or of
other facilities, so as to increase, extend or enlarge the System to provide additional
capacity or service capability.
(ff) "Financial Review Committee"means the committee provided for in Section
6.03 of this Agreement.
(gg) "Fiscal Year" means the twelve(12) Month period beginning October 1 of
each year.
(hh) "Flow Charge" means the amount to be paid each Month by each Customer
calculated in accordance with Section 5.05 of this Agreement.
(ii) "Funding" means the receipt from time to time by LCRA or BRA of the
funds necessary to pay the Project Costs.
aj) "Funding Date" means the date or dates on which a Funding occurs.
(kk) "Initial Funding(s)" means the Funding(s) necessary to accomplish
implementation of the Alliance Acquisition Contracts and the construction of the remainder
of Phase I of the System.
01) "Initial Funding Date(s)" means the dates of the Initial Funding(s).
(mm) "LCRA Debt" means LCRA's System Revenue Bonds, LCRA's
Commercial Paper Notes, any indebtedness issued to refund same or any other
indebtedness hereafter issued by LCRA for the LCRA System.
(nn) "LCRA System" means the properties or interests therein owned by LCRA
from which revenues are derived that, together with other available funds, secure the
LCRA Debt,all as described in the resolutions authorizing and governing the LCRA Debt.
(oo) "LIF" means, collectively, the various LCRA Internal Funds from which
LCRA System improvements may be constructed, all as created with respect to the LCRA
System in the resolutions authorizing and creating the LCRA Debt.
(pp) "LIF Advance" means a payment for any Project Cost by LCRA from the
LIF (together with the cost of any assumed bond insurance premium if using the insured
8
rate for LIF Advance Costs as permitted by the definition of LIF Advance Costs) but
excluding payments from Accumulated Coverage.
(qq) "LIF Advance Costs" means the annual payments due from the Customers
with respect to an LIF Advance, which amount shall consist of repayment of principal
amounts advanced and carrying costs thereon amortized over a period substantially the
same as if such amounts had been borrowed at the then current market interest rate and for
a term of years by a governmental entity similar to LCRA and with a similar credit rating
based on the Delnhis Hanover Corporation's Range of Yield Curves' yield for the lower
of uninsured or insured credits and obligations not exceeding thirty (30) year maturities
(or, if the Dglphis Hanover Corporation Range of Yield Curves' yield does not exist, then
a comparable index) for a project similar to that being financed for the System, and
coverage calculated in the manner set forth in the definition of Bond Costs.
(rr) "List of Inadmissible Wastes" means the list of wastes not permitted to be
discharged into the System pursuant to applicable federal and state requirements.
(ss) "Month" means a calendar month.
(tt) "Operation and Maintenance Expense" means all direct and indirect costs
(other than those incurred as a result of the gross negligence or willful misconduct of
LCRA or BRA) of operation, maintenance, repair, rehabilitation, replacement and
decommissioning of the System and of facilities owned either by one or more Customers
or LCRA pursuant to the provisions of Article II below incurred by BRA or LCRA to the
extent not (i) paid from the Repair and Replacement Reserve Fund, (ii) paid from the
Operation and Maintenance Reserve Fund, or (iii) repayable as part of Annual Project
Requirement, including, but not limited to:
(1) costs of maintaining any permits or licenses necessary to own,
operate and maintain the System;
(2) costs (other than those incurred as a result of the gross negligence
or willful misconduct of LCRA or BRA) such as, but not limited to, costs of labor,
materials, utilities, supervision, engineering, accounting, auditing, legal and
professional services, insurance, personnel, data processing and purchasing;
(3) expenses of BRA, LCRA and the Technical Review Committee and
Financial Review Committee in fulfilling the Technical Review Committee's and
Financial Review Committee's responsibilities;
(4) BRA's and LCRA's costs of complying with this Agreement,
including, but not limited to, its remedy and mediation provisions;
(5) such other costs or expenses as may be imposed upon LCRA or
BRA in connection with fulfillment of their obligations under this Agreement
9
because of laws, regulations or requirements of the State of Texas, the United
States, or of any agency or governmental subdivision of the State of Texas or any
agency of the United States having jurisdiction;
(6) costs of any other tools, supplies, inventory, services and
equipment, together with administrative costs not otherwise included in this
definition necessary for proper operation and maintenance of the System;
(7) payments made by LCRA or BRA in satisfaction of judgments
resulting from or settlement of claims not covered by the insurance maintained by
LCRA or BRA or not paid by one particular Customer arising in connection with
the ownership, operation or maintenance of the System;
(8) any and all expenses incurred by LCRA or BRA in connection with
any litigation or administrative proceedings of any nature whatsoever concerning
the System or LCRA's or.BRA's responsibilities hereunder to any person, entity
or party hereto;
(9) the cost of restoration of the Operation and Maintenance Reserve
Fund after expenditures are made therefrom with any such replenishment amounts
to be amortized over a reasonable period of time at a reasonable carrying cost; and
(10) the Operation & Maintenance Management Fee.
Depreciation- shall not be considered an item of Operation and Maintenance Expense.
Operation and Maintenance Expenses shall not include any Project Costs.
(uu) "Operation and Maintenance Management Fee" means a fee of five percent
(5%) of the amounts (other than that portion of the Annual Operation and Maintenance
Expense Requirement consisting of the Operation & Maintenance Management Fee and
fines imposed by governmental regulatory authorities)budgeted for the Annual Operation
and Maintenance Expense Requirement each year.
(vv) "Operation and Maintenance Reserve Fund" means the fund in an amount
adjusted annually to equal one-sixth (1/6) of the Annual Operation and Maintenance
Expense Requirement in order to provide moneys to operate and maintain the System in
the event current revenues of the System are insufficient to meet the Operation and
Maintenance Expenses of the System or pending receipt of payments from Customers
required hereunder.
(ww) "Phase I of the System" means the facilities described as such in the
Engineering Report.
(xx) "Phase II of the System" means the facilities described as such in the
Engineering Report.
10
(YY) "Point of Entry" means a point at which Wastewater enters the System.
(zz) "Project Costs" means all acquisition, construction, reconstruction,
rehabilitation, replacement and decommissioning costs as those terms are geney under-
stood in standard accounting practice as applied to projects of the nature of the System and rall
Bond Issuance Costs, if Bonds are issued to pay the Project Costs; and without limiting the
generality of the foregoing, the term shall include the cost of any Required Improvements;
the costs of obtaining all licenses and permits; purchase of equipment, pro
erty, rights in
Property, costs of land, easements and rights-of-way, including damages to land and
property; engineering, inspections, administrative, auditing, legal expenses incurred in
connection with the planning, development, acquisition, construction, reconstruction or
decommissioning of the System; tools and equipment required for the operation and
maintenance of the System; costs of the same nature for any expansion, extension,
enlargement, improvement, rehabilitation or replacement of the System; the costs of
establishing and replenishing the Repair and Replacement Reserve Fund and any Debt
Service Reserve Fund for the Bonds; legal and other expenses incurred by LCRA or BRA
in accomplishing the acquisition or construction of-the System (other than those incurred
as a result of the gross negligence or willful misconduct of LCRA or BRA), including all
expenses incurred by LORA or BRA in connection with any litigation or administrative
proceedings of any nature whatsoever concerning the acquisition, construction,
reconstruction or decommissioning of System or responsibilities of LCRA or BRA
hereunder to any person, entity or party hereto. Project Costs will not include an
Operation and Maintenance Expenses. Y
(aaa) "Regional System Assets" means the assets obtained or to be obtained for
the System pursuant to the Alliance Acquisition Contracts.
(bbb) "Repair and Replacement Reserve Fund" means the fund, to be established
initially by LORA, in an amount of not to exceed one-half of one percent (.5%) of the
Project Costs expended at any given time or such other amount as LCRA and BRA, with
the approval of the Technical Review Committee, may jointly determine to be appropriate
given the age, condition and size of the System, and additional similar funds established
by BRA or LCRA.
(ccc) "Required Improvement" means any improvement, betterment, enlarge-
ment,addition,repair,rehabilitation or replacement to any System Component(i)required
to be installed or constructed by applicable governmental law, rule, regulation, order or
similar requirement or (ii) needed to maintain the capability of the System to perform its
intended function of providing adequate Wastewater service to the Customers in
accordance with their rights under this Agreement.
(ddd) "Reserved Capacity" means the total quantity of Wastewater that a
Customer is entitled to deliver into any System Component during a specified period of
time pursuant to this Agreement, or, altematively, the percentage of capacity of a System
11
Component that a Customer is entitled to utilize in any System Component pursuant to this
Agreement, all as set forth in Exhibit B.
(eee) "Round Rock" means the City of Round Rock.
(fff) "RR/Alliance Acquisition Contract" means that certain "Agreement for
Acquisition of Wastewater System Assets" between Round Rock and LCRA.
(ggg) "RR/Alliance Wastewater Disposal Contract" means that certain
"Wastewater Disposal Contract" and "Supplemental Agreement" dated July 7, 1996,
among Round Rock, LCRA and BRA as described in the recitals hereto.
(hhh) "Service Area" means the following:
(1) For Round Rock, the area within its corporate limits or
extraterritorial jurisdiction as the same exist from time to time save and except
areas in the LCRA Service Area as provided below;
(2) For Cedar Park, the area within its corporate limits or
extraterritorial jurisdiction as the same exist from time to time;
(3) For Austin, that part of the area both (i) within its corporate limits
or extraterritorial jurisdiction as the same exist from time to time and (ii) which is
within the Brushy Creek watershed or other areas depicted on Figure 1 of the
Engineering Report, save and except areas in the LCRA Service Area as defined
below;
(4) For LCRA, the area presently served by Fern Bluff Municipal
Utility District and Brushy Creek Municipal Utility District (which includes their
district boundaries and certain out-of-district tracts served by Brushy Creek
Municipal Utility District) as shown in Figure 1 of the Engineering Report; and
(5) For the Surplus Reserved Capacity for Leander, that area within
Leander's corporate limits and extraterritorial jurisdiction as the same exist from
time to time.
At the present time, for any particular Customer, the current Service Area for that
Customer is shown in Figure 1 of the Engineering Report.
(iii) "Significant Industrial Users" has the meaning for that term as defined by
40 CFR 403.3(t).
(jjj) "Surplus Reserved Capacity for Leander" means the excess Reserved
Capacity in various System Components contemplated to be needed to serve the Leander
Service Area in the future as described in Appendix 2 of the Engineering Report.
12
(kkk) "System" means all of the facilities constructed or acquired by LCRA or
BRA for receiving, measuring, transporting, treating and disposing of Wastewater from
the Customers in Phases I and II of the System as described in the Engineering Report,
together with any Expansions or Required Improvements added by LCRA or BRA
pursuant to this Agreement.
(lll) "System Component" means a specified facility comprising part of the
System and listed as a System Component.in the Engineering Report.
(mmm) "Technical Review Committee" means the committee created by Article
VI of this Agreement.
(nnn) "Termination Agreement" means that certain "Agreement for Termination
of Brushy Creek Regional Wastewater Disposal Agreement"dated effective September 19,
1994, and amended on September 18, 1995, and March 19, 1996, between Austin, Round
Rock and the WCID, setting forth the terms and conditions for termination of the
Wastewater Disposal Agreement and providing for certain other matters.
(000) "Treatment Facilities" means any wastewater treatment and disposal
facilities acquired or constructed by LCRA or BRA to comprise a part of the System,
together with any extensions, improvements, expansions, betterments, rehabilitations or
replacements thereof.
(ppp) "Total Reserved Capacity" means the sum of the Reserved Capacities of all
Customers in a particular System Component pursuant to this Agreement as set forth in
Exhibit B.
(qqq) "Upstream Collection System" means that portion of the System consisting
of the System's interceptor line from Node K upstream, as described in the Engineering
Report.
(m) "Wastewater" means liquid and water-carried waste discharged from sanitary
conveniences of dwellings, business buildings, institutions and the like including garbage
which has been shredded to such degree that all particles will be carried freely under flow
conditions normally prevailing in public sewers, with no particle greater than one-half
(1/2) inch in any dimension and the liquid wastes from industrial processes, and includes
any infiltration water that has migrated from the ground into the System.
(sss) "Wastewater Disposal Agreement" means the prior Wastewater Disposal
Agreement, as amended, among Austin, Round Rock and the WCID.
(ttt) "WCID" means the Brushy Creek Water Control and Improvement District
No. 1 of Williamson and Milam Counties.
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(uuu) "WCID System" means the former regional wastewater transportation and
treatment system of the WCID.
(vvv) "West Plant" means the plant purchased by LCRA which was formerly
Round Rock's 3.0 MGD wastewater treatment plant and appurtenances as described in the
Engineering Report.
Section 1.02. INTERPRETATION. Terms used in this Agreement with initial letters
capitalized and not otherwise defined in this Agreement have the meanings assigned to them in
Section 1.01. Except where the context otherwise requires, words imparting the singular number
shall include the plural number and vice versa. Reference to any document means that document
as amended or supplemented from time to time. Reference to any party or governmental
regulatory agency means that entity and its successors and assigns.
ARTICLE II
DESIGN, ACQUISITION AND
CONSTRUCTION OF SYSTEM BY THE ALLIANCE
Section 2.01. ALLIANCE RESPONSIBILITIES.
(a) General. The System will be used for receiving, transporting, treating and
disposing of Wastewater for the Customers. LCRA will design, acquire, construct,
expand, extend, enlarge, improve and repair the System. BRA will operate and maintain
the System, together with any facilities owned either by one or more Customers or by
LCRA pursuant to this Article H and provide inspection during construction by LCRA.
(b) System Acquisition and Construction. The System shall be implemented
as described in the Engineering Report. LCRA shall exercise due diligence to complete
acquisition and construction of the System as set forth in the Engineering Report and this
Agreement. The Engineering Report may be amended and updated from time to time,
with the unanimous approval of the Technical Review Committee, as provided in 6.02(1),
to reflect final design and construction changes in the System and to reflect further actions
and understandings of the parties pursuant to this Agreement. A copy of all amendments
and updates to the Engineering Report will be provided promptly to the Customers.
(c) Permits and Approvals. LCRA shall obtain and hold all permits and
approvals required for acquisition, construction and ownership of System. LCRA and
BRA jointly shall hold all permits and approvals for operation of the System granting to
each party the legal authority to operate the System. If, by virtue of regulatory, legal,
financial or other requirements, it is necessary or appropriate that any permit or approval
should be held jointly in order for LCRA to own facilities operated by BRA, LCRA and
BRA agree to fully cooperate with each other in efforts to obtain, hold and comply with
such permits or approvals.
14
(d) Payment of Project Costs. LCRA agrees that the System will be part of the
LCRA System and that LCRA will pay all Project Costs from sources utilized by LCRA
for financing the LCRA System and in a manner which is financially prudent for both the
LCRA System and the System. Such payment.may be made from the proceeds of Bonds,
from an LIF Advance, or from Accumulated Coverage. Subject to the provisions of the
Bond Resolutions or the resolutions authorizing and governing the LCRA Debt,LCRA and
BRA agree that Accumulated Coverage shall inure to the benefit of the System and be used
by LCRA or BRA solely for the purpose of paying future Project Costs. LCRA will
inform the Technical Review Committee and the Financial Review Committee of the
source(s) of funds to be used to pay Project Costs, of the amortization and carrying costs,
and the anticipated effect of same on the Annual Project Requirement. Funds in the Repair
and Replacement Reserve Funds shall be used, when appropriate, to pay for repairs and
replacements of the System Components in order to minimize the need for budget
adjustments. LCRA shall use diligent efforts so that Project Costs incurred by LCRA and
ultimately repaid by the Customers are reasonable and justified.
(e) Construction by LCRA. Except in the case of Expansions which LCRA
shall elect not to construct, all planning and construction provided to be done under this
Agreement shall be done and paid for by LCRA as a Project Cost. In all cases where
construction is to be done by LCRA, preliminary engineering memoranda, modifications
and updates to the Engineering Report, all plans and specifications and substantive change
orders therefor shall be submitted to BRA and the Technical Review Committee for
comments and suggestions sufficiently in advance of the time when bids for the planned
work are to be taken to allow BRA and the Technical Review Committee to make a
thorough review thereof and all comments and suggestions from BRA and the Technical
Review Committee shall be given serious consideration by LCRA and its engineers. BRA
shall be the onsite inspector on the premises where construction is to be done by LCRA
and shall report its findings to LCRA as owner. Such inspector shall have access to the
work as it progresses and shall comment on and make suggestions with respect to such
work. All such comments and suggestions shall be given serious consideration by LCRA
and its engineers. The cost of such inspector and his work shall be deemed a Project Cost.
(f) Construction by BRA. If LCRA should ever elect not to construct and pay
for any Expansion, BRA may proceed to construct and pay for it. In the case of
construction by BRA, LCRA and the Technical Review Committee shall have the same
rights and privileges accorded to BRA and the Technical Review Committee,respectively,
by the preceding subsection (e), except that BRA shall remain as the onsite inspector.
Further, BRA shall have the same construction duties as set forth in subsection (h) below
for LCRA. All facilities so constructed and all assets acquired by BRA in any such
Expansion shall be part of the System which shall continue to be owned by LCRA. The
Repair and Replacement Fund and any similar funds required in connection with
Expansions shall be provided by LCRA, except that any such similar fund required in
connection with construction to be done and paid for by BRA shall be provided by BRA.
15
(g) BRA and LCRA Distinct Obligations. Neither BRA nor LCRA shall ever
have any liability to the other or to any Customer arising out of failure of the other to
construct or any defect in any construction done by the other. Bonds issued for
construction shall be those of the entity which is to do the construction, as above provided,
and neither BRA nor LCRA shall ever have any liability for the payment of indebtedness
evidenced by or provided in Bonds issued by the other.
(h) Construction Duties. LCRA will acquire and construct the System in
accordance with accepted good business and engineering practices and in accordance with
requirements of the Clean Water Act and the Texas Water Code, as amended, and as said
laws may be amended in the future, and any rules and regulations issued and to be issued
by appropriate agencies in the administration of said laws. LCRA will prepare plans and
specifications for the System Component(s)remaining to be constructed in Phase I as soon
as possible and proceed to take all other action necessary to acquire or construct such
System Component(s). After all such regulatory approvals have been obtained, LCRA
shall proceed, as appropriate, to advertise for bids for construction of the remainder of the
System Component(s). Upon receipt of such bids, LCRA shall tabulate the bids and notify
BRA, the Customers and the Technical Review Committee of the bids which have been
received and shall recommend approval of the lowest and best bid for the construction of
the System Component(s). LCRA shall also notify BRA, the Customers and Technical
Review Committee, based on such lowest and best bid, of the estimated Project Costs of
the System Component(s)and the Funding Date for such Project Costs. LCRA may accept
the lowest and best bid for the construction of the System Component(s). In determining
whether or not to accept any such bid, LCRA shall consider advice and recommendations
of BRA, the Customers and the Technical Review Committee, but the decision as to its
acceptance shall be within the sole discretion of LCRA. Thereafter, LCRA will diligently
construct the System Component(s).
Section 2.02. ALLIANCE MODIFICATIONS. BRA and LCRA may jointly modify their
respective responsibilities to each other under this Agreement without approval of the Customers
to the extent that such modification does not adversely affect the Customers and the Customers
and Technical Review Committee are provided prior written notice of such modifications.
Section 2.03. ACQUISITION AND CONSTRUCTION OF PHASE I OF THE SYSTEM.
(a) Acquisition of Existing Assets. LCRA and the Customers agree to proceed
as expeditiously as possible to consummate any remaining transactions contemplated in the
Alliance Acquisition Contracts.
(b) Construction of Phase I of the System. Construction of Phase I of the
System by LCRA is now substantially complete and it is operational.
(c) Notwithstanding anything in this Agreement to the contrary, the parties
agree that until the time that all of Phase II of the System is completed, Cedar Park shall
be entitled to a minimum of.5 MGD (on a thirty day average)of Reserved Capacity in the
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Onion Branch Lift Station (obtained from Austin as part of the Regional System Assets)
and related Downstream Collection System Components of the System. If, for whatever
reason, .5 MGD of capacity is not available for Cedar Park's use in the Onion Branch Lift
Station and related facilities, then LCRA, with the advice of the Technical Review
Committee, shall construct or acquire alternative System Components or services (either
interim or permanent) to provide adequate and timely service to Cedar Park in the amount
of at least .5 MGD as provided herein.
Section 2.04. CONSTRUCTION OF PHASE H. When appropriate to provide for
continued service to the Customers, LCRA shall proceed diligently with design and construction
of Phase II of the System. Austin has requested that LCRA construct the Downstream Collection
System portion of Phase II of the System with Reserved Capacity for anticipated future wastewater
flows from a portion of Austin's Lake Creek watershed. The Customers' Reserved Capacities,
therefore, are as set forth in Exhibit B. LCRA has commenced preliminary design of Phase II
of the System to provide continuous and adequate service to the Customers from the System.
LCRA shall have commenced construction of all or any necessary portions of Phase II of the
System to provide continuous and adequate service to the Customers from the System at the
earlier of (i) such time as any Customer's flow over any three (3) consecutive Months at the
"Onion Branch Lift Station" shall average more than fifty(50)percent of the Customer's Reserved
Capacity in the "Onion Branch Lift Station" or(ii) Cedar Park's discharges from the Cedar Park
Treatment Plant for any three (3) consecutive Months are at least ninety (90) percent of the
permitted capacity of the Cedar Park Treatment Plant. LCRA shall have completed construction
of the Upstream Collection System portion of Phase II of the System within twelve (12) Months
after commencement of construction of same and the Downstream Collection System portion of
Phase II of the System within twenty-four (24) Months after commencement of construction of
same. If LCRA fails to complete Phase II within the required time as provided in this section,
(i) LCRA, with the advice and approval of the Technical Review Committee, shall construct or
acquire alternative System Components or services (either interim or permanent) to provide
adequate and timely service to the Customers, or(ii) the Customer whose flows have necessitated
the commencement of construction of Phase II of the System will have the right (but not the
obligation) to construct Phase II of the System using any funds available to it. If it elects to do
so, it shall be entitled to retain ownership of any portion of Phase II which it constructs entirely
and will have no obligation to sell, transfer or assign any interest in any portion of Phase II of the
System it owns to LCRA. In such event, such Customer will be entitled to utilize, on a non-
exclusive basis, any easements that have been obtained by LCRA or BRA for Phase II of the
System without any charge. The parties shall cooperate to document any such non-exclusive
rights, if necessary.
Section 2.05. EXPANSIONS BEYOND PHASE H.
(a) Requests for Expansions. Any Customer may request that an Expansion of the
System be made by LORA. When the actual flow of Wastewater from a Customer reaches
seventy-five percent (75%) of the Reserved Capacity of that Customer in a System
Component, that Customer shall be deemed to have requested LCRA to commence
planning and design for an appropriate Expansion, unless the Customer's anticipated
17
growth does not warrant making the Expansion. When the actual flow of Wastewater from
a Customer reaches ninety percent(90%) of the Reserved Capacity of that Customer in a
System Component, that Customer shall be deemed to have requested commencement of
construction of an appropriate Expansion by LCRA, unless the Customer's anticipated
growth does not warrant making the Expansion. Except as provided in Section 7.13,
during the term of this Agreement, the Customers agree to request Expansions for all of
their Wastewater service needs in their respective Service Areas. Any request shall be
filed with LCRA and BRA in writing, with copies to the Technical Review Committee and
each other Customer.
(b) Construction by LCRA, BRA. Should any Customer request in writing, or be
deemed to have requested, an Expansion, LCRA and BRA shall notify such Customer and
the other Customers and the Technical Review Committee in writing within forty-five(45)
days as to whether either is willing to construct the Expansion. If LCRA or BRA
constructs the Expansion, upon completion of construction the Expansion will be part of
the System, the Reserved Capacity of the Expansion will be reserved for the Customer and
the Annual Project Requirement attributable to the Expansion shall be charged to the
Customer in its Capital Charge. In the event more than one Customer participates in an
Expansion, the Reserved Capacity and Annual Project Requirement shall be divided pro
rata between the participating Customers.
(c) Construction by Customer(s). If neither LCRA nor BRA is willing to construct
the Expansion, the requesting Customer may construct the Expansion. LCRA and BRA
will fully cooperate with the constructing Customer(s) in efforts to obtain necessary
governmental and regulatory approvals and permits and will use their best efforts to
provide assistance in this regard, which shall be paid for solely by the requesting
Customer(s), shall be owned by it, and shall not be part-of the System.
(d) General. In any event, the preparation of plans and specifications, and the
receipt and acceptance of bids for construction shall be subject to the same requirements
contained in this Article II in. regard to advertisement for and award of bids for
construction and for notice thereof to parties. Such plans and specifications shall be
subject to approval of LCRA and BRA, which shall not be unreasonably withheld or
delayed. Such construction shall be under the supervision of LCRA and onsite inspection
shall be provided by BRA.
(e) Approval or Review by Technical Review Committee. Expansions of
Treatment Facilities or the parallel line to the Contract 6A Wastewater Interceptor Line
by LCRA must be reviewed by the Technical Review Committee prior to construction but
need not receive approval of the Technical Review Committee. Expansions of other
System Components must receive the unanimous approval of the Technical Review
Committee prior to construction.
Section 2.06. CONSTRUCTION OF REQUIRED IMPROVEMENTS. At such time as
LCRA or BRA shall determine that construction of Required Improvements is necessary in order
18
for the System to be able to treat and dispose of Wastewater expected to be delivered to it without
violation of applicable permits or in order to avoid violation(s) of permits or other regulatory
requirements related to the System, the party making the determination shall give forty-five(45)
days prior written notice and opportunity to comment to the other and each Customer and to the
Technical Review Committee of its intention to proceed with construction of such Required
Improvements. Thereafter,the Required Improvements will be constructed by LCRA as otherwise
provided for Expansions and in accordance with the requirements of Section 2.01(h), to the extent
applicable.
Section 2.07. LCRA RIGHT TO RESERVED CAPACITY. LCRA shall be considered
a "Customer" for all purposes of this Agreement for that part of the Reserved Capacity referenced
in Section 4.01 and shown in Exhibit B as being reserved for LORA. LCRA may use its
Reserved Capacity to serve the LCRA Service Area. In addition, LCRA may add Reserved
Capacity at the East Plant, at its sole expense, to serve area in Hutto's city limits or extraterritorial
jurisdiction; provided, however, prior to adding Reserved Capacity at the East Plant for Hutto,
LCRA will first give the Customers sixty days notice thereof and lease or otherwise acquire any
Reserved Capacity in the East Plant of a Customer willing to sell or lease its Reserved Capacity
at that Customer's cost for Hutto in order to avoid or delay having to construct additional
Reserved Capacity at the East Plant for Hutto. The parties recognize and contemplate, however,
Leander's joining the System in the future and acquiring the Surplus Reserved Capacity for
Leander to serve the Leander Service Area at that time. In that regard, the parties agree to
reasonably cooperate to try to obtain Leander's agreement to enter into an agreement with the
parties to receive service from the System as provided in Section 7.09(c) hereof.
Section 2.08. DEPOSITS ON FUNDING DATES. After LCRA or BRA, as appropriate,
obtains all funds related to Funding on the Funding Date for Phase I, Phase II or any Expansion
of the System, LCRA or BRA, as appropriate, shall deposit all of said funds into the construction
fund or reserve funds provided in any applicable Bond Resolution and the one-half of one percent
(1/236) of Project Costs necessary to fund the Repair and Replacement Reserve Fund. Upon the
first to occur of the Initial Fundings, BRA shall deposit the agreed amount of money into the
Operation and Maintenance Reserve Fund which shall be maintained by it as a part of the
enterprise fund to be established on its books and records and identified in its financial statements,
in connection with the operation of the System.
ARTICLE III
OPERATION OF SYSTEM BY BRA
Section 3.01. OPERATION..
(a) General. The System, together with any facilities owned either by one or
more Customers or LCRA pursuant to Article II of this Agreement, shall be operated by
BRA; provided that LCRA will provide certain management, bookkeeping, billing and
similar services for the System. As the transactions in which LCRA is acquiring the assets
of the System are closed, possession of the assets being acquired by LCRA for use in
operation of the System shall be made available to BRA. Possession of facilities to be
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constructed by LCRA in connection with the remainder of the System shall be made
available to BRA as same become useful in operation of the System. BRA will operate the
System, together with any facilities owned either by one or more Customers or LCRA
pursuant to Article II of this Agreement, in accordance with accepted good business and
engineering practices and in accordance with requirements of the Clean Water Act and the
Texas Water Code, as amended, and as said laws may be amended in the future, and any
rules and regulations issued and to be issued by appropriate agencies in the administration
of said laws. BRA's obligation for operation of facilities delivered to its possession under
the provisions of this Agreement shall begin after a reasonable transition period to allow
orderly transfer of operational responsibility from previous operators, in the case of
existing facilities, and orderly start up in the case of newly constructed facilities.
(b) Initiation of Service to Customers. LCRA and BRA have commenced
operation of the System and service to Round Rock and Cedar Park already. The
obligation of BRA to provide service to Austin and LCRA is conditioned upon
consummation of the Austin/Alliance Acquisition Contract in accordance with the
provisions thereof.
Section 3.02. COMPETITIVE BIDS. Costs to Customers for Operation and Maintenance
Expenses shall be of primary importance to BRA. BRA shall use diligent efforts so that Operation
and Maintenance Expenses incurred by BRA and ultimately repaid by the Customers are
reasonable and justified. If specifically requested to do so by the Technical Review Committee,
BRA shall seek competitive bids or proposals from others to provide day-to-day operation of the
System or any Component thereof for specific periods not to exceed five(5)years in length at the
following times:
(a) (i) If the System or such component is being operated for the owner
under contract with a private operator when BRA assumes management under this
Agreement, prior to termination of the private operator; or
(ii) If the System or such component is not being operated for the owner by a
private operator under contract at the time when BRA assumes management, prior to
assumption of operation by BRA; and
(b) At the end of every period of operation by a private operator or at the end
of five (5) years of operation by BRA.
Before competitive bids or proposals are taken, BRA shall make a written estimate of the
cost of the process of taking bids or proposals and shall furnish such written estimate to the
Technical Review Committee. BRA will proceed with the steps necessary to take competitive bids
or proposals only after written approval of such estimate from the Technical Review Committee.
Provided that such written approval is obtained, the cost of the process of taking such competitive
bids or proposals shall be and become an Operation and Maintenance Expense. When competitive
bids or proposals are taken pursuant to this Section 3.02, BRA may submit its own proposal for
the day-today operation of the System or such component thereof with its own employees.
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Promptly after such competitive bids or proposals are received, same shall be submitted to the
Technical Review Committee for evaluation. The Technical Review Committee shall provide to
the Board of Directors of BRA its advice as to which of the bids or proposals will result in the
most efficient and cost effective service to the Customers. After receiving and considering such
advice, the Board of Directors shall determine which of such bids or proposals shall be accepted.
The determination shall be based on the Board's reasonable judgment as to which will result in
the most efficient and cost effective service to the Customers. If the bid to be accepted is from
a bidder other than BRA itself, BRA shall contract with the bidder on the basis of the bid for day-
to-day operation of the System or such component for a period established by BRA not to exceed
five years. If it is that of BRA itself, BRA shall conduct day-to-day operation of the System or
such component on the basis of its own bid until the next occasion on which competitive bids or
proposals are taken under this Section 3.02.
Section 3.03. PAYMENTS TO BRA FOR OPERATION OF SYSTEM. Pursuant to the
understanding between BRA and LCRA, acting in furtherance of the purposes of the Alliance,
BRA's portion of the Annual Operation and Maintenance Expense Requirement of the System,
including the Operation & Maintenance Management Fee shall be remitted to BRA by LCRA
within a time ending at the later of one working day after the due date of Flow Charges or one
day after receipt of the Flow Charges by LCRA.
Section 3.04. OPERATION&MAINTENANCE MANAGEMENT FEE. The Operation
& Maintenance Management Fee shall constitute a regional fee which BRA expects to utilize in
furtherance of its efforts to continue to provide additional services to residents of the Brazos River
Basin; provided that LCRA may retain for its use the portion of the Operation & Maintenance
Management Fee related to Operation and Maintenance Expenses paid by LCRA.
Section 3.05. COOPERATION DURING MAINTENANCE OR EMERGENCY.
Customers will cooperate with BRA during periods of an emergency or required maintenance of
the System and, if necessary, will discontinue, cycle, test, inspect, or otherwise operate and
maintain their wastewater facilities at their expense in a manner determined by BRA to be
necessary to the safe and efficient completion of repairs or the replacement of the System's
facilities, the restoration of service, and the protection of the public health, safety, and welfare.
BRA will attempt to provide the Customers reasonable notice under the circumstance of the
actions to be undertaken by BRA and cooperate to try to minimize inconvenience to the
Customers.
ARTICLE IV
RESERVED CAPACITY AND DISCHARGE OF WASTEWATER
Section 4.01. DISCHARGE QUANTITIES.
(a) Initial Reserved Capacities. (i) Except as provided below in subsection
(a)(ii),each Customer,respectively, shall have the exclusive right to discharge Wastewater
into the System to the extent, and by utilizing, its Reserved Capacity in each System
Component as described in Exhibit B. No Reserved Capacity may be allocated to or used
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by anyone other than the Customer on whose behalf that capacity has been reserved, unless
the affected Customer specifically agrees in writing to the allocation.or use.
(ii) Notwithstanding the above two sentences, it is specifically
recognized by the parties hereto that the portion of the Regional System Assets
contemplated to be acquired by LCRA at the Initial Fundings may be insufficient
to permit LCRA, after the Initial Fundings, to enable all of the customers to have
access to all of their respective Reserved Capacities in that portion of the Contract
6A Wastewater Interceptor Line. The parties agree that any Customer may
discharge its Wastewater through the Contract 6A Wastewater Interceptor Line in
amounts up to its respective Reserved Capacity in said line and so long as the total
Reserved Capacity of the Contract 6A Wastewater Interceptor Line of all
Customers is not exceeded.
(b) Transfer of Reserved Capacity. Any Customer may transfer any portion
of its Reserved Capacity in one or more System Components to another Customer, BRA,
LCRA, or another entity in exchange for such consideration as the parties to such transfer
shall deem appropriate. The parties making any such transfer shall provide written notice
to LCRA, BRA and the other Customers, signed by the parties accomplishing the transfer,
specifying the amount of transferred Reserved Capacity and the affected System
Component(s), and providing that the parties otherwise ratify and confirm their pre-
existing obligations under this Agreement. No such transfer shall be effective until and
unless such notice is provided. A transfer of Reserved Capacity shall not change any
payment or other obligations of the Customers, BRA or LCRA, unless agreed to by all
parties hereto.
(c) Documentation of Transferred Reserved Capacity In System Components.
In the event that Reserved Capacity is transferred LCRA shall cause a written addition to
be made to Exhibit B describing such transfer and setting forth the revised Reserved
Capacity of each Customer in such new System Component(s).
(d) Notice of Use of Reserved Capacity. At least once each year, BRA shall
notify the Technical Review Committee of the level of usage by each Customer of its
Reserved Capacity in each System Component if BRA has such information. BRA,LCRA
or any Customer may, but none shall have any duty to, enforce or restrict the discharge
of Wastewater by any Customer to its Reserved Capacity.
Section 4.02. POINT(S) OF ENTRY. The parties recognize that at this time they are
unable to designate specific Points of Entry for each Customer. Each Customer shall discharge
its Wastewater at a Point or Points of Entry to be designated for each Customer in an amendment
to the Engineering Report to be mutually agreed upon by BRA, LCRA and any Customer utilizing
such Point of Entry as design of the System progresses. It shall be the sole responsibility of each
Customer to convey its Wastewater to the Point or Points of Entry.
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Section 4.03. RATE AND QUANTITY AT POINT(S) OF ENTRY. The rate and
quantity of Wastewater discharged into the System at the Point or Points of Entry by each
Customer shall be metered unless otherwise agreed by all parties to this Agreement. BRA, LCRA
and the Customers will cooperate in good faith to design the Points of Entry to be at appropriate
sizes and in appropriate locations to receive the Customers' Reserved Capacities. Each Point of
Entry shall be designed to accept discharges at a maximum rate to be agreed upon by BRA, LCRA
and the Customers as design of the System progresses and stated in an amendment to the
Engineering Report, and no Customer shall ever make discharges into the System at such Point
of Entry at a rate exceeding such agreed design rate.
Section 4.04. DISCHARGE QUALITY. The Customers shall have the right to discharge
Wastewater into the System meeting the requirements of quality as set forth in this Article and not
containing wastes identified in the List of Inadmissible Wastes attached as Exhibit C of this
Agreement.
(a) General Requirements. In order to permit BRA to properly treat and
dispose of the Customers' Wastewater; to protect the public health; and to permit
cooperation with other agencies which have requirements for the protection of the
physical, chemical, and bacteriological quality of public water and water courses, each
Customer agrees to prohibit discharge into the System at unauthorized points of entry or
at rates of flow or of quality not herein specified as admissible.
(b) Admissible Wastes. Discharges into the System shall consist only of waste
which the System is capable of handling:
(1) so that the effluent and sludge from the System meets the current
legal standards of the EPA, the Commission or any governmental body having
legal authority to set standards for such effluents;
(2) without causing damage to the System which would result in
increased maintenance costs;
(3) without causing excessive treatment costs; and
(4) which meets the requirements of the EPA Pretreatment Regulations,
40 CFR Part 403, the Customer's applicable ordinances and the EPA-approved
pretreatment program for the System.
(c) Inadmissible Wastes. A List of Inadmissible Wastes promulgated by BRA
is attached hereto as Exhibit C. EPA and the Commission periodically modify standards
on prohibited discharges; therefore, revisions to, additions to or deletions from the items
listed in this Section will become necessary to comply with these latest standards. It is the
intention of this Agreement that prohibited discharge requirements be reviewed
periodically by BRA and that Exhibit C be revised by BRA in accordance with the latest
standards of EPA, the Commission or federal or state agency having regulatory authority
23
over the discharges made to the System. Exhibit C may also be revised on the basis of
changes in the treatment process or the general character of Wastewater received at the
treatment works or indicated in the monitoring data collected pursuant to the System
pretreatment program. Any required revisions shall be made by BRA only after notice and
opportunity to comment has been provided to LCRA, the Customers and the Technical
Review Committee and shall become effective upon written notice thereof being given to
LCRA, the Customers and the Technical Review Committee. Each Customer shall be
responsible for integrating such changes into its local sewer use ordinances and notifying
all affected users of the change.
Section 4.05. REGULATIONS. Discharges to the System shall be governed by the
requirements set forth in the EPA pretreatment regulations,Commission pretreatment regulations,
the List of Inadmissible Wastes, the System pretreatment program and the Customers' respective
sewer use ordinances.
Periodically, BRA will promulgate a new List of Inadmissible Wastes, Exhibit C, of this
Agreement, in response to changes in federal or state requirements, changes in the treatment
process, or the general character of the wastewater received at the treatment works, as described
in Section 4.04(c) above. The List of Inadmissible Wastes will contain pollutant allocations to
each Customer. Each Customer is responsible for developing specific local limits from the
pollutant allocations and enforcing these limits through the Customers' ordinances and sewer use
permits.
Section 4.06. INDUSTRIAL WASTES. Each Customer agrees to implement and enforce
the System pretreatment program for all areas receiving sanitary sewer service from the Customer.
Each Customer also covenants that it will have in effect and will enforce a sewer use ordinance
in accordance with EPA and Commission regulations or regulations of other governmental
agencies having lawful jurisdiction to set standards for waste discharges. Furthermore, each
Customer shall, at any reasonable time upon request by BRA, produce pretreatment program
records for review.
Each Customer also agrees that no new Significant Industrial User shall be allowed to
connect to the Customer's sewer system without prior notification being given by the Customer
to BRA of the intent to connect. The Customer will provide BRA with a copy of the draft sewer
use permit and permit application at the time such notification is given. All Significant Industrial
Users that are customers of a Customer and located outside the Customer's city limits will also
be required to obtain a sewer use permit.
BRA will be responsible for treatment plant monitoring and reporting as required by the
EPA and the Commission. All additional responsibilities not mentioned in this Agreement are
outlined in the EPA-approved System pretreatment program which may be amended from time
to time.
Section 4.07. SYSTEM LIMITATIONS. LCRA and BRA shall be obligated to receive
into the System at the Points of Entry only Wastewater meeting the quantity limits and quality
24
requirements of the Article IV of this Agreement; provided, however, (i) the total quantity of
Wastewater discharged into the System shall never exceed the amount which the System is capable
of receiving, treating, and disposing, and (ii) no discharge will be made into the System which
would cause it to be overloaded or be in violation of its permits from the State of Texas and/or
the United States of America.
Section 4.08. RESPONSIBILITY FOR TREATMENT AND DISPOSAL OF WASTE-
WATER. Responsibility for the reception, transportation,delivery and disposal of all Wastewater
discharged hereunder shall remain with each Customer to the Points of Entry, and upon passing
through the Points of Entry, responsibility shall, except as provided below, pass to BRA, which
shall be responsible for the proper reception, transportation, treatment and disposal of all such
Wastewater, meeting the applicable state and federal quality requirements received by it at the
Points of Entry. Responsibility for proper reception, transportation, treatment and disposal of
Wastewater received by BRA at the Points of Entry which does not meet the applicable quality
standards shall remain with the Customer delivering same and any expenses incurred by BRA in
receiving, transporting, treating and disposing of such non-compliant Wastewater shall be charged
directly to the Customer by BRA.
Section 4.09. METERING. The provisions of Section 4.09 shall apply unless otherwise
agreed to by LCRA and BRA and approved by the unanimous vote of the Technical Review
Committee, in which event, a substitute for this Section 4.09 shall be provided to the Customers
by LCRA and BRA. LCRA will furnish and install as a Project Cost, and BRA will operate and
maintain at its expense, as an Operation and Maintenance Expense, at each Point of Entry the
necessary equipment and devices of standard type for measuring properly all Wastewater to be
discharged under this Agreement as such devices are specified in the Engineering Report. Such
meters and other equipment shall remain the property of LCRA and constitute a portion of the
System. The Customers shall have access to such metering equipment at all reasonable times for
inspection and examination. The reading, calibration and adjustment of meters shall be done by
employees or agents of BRA after two (2) working days notice to the Customers and in. the
presence of a representative of any Customer if requested by the Customer. All readings of
meters will be entered upon proper books of record or in computer records maintained by BRA
and a copy or printout of said readings supplied to the Customers and LCRA. Upon written
request any Customer may have access to said record books or computer printouts during
reasonable business hours.
BRA shall calibrate the meters at least once in each year of operation. BRA shall provide
reasonable notice of at least two (2) days to the Customers of a calibration and provide the
Customers an opportunity to observe the calibration. Not more than three(3) times in each year
of operation, BRA shall calibrate the meters,if requested in writing by the affected Customer, in
the presence of a representative of the requesting party. Such parties shall jointly observe any
adjustments which are made to the meters in case any adjustment is found to be necessary. If, for
any reason, any meters are out of service or out of repair, or if, upon any test, the percentage of
inaccuracy of any meter is found to be in excess of five percent (5%), registration thereof shall
be corrected for a period of time extending back to the time when such inaccuracy began, if such
time is ascertainable, and if not ascertainable, then fora period extending back one-half(1/2) of
25
the time elapsed since the date of the last calibration, but in no event further back than a period
of six (6) Months. Any Customer may, at its option and its own expense, install and operate a
check meter to check each meter operated by BRA, but the measurement for the purpose of this
Agreement shall be solely by LCRA's meters, except during any period when a check meter may
be used under specific written consent by BRA. All such check meters shall be of standard make
and shall be subject at all reasonable times to inspection and examination by any employee or
agent of BRA, but the reading, calibration and adjustment thereof shall be made only by the
Customer installing same.
Section 4.10. UNIT OF MEASUREMENT. The unit of measurement for Wastewater
delivered hereunder shall be one thousand (1,000) gallons, U.S. Standard Liquid Measure.
ARTICLE V
SYSTEM BUDGETS AND CHARGES
Section 5.01. ESTABLISHING BUDGETS AND CHARGES.
(a) Initial Proposals. As soon as reasonably possible during the first partial
Fiscal Year and not less than one hundred twenty (120) days before commencement of
each Fiscal Year thereafter while this Agreement is in effect, BRA shall furnish to LCRA
a detailed estimate of expenses or costs projected to be incurred by it in the next ensuing
Fiscal Year which it deems properly includable in the Annual Project Requirement for
such next following Fiscal Year and LCRA shall furnish to BRA a detailed estimate of
expenses or costs projected to be incurred by it in such next ensuing Fiscal Year which it
deems properly includable in the Annual Operation and Maintenance Expense Requirement
for such next following Fiscal Year. Copies will be provided to the Technical Review
Committee and Financial Review Committee. As soon as reasonably possible during the
first partial Fiscal Year and not less than ninety (90) days before commencement of each
Fiscal Year thereafter while this Agreement is.in effect, LCRA and BRA, respectively,
shall cause to be prepared and filed with each other, the Technical Review Committee, the
Financial Review Committee and each Customer the tentative budgets for Annual Project
Requirement and Annual Operation and Maintenance Expense Requirement and
corresponding proposed Capital Charges and Flow Charges for the System for the next
ensuing Fiscal Year.
(b) Approval of Budget if No Protest. If no protest or request for a hearing on
such tentative budgets and proposed Capital Charges and Flow Charges is presented within
thirty(30)days after such filing of the tentative budgets and proposed Capital Charges and
Flow Charges, the tentative budgets and proposed Capital Charges and Flow Charges for
the System, when adopted by LCRA's and BRA's Boards of Directors, respectively, shall
be deemed to be in effect for all purposes for the next ensuing Fiscal Year.
(c) Procedures for Protested Budget. If a protest or request for a hearing is duly
filed, it shall be the duty of BRA and/or LCRA to fix a date and time for a hearing on the
tentative budget or budgets and proposed Capital Charges and/or Flow Charges to be
26
conducted in a manner to enable interested persons to communicate such information as
they shall desire to present and such views as they shall desire to express to the Board of
Directors of the entity at whose budget the protest or request is directed. The party filing
such protest, the Technical Review Committee, the Financial Review Committee and all
Customers shall be advised in writing of the time and place of such hearing. After
consideration of the information and comments produced at such hearing, the Boards of
Directors of BRA and/or LCRA may adopt the budget or budgets and proposed Capital
Charges and/or Flow Charges or make such amendments thereof as may seem proper. The
budget or budgets and proposed Capital Charges and/or Flow Charges thus approved by
the Boards of Directors of BRA and LCRA shall be deemed to be in effect for the next
ensuing Fiscal Year.
(d) General. Subject to the provisions of the resolutions authorizing LCRA Debt,
all interest income earned by the investment of any funds created in the Bond Resolution
or any other funds related to the System(with exception of the Operation and Maintenance
Reserve Fund funded by BRA) shall inure to the benefit of the System and be taken into
account in determining the budgets. BRA and LCRA shall consult with each other
regarding the use of the Repair and Replacement Reserve Fund and LCRA shall use the
moneys from the Repair and Replacement Fund to pay costs of repairs or replacements of
the System which are such that they should be spread over a number of years rather than
included as a part of the Operation and Maintenance Expense in a single year. Any such
duties and responsibilities performed in response to this Agreement not specifically
described herein as the role of LCRA or BRA shall be decided by the two parties as they
occur and the related costs thereof included in Project Costs or Operation and Maintenance
Expense, as applicable.
(e) BRA and LCRA Relations. To the extent applicable law delegates to LCRA
or BRA (the "mandated entity") the responsibility and authority to approve the budget or
budgets or the Capital Charge or Flow Charge,but the other of LORA or BRA (the "other
entity") actually establishes and submits to the other said proposed budget or charge, then
failure to protest or request a hearing within the timeframes provided above shall be
deemed to be approval by the mandated entity of the proposed budget or charge adopted
by the other entity. Otherwise, to the extent that the mandated entity reasonably
determines that the budget or charge finally adopted by the other entity requires modifica-
tions, then ultimate authority to make modifications to said budget or charge shall lie with
the mandated entity which shall promptly make any such modifications to the budget or
charge as reasonably required and notify the other entity and all Customers of same, which
shall be effective upon receipt. Copies of the approved budgets and a schedule of
projected Capital Charges and Flow Charges shall be provided to the Customers promptly.
Should LCRA be the mandated entity with respect to any item of Operation and
Maintenance Expense budgeted by BRA to be paid by BRA and should it effectively
exercise its rights as the mandated entity to make any modification in the amount of such
item budgeted by BRA, BRA may, upon ninety (90) days written notice to LCRA,
Customers, the Technical Review Committee and the Financial Review Committee,
surrender and transfer to LCRA its rights and obligations with respect to Operation and
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Maintenance of System pursuant to this Agreement. Upon the delivery of such notice,
LCRA shall, at the expiration of such ninety (90) day period, succeed to the rights and
obligations provided herein for operation and maintenance of the System by BRA and BRA
shall have no further rights or obligations hereunder, except that its rights with respect to
collection of Capital Charges resulting from Project Costs theretofore incurred by BRA
shall not be affected and LCRA shall pay it for all Operation and Maintenance Expense
incurred by it up to and including the time of termination of its rights and obligations
provided herein, together with the costs incurred by it in effecting termination, which
termination costs shall constitute Operation and Maintenance Expense.
(f) Just and Reasonable Charges. The parties agree that the Annual Project
Requirement, Annual Operation and Maintenance Expense Requirement, Capital Charges
and Flow Charges shall be just and reasonable. The parties further agree that the use of
the Year 2037 Contractual Flows as the method of cost allocation of the Annual Project
Requirement for the Upstream Collection System and Downstream Collection System as
set forth in Exhibit B is just and reasonable. In so stipulating, the parties are not
stipulating in advance that any or all later applications of this method by LCRA or BRA
in making particular allocations of the Annual Project Requirement for the Upstream
Collection System and Downstream Collection System are correct,just and reasonable or
otherwise in accordance with the provisions of this Agreement.
Section 5.02. CUSTOMER DISPUTES. The Customers retain such rights as they may
possess under applicable law to seek review of the reasonableness of LCRA's or BRA's charges
under this Agreement by the Commission. If a Customer at any time disputes the amount to be
paid by it under this Agreement, such Customer shall nevertheless promptly make the payment
or payments determined by BRA and LCRA. If it is subsequently determined by agreement,
administrative agency or court decision that such disputed payments made by the Customer should
be changed, BRA and LCRA shall promptly revise and reallocate the charges among all
Customers then being served by BRA and LCRA in such manner that the Customers will pay
amounts which cumulatively permit BRA and LCRA to receive the entire amount of the Annual
Project Requirement and the Annual Operation and Maintenance Expense Requirement permitted
hereunder as the same may be modified by final effective order of an administrative agency or
court of appropriate jurisdiction; provided, however, nothing herein shall ever be construed to
prevent LCRA or BRA from recovering from the Customers the amount required to meet the
Annual Project Requirement hereunder. If the Capital Charges or Flow Charges are redetermined
as herein provided, BRA and LCRA will promptly furnish each Customer with an updated
schedule of monthly payments reflecting such redetermination.
Section 5.03. CHANGES FROM NEW CUSTOMERS, EMERGENCIES AND LEGAL
ACTION. LCRA and BRA may adopt amendments to the budgets or the Capital Charges or Flow
Charges by following a process similar to that provided above for the establishment of such
matters initially if, during a Fiscal Year:
(i) new customers are added to the System by agreement of the
Customers, BRA and LCRA;
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(ii) unanticipated emergency Project Costs or Operation and Mainte-
nance Expenses are experienced; or
(iii) an adjustment is necessitated by regulatory requirement.
Section 5.04. CAPITAL CHARGES; UNCONDITIONAL PAYMENT OBLIGATION.
(a) General. On or before the first day of each Month, every Customer shall
pay its Capital Charge. During the term of this Agreement, the Capital Charge for each
Customer to be paid each Month shall be determined by allocating among the Customers
one-twelfth(1/12)of the Annual Project Requirement in the manner set forth in subsection
(b)below, which the Customers,LCRA and BRA believe is a reasonable basis upon which
to allocate said costs. Notwithstanding anything in this Agreement to the contrary, in all
circumstances, the sum of the Capital Charges paid by all Customers shall equal one
hundred percent (100%) of the Annual Project Requirement.
(b) Allocation of Annual Project Requirement. The Annual Project
Requirement will be allocated among Customers in two steps:
(i) The Annual Project Requirement will be functionalized between
Treatment Facilities, Downstream Collection System and Upstream Collection
System in proportion to LCRA's and BRA's cumulative Project Costs in each.
LCRA's continuing property records will be used for cost functionalization.
Project Costs not directly attributable to one of the three categories will be
functionalized among the three categories in proportion to the Project Costs directly
functionalized to those categories.
(ii) (A) The Annual Project Requirement-Treatment Facilities will
be allocated among the Customers in proportion to the Customers' Reserved
Capacities (as shown in Exhibit B). The resulting proportions of the Annual
Project Requirement to be allocated to each Customer for each year are also shown
on that Exhibit B. The resulting percentages are also shown on that Exhibit.
(B) The Annual Project Requirement - Downstream Collection
System will be allocated among the Customers in proportion to their Contractual
Flows in Year 2037 as shown-on Exhibit B. The resulting percentages are also
shown on that Exhibit.
(C) The Annual Project Requirement - Upstream Collection
System will be allocated between the Customers in proportion to the Customers'
Contractual Flows into only the Upstream Collection System in year 2037 as shown
on Exhibit B. The resulting percentages are also shown on that Exhibit.
(c) Recognizing that-LCRA or BRA will pledge the revenues of the System,
together with, in the case of LCRA, other revenues of the LCRA System, to pay, secure
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and finance the issuance of Bonds, it is hereby agreed that upon the effective date of this
Agreement, each Customer shall be unconditionally obligated to pay the Capital Charge
and Flow Charge regardless of whether or not such Customer actually discharges
Wastewater hereunder, whether due to Force Majeure or otherwise. Each Customer
agrees that its obligation to pay the Capital Charge and Flow Charge shall be absolute and
unconditional, irrespective of any rights of set-off, diminution, abatement, recoupment or
counterclaim the Customer might otherwise have against BRA or LCRA or any other
person,and the Customer covenants not to seek and hereby waives, to the extent permitted
by applicable law, the benefits of any rights which it may have at any time to any stay or
extension of time for performance or to terminate, cancel or limit its liability to pay the
Capital Charge and Flow Charge. Each Customer hereby agrees that the holders from
time to time of the Bonds shall be entitled to rely upon the agreement of the Customer to
pay the Capital Charge and Flow Charge regardless of the validity of the remainder of this
Agreement or any other agreement. Each Customer agrees, if requested to do so by
LCRA or BRA, as appropriate, to execute a separate agreement with LCRA, the owners
of the Bonds or a trustee acting on behalf of the owners of the Bonds evidencing its
unconditional obligation, to pay the Capital Charge and Flow Charge to enable LORA or
BRA, as appropriate, to pay debt service on the Bonds issued by LCRA or BRA for the
System. Such additional agreements shall in all respects be consistent with the
requirements of this Agreement regarding the payment of the Capital Charge and Flow
Charge by the Customer.
(d) The preceding paragraph shall not be construed to release BRA or LCRA
from the performance of any of their undertakings contained in this Agreement or, except
to the extent provided in this section, prevent or restrict any Customer from asserting any
rights which it may have against BRA, LCRA or any other person under this Agreement
or under any provision of law or prevent or restrict such Customer, at its own cost and
expense, from prosecuting or defending any action or proceeding against or by third
parties or taking any other action to secure or protect its rights under this Agreement.
(e) The parties recognize the unique status of development of Cedar Park's
utility system which is not as developed as that of Round Rock. Because of this, all parties
have agreed to cooperate to attempt to structure repayment of the Project Costs in the first
five years of this Agreement so as to minimize the potential for unplanned retail rate
adjustments by Cedar Park. Accordingly,LCRA agrees to use diligent and prudent efforts
to amortize the Project Costs for Phases I and lI of the System in a-manner and over a
period that results in total costs of regional service to Cedar Park in the next two full years
of the project in amounts no more than:
FY 2001 $850,000
FY 2002 $1,100,000
(f) Each Customer recognizes that the Bonds issued by LCRA or BRA, as
appropriate, for the System will be supported by the pledge, directly or indirectly, of the
payment of the Capital Charges and Flow Charge by the Customers under the terms of the
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ACP
greement and, therefore, that each Customer is an "obligated person" as that term is
applied within the meaning of Securities Exchange Commission Rule 15c2-12. In order
to enable LCRA or BRA, as appropriate, to issue the Bonds and comply with applicable
securities laws, each Customer agrees to execute,and by signing this Agreement approves
and authorizes the execution of, if requested by BRA and LORA, a continuing disclosure
agreement in form and substance substantially as provided in Exhibit D hereto.
Section 5.05. FLOW CHARGES. Each Customer shall be required to pay each Month
a Flow Charge for use in meeting that Month's portion of the Annual Operation and Maintenance
Expense Requirement. Subject to, and in accordance with, the provisions of Sections 5.01 and
5.02, (i)before the Initial Funding Date and(ii)before the first day of each Fiscal Year thereafter,
BRA shall estimate and Budget the Annual Operation and Maintenance Expense Requirement for
the period between Initial Funding Date and August 31, 2000, in the case of that period, and for
the following Fiscal Year in the case of each subsequent Fiscal Year. In the case of each annual
Operation and Maintenance Expense budget made after the availability of the annual report
required by the provisions of Section 7.14, below, covering a Fiscal Year during which Flow
Charges from any Customer have been payable hereunder, the amount estimated for the following
Fiscal Year per the sentence next preceding shall be adjusted upward or downward, as
appropriate, to account for difference between actual Operation and Maintenance Expense as
reflected by the annual report and that estimated for the previously reported period. The monthly
Flow Charge for each Customer for the period for which the estimate is made shall be 1/12th (or
in the case of the initial Fiscal Year, the fraction obtained by dividing 1 by the number of
complete Months between the Initial Funding Date and August 31, 2000)of the amount calculated
by multiplying the actual flows of Wastewater from such party's collector system into the System
during the twelve (12) Month period ending on April 30 preceding the beginning of the Fiscal
Year for which the calculation is being made, expressed in thousands of gallons, by the quotient
obtained by dividing the estimated Annual Operation and Maintenance Expense Requirement for
the period for which the calculation is being made, expressed in dollars, by the actual flows into
System, also expressed in thousands of gallons, from the collector systems of all Customers during
the twelve (12) Month period ending on such April 30. In the initial Fiscal Year of service, the
allocation of the Operation and Maintenance Expenses among the Customers shall be based on
projected flows as follows: Austin - 13,140,000 gallons, Cedar Park- 1,000,000 gallons, Round
Rock - 2,551,038,000 gallons, and LCRA - 445,428,000 gallons.
Section 5.06. HOW,WHEN AND WHERE PAYMENTS ARE TO BE MADE. Delivery
to the Customers of the final budgets for a Fiscal Year, together with the schedule of resulting
Capital Charges and Flow Charges, shall constitute the invoice for same for the entire Fiscal Year.
Payment of all Capital Charges and Flow Charges required to be paid by.Customers under the
provisions of this Agreement shall be made to LCRA. LCRA and the individual(s) acting for it
in receiving payment of such charges shall receive the portion of each payment received consisting
of Capital Charges owing to BRA as agent for BRA. Receipt of such payments by LCRA as agent
for BRA shall completely discharge any liability of Customer to BRA for such payments. All
such funds so received as agent shall be disbursed to BRA in accordancewith Section 3.03, and
the duties of the agent shall be completely discharged by such disbursement. All charges payable
for any Month shall be due and payable in Travis County, Texas, on or before the first day of
31
such Month. Past due payments shall bear interest from the date due until paid at the lower of ten
percent (10%) per annum or the highest lawful rate in the State of Texas.
Section 5.07. DEFAULT.
(a) Monetary Defaults by Customers. In the event any Customer defaults in
the payment of the Capital Charge or Flow Charge required hereunder, BRA and LCRA
shall immediately give notice of such default to such Customer and other Customers;
provided, however, that nothing in this section shall prevent any Customer from paying
under protest any amount alleged as owed by BRA or LCRA or prevent BRA or LCRA
from accepting any payment even if less than the amount alleged by BRA or LCRA as
owed by the Customer. Payment or receipt of any such disputed amount shall not be
construed as a waiver of any right of the party making or receiving such disputed amount
to contest such matter and to demand payment or receipt of a different amount.
Thereafter, the defaulting Customer shall take all appropriate steps to correct such default
and shall correct such default within ten (10) days after receipt of such notice. Any past
due amount shall be paid, together with interest at the lesser of ten percent (10%) per
annum or the maximum legal rate of interest then in effect.
(b) Other Defaults by Customers, BRA and LCRA. In the event that any
Customer or BRA or LCRA defaults in the performance of any of their respective
obligations under this Agreement, other than the obligation to make payments of the
Capital Charge or Flow Charge, any of the non-defaulting parties, after giving reasonable
notice of the default and opportunity to cure same, may exercise any remedy provided
below in Article VIII.
Section 5.08. CAPITAL MANAGEMENT FEE.
It is agreed among the parties that, in addition to all other compensation or reimbursement
authorized and required to be made by the Customers as otherwise provided in this Agreement,
LCRA, or BRA as appropriate, shall receive a fee in the total aggregate amount from all
Customers of five percent (5%) of the portion of the Annual Project Requirement (exclusive of
that portion of the Annual Project Requirement consisting of the Capital Management Fee,
amounts attributable to the Debt Service Reserve Fund and coverage as described in subsection
(iii) of the definition of Bond Costs) to compensate LCRA for agreeing to include the System in
the LCRA System and for the increased responsibility, financial risk and regulatory risk borne by
LCRA, or BRA as appropriate, in fulfilling its management obligations under this Agreement.
Such fee shall be included in the Annual Project Requirement to be recovered through the Capital
Charges paid by the Customers of the System. Money received by LCRA, or BRA as
appropriate, from such fee may be used for any lawful purpose. Provided further, however, that
if BRA pays the Project Costs which result in receipt of Annual Project Requirement repayments
by the Customers, that part of the five percent (5%) Capital Management Fee shall be remitted
by LCRA to BRA.
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ARTICLE VI
TECHNICAL REVIEW COMMITTEE
Section 6.01. COMPOSITION OF TECHNICAL REVIEW COMMITTEE. There'is
hereby created an Technical Review Committee to be composed of the following:
(a) Two representatives appointed by Cedar Park;
(b) Two representatives appointed by Round Rock;
(c) Two representatives appointed by Austin;
(d) One representative appointed by BRA; and
(e) One representative appointed by LCRA.
The governing bodies of each party to this Agreement shall each appoint their
representatives (and alternate representatives to serve in the absence of the Customers,
representatives) to the Technical Review Committee promptly after execution of this Agreement,
and shall immediately notify the other parties of such appointment. Each representative (or
alternate representative) of a party shall serve at the will of the governing body which the person
represents. Upon the death, resignation or revocation of the power of such representative (or
alternate representative), the governing body of the appropriate entity shall promptly appoint a
new representative (or alternate representative) to the Technical Review Committee.
Section 6.02. RESPONSIBILITY OF TECHNICAL REVIEW COMMITTEE. The
Technical Review Committee shall represent the individual and collective interests of Customers
and shall consult with and advise BRA and LORA, through their respective General Managers or
designated representatives, with regard to the following matters pertaining to the System:
(a) The proposed amount,timing, maturity schedule and similar matters related
to the issuance of Bonds maturing over a period in excess of one year or refunding thereof
or the annual structuring of any LIF Advance Costs and the timing of any Funding
Date(s), including having a meeting of the Financial Review Committee to review such
matters at least sixty (60) days prior to the sale of the Bonds or the annual structuring of
any LIF Advance Costs and meetings of the Technical Review Committee to review such
matters at least thirty (30) days prior to sale of the Bonds and ten (10) days prior to
implementing any material changes to such matters previously reviewed by the Technical
Review Committee;
(b) The operation and maintenance of the System;
(c) The addition of new customers to the System and the terms and conditions
of the agreements with such new customers consistent with the provisions of this
Agreement;
(d) Review of the budgets, prior to submission to the Boards of Directors of
BRA or LCRA;
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(e) Review of the annual reports of the System;
(f) Improvements to and Expansions of the System;
(g) Review of the funding and use of the Operation and Maintenance Reserve
Fund and the Repair and Replacement Reserve Fund;
(h) Consideration of whether BRA should solicit proposals or bids for operation
of the.System;
(i) Review and provide recommendations regarding proposals for operation of
the System;
6) Review and make suggestions regarding proposals submitted to LCRA and
BRA for engineering services related to the System;
(k) Review bids received for construction of System Components;
(1) Changes to the Engineering Report; and
(m) Any other pertinent matters relating to the management of the System.
Changes to the Engineering Report and Expansions consisting of System Components other than
Treatment Facilities and the parallel line to the Contract 6A Wastewater Interceptor Line shall not
be made without unanimous approval by the Technical Review Committee. The Technical Review
Committee shall meet at regular intervals to review progress of construction of the System and the
ongoing operation of the System. The Technical Review Committee shall have access to and may
inspect at any reasonable time all physical elements of the System and all records and accounts
of BRA and LCRA pertaining to the System. The Technical Review Committee shall be diligent,
prompt and timely in reviewing and commenting on matters submitted to it. The Customers
recognize that the activities of the Technical Review Committee are an important function of the
operation of the System and authorize payment of all expenses and charges associated therewith.
Section 6.03. COMPOSITION OF FINANCIAL REVIEW COMMITTEE. There is
hereby created a Financial Review Committee to be composed of the following:
(a) One representative appointed by Cedar Park;
(b) One representative appointed by Round Rock;
(c) One representative appointed by Austin;
(d) One representative from LCRA; and
(e) One representative from BRA.
The Technical Review Committee representatives of the Customers shall each appoint their
representatives (and alternate representatives to serve in the absence of the Customers'
representatives) to the Financial Review Committee promptly after execution of this Agreement.
34
Each representative (or alternate representative) of a Customer shall serve at the will of the
Technical Review Committee representative which the person represents. Upon the death,
resignation or revocation of the appointment of such Financial Review Committee representative
(or alternate representative), the Technical Review Committee representative of the appropriate
entity shall promptly appoint a new representative (or alternate representative) to the Financial
Review Committee.
Section 6.04. RESPONSIBILITY OF FINANCIAL REVIEW COMMITTEE. The
Financial Review Committee shall represent the individual and collective interests of Customers
and shall consult with and advise the Technical Review Committee with regard to the following
matters pertaining to the System:
(a) Review of the Engineering Report and pro-forma cash flow projections
prepared by BRA and LCRA and provide input as to the assumptions contained therein;
(b) Prepare a written recommendation to the Technical Review committee
regarding assumptions; funding of the capital projects; timing and structure of Bonds,LIF,
or any other obligations of the System, prior to implementation of same; and refunding
thereof;
(c) Advise LCRA and BRA regarding the most efficient form of financing for
Project Costs. Any form of financing other than LCRA Debt or LIF financing shall
require a contract amendment to allow such financing; and
(d) Any other project as assigned by the Technical Review Committee.
The Financial Review Committee shall meet at regular intervals to review progress of
construction of the system and the ongoing operation of the System. The Financial Review
Committee shall have access to and may inspect at any reasonable time all physical elements of
the System and all records and accounts of BRA and LCRA pertaining to the System. The
Financial Review committee shall be diligent, prompt and timely in reviewing and commenting
on matters submitted to it. The Customers recognize that the activities of the Financial Review
Committee are an important function of the operation of the System and authorize payment of all
expenses and charges associated therewith.
ARTICLE VII
GENERAL PROVISIONS
Section 7.01. NO TAX OBLIGATION OF CUSTOMERS. Unless otherwise specifically
provided in writing by subsequent agreement between BRA and LCRA and any Customer, neither
BRA nor LCRA shall ever have the right to demand payment by a Customer of any obligation
assumed or imposed on it under and by virtue of this Agreement from funds raised or to be raised
by taxation, it being expressly understood by the parties hereto that all payments due by the
Customers hereunder are to be made from the revenues and income received by each Customer
from its waterworks and sanitary sewer systems.
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Section 7.02. PAYMENTS TO CONSTITUTE OPERATING EXPENSES OF
CUSTOMER. Each Customer represents and covenants that the services to be obtained pursuant
to this Agreement are essential and necessary to the operation by the Customer of its own
wastewater facilities and the provision of sanitary sewer services to its constituents, and that all
payments to be made hereunder by it will constitute reasonable and necessary operating expenses
of the Customer's waterworks and sanitary sewer systems, within the meaning of Section
1502.056, Texas Government Code, to the extent applicable to a Customer, and the provisions
of all ordinances or resolutions, as appropriate, authorizing the issuance of all bonds of the
Customer which are payable from revenues of the Customer's waterworks and sanitary sewer
systems. The parties acknowledge that, to the extent each Customer has Reserved Capacity in any
System Component, LCRA and BRA intend to own and operate the System as capital
improvements on behalf of that Customer within the meaning of Section 395.001(1), Texas Local
Government Code. The parties understand and agree that the decision as to whether the capital
improvements constructed or acquired by LCRA and BRA on behalf of a Customer are used to
serve new development (within the meaning of Section 395.001(6), Texas Local Government
Code) and the decision as to whether to impose any impact fees (within the meaning of Section
395.001(4), Texas Local Government Code) is exclusively that of such Customer.
Section 7.03. CUSTOMER RATES,FEES AND CHARGES. BRA and LCRA acknowl-
edge that each Customer has the right under applicable law to assess, charge and collect such
Customer impact fees, capital recovery fees, connection fees, meter fees, or other service fees,
rates, taxes or other charges as it will deem appropriate. They will not construe this Agreement
to require(except as provided otherwise in this Section), limit or restrict the governmental power
of any Customer to implement the same. Each Customer will be solely responsible for the proper
exercise of its governmental power to assess and collect such fees and charges and for ensuring
that all fees, taxes, rates and charges Customer elects to charge are in compliance with applicable
law. Each Customer agrees to establish and collect such rates and charges for its waterworks and
sanitary sewer services to be supplied by its system as will make possible the prompt payment of
all expenses of operating and maintaining its system including the payments committed hereunder,
and the prompt payment of the principal of and interest on its obligations, if any, payable from
the revenues of its waterworks and sanitary sewer systems.
Section 7.04. USE OF PUBLIC PROPERTY. By these presents, each Customer, to the
extent capable under existing law,authorizes use by BRA and LCRA of streets and general utility
or sewer easements of the Customer for construction, operation and maintenance of Phases I and
II of the System, so long as such use is in compliance with the terms of any easement utilized by
BRA and LCRA and does not interfere with any lawful use by the Customer and subject to all of
the Customer's ordinances, rules and regulations respecting the manner of such use and restoration
of lands, pavement or improvements resulting from exercise of the rights provided in this section,
including the cost of relocation of any facilities located within any such easement as an expense
of the System. BRA and LCRA will cooperate with each Customer in the timing, planning and
installation of the System to be constructed and installed hereunder.
Section 7.05. FORCE MAJEURE. In case by reason of"Force Majeure"any party hereto
shall be rendered unable wholly or in part to carry out its obligations under this Agreement, then
36
if such party shall give notice and full particulars of such "Force Majeure" in writing to the other
parties within a reasonable time after occurrence of the event or cause relied on, the obligation
of the party giving such notice, so far as it is affected by such Force Majeure, with the exception
of the obligation to pay Capital Charges, shall be suspended during the continuance of the inability
then claimed, but for no longer period, and any such party shall endeavor to remove or overcome
such inability with all reasonable dispatch. The term "Force Majeure" as employed herein shall
mean acts of God, strikes, lockouts or other industrial disturbances, acts of public enemy, orders
of any kind of the United States or the State of Texas or any civil or military authority, insurrec-
tions, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods,
washouts, droughts, arrests, restraint of government and people, civil disturbances, explosions,
breakage or accidents to machinery, pipelines or canals, partial or entire failure of water supply
and inability on the part of such Customer to provide water necessary for operation of its water
and wastewater system hereunder or of BRA and LCRA to receive Wastewater on account of any
other causes not reasonably within the control of the party claiming such inability. It is
understood and agreed that the settlement of strikes and lockouts shall be entirely within the
discretion of the party having the difficulty and that the above requirement that any Force Majeure
shall be remedied with all reasonable dispatch shall not require the settlement of strikes and
lockouts by acceding to the demands of the opposing party or parties when such settlement is
unfavorable in the judgment of the party having the difficulty.
Section 7.06. INSURANCE. BRA and/or LCRA will carry fire, casualty,public liability
and other insurance for purposes and in amounts which would ordinarily be carried by a privately
owned utility company owning and operating facilities similar to the System, except that BRA and
LCRA need not carry liability insurance except to insure against risk of loss due to claims for
which they can, in the opinion of their respective legal counsels, be liable under law or judicial
decision. Such provisions will be so designed as to afford protection not only for the owners of
the Bonds but to assure and facilitate, to the extent feasible and practicable, the restoration of
damaged or destroyed properties and to minimize the interruption of service to the Customers and
others. Provided, however, nothing herein shall prevent BRA and/or LCRA from providing such
insurance through self-insurance, self-insurance pools or similar methods.
Section 7.07. GOVERNMENTAL REGULATION. This Agreement shall be subject to
all valid rules, regulations and laws applicable hereto passed or promulgated by the United States
of America, the State of Texas or any governmental body or agency having lawful jurisdiction or
any authorized representative or agency of any of them. In each instance herein where reference
is made to a federal or State regulation, it is the intention of the parties that at any given time the
then current edition of any such federal or State regulation shall apply. BRA, LCRA and the
Customers agree that their obligations under this Agreement shall include compliance with the
requirements made under said laws, and any rules and regulations issued pursuant thereto. New
standards shall be adopted by BRA and LCRA which are in compliance with applicable State and
federal laws and any valid rules and regulations issued pursuant thereto.
Section 7.08. CUSTOMER COOPERATION TO ASSURE REGULATORY
COMPLIANCE. Since BRA and LCRA must comply with all federal, state and local
requirements to obtain permits, grants and assistance for system construction, studies, etc., each
37
Customer will cooperate with BRA and LCRA in good faith at all times to assure compliance with
any such governmental requirements where noncompliance or non-cooperation by the Customer
may subject BRA and LCRA to penalties, loss of grants or other funds, or other adverse
regulatory action. In making the determinations called for herein, BRA and LCRA covenant that
such determinations will be made only after informing the Technical Review Committee, after
detailed studies of statistical data available as to the need and feasibility have been made, and after
consulting with engineers and financial advisors. Each Customer will be kept advised at all times
of planning and implementing Required Improvements. In that regard, each Customer agrees to
adopt and enforce, and to provide in its wholesale contracts with its water customers in the future
that they shall adopt and enforce, an appropriate water conservation and/or drought management
plan as required by the Texas Water Development Board as a result of its loan of funds to LCRA
for construction and acquisition of the System.
Section 7.09. CONTRACTS WITH OTHERS IN RELATION TO SYSTEM.
(a) Each Customer shall have the right to enter into contracts with other persons
natural or corporate, private.or public, to receive Wastewater from such persons. Each
Customer covenants that it will advise BRA and LCRA of all such written contracts and
will, if requested by BRA or LCRA, furnish BRA and LCRA with a list of all customers
other than retail, residential customers. Initially, within thirty (30) days after execution
of this Agreement,and thereafter for each calendar year during the tenure hereof, each
Customer will send to LCRA and BRA by January 15 of each year an annual report
containing the following data about each Customer's customers that the System ultimately
serves:
(1) actual number of connections as of the end of the calendar year;
(2) number of new wastewater connections made in the previous
calendar year;
(3) classification, by number and percentage, of accounts according to
the following:
(i) residential;
(ii) multi-family;
(iii) business/commercial; and
(iv) other; and
(4) if business or commercial connections, a copy of any Customer
industrial waste discharge permit issued to such premises.
(b) BRA and LCRA shall have the right to enter into agreements with other
persons so long as such agreements do not prevent BRA or LCRA from meeting their
obligations to provide service to the Customers from the System in accordance with this
Agreement.
38
(c) The parties recognize and acknowledge that the System contains Surplus
Reserved Capacity for Leander, which is not needed to meet the requirements of the
Customers. The Engineering Report will identify the Surplus Reserved Capacity for
Leander in each System component. The parties agree that the Surplus Reserved Capacity
for Leander should be utilized, if possible, to provide service to areas within the Leander
Service Area. In that regard, the parties further agree as follows:
. (1) to jointly and creatively pursue efforts to obtain an agreement from
Leander to receive service from the System. LCRA and BRA are encouraged and
directed to enter into negotiations in that regard. LCRA and BRA shall keep the
Technical Review Committee reasonably and timely informed of the status and
progress of those negotiations.
(2) LCRA and BRA may enter into any agreement they desire with
Leander regarding wastewater service to the Leander Service Area; provided,
however, LCRA and BRA shall not operate, manage, finance or own a wastewater
treatment system providing service to Leander in an amount exceeding 2.25 million
gallons per day unless all of the Customers otherwise agree in writing.
(3) Should LCRA acquire the Leander wastewater treatment plant (up
to a maximum of 2.25 million gallons per day), the parties agree that that plant
may become part of the System if each of the Customers agrees thereto in writing.
(4) As provided in the Engineering Report, the System will be
constructed at a size sufficient to provide for the Leander Reserved Capacity.
Section 7.10. NON-INFRINGEMENT. Notwithstanding anything in Section 7.09, the
Customers, BRA and LCRA agree that they will not provide or enter into an agreement to provide
wastewater service directly or indirectly to another Customer's Service Area unless the Customer
in whose Service Area the service is to be provided consents which consent may be granted or
denied in the sole and complete discretion of the Customer in whose Service Area the service is
to be provided.
Section 7.11. SALE OR TRANSFER OF SYSTEM; CUSTOMERS' RIGHT OF FIRST
REFUSAL.
(a) As the System will constitute a portion of the LCRA System, LCRA has
covenanted in the Bond Resolution and in the resolutions authorizing and governing the
outstanding LCRA Debt that it will not sell, lease or otherwise dispose of the System (or
any other LCRA System properties) required, in the reasonable judgment of the LCRA
Board of Directors, for the efficient operations of the LCRA System and the sale or
disposal of which would cause a breach of LCRA's covenants to secure its outstanding
LCRA Debt. The Customers acknowledge that any transfer or sale of the System to the
Customers will require the LCRA Board of Directors to determine that the System is no
longer required as described above, and further, that the System is no longer necessary or
39
convenient or of beneficial use to the business of LCRA. The approval of any such
transfer or sale shall be in the sole discretion of the LCRA Board of Directors at the time
of any such proposed transfer or sale.
(b) Should LCRA or BRA desire to transfer the System or any portion thereof
to any other person (other than a subsidiary or affiliate of LCRA or BRA), it shall first
give one hundred eighty(180)days written notice to the Customers setting forth the terms
of the proposed transfer. The Customers collectively, shall have the right of first refusal
at any time during said one hundred eighty (180) day period to enter into an agreement
with LCRA or BRA to purchase the System or portion thereof proposed to be transferred
on the same terms as the proposed transfer.
Section 7.12. LCRA RIGHT OF FIRST REFUSAL TO PURCHASE CEDAR PARK
TREATMENT PLANT. Cedar Park hereby grants to LCRA a right of first refusal to purchase
the Cedar Park Treatment Plant during the term of this Agreement. If, during the term of this
Agreement, Cedar Park desires to transfer the Cedar Park Treatment Plant or any portion thereof
to any other person (other than a subsidiary or affiliate of Cedar Park), it shall first give one
hundred eighty(180)days written notice to LCRA setting forth the terms of the proposed transfer.
LCRA shall have the right of first refusal at any time during said one hundred (180) day period
to enter into an agreement with Cedar Park to purchase the Cedar Park Treatment Plant or portion
thereof proposed to be transferred on the same terms as the proposed transfer. If LCRA buys the
Cedar Park Treatment Plant during the term of this Agreement, it shall become part of the System
and shall be operated by BRA.
Section 7.13. EXCEPTIONS TO SOLE SOURCE REQUIREMENT. Notwithstanding
the provisions of Section 2.05(a) to the contrary, Cedar Park and Austin may obtain service by
construction of their own facilities for their respective Service Areas to the following extent:
(a) Cedar Park agrees not to expand the Cedar Park Treatment Plant during the
term of this Agreement, provided that all Wastewater capacity required by Cedar Park
(i)is available from the System(including any Expansions)more economically than a plant
expansion and (ii) can be provided in the System within the timeframe required by Cedar
Park. Economics and timing will be determined by Cedar Park, in its sole discretion. If
Cedar Park determines that the conditions set forth in (i) or (ii) above cannot be met,
Cedar Park will have the right to expand the Cedar Park Treatment Plant within the limits
of and pursuant to the existing permit for that plant and the other Customers, LCRA and
BRA agree not to oppose or resist that expansion in any way. Cedar Park will further
have the right to continue to operate the Cedar Park Treatment Plant and the Block House
Creek treatment plant, and to maintain in effect and to renew the existing discharge
permits for those plants,TNRCC Permit No. TX0085740 and NPDES Permit No. 12308-
001 for the Cedar Park Treatment Plant, and TNRCC Permit No. 13031-001 and NPDES
Permit No. TX 0101397 for the Block House Creek treatment plant. The other
Customers, LCRA and BRA agree not to oppose or resist in any way (i) renewal of those
permits or (ii) amendments which would make the permit parameters more stringent.
40
(b) Austin presently provides Wastewater service to that portion of its Service
Area west of Partner Lane by means of a lift station and force main which divert the
Wastewater flows to Austin's Walnut Creek Treatment Plant. Austin may continue to
provide Wastewater service in that manner for that area or, at Austin's sole discretion, it
may provide Wastewater service to such area through the System in accordance with the
terms of this Agreement.
Section 7.14. ANNUAL REPORT OF SYSTEM AND AUDITS. BRA and LCRA shall
cause to be prepared an annual report of the System each year. Such report shall contain such
matters and information as may be considered necessary and useful by BRA, LORA,the Technical
Review Committee and the Financial Review Committee. A copy of the annual report and BRA's
and LCRA's annual audits and accompanying management letters shall be promptly provided to
each other and to each Customer, the Technical Review Committee and the Financial Review
Committee.
Section 7.15. NO ADDITIONAL WAIVER IMPLIED. No waiver or waivers of any
breach or default (or any breaches or defaults) by any party hereto of any term, covenant,
conditions, or liability hereunder, or of performance by the other parties of any duty or obligation
hereunder, shall be deemed or construed to be a waiver of subsequent breaches or defaults of any
kind, under any circumstances.
Section 7.16. ADDRESSES AND NOTICE. Unless otherwise provided in this
Agreement, any notice, communication, request, reply, or advice (herein severally and
collectively, for convenience, called "Notice") herein provided or permitted to be given, made or
accepted by any party to the others must be in writing and may be given or be served by
depositing the same in the United States mail postpaid and registered or certified and addressed
to the party to be notified, with return receipt requested, or by delivering the same to an officer
of such party, or by telecopier, when appropriate, addressed to the party to be notified. Notice
deposited in the mail in the manner hereinabove described shall be conclusively deemed to be
effective, unless otherwise stated in this Agreement, from and after the expiration of four(4)days
after it is so deposited. Notice given in any other manner shall be effective only if and when
received by the party to be notified. For the purpose of notice, the addresses of the parties shall,
until changed as hereinafter provided, be as follows:
If to LCRA, to;
General Manager
Lower Colorado River Authority
P. O. Box 220
3701 Lake Austin Boulevard
Austin, Texas 78767
Fax No. (512) 473-3298
41
If to BRA, to:
General Manager
Brazos River Authority
PO Box 7555
Waco, Texas 76714-7555
Fax No. (254) 772-5780
If to Round Rock, to:
City Manager
City of Round Rock
221 East Main
Round Rock, Texas 78664
Fax No. (512) 218-7097
If to Cedar Park, to:
City Manager
City of Cedar Park
600 North Bell Blvd.
Cedar Park, Texas 78613
Fax No. (512) 258-6083
If to Austin, to:
City Manager
City of Austin
P. O. Box 1088
Austin, Texas 78767-1088
Fax No. (512) 499-2374
The parties shall have the right from time to time and at any time to change their respective
addresses and each shall have the right to specify as its address any other address by at least fifteen
(15) days written notice to the other parties.
Section 7.17. MODIFICATION. Except as otherwise provided in Section 2.02, this
Agreement shall be subject to change or modification only with the mutual consent of the
governing bodies of each of the parties hereto, which consent shall not be unreasonably withheld
or delayed, but the parties recognize that the Bond Resolution may contain covenants by BRA or
LCRA not to consent to certain changes or modifications of this Agreement.
Section 7.18. ASSIGNABILITY. This Agreement shall not be assignable by any party
without the prior written consent of the other parties, which consent shall not be unreasonably
withheld or delayed.
42
Section 7.19. SEVERABILITY. The provisions of this Agreement are severable, and if
any provision or part of this Agreement or the application thereof to any person or circumstance
shall ever be held by any court of competent jurisdiction to be invalid or unconstitutional for any
reason, the remainder of this Agreement and the application of such provision or part of this
Agreement to other persons or circumstances shall not be affected thereby.
Section 7.20. MERGER. Other than the other contracts mentioned herein,this Agreement
constitutes the entire agreement between the parties relative to the subject matter thereof. Except
as noted in the previous sentence, there have been and are no agreements, covenants,
representations or warranties between the parties other than those expressly stated herein or
expressly provided for herein.
Section 7.21. VENUE. Venue for any action arising hereunder will be in Williamson
County, Texas.
Section 7.22. NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement,
express or implied, is intended to confer upon any person or entity, other than the parties hereto,
any rights, benefits, or remedies under or by reason of this Agreement.
Section 7.23. REUSE OF TREATED EFFLUENT FROM THE SYSTEM. Any
Customer may utilize treated effluent from the System in accordance with this Section. There will
be no charge by LCRA or BRA for the treated effluent; however, each Customer will be
responsible for paying for all capital and operational costs associated with its respective use for
any treated effluent reuse facilities. Each Customer's allowable withdrawal rates of treated
effluent at any given time shall be in proportion to each Customer's Reserved Capacity in System
Treatment Facilities as a percent of the total Reserved Capacity of all Customers in the System
Treatment Facilities. The Technical Review Committee shall be kept apprised routinely by LCRA
and BRA, and any other Customer, regarding actions taken or contemplated to be taken in regard
to use of treated effluent, including without limitation, plans, engineering reports and similar
information verifying compliance with the provisions of this Section. All reuse facilities shall be
constructed by the Customer for whose benefit the reuse facilities are intended, except that LCRA
or BRA shall, at the Customer's expense, construct reuse facilities on System property. Reuse
facilities may be constructed on System property provided that LCRA and BRA agree and
provided further that the location of the facilities will not impair the ability of System facilities
to be constructed in the future. Unless otherwise agreed by LCRA and BRA with the unanimous
approval of the Technical Review Committee, title to any reuse facilities located on System
property shall be dedicated to LCRA and BRA for ownership and operation,but responsibility for,
construction costs and operation and maintenance costs of same and the right to the use of said
facilities shall remain with the Customer or Customers for whose benefit the reuse facilities exist.
Round Rock's service area for treated effluent shall be Round Rock's Service Area. Cedar Park's
service area for treated effluent shall be Cedar Park's Service Area and areas outside of Round
Rock's, Cedar Park's, Austin's and LCRA's Service Areas. Austin's service area for treated
effluent shall be Austin's Service Area and areas outside of Round Rock's, Cedar Park's,
Austin's, and LCRA's Service Area. LCRA/BRA's service area for treated effluent shall be
LCRA's Service Area and areas outside of Round Rock's, Cedar Park's, Austin's and
43
LCRA/BRA's Service Areas. Round Rock agrees to allow Cedar Park to oversize Round Rock's
reuse delivery system to allow delivery of 1 MGD to Cedar Park's Service Area adjacent to FM
1431, provided that Cedar Park shall pay its pro rata share of the capital and operations costs of
Round Rock's reuse delivery system based on the capacity in Round Rock's reuse delivery system.
BRA and all Customers agree to not object to any future water right bed and banks permit requests
filed by any Customer or BRA for delivery of treated effluent from the East Plant.
ARTICLE VIII
NEGOTIATION AND MEDIATION OF DISPUTES
Section 8.01. AGREEMENT REGARDING REMEDIES. The parties agree that their
respective obligations under this Agreement are unique and recognize that LCRA or BRA may be
issuing its Bonds to acquire, construct, expand, improve or replace the System and may pledge
the revenues from this Agreement to secure payment of principal of,premium, if any, and interest
on the Bonds. The failure by any party to perform its obligations under this Agreement would
not be capable of being appropriately remedied by award of damages to any other affected party
to this Agreement and in any event, such damages would be difficult, if not impossible; to
determine because of the unique nature of the parties' obligations to each other hereunder.
Further, the parties agree that the remedy of termination of this Agreement by any party is
inappropriate and not in the public interest. Therefore, the parties agree that they shall be entitled,
and limited, to the remedies of specific performance, mandamus and injunction in the event of any
breach of any obligation by any party under this Agreement. The parties hereby waive any
requirement that they be required to provide any bond or other surety in order to obtain any of
the agreed upon remedies.
Section 8.02. AGREEMENT TO NEGOTIATE FIRST TO RESOLVE ISSUES. The
parties agree to attempt first to resolve disputes concerning this Agreement amicably by promptly
entering into negotiations in good faith. The parties agree that they will not refer any dispute to
another dispute resolution procedure including mediation or litigation until they have first made
reasonable and good faith efforts to settle their differences by joint negotiations conducted in a
timely manner.
Section 8.03. AGREEMENT TO MEDIATE. If any dispute cannot be resolved through
good faith negotiation, then the parties shall endeavor to resolve the dispute by mediation as
provided herein.
Section 8.04. PRESENTATION OF WRITTEN CLAIM REGARDING DISPUTES NOT
RESOLVED BY NEGOTIATION. In the event that a dispute is not resolved as a result of such
negotiations, either party may at any time give formal written notice to the other of a "claim."
A "claim" as used herein means a demand or assertion by one of the parties (the "claimant")
seeking, as a matter of right, adjustment or interpretation of contract terms, the payment of
money, an extension of time for performance or other relief with respect to the terms of this
Agreement or any other dispute or matter in question among the parties arising out of or related
to this Agreement. Such notice shall be in writing. After such notice is given, the dispute
resolution procedure provided for below shall immediately enter into effect.
44
Section 8.05. PERFORMANCE DURING MEDIATION. The claimant shall continue
with performance under this Agreement pending mediation of the dispute.
Section 8.06. APPOINTMENT OF MEDIATOR. Promptly following the making of a
written claim by any party, the parties will consult with one another to agree on the appointment
of a mediator acceptable to all parties. The mediator shall have experience in matters of the kind
giving rise to the claim. If within five (5) business days the parties are unable to agree on the
appointment of a mediator, then any party may request the appointment of a mediator by the
Center for Public Policy Dispute Resolution at the University of Texas at Austin School of Law.
The parties shall endeavor to secure such appointment from the Center for Public Policy Dispute
Resolution within ten (10) business days after the request for same is made. The parties agree to
utilize the mediator appointed by the Center unless they ultimately reach agreement on an
alternative selection and give notice to the Center that another selection has been made by
agreement.
Section 8.07. RULES FOR MEDIATION. The parties agree to the following stipulations
concerning the conduct of the mediation:
(a) The mediator shall be impartial among the parties and shall have no conflict
of interest.
(b) The mediator shall not have any past, present or anticipated financial
interest in the Agreement or the System except for the payment for services as mediator
nor shall the mediator have been previously employed or acted as a consultant, attorney,
employee, engineer, architect, contractor or subcontractor of any party nor have any
present or anticipated future engagement of the kind described. Before the engagement
of the mediator is finalized, the mediator shall provide to the parties a disclosure statement
containing a resume of experience, a description of past, present or anticipated future
relationships to the System and the parties, their engineers, contractors, subcontractors,
attorneys, architects, or consultants.
(c) The mediation shall be held at a time and location mutually agreeable to the
parties and the mediator provided, however, that the mediation shall commence no later
than fifteen (15) business days following the confirmation of appointment.
(d) At least five (5) business days prior to the mediation, the claimant shall
submit to the parties and the mediator a statement of the claimant's position, the issues that
need to be resolved and a summary of the arguments supporting the claimant's position.
At least two (2) business days prior to the mediation, the responding parties shall submit
their written response to the claimant's statement and provide a summary of their
arguments in response.
(e) If the parties agree that independent expert or technical advice would be
helpful in facilitating a negotiated resolution of the dispute, the mediator may make
arrangements to obtain such advice, and may, with the agreement of the parties, make
45
arrangements for an independent expert to render a non-binding advisory opinion with
respect to any technical matters in dispute after hearing the contentions of the parties with
respect thereto. The expenses of obtaining such independent advice or advisory opinion
shall be borne equally by the parties.
(f) No party shall engage in any private interview,discussion or argument with
the mediator concerning the subject matter of the mediation.
(g) The fees of the mediator and any other costs of administering the mediation
shall be borne equally by the parties unless otherwise agreed among them in writing.
(h) The mediator may promote settlement in any manner the mediator believes
appropriate at one or several mediation sessions as agreed to by the parties. The mediation
shall continue only so long as desired by the parties and with the consent of all of them.
(i) Mediation sessions shall be private unless otherwise required by law.
Persons other than the representatives of the parties may attend mediation sessions only
with the permission of all parties and the consent of the mediator.
0) All communications made in the course of the mediation process including
any advice or advisory opinions rendered shall be confidential in accordance with
V.T.C.A. Civil Practice and Remedies Code, Section 154.073.
Section 8.08. EXCEPTION. Notwithstanding the foregoing provisions of Sections 8.02-
8.07, the parties agree that those provisions shall not be applicable in emergency situations.
ARTICLE IX
EFFECTIVE DATE AND TERM OF AGREEMENT
Section 9.01. EFFECTIVE DATE. This Agreement shall become effective upon
execution by BRA, LCRA and all Customers and such fact shall be communicated in writing to
the Customers by BRA and LORA. This Agreement shall constitute the sole and only contract
between the Customers and BRA and LCRA regarding Wastewater disposal services and the
Customers hereby recognize and affirm their responsibility to make the payments required hereun-
der.
Section 9.02. TERM OF AGREEMENT. This Agreement shall continue in force and
effect from the effective date hereof for a period of forty(40) years, and thereafter shall continue
in effect until any Bonds, or Bonds issued to refund same, if any, have been paid in full. The
Customers shall have the right to the continued performance.of services provided hereunder for
the useful life of the System to the extent of their respective Reserved Capacities after amortization
of LCRA's and BRA's investment in the System, upon payment of just and reasonable charges
by the Customers.
46
Section 9.03. EFFECT ON CERTAIN PRIOR AGREEMENTS. The parties recognize
that LCRA, BRA, Cedar Park and Round Rock have previously entered into that certain
agreement dated July 18, 1997,entitled "Wastewater Disposal Contract"pursuant to which LCRA
and BRA agreed to provide Wastewater service to Cedar Park and Round Rock. The parties agree
that one of the purposes, and the effect, of this Agreement is to amend and replace that prior
agreement which is hereby terminated; provided, however, the parties to that agreement further
recognize that they will separately agree among themselves at a future time for any matters arising
out of their respective rights and obligations pursuant to Section 5.05 of that agreement.
IN WITNESS WHEREOF, the parties hereto acting under authority of their respective
governing bodies have caused this Agreement to be duly executed i v ral ounterparts, each
of which shall constitute an original, all as of the �, day of , 2000.
BRAZOS RIVER AUTHORITY
By:
Name. ary n
Title: General anager
ATTEST:
By:
Name: /`'1 I CA p 6 L F. f=i'6 W
Title:
47
LOWER COLORADO RIVER AUTHORITY
By: —4 j 6�"'j
Name: Paul Nornhill, P.E.
Title: Manager, WaterCo
ATTEST:
By:
Name: Thomas Thomas G. Mason
Title: General Counsel
48
CITY OF ROUND ROCK
By:
Robert Stluka
Mayor
ATTEST:
(1)7 .4 AA J
N e: Joan r1G
Title: City Secretary
49
CITY OF CEDAR PARK
By: & c
Bob Y g
Mayoff
ATTEST:
iwn'�e: LL-'4*,Jjnr% Iry1• r-n
Title: Ci �- ► rt�'Qf N
50
CITY OF AUSTIN
By:
Name: Toby Ha ett Futrell
Title: Deputy City Manager
ATTEST:
By: AVn� wp€
Name: /t 0C"Al r
Title: D,01- 47y
s
brlcra38.wpd
.1s �
,9 S A
51
EXHIBIT A
to the
WASTEWATER DISPOSAL CONTRACT
BRUSHY CREEK REGIONAL WASTEWATER SYSTEM
Regional System Assets
City of Austin Less Depreciation
Asset Description Total Cost' Allocation' (1996-2000) Acquisition Cost
Contracts 1, 2 & 3 $416,768 $125,030 $0 $125,030
Contracts 4 & 5-I (LS & 16" FM) 773,328 773,328 -515,552 257,776
Contract 5-II (24" Gravity Line) 104,303 69,883 -6,988 62,895
Contract 5-II 609,426 408,315 -40,832 367,484
Contract 6a 2,692,667 1,346,334 -134,633 1,211,701
Contract 6 117,412 52,131 0 52,131
Contracts 20, 20a& 21 1,219,009 609,505 0 609,505
WWTP Planning (HDR) 182,190 71,054 0 71,054
WWTP Design (HDR) 772,092 216,186 0 216,186
Land at WWTP 720.666 374,747 0
374,747
Total $7,607,861 $4,046,513 -$698,005 $3,348,508
Adjustment for Capital Charges Carried by LCRA on Austin's Behalf (FY97 - FY00) Z -$191,788
Net Acquisition Cost $3,156,720
1
NOTES:
1. From the following existing agreements:
"Agreement for Termination of Brushy Creek Regional Wastewater Disposal Agreement"
"Round Rock/LCRA Alliance Acquisition Contract"
"Austin/Cedar Park Transfer Agreement"
2. The Parties agree that LCRA should receive a credit to be applied to the Purchase Price to reimburse LCRA for the cost of
carrying 300,000 gpd of Reserved capacity in the Brushy Creek Regional Wastewater System up to the date of Closing.
Accordingly, the Parties agree:
a) For Closing that occurs on any day other than September 29, 2000 which is after July 1, 2000 and prior to January 1, 2001
the Adjustment for Capital Charges Carried by LCRA on Austin's Behalf will be calculated as follows:
$190,006 x(1 + 0.06/12)"
where n=the number of months and partial months after July 2000 up to six months.
b) For Closing that occurs after January 1, 2001 the Adjustment for Capital Charges Carried by LCRA on Austin's Behalf will
be the sum of(a) above and that portion of any principal and interest payments made on any outstanding Bonds or LIF between
December 31, 2000 and the date of Closing allocated to LCRA on Austin's behalf (1 + 0.06/12)'where n=the number of
months and partial months between January 2001 and the Closing date.
2
r
I
EXHIBIT .B
to the
WASTEWATER DISPOSAL CONTRACT
BRUSHY CREEK REGIONAL WASTEWATER SYSTEM
Capacity Reservations: Upstream and Downstream Collection System
Based on Peak Wet Weather Flows
Expressed in %
Round Cedar
Node Rock Park
A= L_
A 000
B 100.00 0.00 0.00
0.00 100.00 0.00
C 0.00
D 0.00 90.78 9.22 0.00
E 0.00 90.90 9.10 0.00
0.00 87.30 12.70
0.00
F
F0.00 86.11 13.89
0.00 83.38 0.00
H 16.62 0.00
I 0.00 87.16 0.00 86.09 12.84 0.00
J 12.68 1.23
0.00 82.66 12.18
5.16
K 9.95 72.73
L 10.73 6.59
11.01 71.88 10.60
M 10.78 6.51
N 45.23 35.60 8.39
20.02 40.27 31.71
O 22.86 38.84 8.0030.59 7.71
P 30.13
Q 35.16 27.73 6.98
R 32.12 34.17 26.94
33.90 33.26 6'77
S 35.21 26.25 6.59
32.61 25.72 6.46
Node from Figure 1-1 of Engineering Report
1
EXHIBIT B
to the
WASTEWATER DISPOSAL CONTRACT
BRUSHY CREEK REGIONAL WASTEWATER SYSTEM
Allocation of Annual Project Requirements: Upstream and Downstream Collection System
Upstream Collection System:
2037 Contractual Flows Upstream
Customer Population GPCD al/da Allocator (in %)
City of Round Rock 0 140 0 0.00
City of Cedar Park 83,281 85 7,078,885 67.95
City of Austin 12,004 100 1,200,400 11.52
LCRA 21.388 100 2.138.800 20.53
Total 116,673 10,418,085 100.00
Downstream Collection System:
2037 Contractual Flows Downstream
Customer Population GPCD al/da Allocator (in %)
I
City of Round Rock 142,896 140 20,005,440 54.75
City of Cedar Park 83,281 85 7,078,885 19.37
City of Austin 70,836 100 7,083,600 19.39
LCRA 23,703 100 2.370.300 6.49
Total 320,716 36,538,225 100.00
GPCD = Gallons Per Capita per Day
2
EXHIBIT B
to the
WASTEWATER DISPOSAL CONTRACT
BRUSHY CREEK REGIONAL WASTEWATER SYSTEM
Capacity Reservations and Allocation of Annual Project Requirements: Treatment Facilities
Reserved Capacity/
Contractual Flows Treatment
Customer (MGD) Allocator (in %)
City of Round Rock 9.60 64.86
City of Cedar Park 2.50 16.89
City of Austin 0.30 2.03
LCRA 2.40 16.22
Total 14.80 100.00
MGD = Million Gallons per Day
3
EXHIBIT C
to the
WASTEWATER DISPOSAL CONTRACT
BRUSHY CREEK REGIONAL WASTEWATER SYSTEM
August, 2000
LIST OF INADMISSIBLE WASTES
In accordance with the provisions of Section 4.04 of the Wastewater Disposal Contract
between the Brazos River Authority ("BRA"), the Lower Colorado River Authority ("LCRA"),
the City of Round Rock, the City of Cedar Park and the City of Austin, the following List of
Inadmissible Wastes specifying materials that can not be discharged to the sewer system and
concentrations for substances which should not be exceeded in discharges to the system, is
promulgated by the BRA as of August, 2000.
The following list constitutes the pollutant allocations and local limits established under
the Brushy Creek Regional Wastewater System Pretreatment Program specifying both numerical
concentration limits and prohibited substances for discharge to the System of toxic or regulated
pollutants which could cause interference with the operation of the treatment plant or cause a
violation of the BRA/LCRA's State or Federal discharge permit provisions. Under the provisions
of Section 4.04, each Customer agrees to limit discharges to the System in accordance with the
following list:
Prohibited discharges include:
1. Wastewater having a temperature that would result in the total combined influent to the
treatment plant to exceed a temperature of 104 degrees Fahrenheit or 32.2 degrees Celsius.
2. Wastewater having a pH value lower than 5.0 or higher than 10.5 or which will cause
structural damage to the System.
3. Wastewater containing gasoline, benzene, naphtha, fuel oil, or other flammable or
explosive liquids, solids, gases, or any material that will result in the presence of toxic
gases, vapors or fumes within the System in quantities which may cause acute worker
health and safety problems.
4. Wastewater containing oil and grease or any grease, fats, waxes, oil, plastic or other
substances that will solidify or become discernibly viscous at any temperature between 32
degrees Fahrenheit and 90 degrees Fahrenheit so as to cause obstruction in the collection
system or at the treatment plant.
5. Wastewater with a radioactive content greater than allowable by applicable provisions of
the Texas Radiation Control Act, Article 4590 (f), Revised Civil Statutes of Texas, and
Texas Regulations for Control of Radiation issued thereunder.
1
6. Wastewater with a dissolved hydrogen sulfide concentration greater than 1.0 milligrams
per liter.
7. Wastewater containing corrosive constituents, that have a damaging or corrosive effect on
system components.
8. Any hazardous wastes prohibited by regulatory agencies.
9. Any trucked or hauled pollutants except at discharge points designated by the BRA and
with the written consent of the Customer or BRA.
10. Wastewater, which alone or in conjunction with other wastewater, causes the wastewater
entering any entry point into the system to exceed a five-day Biochemical Oxygen Demand
(BOD), concentration of 300 milligrams per liter or a Total Suspended Solids (TSS),
concentration of 400 milligrams per liter, shall be subject to surcharge on the basis of
actual increased operating costs so long as the pollutant is not causing interference with the
operation of the BRA/LCRA's State or Federal discharge permit provisions, and as long
as said pollutants are deemed acceptable by the BRA. BRA shall determine the cost of
treatment for pollutants received from all Customers and determine additional treatment
costs for excessive pollutants to be surcharged.
11. Wastewater with concentrations of toxic pollutants, including heavy metals and other
pollutants designated under the System Pretreatment Program, which will alone or in
conjunction with other wastewater cause the treatment plant influent to contain in excess
of:
Pollutant System Headworks Limit
24 hour Composite
Ibs/dav m /1
Cadmium 24.6864 0.2
Chloroform 493.7280 4.0
Chromium (Total) 2,098.3440 17.0
Copper 432.0120 3.5
Ethyl Benzene 1,974.9120 16.0
Lead 61.7160 0.5
Naphthalene 1,851.4800 15.0
Nickel 555.4440 4.5
Silver 8.6402 0.07
Tetrachloroethylene 617.1600 5.0
Toluene 1,728.0480 14.0
Zinc 469.0416 3.8
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12. The combined volume of all wastewater discharged by the Customers shall not contain the
following listed pollutants in excess of the listed loading without prior written approval
from the BRA.
Pollutant Pollutant Allocation in lbs/day
Round Cedar
Rock Park Austin LCRA Total
Cadmium 16.0128 4.1700 0.5004 4.0032 24.6864
Chloroform 320.2560 83.4000 10.0080 80.0640 493.7280
Chromium (Total) 1,361.0880 354.4500 42.5340 340.2720 2,098.3440
Copper 280.2240 72.9750 8.7570 70.0560 432.0120
Ethyl Benzene 1,281.0240 333.6000 40.0320 320.2560 1,974.9120
Lead 40.0320 10.4250 1.2510 10.0080 61.7160
Naphthalene 1,200.9600 312.7500 37.5300 300.2400 1,851.4800
Nickel 360.2880 93.8250 11.2590 90.0720 555.4440
Silver 5.6045 1.4595 0.1751 1.4011 8.6402
Tetrachloroethylene 400.3200 104.2500 12.5100 100.0800 617.1600
Toluene 1,120.8960 291.9000 35.0280 280.2240 1,728.0480
Zinc 304.2432 79.2300 9.5076 76.0608 469.0416
The BRA will periodically monitor for those pollutants at selected Customer's Points of
Entry. Should the analysis indicate any of the pollutants listed are approaching or
exceeding the System Head Works Limit, the Customer(s) shall determine the source of
the pollutant and require the generator(s) to reduce or cease discharge of the pollutant
and/or commence monitoring of the pollutant as required in the Brushy Creek Regional
Wastewater System Pretreatment Program.
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EXHIBIT D
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the "Agreement), dated as of ,
2000, is executed and delivered by the Lower Colorado River Authority (the "Issuer") and
(the "Disclosure Party") in connection with the issuance,
from time to time, of the Issuer's "municipal securities," with respect to which the Disclosure
Party is an "obligated person," as such terms are applied within the meaning of the Rule (the
"Bonds"). For good and valuable consideration, the Issuer and the Disclosure Party covenant and
agree as follows:
SECTION 1. Definitions.
As used in this Agreement, the following terms have the meanings ascribed to such terms
below:
"MSRB" means the Municipal Securities Rulemaking Board and any successor to its duties.
"NRMSIR" means each person whom the SEC or its staff has determined to be a nationally
recognized municipal securities information repository within the meaning of the Rule from time
to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission and any successor
to its duties.
"SID" means any entity designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
SECTION 2. Annual Reports; Obligations of Disclosure Party.
The Disclosure Party undertakes to and shall provide annually to each NRMSIR and any
SID, within six months after the end of each of its fiscal year ending on or after January 1, 1996,
financial information and operating data with respect to the Disclosure Party as specified and
included in Appendix B of any final official statement relating to Bonds. Any financial statements
so to be provided shall be (1) prepared in accordance with the accounting principles described in
the notes to the financial statements as specified and included in Appendix B of any final official
statement relating to Bonds, or such other accounting principles as the Disclosure Party may be
required to employ from time to time pursuant to state law or regulation, and (2) audited, if the
Disclosure Party commissions an audit of such statements and the audit is completed within the
period during which it must be provided. If the audit of such financial statements is not complete
within such period, then the Disclosure Party shall provide unaudited financial statements for the
applicable fiscal year to each NRMSIR and any SID within the period during which it must be
provided and the audited financial statements, when and if the audit report on such statements
becomes available.
If the Disclosure Party changes its fiscal year, it will notify the Issuer, each NRMSIR and
any SID in writing of the change(and of the date of the new fiscal year end) prior to the next date
by which the Disclosure Party otherwise would be required to provide financial information and
operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be incorporated by specific reference to any
document or specific part thereby (including an official statement or other offering document, if
it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID
or filed with the SEC.
The Disclosure Party shall, within ten (10) business days of the filings of the annual
reports, notify the Issuer in writing that the filings have been made.
Further, the Disclosure Party shall provide (1) in a timely manner, notice of any failure
by the Disclosure Party to provide annual financial statements and operating data in accordance
with Section 2 hereof to each NRMSIR and each SID and (2) within ten (10)business days of the
Disclosure Party's obtaining actual knowledge of the occurrence of any of the events enumerated
in 3(a) below, notice to the Issuer of such event.
SECTION 3. Material Event Notices.
(a) The following are the events with respect to Bonds that the Issuer agrees to disclose
in a timely manner pursuant to the terms hereof, if the Issuer determines, pursuant to subsection
(b)below, that such events are "material" under applicable federal securities laws and regulations
promulgated thereunder.
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions or events affecting the tax-exempt status of the
security;
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(7) Modifications to rights of securities holders;
(8) Bond calls;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the
securities; and
(11) Rating changes.
(b) Whenever the Issuer obtains knowledge of the occurrence of one of the above
events, whether because of a notice from the Disclosure Party pursuant to subsection (d) or
otherwise, the Issuer shall, in a timely manner, determine if such event would constitute material
information for bondholders and beneficial owners of Bonds.
(c) If the Issuer determines that the occurrence of one of the above events is material
within the meaning of applicable federal securities laws and regulations promulgated thereunder,
the Issuer shall promptly file a notice of such occurrence with each NRMSIR or the MSRB and
each SID.
SECTION 4. Limitations, Disclaimers, and Amendments.
The Issuer and the Disclosure Party shall be obligated to observe and perform the
covenants specified in this Agreement for so long as, but only for so long as, the Disclosure Party
remains an "obligated person" with respect to Bonds within the meaning of the Rule, except that
the Disclosure Party in any event will give notice of any deposit made that causes Bonds no longer
to be outstanding.
The provisions of this Agreement are for the sole benefit of(and may be enforced by) the
bondholders and beneficial owners of Bonds and the parties to this Agreement, and nothing in this
Agreement, express or implied, shall give any benefit or any legal or equitable right, remedy, or
claim hereunder to any other person. The Issuer and the Disclosure Party undertake to provide
only the financial information, operating data, financial statements, and notices which each has
expressly agreed to provide pursuant to this Agreement and do not hereby undertake to provide
any other information that may be relevant or material to a complete presentation of the Issuer's
or the Disclosure Party's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Agreement or otherwise, except as expressly
provided herein. Neither the Issuer nor the Disclosure Party make any representation or warranty
concerning such information or its usefulness to a decision to invest in or sell Bonds at any future
date.
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UNDER NO CIRCUMSTANCES SHALL THE ISSUER OR THE DISCLOSURE
PARTY BE LIABLE TO THE BONDHOLDER OR BENEFICIAL OWNER OF ANY BOND
OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN
WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER OR THE DISCLOSURE
PARTY, RESPECTIVELY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART,
OF ANY COVENANT SPECIFIED IN THIS AGREEMENT, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT
OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR
SPECIFIC PERFORMANCE.
No default by the Issuer or the Disclosure Party in observing or performing their respective
obligations under this Agreement shall comprise a breach of or default under any resolution of the
Issuer authorizing the issuance of Bonds, or any contract relating thereto, for purposes of any
other provision of this Agreement.
Nothing in this Agreement is intended or shall act to disclaim, waive, or otherwise limit
the duties of the Issuer or the Disclosure Party under federal and state securities laws.
The provisions of this Agreement may be amended by the Issuer or the Disclosure Party
from time to time to adapt to changed circumstances that arise from a change in legal
requirements, a change in law, or a change in the identity, nature, status, or type of operations
of the Issuer or the Disclosure Party, but only if (1) the provisions of this Agreement, as so
amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering
of Bonds in compliance with the Rule, taking into account any amendments or interpretations of
the Rule since such offering as well as such changed circumstances and (2) either (a) the
bondholders or beneficial owners of a majority in aggregate principal amount (or any greater
amount required by any other provision of this Agreement that authorizes such an amendment)
of outstanding Bonds consent to such amendment or (b) an entity that is unaffiliated with the
Issuer or the Disclosure Party (such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interest of the bondholders and beneficial owners of
Bonds and is permitted by the terms of the Agreement. If the Issuer or the Disclosure Party so
amend the provisions of this Agreement in connection with the financial or operating data which
it is required to disclose under Section 2 hereof, the Disclosure Party shall provide a notice of
such amendment to be filed in accordance with Section 3(b) hereof, together with an explanation,
in narrative form, of the reason for the amendment and the impact of any change in the type of
financial information or operating data to be so provided. The Issuer or the Disclosure Party may
also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or
repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment that
such provisions of the Rule are invalid, but only if and to the extent that the provisions of this
sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the
primary offering of Bonds.
SECTION 5. Miscellaneous.
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Each of the parties hereto represents and warrants to each other party that it has (i) duly
authorized the execution and delivery of this Agreement by the officers of such party whose
signatures appear on the execution pages hereto, (ii) that it has all requisite power and authority
to execute, deliver and perform this Agreement under applicable law and any resolutions or other
actions of such party now in effect, (iii) that the execution and delivery of this Agreement, and
performance of the terms hereof, does not and will not violate any law, regulation, ruling,
decision, order, indenture, decree, agreement or instrument by which such party is bound, and
(iv) such party is not aware of any litigation or proceeding pending, or, to the best of such party's
knowledge, threatened,contesting or questioning its existence, or its power and authority to enter
into this Agreement, or its due authorization, execution and delivery of this Agreement, or
otherwise contesting or questioning the issuance of Bonds.
B. Governing Law.
This Agreement shall be governed by and interpreted in accordance with the laws of the
State of Texas and applicable federal law.
C. SeverabilitX.
If any provision hereof shall be held invalid or unenforceable by a court of competent
jurisdiction, the remaining provisions hereof shall survive and continue in full force and effect.
D. Counter.
This Agreement may be executed in one or more counterparts, each and all of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Issuer and the Disclosure Party have each caused their duly
authorized officers to execute this Agreement as of the day and year first above written.
LOWER COLORADO RIVER AUTHORITY
President, Board of Directors
ATTEST:
Secretary, Board of Directors
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By:
Tide:
ATTEST:
Tide:
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