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R-01-09-13-15F11 - 9/13/2001 RESOLUTION NO. R-01-09-13-15F11 WHEREAS, the City of Round Rock desires to acquire water from the Brazos River Authority, and WHEREAS, the City Council wishes to enter into a System Water Availability Agreement between Brazos River Authority and City of Round Rock - Lake Stilhouse Hollow for the purchase of water from Lake Stillhouse Hollow, Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the Mayor is hereby authorized and directed to execute on behalf of the City a System Water Availability Agreement between Brazos River Authority and City of Round Rock - Lake Stilhouse Hollow for the purchase of water from Lake Stillhouse Hollow, a copy of said agreement being attached hereto as Exhibit "A" and incorporated herein for all purposes. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. RESOLVED this 13th day of Sept e 001 . RO A. STL KA, JR. , ayor =EST: City of Round Rock, Texas City Secret ry 4C1/R'67'/Au6 rnAR'rIAZZI R 65Y. ::ODMF.\WORLDOX\O:\W:.0X\RESOLUTI\RIO 913F.11/6C SYSTEM WATER AVAILABILITY AGREEMENT EXHIBIT BETWEEN iI „A„ BRAZOS RIVER AUTHORITY AND CITY OF ROUND ROCK - LAKE STILLHOUSE HOLLOW AGREEMENT made and entered into this the _ day of - 2001, by and between BRAZOS RIVER AUTHORITY ("Authority"), a river authority of the State of Texas, and the CITY OF ROUND ROCK ("Purchaser") of Williamson County, Texas. 1. RECITALS. Authority owns and operates various lakes in the Brazos River Basin. Authority also has entered into contracts with the United States of America by virtue of which it has obtained the right to utilize for water supply purposes a portion of the usable storage space in various lakes owned and operated by the United States Army Corps of Engineers. Authority is authorized by the State of Texas to store State waters in the lakes owned by Authority and various lakes owned and operated by the United States Army Corps of Engineers in the Brazos River Basin, hereinafter collectively called the"System', and to make such stored waters available for beneficial use. Authority is authorized to operate the System as a hydrologic unit pursuant to an order of the Texas Water Commission (now Texas Natural Resource Conservation Commission "TNRCC'� issued on July 23, 1964 ("System Operation Order'). The Final Determination of All Claims of Water Rights in the Brazos River Basin and the San Jacinto-Brazos Coastal Basin Maintained by the Brazos River Authority, Fort Bend Counter W.C.I.D. No. 1 and Galveston County Water Authority ("Final Determination') issued on June 26, 1985, by TNRCC clarified and amplified the System Operation Order. Under the System Operation Order as adjudicated by the Final Determination, Authority is authorized to operate the System as a hydrologic unit to more efficiently utilize the reservoirs that make up the System to make water available to meet the needs of Authority's customers. Purchaser is a party to three existing raw water agreements with Authority: (1) "Replacement Water Supply Agreement Between Brazos River Authority and City of Round Rock"; dated September 12, 1991 (1991 Agreement) for 8,134 acre-feet of water per year, (2) "System Water Supply Agreement Between Brazos River Authority and City of Round Rock", dated November 13, 1996 (1996 Agreement) for 10,000 acre-feet of water per year, and (3) "Water Supply Contract By and Between Brazos River Authority and City of Round Rock", as amended, originally dated May 2, 1978 (1978 Contract) for 6,720 acre-feet of water per year. This Agreement cancels the 1991 Agreement and the 1996 Agreement and provides for the Authority to make available to Purchaser a total of 18,134 acre-feet of water per Fiscal Year. The 1978 Contract is addressed in a separate agreement, "System Water Availability Agreement Between Brazos River Authority and City of Round Rock— Lake Georgetown." Authority has implemented a System-wide pricing methodology using a cash basis cost-of-service consistent with accepted ratemaking practices of the water industry. Purchaser wishes to contract for Authority to make available 18,134 acre-feet of water per Fiscal Year under the terms of this Agreement pursuant to the System-wide pricing methodology, and Authority agrees to make water available to Purchaser pursuant to the terms and conditions herein provided. 2. DEFINITIONS. a) The term "Agreement" means this agreement. b) The term "Annual Capital Related Costs" shall mean, for any Fiscal Year, the just and reasonable amounts prudently incurred by Authority for the construction, reconstruction, acquisition, or replacement of the System including, without limitation, the principal, interest, reserve requirements, paying agent-registrar fees, debt service coverage requirement, and other expenses related to any bonds or other obligations issued and outstanding and used for the purpose of financing or refinancing the capital related costs of the System and cash expenditures therefore to- the extent said cash expenditures are reasonable and prudent. C) The term "Annual System Operation and Maintenance Expenses" shall mean, for any Fiscal Year, all just and reasonable and prudently incurred costs of operating and maintaining, and for repairs and replacement of, the System including (for greater certainty but without limiting the generality of the foregoing) costs incurred for labor, supervision, engineering, accounting, auditing, legal services, energy, supplies, insurance, payments made by Authority in satisfaction of judgments resulting from claims not covered by Authority's insurance, and services and equipment necessary for the proper operation and maintenance of the System. Operation and maintenance of the System shall include (for greater certainty, but not by way of limitation) activities related to water supply, streamgaging, water quality monitoring, efforts to control salt pollution, planning related to water supply and water quality, all payments made by Authority to the United States of America or others pursuant to the Federal Contracts, all expenditures made by Authority to generally protect the quality of water in the Brazos River or its tributaries, cost of improvements required by the State of Texas, the United States of America, or any State or Federal agency, amounts to cover Authority's general and administrative expense allocable to the System and amounts required to prudently maintain appropriate reserves for insuring continuous, reliable and adequate operation, maintenance, repair and replacement of the System. d) The term "Authority" shall mean Brazos River Authority. e) The term "Board" shall mean the Board of Directors of Brazos River Authority. f) The term "Federal Contracts" shall mean those contracts with the United States of America whereby Authority has acquired, is acquiring, or may acquire conservation storage capacity in Federal Reservoirs. g) The term "Federal Reservoirs" shall include the following: Aquilla Dam and Reservoir Belton Dam and Reservoir Georgetown Dam and Reservoir Granger Dam and Reservoir Proctor Dam and Reservoir Somerville Dam and Reservoir Stillhouse Hollow Dam and Reservoir Whitney Dam and Reservoir h) The term "Fiscal Year" shall mean Authority's fiscal year from September 1 through August 31, or such other annual fiscal year period as Authority may later determine. i) The term "Highest Lawful Rate" shall mean the maximum rate which Authority may charge on obligations payable under this Agreement without violation of 2 any applicable law or any applicable lawful regulation of any agency of the State of Texas or of the United States having jurisdiction of the matter. j) The term "Industrial Use" shall mean the use of water in processes designed to convert materials of a lower order of value into forms having greater usability and commercial value, including commercial feedlot operations, commercial fish production, and the development of power by means other than hydroelectric. k) The term "Irrigation Use"shall mean the use of water for the irrigation of crops, trees, and pastureland, including, but not limited to, golf courses and parks which do not receive water through a municipal distribution system. 1) The term "Mining Use" shall mean the use of water for mining processes including hydraulic use, drilling, washing sand and gravel, and oil field repressuring. m) The term "Municipal Use" shall mean the use of potable water within a community or municipality and its environs for domestic, recreational, commercial, or industrial purposes or for the watering of golf courses, parks and parkways. n) The term "Purchaser" shall mean City of Round Rock. o) The term "System" shall mean Authority's Water Supply System and shall include certain of Authority's facilities and properties insofar as they are related to making water available from the System, to wit, as follows: Morris Sheppard Dam and Possum Kingdom Reservoir, DeCordova Bend Dam and Lake Granbury, Sterling C. Robertson Dam and Lake Limestone, and Authority's conservation storage in the Federal Reservoirs, together with all future extensions, improvements, enlargements, and additions to and replacements of the System, and all replacements thereof whether from surface water supplies, groundwater, or a combination thereof, specifically added to the System by resolution of the Board; provided that, notwithstanding the foregoing, the term System shall not include (i) any of Authority's facilities and properties not specifically included in the System by the terms of this Agreement or not added by a subsequent resolution of the Board adopted pursuant to Section 15., System Expansion below, and (ii) any water supply, wastewater or other facilities which have been or are declared not to be a part of the System and which may be acquired or constructed by Authority with the proceeds from the issuance of "Special Facilities Bonds," which are hereby defined as being special revenue obligations of Authority which are not secured by or payable from the revenues of the System but which are secured by and payable solely from special contract revenues or payments received from any persons or other legal entity or entities in connection with such special facilities. p) The term "System Operation Order" shall mean that certain order of the TNRCC or its predecessor dated July 23, 1964, as adjudicated by order of the TNRCC or its predecessor on June 26, 1985, in the Final Determination of all Claims of Water Rights in the Brazos River Basin and the San Jacinto-Brazos Coastal Basin Maintained by the Brazos River Authority Fort Bend County W C I D No 1 and Galveston County Water Authority. q) The term "System Rate" shall mean the rate per acre-foot of water established by Authority from time to time under the system-wide pricing methodology for water made available to Purchaser from the System under this Agreement. r) The term 'Total Annual Budgeted System Costs" shall mean the amounts approved by Authority as estimated costs of the System in the annual budgets adopted by Authority for a given Fiscal Year including, without limitation, amounts budgeted to meet Annual System Operation and Maintenance Expenses and Annual System Capital Related Costs. 3 s) The term 'Total System Billing Units" shall mean the total amount of water (expressed in acre-feet) determined by Authority under accepted engineering practice as necessary to be reserved from firm yield produced by storage in the System to fulfill its commitments for which Authority receives payment under long term (in excess of five years) water sales contracts with Purchaser and Authority's other customers; provided, however, such term shall not include amounts of water required by appropriate governmental authority to be reserved in the System for use for bay and estuary purposes, in-stream uses, or for other similar environmental, public, or other beneficial uses to the extent Authority is not adequately compensated for any such requirement. 3. CANCELLATION OF 1991 and 1996 AGREEMENTS AND EFFECTIVE DATE. The 1991 and 1996 Agreements are cancelled as of the effective date of this Agreement. The effective date of this Agreement is September 1, 2001. 4. AVAILABILITY OF WATER. While this Agreement remains in force, Authority agrees to make available to Purchaser for withdrawal from the System an amount of water not to exceed 18,134 acre-feet of water per Fiscal Year. Such water will be withdrawn from the System and accounted for by Authority as provided by the System Operation Order, as modified by the Final Determination. Purchaser agrees that it is contracting to have water made available to it in amounts and at such times and locations as are provided for herein. Purchaser acquires no property right in the water made available to it under this Agreement beyond the right to have the water made available to it for diversion and use under the terms of this Agreement. This right of use extends to direct use (flange to flange) of the water made available under this Agreement. Authority agrees to make water available from the System, and Purchaser acquires no rights or interests in any of the individual lakes or other water supply sources that comprise the System above and beyond those rights that accrue to it as a customer of the System under this Agreement. Purchaser represents, and Authority relies on such representation, that all water to be made available by Authority under this Agreement to Purchaser shall be used solely for municipal purposes. 5. DATE AND PLACE OF PAYMENTS. Payments to be made hereunder shall be made at Authority's office in Waco, McLennan County, Texas. Authority contemplates that by September 1 of each Fiscal Year it will have adopted budgets for Authority for said Fiscal Year and established the System Rate for said Fiscal Year. Payments for each Fiscal Year may be made under one of three payment options from which Purchaser will select at the beginning of each Fiscal Year. Annual payments shall be made on or before September 15 each Fiscal Year. Quarterly payments shall be made on or before September 15, December 15, March 15, and June 15 each Fiscal Year. Monthly payments shall be made on or before the fifteenth of each month each Fiscal Year. Quarterly payments or monthly payments shall include a multiplier to be applied to the annual payment to allow Authority to recover interest lost on any unpaid balance plus a service charge for administrative costs, including but not limited to costs involving the billing, accounting, and collecting for the quarterly or monthly payments. The multiplier to recover lost interest revenue and the service charge for administrative costs shall be determined on an annual basis by the Board at the time the Board sets the System Rate and shall be just and reasonable. 4 If Authority increases the payment due from Purchaser during a Fiscal Year, it shall notify Purchaser of any increased amount of payment due for the remainder of the Fiscal Year and the increased amount shall be paid by Purchaser (i) within 30 days after receipt of notice of the increase if Purchaser has already paid all amounts otherwise due to Authority for such Fiscal Year, or (ii) in approximately equal installments added to any further installment amounts owed by Purchaser for the remainder of such Fiscal Year if Purchaser has selected a payment option which resulted in Purchaser still having payments due to Authority during the remainder of such Fiscal Year. 6. UNCONDITIONAL NATURE OF PAYMENT OBLIGATION; PRICE. a) Purchaser unconditionally agrees to pay Authority annually for the water agreed to be made available to Purchaser hereunder at a price equal to the product of multiplying the System Rate times 18,134 acre-feet of water per Fiscal Year agreed to be made available to Purchaser by Authority from the System pursuant to this Agreement regardless of whether, or how much of, said water is diverted and used by Purchaser. b) The System Rate has been established by the Board at a rate of $26.00 per acre-foot of water agreed to be made available annually to Purchaser from the System. Authority may, and it specifically reserves the right to, revise the System Rate from time to time (usually prior to the start of each Fiscal Year) to reflect changes in Authority's cost of service to make water available from the System and to reflect changes in the number of Total System Billing Units. Authority shall not increase the System Rate other than on a Fiscal Year basis except for unforeseeable reasons of a serious and substantial nature. Such reasons include Force Majeure, government legislation or regulation, or permit requirements. c) The System Rate shall be calculated from time to time (usually prior to the start of each Fiscal Year) by the Board using accepted rate making principles; shall be ascertained by utilizing the cash basis to determine an annual revenue requirement considering the Total Annual Budgeted System Costs and the Total System Billing Units as of the date the System Rate is adopted by the Board; shall be based on Authority's cost of service as evidenced by Authority's approved budgets; and shall be just, reasonable, and non-discriminatory. 7. SOURCE OF PAYMENTS. The payments to be made hereunder by Purchaser shall constitute operating expenses of Purchaser's water works system or Purchaser's combined water works and sewer system. Purchaser shall charge rates for services of its water works system or its combined water works and sewer systems that will be sufficient to pay the operating and maintenance expenses thereof, including the payments provided for hereunder, and the interest on and principal of, as the same come due and mature, obligations issued by Purchaser now or hereafter payable from the revenues of said system or systems. 8. INTEREST ON PAST DUE PAYMENT; COLLECTION. In the event of failure of Purchaser to make any payment to Authority provided to be made in this Agreement at the time when same shall be due, the past due payment shall bear interest at the lesser of the highest rate allowed by applicable law or 18 percent per year. Regardless of any other provision contained in this Agreement, Authority shall 5 never be entitled to receive, collect, or apply as interest under this Agreement any amount of money determined at a rate which exceeds the Highest Lawful Rate. If Authority ever charges, receives, collects, or applies as interest an amount in excess of that permitted by application of the Highest Lawful Rate, then any such amount which would be excessive interest shall be deemed a partial prepayment of amounts payable under this Agreement which do not constitute interest and shall be treated hereunder as such; and if all other obligations payable under this Agreement shall have been paid in full, then Authority shall refund the amount of such excessive interest. 9. REMEDIES FOR NONPAYMENT OR DEFAULT. Should Purchaser fail to make any payment to Authority when due hereunder or otherwise be in default under this Agreement, Authority at its sole option and in addition to and without impairing any other remedy available to it on account of the default, may elect to either (i) suspend its duty to make available water to Purchaser under this Agreement or (ii) terminate this Agreement, by providing written notice of such suspension or termination delivered to Purchaser on or before 30 days before the date specified in said notice of suspension or termination, provided that the nonpayment or other default with respect to which notice of suspension or termination of this Agreement has been given, shall not be cured by the date specified in such notice. Nothing in this Agreement shall be construed in any manner so as to abridge, limit, or deprive either party hereunto of any means which it would otherwise have of enforcing any right or remedy either in law or in equity for breach of any of the provisions hereof. 10. REMEDIES FOR OVERUSE. Purchaser recognizes that any diversion of water in excess of its contractual amount may impact Authority's ability to make available water to Authority's other raw water customers. Purchaser agrees that if for any reason it needs to exceed the contractual annual amount of water to be made available to it under this Agreement, Purchaser will give written notice to Authority 30 days in advance of the need for such additional water and in such notice will state the reason for the additional need, the amount of water needed to be made available, and the duration of the need. Authority, in its sole discretion, may make all or a portion of the requested water available. Should Authority determine that it can make all or a portion of the requested water available without adversely impacting its ability to make water available to its other customers, Purchaser agrees to pay for such water to be made available in advance at a rate that is equal to twice the current System Rate. Should Purchaser request water to be made available to it in excess of its contractual amount twice in any five-year period, Authority may, if such additional water can be made available on a long-term basis, cause this Agreement to be amended to increase the contractual amount of water to be made available under this Agreement to the maximum amount requested by Purchaser to be made available in any one fiscal year. Such Amendment shall not excuse Purchaser from paying for any water used in excess of the amount agreed to be made available under this Agreement prior to amendment of this Agreement at twice the System Rate. Following any such amendment, Purchaser shall pay for all water to be made available to Purchaser under this Agreement and such amendment at the System Rate. 6 Should Purchaser fail to notify Authority of its need for additional water to be made available, and exceed the contractual annual amount of water to be made available to it, or should Purchaser, after notification of Authority and Authority's determination that additional water is not available for Purchaser's use, nonetheless exceed the contractual amount of water to be made available to it, Authority may, at its option, cancel this Agreement by providing written notice of such cancellation delivered to Purchaser on or before thirty (30) days before the date specified in said notice of cancellation or charge the Purchaser for the overuse at a rate of three times the System Rate. Nothing in this Agreement shall be construed in any manner so as to abridge, limit, or deprive either party hereunto of any means which it would otherwise have of enforcing any right or remedy either in law or in equity for breach of any of the provisions hereof. 11. DIVERSION RATE. It is anticipated that water from this Agreement will be diverted from Lake Stillhouse Hollow and that water may be diverted from Lake Georgetown at daily rates desired by Purchaser provided that Authority shall not be required to make water available for diversion by Purchaser at a daily rate in excess of five times the average daily rate which would result in diversion during a Fiscal Year of the total number of acre-feet of water per year then agreed to be made available for diversion by Purchaser. 12. WITHDRAWAL FACILITIES. The provision of facilities for diversion of the water agreed to be made available by Authority to Purchaser hereunder shall be solely the responsibility of Purchaser. Where applicable, Authority may allow the construction of such facilities on and across Authority land, subject to the conditions that the design and location of such facilities are approved by Authority, that Purchaser prepare and furnish all documents necessary for approving the easement, and that Purchaser operate the facilities located on Authority land in a manner acceptable to Authority. Where applicable, Authority may use reasonable efforts to assist Purchaser in obtaining an easement for right-of-way for any new diversion facilities across United States Government lands subject to the conditions that the design and location for such facilities be approved by the District Engineer, Fort Worth District, U.S. Army Corps of Engineers; that Purchaser prepare and furnish all documentation necessary for Purchaser to obtain the easement or right-of-way; and that Purchaser operate and maintain the facilities located on United States Government lands in a manner acceptable to the District Engineer, Fort Worth District, U.S. Army Corps of Engineers. For all new diversion facilities, Purchaser shall provide a map of convenient size locating the point of diversion by course and distance from a survey corner or other identifiable point, which map is to be made a part of this Agreement and attached hereto as Exhibit A. 13. METERING. Purchaser agrees that, at its sole cost and expense, it shall install, operate and maintain meters for the accurate measuring of all water diverted by Purchaser under this Agreement in order to aid Authority in accurately reporting actual water usage to the TNRCC as required by applicable law or regulation. Such meter or meters shall be tested and calibrated for accuracy by and at the expense of Purchaser 7 once each fiscal year at intervals of approximately 12 months, and a report of such test and calibration shall be furnished to Authority. Authority shall be given at least two prior days notice of the time of any test and calibration of Purchaser's meters, or any of them, and Authority shall have the right to have a representative present at each test to observe the test and any adjustments found thereby to be necessary. Authority shall have the right to inspect and check the accuracy of Purchaser's meter or meters at any time during usual business hours after not less than one nor more than five (5) days notice. In the event any question arises at any time as to the accuracy of any such meter, such meter shall be tested promptly upon demand of Authority, the expense of such test to be borne by Authority if the meter is found to be correct and by Purchaser if it is found to be incorrect. Readings within 2% of accuracy, plus or minus, shall be considered correct. If, as a result of any test, any meter is found to be registering inaccurately (i.e., in excess of 2% of accuracy, plus or minus), the readings of such meter shall be corrected at the rate of its inaccuracy for any period which is definitely known and agreed upon, but in case the period is not definitely known and agreed upon, then the shorter of the following periods shall be used as the basis for correction: a) a period extending back either 60 days from the date of demand for the test or, if no demand for the test was made, 60 days from the date of the test; or b) a period extending back half of the time elapsed since the last previous test; and the records of readings shall be adjusted accordingly. Following each test of a meter, Purchaser shall cause the same to be calibrated to register accurately. 14. REPORTING. Purchaser agrees that it will keep accurate records of the daily readings from the meter or meters installed pursuant to Section 13., Metering, above. These records shall be subject to inspection by Authority at reasonable times and places. Purchaser shall submit reports to Authority by the 10th day of each month showing the amount of water diverted under this Agreement each day during the preceding month. 15. SYSTEM EXPANSION. Purchaser and Authority understand that Authority may be requested to make water available to other future customers in a manner or in an amount which may necessitate expansion or enlargement of or additions to the System and that in connection with any such expansion, enlargement or addition, Authority may incur additional costs. Purchaser and Authority agree that Authority may enter into any such additional long-term water availability contracts and incur costs to expand, enlarge or add to the System to effect such Agreements. The reasonable and prudent costs incurred by Authority related to such expansion, enlargement, or addition shall be costs of the System. 16. CONSERVATION OF WATER. It is the intent of the parties to this Agreement to provide to the maximum extent practicable for the conservation of water, and Purchaser agrees that it is a condition of this Agreement that it shall maintain and operate its facilities in a manner that will prevent unnecessary waste of water. Authority, in accordance with applicable law or regulation, may from time to time adopt 8 reasonable rules and regulations relating to water conservation. Purchaser agrees to abide by the 'Brazos River Authority Drought Contingency Policy" adopted by the Board on January 16, 1989, or any subsequent Drought Contingency Policy duly adopted by the Board and any Drought Contingency Plans developed under the Drought Contingency Policy. If required by applicable law or regulation or by Authority, Purchaser agrees to implement a water conservation and drought management program in accordance with a water conservation plan and that the water made available and diverted by Purchaser pursuant to this Agreement will be used in accordance with such conservation plan. If required by applicable law or regulation Purchaser agrees that, in the event Purchaser furnishes water or water services to a third party that in turn will furnish the water or services to the ultimate consumer, the requirements relative to water conservation shall be met through contractual agreements between Purchaser and the third party providing for the establishment and implementation of a water conservation program in compliance with such applicable law or regulation. 17. WATER QUALITY. As a further condition of this Agreement, Purchaser also agrees that it will comply with applicable water quality standards of the State in the diversion, use, reuse, or discharge of water made available hereunder. Should Purchaser be determined by any competent legal authority to have degraded the quality of water of the State or to have violated any water quality standard established by law or lawfully adopted regulation, and subsequently fail to take action with reasonable diligence to correct such deficiency as directed by competent legal authority, such failure shall constitute an event of default under this Agreement. Authority, in accordance with applicable law or regulation, may from time to time adopt reasonable rules and regulations relating to water quality protection. If required by applicable law or regulation, Purchaser agrees to implement appropriate water quality protection measures including, without limitation, a non-point source water pollution abatement program in accordance with a non-point source water pollution abatement plan. 18. WATER SURPLUS TO PURCHASER'S NEEDS. Purchaser may not unilaterally cancel this Agreement or reduce the amounts of water agreed to be made available to it and for which availability it is obligated to pay under the terms of Sections 4. and 6., above. Purchaser may not sell or make available to others the water agreed to be made available to it under this Agreement, except in the case of municipal uses, as potable treated water. Should Purchaser desire to provide water for industrial purposes, Purchaser agrees to seek a permit amendment to provide for such use, and Authority agrees not to unreasonably withhold approval of such amendment. Should Purchaser determine that it has water surplus to its anticipated needs from the water to be made available by Authority under this Agreement, Purchaser may notify Authority as to the amount of water no longer needed to be made available to it. Authority will use reasonable efforts to find a third party who is able and willing to pay for such availability for a period to the end of or beyond the term of this Agreement. If Authority is successful in finding such a third party suitable to it to acquire Purchaser's interest in its available surplus for a period of time to the end of or beyond the term of this Agreement, this Agreement will be amended to reduce the amount of water to be made available to Purchaser by the amount of availability paid for by such third party, and 9 Purchaser will be relieved of the obligation to make payments for such availability of water. 19. INTERBASIN TRANSFER. Water made available under this Agreement shall not be transferred or used outside of the Brazos River Basin unless Purchaser obtains the express written consent of Authority and obtains all required governmental approvals. 20. SHORTAGES AND YEARLY REPORTS. Authority makes no guarantee that any lakes or other sources of supply in the System will be maintained at any specific level at any particular time. Purchaser bears all transportation losses prior to final diversion. It is fully understood by the parties hereto that the level of lakes or other sources of supply in the System will vary as a result of weather conditions beyond the control of Authority, the use of water from the System by other water customers of Authority, and in Federal Reservoirs, as a result of releases made by the U.S. Army Corps of Engineers and that this instrument is merely an agreement to require Authority to make available water when and if water is present in the System, and to allow Purchaser to make withdrawals of the water subject to the general law on distribution and allocation of water during shortages of supply and in conformity with Authority's water rights from the TNRCC and the System Order. Authority covenants that it will use its best reasonable efforts in accordance with accepted hydrological engineering practices to provide the quantities of water agreed to be provided herein. In the event of a drought of greater severity than that previously experienced, or if for any other reason water in the System becomes in short supply, Authority agrees, and Purchaser covenants, that Authority may fairly and equitably apportion and ration the available water supply from the System among all its several customers, including Purchaser. Authority, if requested in writing, agrees to provide to Purchaser, on an annual basis, information indicating the amount of water that Authority has committed to make available from the System and the amount of uncommitted water that Authority has available for contract on a long-term basis from the System. Additionally, Authority, if requested in writing, will provide to Purchaser copies of Authority's yearly audited financial reports and budgets as they are completed and approved and made available to Authority. 21. OPERATION OF SYSTEM; AUTHORITY'S OTHER CONTRACTS The right of Authority to maintain and operate the System and at any and all times in the future to impound, release and make available waters therefrom in any lawful manner and to any lawful extent Authority may see fit is recognized by Purchaser; and, except as otherwise provided herein, there shall be no obligation hereunder upon Authority to store or not to store or to release and make available or not to release or make available any impounded waters at any time or to maintain any waters at any specified level or to operate the System in any manner not in compliance with applicable laws or regulations, Authority's water rights and System Order. Authority may enter into agreements with other parties regarding the System, including its operation and maintenance and the storage, release and making available water therefrom, so long as 10 such contracts do not impair Authority's ability to meet the needs of Purchaser to divert for beneficial use in accordance with this Agreement the water agreed to be made available hereunder. Authority makes no representation as to the quality of the water in the System. 22. FORCE MAJEURE. Notwithstanding anything herein to the contrary, neither party hereto shall be under any liability or be deemed in default with respect to its obligations under this Agreement for any failure to perform or for delay in performing such party's obligations hereunder (except for the obligation to pay money) where such failure or delay is due to force majeure, while and to the extent that such performance is prevented by such cause. The term force majeure means acts of God, fire, storm, flood, war, riots, sabotage, drought, lack of availability of water due to sedimentation, low inflows of water to, or lack of water supply in the System, strikes or other differences with labor (whether or not within the power of the parties to settle same), decrees or orders of the courts or other governmental authority, or other similar or dissimilar causes not within the reasonable control of such party and not due to negligence of such party. Each party shall use due diligence to resume performance of any obligation suspended by force majeure at the earliest practicable time. 23. WAIVER. Any waiver at any time by any party of its rights with respect to default under this Agreement shall not be deemed a waiver of such rights with respect to any subsequent default or matter. 24. NOTICES AND CERTIFICATIONS. Notices and certifications provided for in this Agreement shall be in writing. The same shall be delivered by mailing certified mail, postage paid, return receipt requested, to the respective parties at the following addresses: Authority: Brazos River Authority P.O. Box 7555 Waco, Texas 76714-7555 Telephone: (254) 776-1441 Fax: (254) 772-5780 Purchaser: City of Round Rock 221 East Main Street Round Rock, Texas 78664 Telephone: 512-218-5400 Fax: 512-218-7097 Either party may change its address as shown above by written notice to the other party. Notices shall be deemed to have been delivered on the business day following their deposit in the United States mail, postage paid, and properly addressed and certified. 25. OTHER REQUIREMENTS. This Agreement is subject to all conditions, provisions, and limitations included in Authority's water rights from the TNRCC and the System Order. Further, this Agreement is subject to all applicable Federal, State and 11 local laws, and any applicable ordinances, rules, orders and regulations of any local, State or Federal governmental authority having jurisdiction. However, nothing contained in this Agreement shall be construed as a waiver of any right to question or contest any law, ordinance, order, rule, or regulation of any governmental authority. 26. SEVERABILITY. The provisions of this Agreement are severable, and if for any reason any one or more of the provisions contained in this Agreement shall be held to be invalid, illegal, or unenforceable in any respect, the invalidity, illegality, or unenforceability shall not affect any other provisions of this- Agreement and this Agreement shall remain in effect and be construed as if the invalid, illegal, or unenforceable provision had never been contained in the Agreement. 27. ASSIGNMENT. This Agreement may be assigned by Purchaser only with the written consent of Authority, which consent shall not be unreasonably withheld or delayed. Only assignment of this entire Agreement will be approved. Releases of lesser obligations must be authorized under Section 18., Water Surplus to Purchaser's Needs, above 28. TERM OF AGREEMENT. The term of this Agreement shall begin on the Effective Date, Section 3., and shall end on August 31, 2040. This Agreement shall be extended thereafter at the written request of Purchaser under the terms and conditions of Authority's standard long-term water availability contract at that time for so long as, and to the extent that, Authority continues to have the right and ability to make available the amount of water to be made available to Purchaser hereunder. The amount of water to be made available under any extension of this Agreement may be pro rated to account for loss of System yield over time. CITY OF ROUND ROCK BRAZOS RIVER AUTHORITY By By Robert Stluka Phillip J. Ford Mayor General Manager ATTEST: ATTEST: Assistant Secretary 1lbrdea Ipalwplcorrlfieldlro u rockswaa-lksti I hou2.doc 12 DATE: September 7, 2001 SUBJECT: City Council Meeting—September 13, 2001 ITEM: 15.F.11. Consider a resolution authorizing the Mayor to execute a System Water Availability Agreement Between Brazos River Authority and City of Round Rock-Lake Stillhouse Hollow,for the purchase of waterfront Lake Stillhouse Hollow. The City is requesting a total of 18,134 acre-feet of water per Fiscal Year. Round Rock has contracted with the BRA for surface water. This agreement will extend the term until 2050. Resource: Jim Nuse, Director of Public Works History: Round Rock has contracted with the BRA for surface water. This agreement will extend the term until 2050. Funding: Cost: The system rate is $26.00/acre-foot. Source of funds: Utility Fund-Operating Budget Outside Resources: Brazos River Authority Impact: This will guarantee water until 2050. Benefit: This is a reliable low cost source of water. Public Comment: N/A Sponsor: N/A SYSTEM WATER AVAILABILITY AGREEMENT BETWEEN BRAZOS RIVER AUTHORITY AND CITY OF ROUND ROCK - LAKE STILLHOUSE HOLLOW AGREEMENT made and entered into this the tfrii day of '&i 56✓ 2001, by and between BRAZOS RIVER AUTHORITY ("Authority"), a river authority of the State of Texas, and the CITY OF ROUND ROCK ("Purchaser") of Williamson County, Texas. 1. RECITALS. Authority owns and operates various lakes in the Brazos River Basin. Authority also has entered into contracts with the United States of America by virtue of which it has obtained the right to utilize for water supply purposes a portion of the usable storage space in various lakes owned and operated by the United States Army Corps of Engineers. Authority is authorized by the State of Texas to store State waters in the lakes owned by Authority and various lakes owned and operated by the United States Army Corps of Engineers in the Brazos River Basin, hereinafter collectively called the"System", and to make such stored waters available for beneficial use. Authority is authorized to operate the System as a hydrologic unit pursuant to an order of the Texas Water Commission (now Texas Natural Resource Conservation Commission "TNRCC") issued on July 23, 1964 ("System Operation Order"). The Final Determination of All Claims of Water Rights in the Brazos River Basin and the San Jacinto-Brazos Coastal Basin Maintained by the Brazos River Authority, Fort Bend County W.C.I.D. No. 1 and Galveston County Water Authority ("Final Determination") issued on June 26, 1985, by TNRCC clarified and amplified the System Operation Order. Under the System Operation Order as adjudicated by the Final Determination, Authority is authorized to operate the System as a hydrologic unit to more efficiently utilize the reservoirs that make up the System to make water available to meet the needs of Authority's customers. Purchaser is a party to three existing raw water agreements with Authority: (1) "Replacement Water Supply Agreement Between Brazos River Authority and City of Round Rock", dated September 12, 1991 (1991 Agreement) for 8,134 acre-feet of water per year, (2) "System Water Supply Agreement Between Brazos River Authority and City of Round Rock", dated November 13, 1996 (1996 Agreement) for 10,000 acre-feet of water per year, and (3) "Water Supply Contract By and Between Brazos River Authority and City of Round Rock", as amended, originally dated May 2, 1978 (1978 Contract) for 6,720 acre-feet of water per year. This Agreement cancels the 1991 Agreement and the 1996 Agreement and provides for the Authority to make available to Purchaser a total of 18,134 acre-feet of water per Fiscal Year. The 1978 Contract is addressed in a separate agreement, "System Water Availability Agreement Between Brazos River Authority and City of Round Rock— Lake Georgetown." Authority has implemented a System-wide pricing methodology using a cash basis cost-of-service consistent with accepted ratemaking practices of the water industry. Purchaser wishes to contract for Authority to make available 18,134 acre-feet of water per Fiscal Year under the terms of this Agreement pursuant to the System-wide pricing methodology, and Authority agrees to make water available to Purchaser pursuant to the terms and conditions herein provided. L - - 'R.- 9I-- D11 -) }9 2. DEFINITIONS. a) The term "Agreement" means this agreement. b) The term "Annual Capital Related Costs" shall mean, for any Fiscal Year, the just and reasonable amounts prudently incurred by Authority for the construction, reconstruction, acquisition, or replacement of the System including, without limitation, the principal, interest, reserve requirements, paying agent-registrar fees, debt service coverage requirement, and other expenses related to any bonds or other obligations issued and outstanding and used for the purpose of financing or refinancing the capital related costs of the System and cash expenditures therefore to the extent said cash expenditures are reasonable and prudent. c) The term "Annual System Operation and Maintenance Expenses" shall mean, for any Fiscal Year, all just and reasonable and prudently incurred costs of operating and maintaining, and for repairs and replacement of, the System including (for greater certainty but without limiting the generality of the foregoing) costs incurred for labor, supervision, engineering, accounting, auditing, legal services, energy, supplies, insurance, payments made by Authority in satisfaction of judgments resulting from claims not covered by Authority's insurance, and services and equipment necessary for the proper operation and maintenance of the System. Operation and maintenance of the System shall include (for greater certainty, but not by way of limitation) activities related to water supply, streamgaging, water quality monitoring, efforts to control salt pollution, planning related to water supply and water quality, all payments made by Authority to the United States of America or others pursuant to the Federal Contracts, all expenditures made by Authority to generally protect the quality of water in the Brazos River or its tributaries, cost of improvements required by the State of Texas, the United States of America, or any State or Federal agency, amounts to cover Authority's general and administrative expense allocable to the System and amounts required to prudently maintain appropriate reserves for insuring continuous, reliable and adequate operation, maintenance, repair and replacement of the System. d) The term "Authority" shall mean Brazos River Authority. e) The term "Board" shall mean the Board of Directors of Brazos River Authority. f) The term "Federal Contracts" shall mean those contracts with the United States of America whereby Authority has acquired, is acquiring, or may acquire conservation storage capacity in Federal Reservoirs. g) The term "Federal Reservoirs" shall include the following: Aquilla Dam and Reservoir Belton Dam and Reservoir Georgetown Dam and Reservoir Granger Dam and Reservoir Proctor Dam and Reservoir Somerville Dam and Reservoir Stillhouse Hollow Dam and Reservoir Whitney Dam and Reservoir h) The term "Fiscal Year" shall mean Authority's fiscal year from September 1 through August 31, or such other annual fiscal year period as Authority may later determine. i) The term "Highest Lawful Rate" shall mean the maximum rate which Authority may charge on obligations payable under this Agreement without violation of 2 L J any applicable law or any applicable lawful regulation of any agency of the State of Texas or of the United States having jurisdiction of the matter. j) The term "Industrial Use" shall mean the use of water in processes designed to convert materials of a lower order of value into forms having greater usability and commercial value, including commercial feedlot operations, commercial fish production, and the development of power by means other than hydroelectric. k) The term "Irrigation Use"shall mean the use of water for the irrigation of crops, trees, and pastureland, including, but not limited to, golf courses and parks which do not receive water through a municipal distribution system. I) The term "Mining Use" shall mean the use of water for mining processes including hydraulic use, drilling, washing sand and gravel, and oil field repressuring. m) The term "Municipal Use" shall mean the use of potable water within a community or municipality and its environs for domestic, recreational, commercial, or industrial purposes or for the watering of golf courses, parks and parkways. n) The term "Purchaser" shall mean City of Round Rock. o) The term "System" shall mean Authority's Water Supply System and shall include certain of Authority's facilities and properties insofar as they are related to making water available from the System, to wit, as follows: Morris Sheppard Dam and Possum Kingdom Reservoir, DeCordova Bend Dam and Lake Granbury, Sterling C. Robertson Dam and Lake Limestone, and Authority's conservation storage in the Federal Reservoirs, together with all future extensions, improvements, enlargements, and additions to and replacements of the System, and all replacements thereof whether from surface water supplies, groundwater, or a combination thereof, specifically added to the System by resolution of the Board; provided that, notwithstanding the foregoing, the term System shall not include (i) any of Authority's facilities and properties not specifically included in the System by the terms of this Agreement or not added by a subsequent resolution of the Board adopted pursuant to Section 15., System Expansion below, and (ii) any water supply, wastewater or other facilities which have been or are declared not to be a part of the System and which may be acquired or constructed by Authority with the proceeds from the issuance of "Special Facilities Bonds," which are hereby defined as being special revenue obligations of Authority which are not secured by or payable from the revenues of the System but which are secured by and payable solely from special contract revenues or payments received from any persons or other legal entity or entities in connection with such special facilities. p) The term "System Operation Order" shall mean that certain order of the TNRCC or its predecessor dated July 23, 1964, as adjudicated by order of the TNRCC or its predecessor on June 26, 1985, in the Final Determination of all Claims of Water Rights in the Brazos River Basin and the San Jacinto-Brazos Coastal Basin Maintained by the Brazos River Authority, Fort Bend County W.C.I.D. No. 1 and Galveston County Water Authority. q) The term "System Rate" shall mean the rate per acre-foot of water established by Authority from time to time under the system-wide pricing methodology for water made available to Purchaser from the System under this Agreement. r) The term "Total Annual Budgeted System Costs" shall mean the amounts approved by Authority as estimated costs of the System in the annual budgets adopted by Authority for a given Fiscal Year including, without limitation, amounts budgeted to meet Annual System Operation and Maintenance Expenses and Annual System Capital Related Costs. 3 L J r s) -1 The term "Total System Billing Units" shall mean the total amount of water (expressed in acre-feet) determined by Authority under accepted engineering practice as necessary to be reserved from firm yield produced by storage in the System to fulfill its commitments for which Authority receives payment under long term (in excess of five years) water sales contracts with Purchaser and Authority's other customers; provided, however, such term shall not include amounts of water required by appropriate governmental authority to be reserved in the System for use for bay and estuary purposes, in-stream uses, or for other similar environmental, public, or other beneficial uses to the extent Authority is not adequately compensated for any such requirement. 3. CANCELLATION OF 1991 and 1996 AGREEMENTS AND EFFECTIVE DATE. The 1991 and 1996 Agreements are cancelled as of the effective date of this Agreement. The effective date of this Agreement is September 1, 2001. 4. AVAILABILITY OF WATER. While this Agreement remains in force, Authority agrees to make available to Purchaser for withdrawal from the System an amount of water not to exceed 18,134 acre-feet of water per Fiscal Year. Such water will be withdrawn from the System and accounted for by Authority as provided by the System Operation Order, as modified by the Final Determination. Purchaser agrees that it is contracting to have water made available to it in amounts and at such times and locations as are provided for herein. Purchaser acquires no property right in the water made available to it under this Agreement beyond the right to have the water made available to it for diversion and use under the terms of this Agreement. This right of use extends to direct use (flange to flange) of the water made available under this Agreement. Authority agrees to make water available from the System, and Purchaser acquires no rights or interests in any of the individual lakes or other water supply sources that comprise the System above and beyond those rights that accrue to it as a customer of the System under this Agreement. Purchaser represents, and Authority relies on such representation, that all water to be made available by Authority under this Agreement to Purchaser shall be used solely for municipal purposes. 5. DATE AND PLACE OF PAYMENTS. Payments to be made hereunder shall be made at Authority's office in Waco, McLennan County, Texas. Authority contemplates that by September 1 of each Fiscal Year it will have adopted budgets for Authority for said Fiscal Year and established the System Rate for said Fiscal Year. Payments for each Fiscal Year may be made under one of three payment options from which Purchaser will select at the beginning of each Fiscal Year. Annual payments shall be made on or before September 15 each Fiscal Year. Quarterly payments shall be made on or before September 15, December 15, March 15, and June 15 each Fiscal Year. Monthly payments shall be made on or before the fifteenth of each month each Fiscal Year. Quarterly payments or monthly payments shall include a multiplier to be applied to the annual payment to allow Authority to recover interest lost on any unpaid balance plus a service charge for administrative costs, including but not limited to costs involving the billing, accounting, and collecting for the quarterly or monthly payments. The multiplier to recover lost interest revenue and the service charge for administrative costs shall be determined on an annual basis by the Board at the time the Board sets the System Rate and shall be just and reasonable. 4 L J If Authority increases the payment due from Purchaser during a Fiscal Year, it shall notify Purchaser of any increased amount of payment due for the remainder of the Fiscal Year and the increased amount shall be paid by Purchaser (i) within 30 days after receipt of notice of the increase if Purchaser has already paid all amounts otherwise due to Authority for such Fiscal Year, or (ii) in approximately equal installments added to any further installment amounts owed by Purchaser for the remainder of such Fiscal Year if Purchaser has selected a payment option which resulted in Purchaser still having payments due to Authority during the remainder of such Fiscal Year. 6. UNCONDITIONAL NATURE OF PAYMENT OBLIGATION; PRICE. a) Purchaser unconditionally agrees to pay Authority annually for the water agreed to be made available to Purchaser hereunder at a price equal to the product of multiplying the System Rate times 18,134 acre-feet of water per Fiscal Year agreed to be made available to Purchaser by Authority from the System pursuant to this Agreement regardless of whether, or how much of, said water is diverted and used by Purchaser. b) The System Rate has been established by the Board at a rate of $26.00 per acre-foot of water agreed to be made available annually to Purchaser from the System. Authority may, and it specifically reserves the right to, revise the System Rate from time to time (usually prior to the start of each Fiscal Year) to reflect changes in Authority's cost of service to make water available from the System and to reflect changes in the number of Total System Billing Units. Authority shall not increase the System Rate other than on a Fiscal Year basis except for unforeseeable reasons of a serious and substantial nature. Such reasons include Force Majeure, government legislation or regulation, or permit requirements. c) The System Rate shall be calculated from time to time (usually prior to the start of each Fiscal Year) by the Board using accepted rate making principles; shall be ascertained by utilizing the cash basis to determine an annual revenue requirement considering the Total Annual Budgeted System Costs and the Total System Billing Units as of the date the System Rate is adopted by the Board; shall be based on Authority's cost of service as evidenced by Authority's approved budgets; and shall be just, reasonable, and non-discriminatory. 7. SOURCE OF PAYMENTS. The payments to be made hereunder by Purchaser shall constitute operating expenses of Purchaser's water works system or Purchaser's combined water works and sewer system. Purchaser shall charge rates for services of its water works system or its combined water works and sewer systems that will be sufficient to pay the operating and maintenance expenses thereof, including the payments provided for hereunder, and the interest on and principal of, as the same come due and mature, obligations issued by Purchaser now or hereafter payable from the revenues of said system or systems. 8. INTEREST ON PAST DUE PAYMENT; COLLECTION. In the event of failure of Purchaser to make any payment to Authority provided to be made in this Agreement at the time when same shall be due, the past due payment shall bear interest at the lesser of the highest rate allowed by applicable law or 18 percent per year. Regardless of any other provision contained in this Agreement, Authority shall 5 L J never be entitled to receive, collect, or apply as interest under this Agreement any amount of money determined at a rate which exceeds the Highest Lawful Rate. If Authority ever charges, receives, collects, or applies as interest an amount in excess of that permitted by application of the Highest Lawful Rate, then any such amount which would be excessive interest shall be deemed a partial prepayment of amounts payable under this Agreement which do not constitute interest and shall be treated hereunder as such; and if all other obligations payable under this Agreement shall have been paid in full, then Authority shall refund the amount of such excessive interest. 9. REMEDIES FOR NONPAYMENT OR DEFAULT. Should Purchaser fail to make any payment to Authority when due hereunder or otherwise be in default under this Agreement, Authority at its sole option and in addition to and without impairing any other remedy available to it on account of the default, may elect to either (i) suspend its duty to make available water to Purchaser under this Agreement or (ii) terminate this Agreement, by providing written notice of such suspension or termination delivered to Purchaser on or before 30 days before the date specified in said notice of suspension or termination, provided that the nonpayment or other default with respect to which notice of suspension or termination of this Agreement has been given, shall not be cured by the date specified in such notice. Nothing in this Agreement shall be construed in any manner so as to abridge, limit, or deprive either party hereunto of any means which it would otherwise have of enforcing any right or remedy either in law or in equity for breach of any of the provisions hereof. 10. REMEDIES FOR OVERUSE. Purchaser recognizes that any diversion of water in excess of its contractual amount may impact Authority's ability to make available water to Authority's other raw water customers. Purchaser agrees that if for any reason it needs to exceed the contractual annual amount of water to be made available to it under this Agreement, Purchaser will give written notice to Authority 30 days in advance of the need for such additional water and in such notice will state the reason for the additional need, the amount of water needed to be made available, and the duration of the need. Authority, in its sole discretion, may make all or a portion of the requested water available. Should Authority determine that it can make all or a portion of the requested water available without adversely impacting its ability to make water available to its other customers, Purchaser agrees to pay for such water to be made available in advance at a rate that is equal to twice the current System Rate. Should Purchaser request water to be made available to it in excess of its contractual amount twice in any five-year period, Authority may, if such additional water can be made available on a long-term basis, cause this Agreement to be amended to increase the contractual amount of water to be made available under this Agreement to the maximum amount requested by Purchaser to be made available in any one fiscal year. Such Amendment shall not excuse Purchaser from paying for any water used in excess of the amount agreed to be made available under this Agreement prior to amendment of this Agreement at twice the System Rate. Following any such amendment, Purchaser shall pay for all water to be made available to Purchaser under this Agreement and such amendment at the System Rate. 6 L_ J Should Purchaser fail to notify Authority of its need for additional water to be made available, and exceed the contractual annual amount of water to be made available to it, or should Purchaser, after notification of Authority and Authority's determination that additional water is not available for Purchaser's use, nonetheless exceed the contractual amount of water to be made available to it, Authority may, at its option, cancel this Agreement by providing written notice of such cancellation delivered to Purchaser on or before thirty (30) days before the date specified in said notice of cancellation or charge the Purchaser for the overuse at a rate of three times the System Rate. Nothing in this Agreement shall be construed in any manner so as to abridge, limit, or deprive either party hereunto of any means which it would otherwise have of enforcing any right or remedy either in law or in equity for breach of any of the provisions hereof. 11. DIVERSION RATE. It is anticipated that water from this Agreement will be diverted from Lake Stillhouse Hollow and that water may be diverted from Lake Georgetown at daily rates desired by Purchaser provided that Authority shall not be required to make water available for diversion by Purchaser at a daily rate in excess of five times the average daily rate which would result in diversion during a Fiscal Year of the total number of acre-feet of water per year then agreed to be made available for diversion by Purchaser. 12. WITHDRAWAL FACILITIES. The provision of facilities for diversion of the water agreed to be made available by Authority to Purchaser hereunder shall be solely the responsibility of Purchaser. Where applicable, Authority may allow the construction of such facilities on and across Authority land, subject to the conditions that the design and location of such facilities are approved by Authority, that Purchaser prepare and furnish all documents necessary for approving the easement, and that Purchaser operate the facilities located on Authority land in a manner acceptable to Authority. Where applicable, Authority may use reasonable efforts to assist Purchaser in obtaining an easement for right-of-way for any new diversion facilities across United States Government lands subject to the conditions that the design and location for such facilities be approved by the District Engineer, Fort Worth District, U.S. Army Corps of Engineers; that Purchaser prepare and furnish all documentation necessary for Purchaser to obtain the easement or right-of-way; and that Purchaser operate and maintain the facilities located on United States Government lands in a manner acceptable to the District Engineer, Fort Worth District, U.S. Army Corps of Engineers. For all new diversion facilities, Purchaser shall provide a map of convenient size locating the point of diversion by course and distance from a survey corner or other identifiable point, which map is to be made a part of this Agreement and attached hereto as Exhibit A. 13. METERING. Purchaser agrees that, at its sole cost and expense, it shall install, operate and maintain meters for the accurate measuring of all water diverted by Purchaser under this Agreement in order to aid Authority in accurately reporting actual water usage to the TNRCC as required by applicable law or regulation. Such meter or meters shall be tested and calibrated for accuracy by and at the expense of Purchaser 7 L .J El once each fiscal year at intervals of approximately 12 months, and a report of such test and calibration shall be furnished to Authority. Authority shall be given at least two prior days notice of the time of any test and calibration of Purchaser's meters, or any of them, and Authority shall have the right to have a representative present at each test to observe the test and any adjustments found thereby to be necessary. Authority shall have the right to inspect and check the accuracy of Purchaser's meter or meters at any time during usual business hours after not less than one nor more than five (5) days notice. In the event any question arises at any time as to the accuracy of any such meter, such meter shall be tested promptly upon demand of Authority, the expense of such test to be borne by Authority if the meter is found to be correct and by Purchaser if it is found to be incorrect. Readings within 2% of accuracy, plus or minus, shall be considered correct. If, as a result of any test, any meter is found to be registering inaccurately (i.e., in excess of 2% of accuracy, plus or minus), the readings of such meter shall be corrected at the rate of its inaccuracy for any period which is definitely known and agreed upon, but in case the period is not definitely known and agreed upon, then the shorter of the following periods shall be used as the basis for correction: a) a period extending back either 60 days from the date of demand for the test or, if no demand for the test was made, 60 days from the date of the test; or b) a period extending back half of the time elapsed since the last previous test; and the records of readings shall be adjusted accordingly. Following each test of a meter, Purchaser shall cause the same to be calibrated to register accurately. 14. REPORTING. Purchaser agrees that it will keep accurate records of the daily readings from the meter or meters installed pursuant to Section 13., Metering, above. These records shall be subject to inspection by Authority at reasonable times and places. Purchaser shall submit reports to Authority by the 10th day of each month showing the amount of water diverted under this Agreement each day during the preceding month. 15. SYSTEM EXPANSION. Purchaser and Authority understand that Authority may be requested to make water available to other future customers in a manner or in an amount which may necessitate expansion or enlargement of or additions to the System and that in connection with any such expansion, enlargement or addition, Authority may incur additional costs. Purchaser and Authority agree that Authority may enter into any such additional long-term water availability contracts and incur costs to expand, enlarge or add to the System to effect such Agreements. The reasonable and prudent costs incurred by Authority related to such expansion, enlargement, or addition shall be costs of the System. 16. CONSERVATION OF WATER. It is the intent of the parties to this Agreement to provide to the maximum extent practicable for the conservation of water, and Purchaser agrees that it is a condition of this Agreement that it shall maintain and operate its facilities in a manner that will prevent unnecessary waste of water. Authority, in accordance with applicable law or regulation, may from time to time adopt 8 L J I- reasonable rules and regulations relating to water conservation. Purchaser agrees to abide by the "Brazos River Authority Drought Contingency Policy" adopted by the Board on January 16, 1989, or any subsequent Drought Contingency Policy duly adopted by the Board and any Drought Contingency Plans developed under the Drought Contingency Policy. If required by applicable law or regulation or by Authority, Purchaser agrees to implement a water conservation and drought management program in accordance with a water conservation plan and that the water made available and diverted by Purchaser pursuant to this Agreement will be used in accordance with such conservation plan. If required by applicable law or regulation Purchaser agrees that, in the event Purchaser furnishes water or water services to a third party that in turn will furnish the water or services to the ultimate consumer, the requirements relative to water conservation shall be met through contractual agreements between Purchaser and the third party providing for the establishment and implementation of a water conservation program in compliance with such applicable law or regulation. 17. WATER QUALITY. As a further condition of this Agreement, Purchaser also agrees that it will comply with applicable water quality standards of the State in the diversion, use, reuse, or discharge of water made available hereunder. Should Purchaser be determined by any competent legal authority to have degraded the quality of water of the State or to have violated any water quality standard established by law or lawfully adopted regulation, and subsequently fail to take action with reasonable diligence to correct such deficiency as directed by competent legal authority, such failure shall constitute an event of default under this Agreement. Authority, in accordance with applicable law or regulation, may from time to time adopt reasonable rules and regulations relating to water quality protection. If required by applicable law or regulation, Purchaser agrees to implement appropriate water quality protection measures including, without limitation, a non-point source water pollution abatement program in accordance with a non-point source water pollution abatement plan. 18. WATER SURPLUS TO PURCHASER'S NEEDS. Purchaser may not unilaterally cancel this Agreement or reduce the amounts of water agreed to be made available to it and for which availability it is obligated to pay under the terms of Sections 4. and 6., above. Purchaser may not sell or make available to others the water agreed to be made available to it under this Agreement, except in the case of municipal uses, as potable treated water. Should Purchaser desire to provide water for industrial purposes, Purchaser agrees to seek a permit amendment to provide for such use, and Authority agrees not to unreasonably withhold approval of such amendment. Should Purchaser determine that it has water surplus to its anticipated needs from the water to be made available by Authority under this Agreement, Purchaser may notify Authority as to the amount of water no longer needed to be made available to it. Authority will use reasonable efforts to find a third party who is able and willing to pay for such availability for a period to the end of or beyond the term of this Agreement. If Authority is successful in finding such a third party suitable to it to acquire Purchaser's interest in its available surplus for a period of time to the end of or beyond the term of this Agreement, this Agreement will be amended to reduce the amount of water to be made available to Purchaser by the amount of availability paid for by such third party, and 9 L J Purchaser will be relieved of the obligation to make payments for such availability of water. 19. INTERBASIN TRANSFER. Water made available under this Agreement shall not be transferred or used outside of the Brazos River Basin unless Purchaser obtains the express written consent of Authority and obtains all required governmental approvals. 20. SHORTAGES AND YEARLY REPORTS. Authority makes no guarantee that any lakes or other sources of supply in the System will be maintained at any specific level at any particular time. Purchaser bears all transportation losses prior to final diversion. It is fully understood by the parties hereto that the level of lakes or other sources of supply in the System will vary as a result of weather conditions beyond the control of Authority, the use of water from the System by other water customers of Authority, and in Federal Reservoirs, as a result of releases made by the U.S. Army Corps of Engineers and that this instrument is merely an agreement to require Authority to make available water when and if water is present in the System, and to allow Purchaser to make withdrawals of the water subject to the general law on distribution and allocation of water during shortages of supply and in conformity with Authority's water rights from the TNRCC and the System Order. Authority covenants that it will use its best reasonable efforts in accordance with accepted hydrological engineering practices to provide the quantities of water agreed to be provided herein. In the event of a drought of greater severity than that previously experienced, or if for any other reason water in the System becomes in short supply, Authority agrees, and Purchaser covenants, that Authority may fairly and equitably apportion and ration the available water supply from the System among all its several customers, including Purchaser. Authority, if requested in writing, agrees to provide to Purchaser, on an annual basis, information indicating the amount of water that Authority has committed to make available from the System and the amount of uncommitted water that Authority has available for contract on a long-term basis from the System. Additionally, Authority, if requested in writing, will provide to Purchaser copies of Authority's yearly audited financial reports and budgets as they are completed and approved and made available to Authority. 21. OPERATION OF SYSTEM; AUTHORITY'S OTHER CONTRACTS The right of Authority to maintain and operate the System and at any and all times in the future to impound, release and make available waters therefrom in any lawful manner and to any lawful extent Authority may see fit is recognized by Purchaser; and, except as otherwise provided herein, there shall be no obligation hereunder upon Authority to store or not to store or to release and make available or not to release or make available any impounded waters at any time or to maintain any waters at any specified level or to operate the System in any manner not in compliance with applicable laws or regulations, Authority's water rights and System Order. Authority may enter into agreements with other parties regarding the System, including its operation and maintenance and the storage, release and making available water therefrom, so long as 10 I__.. J such contracts do not impair Authority's ability to meet the needs of Purchaser to divert for beneficial use in accordance with this Agreement the water agreed to be made available hereunder. Authority makes no representation as to the quality of the water in the System. 22. FORCE MAJEURE. Notwithstanding anything herein to the contrary, neither party hereto shall be under any liability or be deemed in default with respect to its obligations under this Agreement for any failure to perform or for delay in performing such party's obligations hereunder (except for the obligation to pay money) where such failure or delay is due to force majeure, while and to the extent that such performance is prevented by such cause. The term force majeure means acts of God, fire, storm, flood, war, riots, sabotage, drought, lack of availability of water due to sedimentation, low inflows of water to, or lack of water supply in the System, strikes or other differences with labor (whether or not within the power of the parties to settle same), decrees or orders of the courts or other governmental authority, or other similar or dissimilar causes not within the reasonable control of such party and not due to negligence of such party. Each party shall use due diligence to resume performance of any obligation suspended by force majeure at the earliest practicable time. 23. WAIVER. Any waiver at any time by any party of its rights with respect to default under this Agreement shall not be deemed a waiver of such rights with respect to any subsequent default or matter. 24. NOTICES AND CERTIFICATIONS. Notices and certifications provided for in this Agreement shall be in writing. The same shall be delivered by mailing certified mail, postage paid, return receipt requested, to the respective parties at the following addresses: Authority: Brazos River Authority P.O. Box 7555 Waco, Texas 76714-7555 Telephone: (254) 776-1441 Fax: (254) 772-5780 Purchaser: City of Round Rock 221 East Main Street Round Rock, Texas 78664 Telephone: 512-218-5400 Fax: 512-218-7097 Either party may change its address as shown above by written notice to the other party. Notices shall be deemed to have been delivered on the business day following their deposit in the United States mail, postage paid, and properly addressed and certified. 25. OTHER REQUIREMENTS. This Agreement is subject to all conditions, provisions, and limitations included in Authority's water rights from the TNRCC and the System Order. Further, this Agreement is subject to all applicable Federal, State and 11 L J local laws, and any applicable ordinances, rules, orders and regulations of any local, State or Federal governmental authority having jurisdiction. However, nothing contained in this Agreement shall be construed as a waiver of any right to question or contest any law, ordinance, order, rule, or regulation of any governmental authority. 26. SEVERABILITY. The provisions of this Agreement are severable, and if for any reason any one or more of the provisions contained in this Agreement shall be held to be invalid, illegal, or unenforceable in any respect, the invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement and this Agreement shall remain in effect and be construed as if the invalid, illegal, or unenforceable provision had never been contained in the Agreement. 27. ASSIGNMENT. This Agreement may be assigned by Purchaser only with the written consent of Authority, which consent shall not be unreasonably withheld or delayed. Only assignment of this entire Agreement will be approved. Releases of lesser obligations must be authorized under Section 18., Water Surplus to Purchaser's Needs, above 28. TERM OF AGREEMENT. The term of this Agreement shall begin on the Effective Date, Section 3., and shall end on August 31, 2040. This Agreement shall be extended thereafter at the written request of Purchaser under the terms and conditions of Authority's standard long-term water availability contract at that time for so long as, and to the extent that, Authority continues to have the right and ability to make available the amount of water to be made available to Purchaser hereunder. The amount of water to be made available under any extension of this Agreement may be pro rated to account for loss of System yield over time. CITY OF ROUND ROCK BRAZOS RIVER AUTHORITY By R' Stluka Phillip 3. Ford Mayor General Manager ATTEST: ATTEST: • . -)eiwistvy•1 C.. P5ST. di Tv 560xEriprzy Assistant Secretary \\brdealpa\wp\corr\field\rourockswaa-Ikstilhou2.doc 12 J Robert J.Huston,Chairman E 0� R.B."Ralph"Marquez,Commissioner ,p�a�* John M.Baker,Commissioner Jeffrey A.Saitas,Executive Director TEXAS NATURAL RESOURCE CONSERVATION COMMISSION Protecting Texas by Reducing and Preventing Pollution November 1, 2001 Mr. Alfredo Rodriguez,P.E. Brazos River Authority P.O. Box 7555 Waco, Texas 76714-7555 Subject: Filing of Water Sales Contract, TNRCC No. 2350 City of Round Rock Dear Mr. Rodriguez: The water supply contract between the Brazos River Authority and the City of Round Rock has been accepted for filing. The Agreement meets the filing requirements of 30 Texas Administrative Code Chapters §295.101 and §297 Sub-Chapter J. Please note that for correspondence and reporting purposes this contract is being identified as Water Supply Contract TNRCC No. 2350. Term: 39 years beginning September 1, 2001 and ending August 31, 2040 Use: Municipal; 18,134 acre-feet per fiscal year Source: Brazos River from Stillhouse Hollow Lake Supplier's Water Right: 12-5161 Please note that this new contract replaces existing Water Supply Contract No. 1906. If you have any questions or comments, please call me at (512) 239-0047. Sincerely, Qi(),(2,,e1) David N. Koinm -MC 160 Water Rights Permits and Availability Section cc: City of Round Rock P.O.Box 13087 • Austin,Texas 78711-3087 • 512/239-1000 • Internet address:www.tnrcc.state.tx.us