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HomeMy WebLinkAbout06917 ORD - 05/27/1963IMS:JKH:5 -27 -63 AN ORDINANCE CANVASSING RETURNS AND DECLARING THE RESULTS OF AN ELECTION HELD IN THE CITY OF CORPUS CHRISTI, TEXAS, ON MAY 25, 1963, ON THE QUESTION OF WHETHER OR NOT TO AUTHORIZE EXECUTION OF A CONTRACT WITH SAN PATRICIO MUNICIPAL WATER DISTRICT FOR SALE OF WATER TO SAID WATER DISTRICT FOR A PERIOD OF 30 YEARS; AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE AND DELIVER, FOR AND ON BEHALF OF THE CITY, SAID CONTRACT OF SALE OF WATER IN ACCORDANCE WITH THE VOTE OF THE PEOPLE AT SAID ELECTION; AND DECLARING AN EMERGENCY. WHEREAS, HERETOFORE ON THE 1ST DAY OF MAY, 1963, AT A REGULAR MEETING, THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, PASSED AN ORDINANCE CALLING AN ELECTION TO BE HELD IN SAID CITY ON THE 25TH DAY OF MAY, 1963, ON THE FOLLOWING PROPOSITION: AND PROPOSITION "A" SHALL THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, BE AUTHORIZED TO CAUSE TO BE EXECUTED A CONTRACT, ON BEHALF OF THE CITY, WITH SAN PATRICIO MUNICIPAL WATER DISTRICT FOR THE SALE OF WATER BY THE CITY OF CORPUS CHRISTI FOR A PERIOD OF THIRTY (30) YEARS WITH AN OPTION ON THE PART OF THE PARTIES, ON GIVING NOTICE TO TERMINATE THE CONTRACT UPON CERTAIN CONDITIONS, AT THE PRICES AND UNDER THE TERMS AS CONTAINED IN THE PROPOSED CONTRACT, SAID CONTRACT BEING SET OUT IN ORDINANCE No. 6898, PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, ON MAY 1, 19638" WHEREAS, NOTICE OF SAID ELECTION WAS ACTUALLY GIVEN AS REQUIRED BY LAW AND AS DIRECTED IN THE ORDINANCE CALLING THE ELECTION, AS IS SHOWN BY AFFIDAVITS PROPERLY FILED IN THE OFFICE OF THE CITY SECRETARY; AND WHEREAS, SAID ELECTION WAS DULY AND LEGALLY HELD ON THE 25TH DAY OF MAY, 1963, IN CONFORMITY WITH THE ELECTION ORDINANCE HERETOFORE PASSED BY THIS CI-T-Y COUNCIL AND THE RESULT OF SAID ELECTION HAS BEEN CERTI- FIED AND RETURNED TO THIS COUNCIL BY THE PROPER JUDGES AND CLERKS THEREOF; AND WHEREAS, THIS COUNCIL HAS TODAY CONSIDERED THE RETURNS OF SAID ELECTION ON THE PROPOSITION HEREINABOVE STATED, WHICH WAS HELD ON THE 25TH DAY OF MAY, 1963; AND WHEREAS, IT APPEARS TO THE COUNCIL AND THE COUNCIL SO FINDS THAT SAID ELECTION WAS IN ALL RESPECTS LAWFULLY HELD AND SAID RETURNS DULY AND LEGALLY MADE AND THAT THERE WERE CAST AT SAID ELECTION THE FOLLOWING VOTES: 6917 PROPOSITION A: TOTAL VOTES FOR THE AUTHORIZATION AND APPROVAL OF THE CONTRACT WITH SAN PATRICIO MUNICIPAL WATER DISTRICT FOR SALE 3,362 OF WATER TO SAID DISTRICT . . . . . . . . . . . . . . . . AGAINST THE AUTHORIZATION AND APPROVAL OF THE CON- TRACT WITH SAN PATRICIO MUNICIPAL WATER DISTRICT 1,617 FOR SALE OF WATER TO SAID DISTRICT . . . . . . . . . . . . . . AND WHEREAS; THE COUNCIL, HAVING FULLY CHECKED ALL OF THE PROCEDURE RELATIVE TO SUCH ELECTION, AND IT APPEARING TO THE COUNCIL, AND THE COUNCIL SO FINDS, THAT A MAJORITY OF THE LEGALLY QUALIFIED VOTERS OF AND WITHIN THE CITY OF CORPUS CHRISTI VOTED IN FAVOR OF AUTHORIZING AND APPROVING OF THE CONTRACT FOR A TERM OF THIRTY (30) YEARS TO SAN PATRICIO MUNICIPAL WATER DISTRICT: NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. THAT THE RETURNS OF THE ELECTION HELD ON THE 25TH DAY OF MAY, 1963, AT THE VARIOUS PRECINCT VOTING PLACES AS PROVIDED FOR IN THE ORDINANCE ORDERING THE ELECTION, WHICH ORDINANCE WAS PASSED ON MAY 11 1963, AT A REGULAR MEETING, AND ALL OF SAID VOTING PRECINCTS AND VOTING PLACES BEING IN THE CITY LIMITS OF THE CITY OF CORPUS CHRISTI, TEXAS, AND ALL BEING CONVENIENT PLACES WITHIN THE SAID CITY LIMITS, ARE HEREBY RECEIVED AND HEREBY CANVASSED AND THE RESULTS THEREOF ARE HEREBY DECLARED AS FOLLOWS: -2- O F F I C I A L TALLY S H E E T. CITY OF CORPUS CHRISTI, TEXAS SPECIAL ELECTION May 25, 1963 Re: Approval of 30 -yr. contract for Sale of Water to San Patricio Municipal Water District For Against Total GEO. EVA:2S SCHOOL /p G 27 DEL MAR COLLEGE Js 1 O O J LINDALE RECREATION CENTER ✓� / �p if dr v / 7 R. B. FISHER SCHOOL 7S O �j 7 ROBT. WILSON SCHOOL f / J-7 CULLEN PLACE SCHOOL JOHN L. TOMPKINS FIELD OFFICE PARKDALE EM EENTARY SCHOOL CARROLL LANE SCHOOL JAS. W. FANNIN SCHOOL PRESCOTT =4 IENTARY SCHOOL I LOZANO SCHOOL r% i OAK PARK SCHOOL SAVAGE LANE FIRE STATION 7 O i TULOSO- MIDWAY HIGH SCHOOL COL `TY BUILDING, ANNAVIISE i O �' / / r 7 CL: 30D SCHOOL A.BSENvTFE BOX T 0 T A L S h /` /7 IT APPEARING FROM SAID CANVAS OF SAID VOTES THAT THE PROPOSITION SO SUB- MITTED IS CARRIED BY A MAJORITY OF 3,362 TO 1,617. SECTION 2. THAT THE CITY MANAGER, IN ACCORDANCE WITH THE CANVASS OF VOTES APPEARING IN THE PRECEDING SECTION, BE AND HE IS HEREBY AUTHORIZED AND DIRECTED, FOR AND ON BEHALF OF THE CITY, TO EXECUTE AND DELIVER A CONTRACT OF SALE WITH SAN PATRICIO MUNICIPAL WATER DISTRICT FOR THE SALE OF WATER BY THE CITY OF CORPUS CHRISTI FOR A PERIOD OF THIRTY YEARS, ALL AS SET OUT MORE FULLY IN THE CONTRACT, A COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF. SECTION 3. THE FACT THAT IT IS OF PUBLIC IMPORTANCE TO THE RESIDENTS OF THE CITY OF CORPUS CHRISTI TO MAKE AN IMMEDfATE RECORD OF THE RESULTS OF THE ELECTION HELD ON MAY 25, 1963, CREATES A PUBLIC EMERGENCY AND AN IMPERATIVE PUBLIC NECESSITY REQUIRING THE SUSPENSION OF THE CHARTER RULE PROVIDING THAT NO ORDINANCE OR RESOLUTION SHALL BE PASSED FINALLY ON THE DATE IT IS INTRODUCED, AND REQUIRING THAT SUCH ORDINANCE OR RESOLUTION SHALL BE READ AT THREE SEVERAL MEETINGS OF THE CITY COUNCIL, AND THE MAYOR HAVING DECLARED THAT SUCH PUBLIC EMERGENCY AND PUBLIC NECESSITY EXISTS, AND HAVING REQUESTED THAT SAID CHARTER RULE BE SUSPENDED AND THAT THIS ORDI- NANCE TAKE EFFECT AND BE IN FULL FORCE AND -1EFFECT FROM AND FTER ITS PASSAGE, IT IS ACCORDINGLY SO ORDAINED THIS THE pK / DAY of , 1963- M ATTEST: THE CITY OF CORPUS CHRISTI, TEXAS I 9 CITY SECRETARY APPROVED AS TO LEGAL FORM THIS THE DAY OF MAY, 1963: `7 'lilt 4 -30 -63 THE STATE OF TEXAS COUNTY OF NUECES ! WATER CONTRACT BETWEEN SAN PATRICIO MUNICIPAL WATER DISTRICT AND THE CITY OF CORPUS CHRISTI WHEREAS, THE CITY OF CORPUS CHRISTI (HEREINAFTER CALLED "CORPUS CHRISTI "), BY VIRTUE OF A CONTRACT EXECUTED ON AUGUST 10, 19551 BETWEEN THE LOWER NUECES RIVER WATER SUPPLY DISTRICT (HEREINAFTER CALLED "DISTRICT") AND CORPUS CHRISTI, IS THE SOLE PURCHASER OF UNTREATED WATER FROM THE DISTRICT; AND WHEREAS, SAID CONTRACT BETWEEN CORPUS CHRISTI AND DISTRICT WAS AUTHORIZED BY THE VOTERS OF THE CITY OF CORPUS CHRISTI ON DECEMBER 131 1952, FOR A PERIOD OF 30 YEARS; AND WHEREAS, SAID CONTRACT GRANTS TO CORPUS CHRISTI COMPLETE AND EXCLUSIVE RIGHTS TO ALL WATER IMPOUNDED BY THE RESERVOIR DURING THE LIFE OF SAID CONTRACT AND OBLIGATES CORPUS CHRISTI TO PROVIDE ALL INHABITANTS OF DISTRICT WITH WATER SERVICE UPON A BASIS OF EQUALITY AND UNIFORMITY WITHOUT DISCRIMINATION IN ACCORDANCE WITH CORPUS CHRISTI'S RATE SCHEDULES AND REQUIRE- MENTS APPLICABLE TO THE VARIOUS CLASSIFICATIONS OF SERVICE, INCLUDING SUCH REQUIREMENTS AS THE CITY MAY PRESCRIBE FOR SUBDIVISIONS AND NEW CONSUMERS (SECTION 10); AND WHEREAS, SAID CONTRACT PROVIDES IN SECTION 11 THEREOF THAT CORPUS CHRISTI SHALL COMPENSATE DISTRICT IN THE AMOUNT OF: FIRST 14,000,000,000 GALLONS - $480,000 FROM 14,000,000,001 GALLONS TO 25,000,000,000 GALLONS AT 3 -140 PER 1000 GALLONS FROM 25,000,000,001 GALLONS TD 30,000,000,000 GALLONS AT 3¢ PER 1000 GALLONS FROM 30,000,0001001 GALLONS TO 35,000,000,000 GALLONS AT 2¢ PER 1000 GALLONS ALL OVER 35,000,000,000 GALLONS AT 1 -120 PER 1000 GALLONS WHEREAS, SAID CONTRACT (SECTION 14) SPECIFIES THAT CORPUS CHRISTI SHALL RETAIN OWNERSHIP OF THE WATER PERMITS HERETOFORE ISSUED TO IT BY THE BOARD OF WATER ENGINEERS OF THE STATE OF TEXAS; AND 4 -30 -63 WHEREAS, SECTION 15 OF SAID CONTRACT STATES: "THE DISTRICT AGREES THAT SO LONG AS THIS CONTRACT SHALL BE IN FORCE, IT WILL NOT ENTER INTO ANY OTHER CONTRACT TO SUPPLY WATER OUT OF THE RESERVOIR PROJECT HEREIN CONTEM- PLATED. THE CITY AGREES THAT SURPLUS WATER WILL BE MADE AVAILABLE BY IT UNDER APPROPRIATE CONTRACT WITH MUNICI- PALITIES AND OTHER CONSUMERS LOCATED OUTSIDE THE DISTRICT { AND WITH AGRICULTURAL USERS FOR IRRIGATION PURPOSES EITHER WITHIN OR WITHOUT THE DISTRICT. IT IS PROVIDED, HOWEVER, THAT PRIOR TO ENTERING INTO SUCH CONTRACT THE CITY SHALL FIRST HAVE THE APPROVAL OF THE DISTRICT. WITH REGARD TO SURPLUS WATER SOLD TO MUNICIPALITIES AND OTHER CONSUMERS OUTSIDE THE DISTRICT, IT IS AGREED THAT THE CITY SHALL SOMPENSATE THE DISTRICT THEREFOR UNDER THE PROVISIONS OF SECTION 11 HEREOF, BUT THAT AS REGARDS ANY SURPLUS WATER SOLD FOR IRRIGATION PURPOSES, IT IS AGREED THAT THE COM- PENSATION RECEIVED THEREFROM BY THE CITY SHALL BE DIVIDED BETWEEN THE CITY AND THE DISTRICT UNDER ARRANGEMENTS AR- RIVED AT WHEN THE CONTRACT THEREFOR IS PRESENTED TO THE DISTRICT FOR ITS APPROVAL, AND THAT ANY AND ALL AMOUNTS TO BE RECEIVED BY THE DISTRICT UNDER SUCH ARRANGEMENTS FOR IRRIGATION PURPOSES SHALL BE IN ADDITION TO THOSE AMOUNTS TO WHICH IT SHALL BE ENTITLED, AND THE WATER SO TAKEN SHALL NOT BE CONSTRUED AS WATER RECEIVED BY THE CITY, UNDER THE PROVISIONS OF SECTION 11 HEREOF. AS USED IN THIS SECTION, THE TERM 'SURPLUS WATER' SHALL BE CONSTRUED TO MEAN WATER NOT NECESSARY TO MEET THE REQUIREMENTS OF CONSUMERS WITHIN THE DISTRICT, OTHER THAN IRRIGATION USERS, OR TO FULFILL THE CITY'S CONTRACTS IN EXISTENCE AT THE TIME OF THE EXECU- TION OF THIS AGREEMENT, AND CONTRACTS SUBSEQUENTLY EXECUTED UNDER THE PROVISIONS HEREOF.' AND WHEREAS, THE SAN PATRICIO MUNICIPAL WATER DISTRICT (HEREINAFTER CALLED SAN PATRICIO), A CONSERVATION DISTRICT AND POLITICAL SUBDIVISION OF THE STATE OF TEXAS, DULY CREATED IN JUNE, 1951 BY THE LEGISLATURE OF THE STATE OF TEXAS, HAS DETERMINED THAT IT DESIRES TO OBTAIN WATER FROM THE NUECES RIVER TO SERVE ITS PRESENT AND FUTURE CUSTOMERS; AND WHEREAS, CORPUS CHRISTI HAS DETERMINED THAT AT THIS TIME SUFFICIENT WATER IS AVAILABLE IN THE NUECES RIVER AND CAN BE IMPOUNDED IN THE EXISTING STORAGE FACILITIES AT LAKE CORPUS CHRISTI SO AS TO SERVE THE EXISTING CUSTOMERS OF CORPUS CHRISTI, MEET THE OBLIGATIONS OF THE EXISTING CONTRACTS OF CORPUS CHRISTI, AND PROVIDE THE ANTICIPATED REQUIREMENTS OF SAN PATRICIO; AND WHEREASi CORPUS CHRISTI IMPOUNDS WATER AT CALALLEN AND PUMPS AND TREATS SAID WATER; AND -2- 5 -1 -63 WHEREAS, CORPUS CHRISTI IS DESIROUS OF SELLING UNTREATED AND TREATED WATER TO SAN PATRICIO FOR THE BENEFIT OF CORPUS CHRISTI, SAN PATRICIO, AND THE NUECES RIVER AREA; AND WHEREAS, REYNOLDS' METALS COMPANY, A DELAWARE CORPORATION (HERE- INAFTER CALLED REYNOLDS), AND CORPUS CHRISTI HAVE ENTERED INTO A 30 YEAR CONTRACT FOR THE PURCHASE OF TREATED WATER (HEREINAFTER CALLED THE REYNOLDS - CORPUS CHRISTI CONTRACT), EXPIRING ON SEPTEMBER 30, 1981, WHICH CONTRACT WAS APPROVED BY THE VOTERS OF CORPUS CHRISTI AND WHICH CONTRACT PROVIDES FOR THE RESALE OF UP TO 3 MILLION GALLONS PER DAY BY REYNOLDS TO OTHERS AND WHEREAS, REYNOLDS IS THE OWNER OF A WATER TRANSMISSION PIPELINE RUNNING FROM THE CORPUS CHRISTI TREATMENT PLANT AT CALALLEN TO MANUFACTURING PLANTS OF REYNOLDS NEAR GREGORY IN SAN PATRICIO COUNTY, TEXAS; AND WHEREAS, REYNOLDS' METALS COMPANY HAS BY LETTER WAIVED ITS RIGHTS TO RESELL TREATED WATER PURCHASED FROM CORPUS CHRISTI TO SAN PATRICIO, OTHER TAX EXEMPT GOVERNMENTAL BODIES, OR DOMESTIC USERS EXCEPT FOR EXISTING CONTRACTUAL OBLIGATIONS TO DOMESTIC USERS; AND WHEREAS, SAN PATRICIO HAS ENTERED INTO A CONTRACT WITH REYNOLDS FOR THE TRANSPORTATION OF TREATED WATER PURCHASED BY SAN PATRICIO FROM CORPUS CHRISTI THROUGH THE REYNOLDS' TRANSMISSION PIPELINE: NOW, THEREFORE, THIS CONTRACT (HEREINAFTER CALLED THE CONTRACT), THIS DAY MADE AND ENTERED INTO BY AND BETWEEN CORPUS CHRISTI, ACTING HEREIN BY AND THROUGH ITS DULY AUTHORIZED OFFICERS, PURSUANT TO AN ELECTION HELD IN CORPUS CHRISTI ON THE 25TH DAY OF MAY, 1963, AND SAN PATRICIO ACTING THROUGH ITS DULY AUTHORIZED OFFICERS, W I T N E S S E T H IN CONSIDERATION OF THE PREMISES AND THE SUM OF TEN DOLLARS ($10.00) CASH IN HAND PAID TO CORPUS CHRISTI BY SAN PATRICIO, THE BENEFITS ARISING TO BOTH CORPUS CHRISTI AND SAN PATRICIO THROUGH THE SALE OF UNTREATED AND TREATED WATER, AND THE MUTUAL COVENANTS AND AGREEMENTS OF THE PARTIES HEREIN CONTAINED, IT 13 AGREED AS FOLLOWS: -3- 5 -1 -63 UNTREATED WATER SECTION 1. CONSTRUCTION OF FACILITIES - SAN PATRICIO SHALL CON- STRUCT OR CAUSE TO BE CONSTRUCTED A DIVERSION WORKS, PUMPS, PIPELINE, TREAT- MENT PLANTS IF ANY; AND TERMINAL STORAGE RESERVOIR, (HEREINAFTER CALLED "FACILITIES") TO BE ARRANGED TO PERMIT TAKING UNTREATED WATER BY SAN PATRICIO FROM THE NUECES RIVER. THE FACILITIES SHALL BE IN ACCORDANCE WITH PLANS AND SPECIFICATIONS AND TO BE PREPARED BY SAN PATRICIO AND ACCEPTABLE TO CORPUS CHRISTI AND MAY AT THE OPTION OF SAN PATRICIO BE BUILT IN STAGES AS THE NEEDS OF SAN PATRICIO MAY REQUIRE, WITH PLANS AND SPECIFICATIONS FOR EACH STAGE RECEIVING INDIVIDUAL APPROVAL BY CORPUS CHRISTI BEFORE THE START OF CON- STRUCTION OF THAT PARTICULAR STAGE. APPROVAL BY CORPUS CHRISTI SHALL RELATE SOLELY TO THOSE MATTERS WHICH MIGHT AFFECT: THE POTENTIAL RATE AND QUANTITY OF TAKING; LAND OWNED BY CORPUS CHRISTI; RESERVOIR POLLUTION; OR DEPENDA- BILITY AND SAFETY OF THE CORPUS CHRISTI WATER SUPPLY. SECTION 2. POINT OF DIVERSION - THE POINT OF DIVERSION SHALL BE FROM A SINGLE LOCATION ON THE BANKS OF THE NUECES RIVER UPSTREAM AND WITHIN 500 FEET OF THE CALALLEN CHANNEL DIVERSION DAM AND RESERVOIR. CHANGES IN THE RATE AT WHICH SAN PATRICIO TAKES WATER FROM TIME TO TIME, EXCEPT IN THE CASE OF EMERGENCIES CAUSED BY EQUIPMENT FAILURE, SHALL BE MADE ONLY AFTER 48 HOURS PRIOR NOTICE TO CORPUS CHRISTI. SUCH CHANGES IN RATE OF TAKING SHALL NOT BE MADE MORE OFTEN THAN ONCE EVERY 24 HOURS. IN THE EVENT THE RATE OF TAKING BY SAN PATRICIO IS REDUCED WITHOUT NOTICE AS ABOVE SET FORTH, IN ADDITION TO THE AMOUNT OF WATER ACTUALLY TAKEN BY SAN PATRICIO AND MEASURED FOR PAYMENT, THERE SHALL BE ADDED A FURTHER QUANTITY OF WATER. THIS ADDITIONAL QUANTITY SHALL BE COMPUTED AS THE AMOUNT SAN PATRICIO WOULD HAVE TAKEN ACCORD- ING TO THE THERETOFORE ESTABLISHED SCHEDULE DURING THE SCHEDULED TIME, AS ESTIMATED BY THE CORPUS CHRISTI WATER SUPERINTENDENTS IF THE UNSCHEDULED REDUCTION IN RATE OF TAKING HAD NOT BEEN MADE. AN INCREASE IN THE RATE OF TAKING BY SAN PATRICIO, WITHOUT DUE NOTICE AS ABOVE PROVIDED MAY BE MADE ONLY UPON DIRECT APPLICATION TO AND WITH THE APPROVAL OF AN AUTHORIZED RE- PRESENTATIVE OF CORPUS CHRISTI. -4- 4 -30 -63 SECTION 3. RIGHT -OF WAY AND E &SEMENTS - CORPUS CHRISTI SHALL ASSIGN UNTO SAN PATRICIO THE NECESSARY EASEMENTS AND RIGHTS -OF -WAY, AS WELL AS RIGHTS OF INGRESS AND EGRESS OF, ALONG, AND ACROSS ALL LANDS OVER WHICH CORPUS CHRISTI NOW HAS OWNERSHIP OR EASEMENT. SUCH EASEMENTS AND ROGHTS -OF -WAY SHALL BE ASSIGNED TO SAN PATRICIO, WITHOUT COST, FOR THE CONSTRUCTION, OPERATION, AND MAINTENANCE OF THE FACILITIES. SECTION 44. RELOCATION a IF CORPUS CHRISTI DETERMINES THAT IT IS NECESSARY TO ADJUST OR RELOCATE ANY OR ALL OF THE FACILITIES CONSTRUCTED BY SAN PATRICIO IN ORDER TO REPAIR, ALTER OR RECONSTRUCT THE CALALLEN CHANNEL DIVERSION DAN, SAN PATRICIO SHALL BEAR THE FULL COST OF SUCH ADJUSTMENTS OR RELOCATIONS. CORPUS CHRISTI WILL GIVE DUE AND CAREFUL CONSIDERATION TO THE LOCATION OF SAN PATRIC109S FACILITIES AND WILL, WITHIN THE LIMITS OF SOUND ENGINEERING AND ULTIMATE TOTAL PROJECT COST TO ALL AGENCIES, MINIMIZE THE REQUIRED RELOCATION OF THE FACILITIES OF SAN PATRICIO. SECTION 5- MAINTENANCE OF UNTREATED FACILITIES CONSTRUCTED BY SAN PATRICIO SHALL BE MAINTAINED AND OPERATED BY OR ON BEHALF OF SAN PATRICIO, SUBJECT TO PROVISIONS HEREIN CONTAINED AND ANY FUTURE MAINTENANCE OR OPERATIONAL CONTRACT WHICH-MIGHT BE ENTERED INTO BY SAN PATRICIO AND CORPUS CHRISTI. CORPUS CHRISTI SHALL HAVE THE RIGHT TO REQUIRE SAN PATRICIO TO MAINTAIN ITS FACILITIES ON CORPUS CHRISTI OR DISTRICT PROPERTY OR EASEMENTS IN A MANNER COMPARABLE TO THE LEVEL OF MAINTENANCE AT SIMILAR CORPUS CHRISTI FACILITIES. CORPUS CHRISTI SHALL HAVE THE RIGHT TO REQUIRE THE DISTRICT TO MAINTAIN ITS FACILITIES IN THE NUECES RIVER SO THAT NO FLOOD DAMAGE WILL RESULT TO THE DIVERSION DAM, THE DIVERSION RESERVOIR, CORPUS CHRISTI PROPERTY OR PRIVATE PROPERTY BECAUSE OF SAN PATRICIO'S FACILITIES. IF SUCH DAMAGE SHOULD OCCUR AS A RESULT OF THE CONSTRUC- TION, OPERATION, OR MAINTENANCE OF THE SAN PATRICIO FACILITIES, INCLUDING THE DIVERSION WORKS, THEN SAN PATRICIO SHALL BE LIABLE FOR RESTORING SUCH DAMAGE. SECTION 6. INDEMNITY - SAN PATRICIO WILL INDEMNIFY CORPUS CHRISTI FROM ANY LIABILITY WHICH-MIGHT ACCRUE BECAUSE OF FACILITIES CONSTRUCTED BY SAN PATRICIO ON LAND OR RIGHT -OF -WAY OWNED BY CORPUS CHRISTI OR DISTRICT AND SAN PATRICIO ASSUMES ALL RESPONSIBILITY FOR ADEQUATELY MAINTAINING AND SAFEGUARDING -5- 5 -i -63 SAID FACILITIES. THIS PROVISION IS FOR THE PROTECTION OF CORPUS CHRISTI, SAN PATRICIO AND DISTRICT AND IS NOT FOR THE BENEFIT OF THIRD PARTIES. SECTION 7. QUANTITY - CORPUS CHRISTI AGREES TO SELL, SUBJECT TO THE CONDITIONS HEREINAFTER SET FORTH SUCH UNTREATED WATER AS SAN PATRICIO MIGHT REQUIRE DURING THE FIRST TWELVE MONTH PERIOD IMMEDIATELY FOLLOWING THE LAST DAY OF THE MONTH IN WHICH WATER IS FIRST TAKEN BY SAN PATRICIO FOR IN- DUSTRIAL USE. IN SUBSEQUENT YEARS CORPUS CHRISTI AGREES TO SELL: (A) THE AMOUNT OF WATER TAKEN BY SAN PATRICIO IN THE PREVIOUS TWELVE MONTH PERIOD PLUS TEN PERCENTS OR (e) THE AVERAGE QUANTITY OF WATER TAKEN BY SAN PATRICIO IN THE PREVIOUS THREE YEARS PLUS TEN PERCENTS WHICHEVER IS GREATER. CORPUS CHRISTI ALSO AGREES TO SELL WHATEVER QUANTITY OF WATER SAN PATRICIO REQUIRES IN EXCESS OF THE ABOVE MENTIONED AMOUNTS, IFS IN THE OPINION OF CORPUS CHRISTI' SUCH WATER IS AVAILABLE AND CAN BE SOLD TO SAN PATRICIO WITHOUT ENDANGERING THE WATER SUPPLY OF CORPUS CHRISTI OR OF HOLDERS OF PRIOR CONTRACTS. THE AMOUNT OF UNTREATED WATER TO BE TAKEN SHALL NOT EXCEED 18 MILLION GALLONS PER DAY WITHOUT PRIOR WRITTEN APPROVAL OF THE CITY COUNCIL OF CORPUS CHRISTI. SECTION 8. MEASUREMENT - THE UNTREATED WATER DELIVERED UNDER THIS CONTRACT SHALL BE MEASURED BY A SUITABLE WATER METER OR METERS TO BE FURNISHED AND INSTALLED BY SAN PATRICIO AND KEPT IN REPAIR BY CORPUS CHRISTI AT OR NEAR THE PLACE OF DELIVERY OF UNTREATED WATER. CORPUS CHRISTI SHALL HAVE THE RIGHT TO SPECIFY THE TYPE OF METER OR METERS TO BE USED AND TO SPECIFY THE INSTALLA- TION DESIGN OF THE METER OR METERS. CHECKS AS TO THE ACCURACY OF THE METER OR METERS SHALL BE MADE SEMI - ANNUALLY BY CORPUS CHRISTI, AND CORPUS CHRISTI SHALL NOTIFY SAN PATRICIO IN WRITING TEN (10) DAYS IN ADVANCE OF ALL SEMI- ANNUAL CHECKS AND TESTS IN ORDER THAT SAN PATRICIO MAY HAVE A REPRESENTATIVE PRESENT AS A WITNESS. SEMI - ANNUAL TESTS AS TO THE ACCURACY OF THE METER OR METERS SHALL BE AT CORPUS CHRISTI'S EXPENSE. IF EITHER CORPUS CHRISTI OR -6- 5 -i_63 ' SAN PATRICIOy AT ANY TIME, SHALL NOTIFY THE OTHER THAT IT DESIRES A SPECIAL TEST OF ANY METER, THE PARTIES SHALL COOPERATE IN ARRANGING FOR A SPECIAL TEST TO BE MADE BY CORPUS CHRISTI. THE EXPENSE OF THE SPECIAL TEST OF THE METER OR METERS SHALL BE PAID BY THE PARTY REQUESTING SUCH TEST. IF, ON ANY TESTS THE METER TESTED SHALL BE FOUND TO BE INACCURATE BY AN AMOUNT EXCEEDING TWO PERCENT (2 %)1 THEN ANY PREVIOUS READINGS OF SUCH METER SHALL BE CORRECTED FOR ANY PERIOD OF INACCURATE MEASUREMENT THEREBY WHICH IS DEFINITELY KNOWN OR AGREED UPON; BUT NO SUCH CORRECTION SHALL EXTEND BACK OVER A PERIOD BEGINNING MORE THAN FIFTEEN (15) DAYS PRIOR TO THE TIME WHEN SUCH INACCURACY WAS FIRST MADE KNOWN BY EITHER PARTY TO THE OTHER. IF, FOR ANY REASON, THE METER OR METERS ARE OUT OF SERVICE SO THAT THE VOLUME OF WATER DELIVERED HEREUNDER CANNOT BE ASCERTAINED OR COMPUTED FROM METER READINGS THEREOF, THE WATER DELIVERED DURING THE PERIOD SUCH METER OR METERS ARE OUT OF SERVICE SHALL BE ESTIMATED AND AGREED UPON BY THE PARTIES HERETO UPON THE BASIS OF THE BEST DATA AVAILABLE. CORPUS CHRISTI SHALL READ THE METER OR METERS ON OR ABOUT THE LAST DAY OF EACH MONTH AND SHALL DETERMINE FROM THESE READINGS THE AMOUNT OF WATER DELIVERED TO SAN PATRICIO. CORPUS CHRISTI SHALL SERVICE THE RECORDING AND INTEGRATING INSTRUMENTS OF THE METER OR METERS AND SHALL RETAIN THE CHARTS AND INTEGRATOR READINGS AS A PART OF THE CORPUS CHRISTI WATER RECORDS. ALL SUCH CHARTS AND INTEGRATOR READINGS SHALL BE MADE AVAILABLE TO SAN PATRICIO'S REPRESENTATIVES AT ALL REASONABLE OFFICE HOURS. ANY DUPLICATE RECORDERS PROVIDING CHARTS FOR SAN PATRICIO SHALL BE PURCHASED] MAINTAINEDI AND SERVICED BY AND AT THE EXPENSE OF SAN PATRICIO. SECTION 9. PRICE - THE PRICE TO BE CHARGED FOR UNTREATED WATER SOLD BY CORPUS CHRISTI TO SAN PATRICIO WILL BE WHICHEVER OF THE TWO FOLLOW- ING PRICES IS THE LOWER: (A) THE REGULAR ESTABLISHED UNTREATED OR RAW WATER RATES FOR CUSTOMERS OF CORPUS CHRISTI OF SIMILAR CLASSIFICATION,LOCATION, -7- 5 -1 -63 , AND DEMAND REQUIREMENTS, OTHER THAN IRRIGATION WATER CONSUMERS, OUTSIDE OF THE DISTRICT AND /OR CORPUS CHRISTI, AS CURRENTLY ESTABLISHED OR SUBSEQUENTLY ADJUSTED, WHICH NOW ARE 5¢ PER THOUSAND GALLONS FOR ALL WATER USED UP TO TEN MILLION GALLONS PER MONTH, AND 4¢ PER THOUSAND GALLONS FOR ALL WATER USED IN EXCESS OF TEN MILLION GALLONS PER MONTH; OR (B) THE "COMPOSITE COST OF UNTREATED WATER" AS DEFINED IN SECTION 10 HEREOF. SECTION 10. COMPOSITE COST OF UNTREATED WATER - THE COMPOSITE COST OF UNTREATED WATER WILL BE CALCULATED AS OF EACH ANNIVERSARY DATE OF THIS CONTRACT OR JUNE 1 OF EACH CALENDAR YEAR, WHICHEVER DATE OCCURS FIRST IN THE CALENDAR YEAR, AND WILL BE APPLICABLE AT THE BEGINNING OF THE FIRST BILLING CYCLE AFTER THE CALCULATION DATE. THE COMPONENTS OF THE COMPOSITE COST OF UNTREATED WATER ARE: (A) AVERAGE PRICE PAID BY CORPUS CHRISTI TO DISTRICT. THIS AMOUNT IS TO BE DETERMINED BY DIVIDING THE TOTAL PAYMENT BY CORPUS CHRISTI FOR THE LAST COMPLETED CONTRACT YEAR BETWEEN CORPUS CHRISTI AND DISTRICT BY THE TOTAL QUANTITY OF WATER PURCHASED DURING THAT CONTRACT YEAR, ALL AS SET FORTH IN THE ANNUAL FINAL BILL BY THE DISTRICT TO CORPUS CHRISTI; PLUS (B) AN AMOUNT EQUIVALENT TO TAX SUBSIDY, IF ANY, PROVIDED BY THE PROPERTY OWNERS OF THE DISTRICT WHICH IS HEREBY DEFINED TO BE BASED ON THE MOST RECENTLY COMPLETED CALENDAR YEAR, AS REPORTED BY THE ANNUAL AUDIT THEREOF, AND TO INCLUDE THE TOTAL CASH EXPENDITURES OF ALL DISTRICT FUNDS, IN- CLUDING DEBT INTEREST AND PRINCIPAL RETIREMENT AND EX- CLUDING THE BOND CONSTRUCTION FUND BY WHATEVER NAME IT MIGHT BE CALLED, LESS REVENUE RECEIVED FROM: I I 5 -t -63 • , (1) SALES OF WATER TO CORPUS CHRISTI DURING THE SAME CALENDAR YEAR, (2) THE NET INCOME FROM OIL FIELD ACTIVITIES, AND (3) LAND RENTALS AND MISCELLANEOUS NON -TAX RELATED INCOME. FOR THIS PURPOSE ALL INTEREST INCOME OF ANY NATURE WHATSO- EVER WILL BE CONSIDERED TO BE TAX RELATED INCOME. THE NETCASH EXPENDITURE FIGURE, BEFORE THE APPLICATION OF DIRECT OR RELATED TAX INCOME, WILL BE DIVIDED BY THE TOTAL QUANTITY OF WATER USED WITHIN THE DISTRICT DURING THE PRECEDING CALENDAR YEAR AS ESTIMATED BY THE CORPUS CHRISTI WATER SUPERINTENDENT. THE TERM "NET CASH EXPENDITURES" AS USED IN THIS CONTRACT IS HEREBY FURTHER DEFINED AS EX- CLUDING ANY DIRECT EXPENDITURES OR DEBT SERVICE COSTS FOR NEW OR RECONSTRUCTED FACILITIES TO BE CONSTRUCTED SUBSEQUENT TO THE DATE OF THIS CONTRACT, SUCH EXPENDITURES TO BE ACCOUNTED FOR AS SET FORTH IN SECTION 21 BELOW; PLUS (C) ACTUAL COSTS INCURRED BY CORPUS CHRISTI FOR THE MAINTENANCE AND OPERATION OF WESLEY E. SEALE DAM AND LAKE CORPUS CHRISTI DIVIDED BY THE TOTAL QUANTITY OF UNTREATED WATER PURCHASED BY CORPUS CHRISTI FROM THE DISTRICT DURING THE SAME FISCAL YEAR. ACTUAL COSTS ARE HEREBY DEFINED AS THE ACTUAL EXPENDITURES OF THE RESERVOIR ACTIVITY OR ITS SUC- CESSOR IN THE WATER SYSTEM OPERATING FUND FOR THE MOST RECENTLY COMPLETED FISCAL YEAR, AS REPORTED BY THE ANNUAL AUDIT FOR THAT YEAR, PLUS 75% FOR ADMINISTRATION, INSUR- ANCE, CAPITAL OUTLAY REPLACEMENT AND OTHER OVERHEAD FACTORS. -9- 5 -t -63 SECTION 11. RESTRICTIONS ON RESALE - EXCEPT AS TO CITIES TOWNS AND VILLAGES IT IS DISTINCTLY UNDERSTOOD AND AGREED THAT WITHOUT PRIOR WRITTEN CONSENT OF CORPUS CHRISTI, SAN PATRICIO SHALL NOT DELIVER OR SELL UNTREATED WATER OBTAINED UNDER THIS CONTRACT TO ANY OTHER PERSONS, FIRMS OR CORPORATIONS EXCEPT SUCH PERSONS, FIRMS OR CORPORATIONS WHICH ARE 50NAFIDE CUSTOMERS OF THE WATER DISTRIBUTION SYSTEM OF SAN PATRICIO AND WHO DO NOT RESELL SUCH UNTREATED WATER, AND SAN PATRICIO AGREES TO BIND ALL OF ITS CUSTOMERS TO THE EFFECT THAT THE STIPULATION CONTAINED IN THIS CONTRACT, NOT TO RESELL UNTREATED WATER, SHALL BE BINDING UPON EACH OF SAID CUSTOMERS. EXCEPT AS TO CITIES, TOWNS AND VILLAGES, THIS SECTION EXPRESSLY FORBIDS THE RESALE OF UNTREATED WATER BY A CUSTOMER OF SAN PATRICIO TO ANY CONSUMER WITHOUT THE WRITTEN CONSENT TO SUCH RESALE BY CORPUS CHRISTI. TREATED WATER SECTION 12. QUANTITY AND POINT OF TAKING - CORPUS CHRISTI AGREES TO SELL SUCH TREATED WATER AS SHALL BE NEEDED BY SAN PATRICIO IN THE OPERATION OF ITS TRANSMISSION AND DISTRIBUTION SYSTEM, SUBJECT TO THE CONDITIONS SET FORTH HEREIN] AND LIMITED TO 12 MILLION GALLONS PER DAY LESS THE ACTUAL REQUIREMENTS OF REYNOLDS FOR REYNOLDS OWN USE. SAN PATRICIO SHALL TAKE THE TREATED WATER AT THE EXISTING PURCHASE POINT OF REYNOLDS AT THE REYNOLDS TRANSMISSION PIPELINE. NO OTHER TREATED WATER TRANSMISSION FACILITY IS CONTEMPLATED BY THIS CONTRACT. SECTION 13. PRICE - THE PRICE TO BE CHARGED FOR TREATED WATER SOLD BY CORPUS CHRISTI TO SAN PATRICIO SHALL BE AS FOLLOWS: (A) FOR THE FIRST 401000000 GALLONS TAKEN IN EACH MONTH - THE REGULAR ESTABLISHED INSIDE CITY LIMIT RATE (ICL) AT THE TIME OF TAKING FOR CUSTOMERS OF SIMILAR LOCATION AND DEMAND REQUIREMENTS. 5 -10- 5_t -63 (B) FOR ALL OVER 40,000,000 GALLONS TAKEN IN EACH MONTH - THE REGULAR ESTABLISHED OUTSIDE CITY LIMIT (OCL) RATES AT THE TIME OF TAKING FOR CUSTOMERS OF SIMILAR LOCATION AND DEMAND REQUIREMENTS. THE RATES WILL BE APPLIED IN THE SAME MANNER AS IF TWO SEPARATE CUSTOMERS WERE INVOLVED, I.E., THE OCL FIRST STEP WILL APPLY TO USAGE BETWEEN 40,000,000 AND 40,010,000 GALLONS, THE SECOND STEP BETWEEN 40,010,001 AND 4O,020,000 GALLONS, ETC. SECTION 14. REYNOLDS - CORPUS CHRISTI CONTRACT. - THE PARTIES HERETO ARE FAMILIAR WITH THE PROVISIONS OF THE REYNOLDS - CORPUS CHRISTI CONTRACT. THE TREATED WATER SALES AND PURCHASES COVERED BY THIS CONTRACT WILL BE TRANSMITTED BY THE REYNOLDS TRANSMISSION PIPELINE CONSTRUCTED UNDER THE TERMS OF SAID CONTRACT. THE FOLLOWING PROVISIONS OF THAT CON- TRACT ARE HEREBY ADOPTED AND MADE A PART OF THIS CONTRACT WITH MODIFICATIONS OR ADDITIONS AS INbICATED: (A) SERVICE CONNECTIONS (SECTION 4 -PAGE 4) - EXISTING CONNECTIONS WILL BE UTILIZED. (B) LAYING OF LINE AND INSTALLATION OF EQUIPMENT (SECTION 5 -PAGE 4)- THE LINE BUILT UNDER THE TERMS OF THIS SECTION SHALL BE THE ONLY LINE COVERED BY THIS CONTRACT. (C) TITLE (SECTION 6 -PAGE 4) - TITLE TO AND POSSESSION OF THE TREATED WATER DELIVERED HEREUNDER BY CORPUS CHRISTI SHALL BE DEEMED TO PASS TO SAN PATRICIO, OR TO REYNOLDS IF,SAN PATRICIO SO ARRANGES BY CONTRACT WITH REYNOLDS, AT THE POINT OF DELIVERY. COPIES OF ALL CONTRACTS BETWEEN SAN PATRICIO AND REYNOLDS WILL BE FURNISHED TO CORPUS CHRISTI BY SAN PATRICIO WITHIN 30 DAYS OF EXECUTION OF SAME. IT IS AGREED BY CORPUS CHRISTI AND SAN PATRICIO THAT EACH SHALL INDEMNIFY AND FOREVER HOLD HARMLESS THE OTHER AGAINST EACH AND EVERY CLAIM, DEMAND OR CAUSE OF ACTION WHICH MAY ARISE WHILE THE TREATED WATER IS IN ITS POSSESSION. 4 -3o -63 (D) MEASUREMENT OF WATER SECTION 7 - PAGE 4) - MEASUREMENT UNDER THE REYNOLDS - CORPUS CHRISTI CONTRACT WILL DETERMINE THE TOTAL WATER SOLD TO REYNOLDS AND SAN PATRICIO, SAN PATRICIO WILL BE RESPONSIBLE FOR MAKING THE NECESSARY ARRANGE- MENTS WITH REYNOLDS, PROVIDING SUITABLE MEASURING FACILITIES, AND REPORTING BY THE 10TH DAY OF THE MONTH FOLLOWING THE MONTH IN WHICH THE TREATED WATER WAS CONSUMED, THE TOTAL QUANTITY, AS WELL AS THE MINIMUM AND MAXIMUM DAILY AMOUNTS CONSUMED BOTH BY SAN PATRICIO AND REYNOLDS. THE PHYSICAL METERING ARRANGE- MENT SHALL BE SUBJECT TO APPROVAL BY THE CORPUS CHRISTI WATER SUPERINTENDENT. RECORDS OF THE DISTRIBUTION BETWEEN SAN-PATRICIO AND REYNOLDS SHALL BE MAINTAINED BY SAN PATRICIO THROUGHOUT THE TERM OF THIS CONTRACT. CHECKS AS TO THE ACCURACY OF THE METER OR METERS USED TO DETERMINE CONSUMPTION BY SAN PATRICIO SHALL BE MADE SEMI- ANNUALLY BY SAN PATRICIO OR A THIRD PARTY DESIGNATED BY SAN PATRICIO. SAN PATRICIO SHALL NOTIFY CORPUS CHRISTI IN WRITING TEN (10) DAYS IN ADVANCE OF ALL SEMI - ANNUAL CHECKS SO THAT CORPUS CHRISTI MAY HAVE A REPRESENTATIVE PRESENT. EXPENSES OF THE SEMI - ANNUAL TESTS WILL BE BORNE BY SAN PATRICIO. IF CORPUS CHRISTI AT ANY TIME SHALL REQUEST A SPECIAL TBST OF ANY METER, THE PARTIES SHALL CO- OPERATE TO SECURE AN IMMEDIATE DETERMINATION OF THE ACCURACY THEREOF AND SHALL MAKE JOINT OBSERVATIONS OF ANY ADJUSTMENTS. IF, AS A RESULT OF SUCH TEST, ANY METER TESTED IS FOUND TO BE LESS THAN 2% HIGH OR LOW, THE COST OF SUCH TEST WILL BE BORNE BY CORPUS CHRISTI, OTHERWISE, BY SAN PATRICIO, BUT SUCH METER SHALL BE AT ONCE ADJUSTED TO RECORD AS ACCURATELY AS POSSIBLE. IF ON ANY TEST THE METER TESTED SHALL BE FOUND TO BE INACCURATE BY AN AMOUNT EXCEEDING 2 %, THEN ANY PREVIOUS READINGS OF SUCH METER SHALL BE CORRECTED FOR ANY PERIOD OF INACCURATE MEASUREMENT THEREBY WHICH IS DEFINITELY KNOWN OR AGREED UPON, BUT NO SUCH OCRRECTION SHALL EXTEND BACK OVER A -12- 5-1-63 PERIOD BEGINNING MORE THAN THIRTY (30) DAYS PRIOR TO THE TIME WHEN SUCH INACCURACY WAS FIRST MADE KNOWN BY EITHER PARTY TO THE OTHER. IF FOR ANY REASON THE METER OR METERS ARE OUT OF SERVICE SO THAT THE VOLUME OF WATER DELIVERED HEREUNDER CANNOT BE ASCERTAINED OR COMPUTED FROM METER READ- INGS THEREOF, THE WATER DELIVERED DURING THE PERIOD SUCH METER OR METERS ARE OUT OF SERVICE SHALL BE ESTIMATED AND AGREED UPON BY THE PARTIES HERETO UPON THE BASIS OF THE BEST DATA AVAILABLE. (E) INGRESS AND EGRESS SECTION 9 - PAGE 6) - EQUALLY APPLICABLE TO SAN PATRICIO. (F) OPTION TO PURCHASE (SECTION 13 - PAGE 7) - IF CORPUS CHRISTI EXERCISES ITS OPTION TO ACQUIRE THE REYNOLDS TRANSMISSION PIPELINE, CORPUS CHRISTI SHALL DELIVER WATER TO SAN PATRICIO FACILITIES OR THE FACILITIES OF THOSE PURCHASING WATER FROM SAN PATRICIO AT A RATE NOT IN EXCESS OF THE RATES SPECIFIED HEREIN FOR DELIVERY AT THE REYNOLDS TRANSMISSION PIPELINE PLUS CORPUS CHRISTI'S ACTUAL COST OF TRANSPORTING SUCH WATER THROUGH THE PIPELINE ACQUIRED BY THE EXERCISE OF THE OPTION OR A SUBSTITUTE PIPELINE, INCLUDING ALL OPERATIONAL, MAINTE- NANCE, REPLACEMENT, AND AMORTIZATION COSTS, PRORATED AMONG ALL USERS OF WATER SERVED BY SUCH PIPELINE. (G) ALTERATIONS AND REPAIRS SECTION 14 - PAGE 8) - EQUALLY APPLICABLE TO SAN PATRICIO BY SUBSTITUTING SAN PATRICIO FOR REYNOLDS. SUBSECTIONS (A), (B), (C), (D), (E) AND (G) SET FORTH ABOVE SHALL CONTINUE IN EFFECT FOR THE TERM OF THIS CONTRACT, NOTWITHSTANDING THE FACT THAT THE REYNOLDS - CORPUS CHRISTICONTRACT MAY SOONER TERMINATE. IT IS MUTUALLY UNDERSTOOD THAT SAN PATRICIO WILL BE SOLELY RESPONSIBLE FOR MAINTAIN- ING A TRANSPORTATION AGREEMENT WITH REYNOLDS IN EFFECT THROUGHOUT THE TERM OF THIS CONTRACT, AND THAT SAN PATRICIO WILL NOT INTRODUCE TREATED WATER OR ALLOW TREATED WATER TO BE INTRODUCED ON ITS BEHALF INTO THE REYNOLDS TRANSMISSION PIPELINE FROM ANY SOURCE OTHER THAN CORPUS CHRISTI. -�3- 5 -i -63 SECTION 15. RESTRICTIONS ON RESALE - IT IS UNDERSTOOD THAT SAN PATRICIO COMTEMPLATES SELLING TREATED WATER TO CUSTOMERS WHO IN TURN RESELL TO OTHERS. SPECIFIC WRITTEN APPROVAL BY THE CITY COUNCIL OF CORPUS CHRISTI WILL BE REQUIRED BEFORE SAN PATRICIO RESELLS TREATED WATER TO: (A) A MUNICIPALITY OR ANY TYPE OF WATER DISTRICT OR AUTHORITY WHICH DESIRES TO RESELL TO OTHERS EXCEPT THOSE MUNICIPALITIES AND THE WATER DISTRICT NOW SERVED BY SAN PATRICIO, AND THOSE CITIES WHICH MAY BECOME A PART OF SAN PATRICIO. (B) ANY PRIVATE ORGANIZATION, NOT NOW BEING SERVED3 DESIRING TO RESELL TO OTHERS. (C) ANY NEW SUBDIVISION NOT NOW BEING SERVED IN AN UNINCORPORATED AREA WITHIN THE AREA OVER WHICH CORPUS CHRISTL MAINTAINS PLAT- TING CONTROL OR TO A GOVERNMENTAL UNIT FOR RESALE TO OR IN SUCH SUBDIVISION UNTIL THE PLAT OF SUCH SUBDIVISION HAS BEEN APPROVED BY THE ZONING AND PLANNING COMMISSION OF CORPUS CHRISTI. SAN PATRICIO AGREES TO BIND ITS FUTURE CUSTOMERS AND ITS EXISTING CUSTOMERS UPON CONTRACT RENEWALS TO THE STIPULATIONS CONTAINED IN THIS CONTRACT AND TO REQUEST ITS EXISTING CUSTOMERS TO HONOR SAID STIPULATIONS. ALL RESALE AGREE- MENTS BOTH FUTURE AND EXISTINGI SINCE EXISTING CUSTOMERS HAVE NO PRIORITY OF USE EXCEPT AS A PART OF REYNOLDS INDUSTRIAL PRIORITY (SECTION 12, PAGE 7 - CORPUS CHRISTI - REYNOLDS CONTRACT) SHALL STIPULATE THAT SHOULD THERE BE A SHORTAGE IN THE BASIC SUPPLY OF WATER WHICH REQUIRES THE RESTRICTION OR CUR- TAILING OF ANY CONSUMER OF WATER WITHIN THE CITY LIMITS OF CORPUS CHRISTI THAT, COINCIDENT WITH SUCH RESTRICTION OR LIMITATION WITHIN CORPUS CHRIST 13 SAN PATRICIO WILL LIMIT AND RESTRICT ALL OF ITS CUSTOMERS BOTH DIRECT AND INDIRECT THROUGH RESALE, TO THE SAME EXTENT. SECTION 16. STORAGE AND PUMPING REQUIREMENTS SAN PATRICIO SHALL CONSTRUCT AND MAINTAIN OR REQUIRE EACH 'CITY•;OH WAtCR `D$SyfticP TO CONSTRUCT AND MAINTAIN GROUND OR OVERHEAD WATER STORAGE FACILITIES OR A COMBINATION OF BOTH IN AMOUNTS EQUAL TO ONE DAY'S SUPPLY BASED ON THE HIGHEST DAILY USE OF EACH CITY FOR ANY ONE DAY DURING THE PREVIOUS FIVE YEARS OR INSTALL RATE CONTROLLERS TO ASSURE AN EVEN DAILY RATE OF TAKE. EACH GROUND STORAGE UNIT SHALL BE EQUIPPED WITH PUMPS AND FILLING i 4 -3o -63 DEVICES AND OPERATED SO THAT SAN PATRICIOIS DAILY RATE OF TAKE FROM THE REYNOLDS TRANSMISSION PIPELINE WILL BE EVEN THROUGHOUT EACH 24 HOUR PERIOD WITH PEAK HOUR DEMANDS OVER THE DAILY AVERAGE BEING SUPPLIED FROM THE GROUND OR OVERHEAD WATER STORAGE. THE PUMPS SHALL BE SIZED TO MEET THE PEAK HOURLY DEMANDS. SAN PATRICIO SHALL REQUIRE ANY CONSUMER OF TREATED WATER TO IN- STALL THE PROPER VALVES OR RATE CONTROLLERS TO INSURE AN EVEN RATE OF TAKE FROM THE REYNOLDS WATER LINE. PUMPS DIRECTLY CONNECTED TO THE REYNOLDS WATER LINE BETWEEN THE ODEM BOOSTER AND THE REYNOLDS METER AT THE CORPUS CHRISTI TREATMENT PLANT ARE PROHIBITED. THE WATER SUPPLY OF SAN PATRICIO AND OF EACH CITY OR WATER DISTRICT SERVED BY SAN PATRICIO SHALL MEET THE REQUIREMENTS OF THE STATE DEPARTMENT OF HEALTH FOR APPROVAL OF THE STATE DEPARTMENT OF HEALTH, IF THE CITY OR WATER DISTRICT IS DIRECTLY CONNECTED TO THE REYNOLDS TRANSMISSION PIPELINE OR TO SAN PATRICIO TRANSMISSION FACILITIES DIRECTLY CONNECTED TO THE REYNOLDS TRANSMISSION PIPELINE. GENERAL PROVISIONS SECTION 17. WATER RIGHTS - IT IS MUTUALLY AGREED AND UNDERSTOOD THAT CORPUS CHRISTI SHALL HAVE COMPLETE AND EXCLUSIVE RIGHTS TO ALL WATER IMPOUNDED BY THE CORPUS CHRISTI RESERVOIRS `NOW LAKE CORPUS CHRISTI AND CALALLEN DIVERSION DAM AND RESERVOIR) DURING THE TIME THIS CONTRACT SHALL _ REMAIN IN FORCE. CORPUS CHRISTI BINDS AND OBLIGATES ITSELF HOWEVER, TO TAKE THE NECESSARY ACTIONS WITHIN ITS POWER AND TO MAKE THE NECESSARY AP- PLICATIONS TO OBTAIN WHATEVER ADDITIONAL WATER RIGHTS AS MIGHT BE NECESSARY TO ADEQUATELY MEET THE NEEDS OF ITS EXISTING CONTRACTS, THIS CONTRACT WITH SAN PATRICIO, AND ANY FUTURE CONTRACTUAL OBLIGATIONS OF CORPUS CHRISTI. IT IS ALSO MUTUALLY AGREED AND UNDERSTOOD THAT THIS CONTRACT IS SUBJECT TO CORPUS CHRISTI OBTAINING THE NECESSARY PERMISSION FROM THE TEXAS WATER COMMISSION OR OTHER REGULATORY BODY HAVING AUTHORITY OVER SUCH MATTERS TO SELL WATER TO SAN PATRICIO AND SAN PATRICIO AGREES TO SUPPORT ANY FUTURE CORPUS CHRISTI REQUEST TO THE TEXAS WATER COMMISSION FOR SAID PERMIT OR FOR ANY OTHER WATER RIGHTS ON THE NUECES RIVER. SHOULD IT DEVELOP THAT -15- 5 -1 -63 SAN PATRICIO REQUIRES A PERMIT TO DIVERT AND TRANSPORT THE WATER SOLD TO SAN PATRICIO BY CORPUS CHRISTI HEREUNDER, CORPUS CHRISTI AGREES TO SUPPORT THE APPLICATION BY SAN PATRICIO TO THE TEXAS WATER COMMISSION FOR SUCH A PERMIT. THE RIGHTS OF SAN PATRICIO TO TAKE WATER UNDER THIS CONTRACT ARE SPECIFICALLY SUBJECT TO ALL THE PROVISIONS OF THE PERMITS FROM THE STATE BOARD OF WATER ENGINEERS AND/OR THE TEXAS WATER COMMISSION UNDER WHICH CORPUS CHRISTI IS AUTHORIZED TO USE WATER FROM THE NUECES RIVER. UNTREATED WATER AGREED TO BE DELIVERED HEREUNDER SHALL BE FOR INDUSTRIAL AND MUNICIPAL USE ONLY. SECTION 18. CORPUS CHRISTI RIGHT TO SELL - CORPUS CHRISTI RE- TAINS THE RIGHT TO SELL EITHER TREATED OR UNTREATED WATER AT POINTS AND TO CUSTOMERS THAT ARE LOCATED EITHER WITHIN OR OUTSIDE OF THE BOUNDARIES OF SAN PATRICIO. SECTION 19. PRIORITIES - UPON EXECUTION OF THIS CONTRACT, AND APPROVAL BY DISTRICT, SAN PATRICIO WILL BECOME A CONTRACT CUSTOMER OF CORPUS CHRISTI. THE WATER NEEDED TO FULFILL THE NEEDS OF SAN PATRICIO UP TO THE CAPACITY OF THE EXISTING REYNOLDS TRANSMISSION PIPELINE (TREATED WATER) AND THE PROPOSED UNTREATED WATER TRANSMISSION MAIN, WILL NO LONGER BE CONSIDERED AS SURPLUS WATER UNDER THE TERMS OF SECTION 15 OF THE CONTRACT BETWEEN THE DISTRICT AND CORPUS CHRISTI. SHOULD THERE BE A SHORTAGE IN THE BASIC SUPPLY OF WATER, AS DETERMINED BY CORPUS CHRISTI, WHICH REQUIRES THE RESTRICTING OR CURTAILING OF ANY CUSTOMER OF WATER WITHIN CORPUS CHRISTI, SAN PATRICIO HEREBY CONTRACTS THAT, COINCIDENT WITH SUCH RESTRICTION OR LIMITATION WITHIN CORPUS CHRISTI, SAN PATRICIO WILL LIMIT AND RESTRICT ALL OF ITS CUSTOMERS TO THE SAME EXTENT. SECTION 20. RELATIVE PRIORITY OF INDUSTRIAL USERS - IT IS UNDER- STOOD BY THE PARTIES HERETO THAT INDUSTRIES OUTSIDE OF CORPUS CHRISTI AND/OR DISTRICT HAVE A LOWER WATER USE PRIORITY THAN INDUSTRIES INSIDE CORPUS CHRISTI -16- 5 -1 -63 AND/OR DISTRICT. IT IS AGREED THAT ANY AND ALL INDUSTRIAL USERS BOTH INSIDE AND OUTSIDE OF SAN PATRICID WHICH MAY BE DIRECTLY OR INDIRECTLY SUPPLIED THROUGH THE LINES AND DISTRIBUTION SYSTEM OF SAN PATRICIO SHALL BE SUBJECT TO AND BOUND BY THE SAME PROVISIONS REGARDING PRIORITY OF USERS OF WATER AS ARE INDUSTRIAL USERS OUTSIDE OF CORPUS-CHRISTI AND/OR DISTRICT WHICH ARE NOW OR MAY BECOME USERS OF WATER DIRECTLY FROM CORPUS CHRISTI AND THAT ALL EXISTING INDUSTRIAL CUSTOMERS OF CORPUS CHRISTI HAVE PRIORITY OVER EXISTING AND FUTURE INDUSTRIAL CUSTOMERS OF SAN PATRICIO. SECTION 21. FUTURE WATER SUPPLY - SAN PATRICIO AGREES TO COOPERATE WITH CORPUS CHRISTI IN INVESTIGATING THE NEED FOR, METHODS TO OBTAIN, AND MOST ADVANTAGEOUS CONSTRUCTION TIMETABLE FOR ENLARGED WATER SUPPLY FACILITIES. IF CORPUS CHRISTI DETERMINES THAT IT IS NECESSARY IN ORDER TO ACCOMPLISH SUCH PURPOSE TO CONSTRUCT OR RECONSTRUCT CHANNEL OR RESERVOIR FACILITIES, THIS CONTRACT SHALL TERMINATE UPON THE COMPLETION OF THOSE FACILITIES UNLESS ONE OF THE FOLLOWING CONDITIONS HAS FIRST BEEN MET: (A) SAN PATRICIO RECOGNIZES AN ADDITIONAL ELEMENT OF COST OF UNTREATED WATER AND AN ADDITIONAL ELEMENT TO BE ADDED TO THE APPLICABLE PRICES AS SET FORTH IN SECTION B FOR TREATED WATER TO BE CALCULATED BY DIVIDING THE TOTAL QUAN- TITY OF UNTREATED WATER USED IN EACH PREVIOUS CALENDAR YEAR INSIDE CORPUS CHRISTI OR WHATEVER GOVERNMENTAL SUB- DIVISION HAS FINANCED THE NEW FACILITIES INTO THE TOTAL TAX COLLECTIONS DERIVED DIRECTLY FROM SUCH GOVERNMENTAL SUBDIVISION IN THAT CALENDAR YEAR FOR THE PURPOSE OF FINANCING THE NEW OR RECONSTRUCTED FACILITIES. THE FIGURE THUS ARRIVED AT WILL BE THE NEW FACILITY TAX SUBSIDY BEING PAID BY THE TAXPAYER WITHIN CORPUS CHRISTI OR THE LARGER GOVERNMENTAL SUBDIVISION FINANCING THE NEW FACILITIES. THIS ADDITIONAL COST ELEMENT IS THUS THE FOURTH COST ELEMENT. SAN PATRICIO AGREES THAT THIS COST ELEMENT PLUS THE THREE COST ELEMENTS °17- 5 -15 -63 OR SEGMENTS SPECIFIED IN SECTION 10 ABOVE WILL, UPON COMPLETION OF THE NEW FACILITIES, BECOME THE BASIS FOR THE PRICE TO BE CHARGED BY CORPUS CHRISTI TO SAN PATRICIO FOR UNTREATED WATER AND WILL SUPERSEDE ANY RATE SCHEDULE IN EFFECT AT THAT TIME AND THAT THE APPLICABLE PRICES FOR TREATED WATER WILL BE INCREASED BY THIS ADDITIONAL ELEMENT. IN THE EVENT THIS FOURTH ELEMENT BECOMES A FACTOR IN THE REVENUE RECEIVED FROM SAN PATRICIO, SUCH REVENUE AS IS DERIVED FROM THIS ELEMENT WILL BE DISPOSED OF BY AGREEMENT BETWEEN THE CITY AND THE DISTRICT ENTERED INTO AT THAT TIME; OR (B) SAN PATRICIO VOLUNTARILY JOINS WHATEVER GOVERNMENTAL SUB - DIVISIONS ASSUMING SOME OTHER GOVERNMENTAL SUBDIVISION THAN CORPUS CHRISTI, IS FINANCING THE NEW OR RECONSTRUCTED FACILITY SO THAT THE TAX BASE OF THE AREA SUPPLIED BY SAN PATRICIO WILL BECOME A PORTION OF THE TAX BASE OF THE SUBDIVISION FINANCING THE NEW SUPPLY FACILITIES AND WHATEVER TAXES ARE LEVIED FOR THE PURPOSE OF CONSTRUCTING OR RECONSTRUCTING THE NEW FACILITIES WILL APPLY EQUALLY TO PROPERTY IN THE AREA SUPPLIED BY SAN PATRICIO AND IN SUCH GOVERNMENTAL SUBDIVISION. SAN PATRICIO SHALL HAVE THE RIGHT TO TERMINATE THIS CONTRACT IN LIEU OF COMPLIANCE WITH SUB- SECTION (A) OR (B) ABOVE, AND IF SAN PATRICIO ELECTS TO EXERCISE THIS RIGHT TO TERMINATE,NOTICE IN WRITING BY REGISTERED MAIL SHALL BE GIVEN TO CORPUS CHRISTI AT LEAST 30 DAYS BEFORE THE BOND OR CONTRACT ELECTION FOR SUCH FACILITY EXPANSION OR RECONSTRUCTION OR NO LATER THAN SEVEN (7) DAYS AFTER SUCH CONTRACT ELECTION IS OFFICIALLY CALLED IF THE RESULTING PERIOD BETWEEN OFFICIAL CALL AND ELECTION IS LESS THAN 30 DAYS. IF SAN PATRICIO DOES NOT ELECT TO CARRY OUT THE PROVISIONS OF SUB - SECTION (B) ABOVE AND NOTICE OF TERMINATION IS NOT PROVIDED TO CORPUS CHRISTI BY SAN PATRICIO, SUB - SECTION (A) ABOVE WILL APPLY. am 5 -i -63 SECTION 22. PAYMENTS - CORPUS CHRISTI SHALL MONTHLY SUBMIT A STATEMENT TO SAN PATRICIO INDICATING THE QUANTITY OF WATER WITHDRAWN BY AND SOLD TO SAN PATRICIO DURING THE PRECEDING METER READING CYCLE. SAN PATRICIO SHALL RENDER PAYMENTS WITHIN 15 DAYS OF RECEIPT OF SAID STATEMENT. ANY CLERICAL ERROR OR MINOR QUESTION REGARDING SAID STATE- MENT WILL NOT BE SUFFICIENT GROUNDS TO DELAY PAYMENT BY SAN PATRICIO TO CORPUS CHRISTI. ANY SUCH QUESTIONS SHALL BE PROMPTLY SETTLED UNDER THE TERMS OF THIS CONTRACT AND BY THE AGREEMENT OF BOTH PARTIES HERETO. ANY ADJUSTMENT IN THE AMOUNT PAID AS A RESULT OF SUCH AGREEMENT SHALL BE ADDED TO OR DEDUCTED FROM THE FOLLOWING MONTHS BILL. SECTION 23. FIXED MINIMUM OBLIGATION - SAN PATRICIO IS OBLIGATED AND HEREBY AGREES TO PURCHASE ALL OF ITS WATER FROM CORPUS CHRISTI, EXCEPT UNTREATED WATER COLLECTED IN ALREADY EXISTING FACILI- TIES OF REYNOLDS OR OBTAINED FROM EXISTING AND FUTURE WELLS WITHIN THE BOUNDARIES OF THE EXISTING DISTRICT. SECTION 24. TERM OF CONTRACT - WHEN THIS CONTRACT SHALL HAVE BEEN APPROVED BY THE PARTIES HERETO, THE OBLIGATIONS OF THE PARTIES HERETO SHALL BE BINDING AND SHALL CONTINUE IN EFFECT FOR THE DELIVERY AND TAKING OF WATER HEREUNDER FOR A PERIOD OF 30 YEARS COMMENCING WITH THE DATE OF FIRST TAKING OF UNTREATED WATER OR OF TREATED WATER UNDER THIS CONTRACT OR JUNE 1� 1964, WHICHEVER SHALL FIRST OCCUR. SECTION 25. COST OF ELECTION - IF THIS CONTRACT SHALL HAVE BEEN AUTHORIZED AT A SPECIAL ELECTION IN CORPUS CHRISTI, CALLED AT THE REQUEST OF SAN PATRICIO� THE COSTS OF SUCH SPECIAL ELECTION WILL BE BORNE BY SAN PATRICIO. SECTION 26. DEFAULT - IT IS COVENANTED AND AGREED THAT IF EITHER PARTY TO THIS CONTRACT SHALL FAIL TO PERFORM ANY OF THE COVE- NANTS OR OBLIGATIONS IMPOSED UPON IT UNDER AND BY VIRTUE OF THIS CON- TRACT, THEN IN SUCH EVENT THE OTHER PARTY HERETO MAY AT ITS OPTION TERMINATE THIS CONTRACT BY PROCEEDING AS FOLLOWS: THE PARTY NOT IN -19- DEFAULT SHALL CAUSE A WRITTEN NOTICE TO BE SERVED ON THE PARTY IN DEFAULT STATING SPECIFICALLY THE CAUSE FOR TERMINATING THIS CONTRACT AND DECLARING IT TO BE THE INTENTION OF THE PARTY GIVING THE NOTICE TO TERMINATE THE SAME; THEREUPON THE PARTY IN DEFAULT SHALL HAVE THIRTY (30) DAYS AFTER THE SERVICE OF THE AFORESAID NOTICE IN WHICH TO REMEDY OR REMOVE THE CAUSE OR CAUSES STATED IN THE NOTICE FOR TERMINATING THE CONTRACT] AND' IF WITHIN SAID PERIOD OF THIRTY (30) DAYS THE PARTY IN DEFAULT DOES SO REMEDY OR REMOVE SAID CAUSE OR CAUSES AND FULLY INDEMNIFY THE PARTY NOT IN DEFAULT FOR ANY AND ALL CONSEQUENCES OF SUCH BREACH' THEN SUCH NOTICE SHALL BE WITHDRAWN AND THIS CONTRACT SHALL CONTINUE IN FULL FORCE AND EFFECT. IN CASE THE PARTY IN DEFAULT DOES NOT SO REMEDY OR REMOVE THE CAUSE OR CAUSES OR DOES NOT INDEMNIFY THE PARTY GIVING THE NOTICE FOR ANY AND ALL CONSEQUENCES OF SUCH BREACH, WITHIN SAID PERIOD OF THIRTY (30) DAYS, THEN, AT THE OPTION OF THE PARTY GIVING THE NOTICE, THIS CONTRACT SHALL BECOME NULL AND VOID FROM AND AFTER THE EXPIRATION OF SAID PERIOD. ANY CANCELLATION OF THIS CONTRACT PURSUANT TO THE PROVISIONS OF THIS ARTICLE SHALL BE WITHOUT PRE- JUDICE TO THE RIGHT OF EITHER PARTY HERETO TO COLLECT ANY AMOUNTS THEN DUE IT FROM THE OTHER PARTY PRIOR TO THE TIME OF CANCELLATION AND WITHOUT WAIVER OF ANY REMEDY TO WHICH THE PARTY NOT IN DEFAULT MAY BE ENTITLED FOR VIOLATIONS OF THIS CONTRACT. NO WAIVER BY EITHER PARTY HERETO OF ANY ONE OR MORE DEFAULTS BY THE OTHER IN THE PERFORMANCE OF ANY PROVISIONS OF THIS CONTRACT SHALL OPERATE OR BE CONSTRUED AS A WAIVER OF ANY FUTURE DEFAULT OR DEFAULTS WHETHER OF A LIKE OR OF A DIFFERENT CHARACTER. SECTION 27. RIGHT TO TERMINATE CONTRACT - IF AFTER 3 YEARS FROM THE DATE OF THIS CONTRACT, SAN PATRICIO HAS NOT PROVIDED FACILITIES FOR THE TAKING OF UNTREATED WATER UNDER THE TERMS HEREOF, CORPUS CHRISTI SHALL HAVE THE RIGHT TO CANCEL THIS CONTRACT AS TO UNTREATED WATER BY GIVING WRITTEN NOTICE TO SAN PATRICIO OF SUCH INTENTION, OR CORPUS CHRISTI MAY IF IT SEES FIT, EXTEND-THE 3 -YEAR PERIOD FOR ANY ADDITIONAL PERIOD OR PERIODS, RE- TAINING THE RIGHT TO TERMINATE THIS CONTRACT AT THE END OF ANY SUCH EXTENDED -20- 5_1 -63 PERIOD UNTIL SUCH TIME AS SAN PATRICIO MAY COMPLETE THE FIRST STAGE OF ITS FACILITIES AND BEGINS TAKING UNTREATED WATER AFTER WHICH CORPUS CHRISTI'S RIGHT TO TERMINATE SHALL CEASE. EXCEPT AS SET FORTH IN THIS SECTION AS TO UNTREATED WATER - AND IN SECTION 21 AS TO ALL WATER, THIS CONTRACT SHALL NOT BE TERMINABLE BY EITHER PARTY EXCEPT BY MUTUAL AGREEMENT. SECTION 28. FORCE MAJEURE - IF CORPUS CHRISTI SHOULD BE PREVENTED, WHOLLY OR IN PART, FROM FULFILLING ITS OBLIGATIONS UNDER TH13 CONTRACT BY REASON OF ANY ACT OF GOD, UNAVOIDABLE ACCIDENT, ACTS OF ENEMY, STRIKES, FIRES, FLOODS, CONSERVATION OF WATER FOR THOSE WITH SUPERIOR AND LEGAL RIGHTS TO SUCH WATER, GOVERNMENTAL RESTRAINT OR REGULATION, OR OTHER CAUSES OF FORCE MAJEURE, OR BY REASON OF CIRCUMSTANCES REASONABLY BEYOND ITS CONTROL, THEN THE OBLIGATIONS OF CORPUS CHRISTI TO DELIVER WATER TO SAN PATRICIO, AS HEREIN - ABOVE PROVIDED, SHALL BE TEMPORARILY SUSPENDED DURING CONTINUATION OF SUCH FORCE MAJEURE. NO DAMAGE SHALL BE RECOVERABLE BY SAN PATRICIO FROM CORPUS CHRISTI BY REASON OF THE TEMPORARY SUSPENSION OF DELIVERIES OF WATER DUE TO ANY OF THE CAUSES ABOVE MENTIONED. IF CORPUS CHRISTI'S OBLIGATION SHOULD BE AFFECTED BY ANY SUCH CAUSES, CORPUS CHRISTI SHALL PROMPTLY NOTIFY SAN PATRICIO IN WRITING, GIVING FULL PARTICULARS OF SUCH FORCE MAJEURE AS SOON AS POSSIBLE AFTER THE OCCURRENCE OF THE CAUSE OR CAUSES RELIED UPON. SECTION 29. ASSIGNABILITY - THIS CONTRACT MAY BE ASSIGNED BY SAN PATRICIO ONLY WITH THE WRITTEN PRIOR CONSENT OF THE GOVERNING BODY OF CORPUS CHRISTI, BUT IF ASSIGNED, THIS CONTRACT SHALL BE BINDING UPON PARTIES HERETO AS WELL AS THEIR SUCCESSORS AND ASSIGNS. SAN PATRICIO HEREBY AGREES THAT SHOULD DISTRICT BE IN ANY WAY CONSOLIDATED WITH OR ABSORBED BY CORPUS CHRISTI THAT CORPUS CHRISTI WILL BE SUBSTITUTED IN THIS CONTRACT IN LIEU OF DISTRICT WHEREVER SUCH WORD APPEARS. SECTION 30. RENEWAL OF CONTRACT - THE PARTIES RECOGNIZE THE FACT THAT MOST OF THE FACILITIES TO BE INSTALLED BY SAN PATRICIO SHOULD -21- 5 -1 -63 HAVE A USEFUL LIFE IN EXCESS OF THE 30-YEAR TERM OF THIS CONTRACT AND THAT THEY WILL HAVE LIMITED VALUE UNLESS OPERATED FOR TAKING WATER FROM THE WATER SUPPLY OF CORPUS CHRISTI. ACCORDINGLY, UPON REQUEST OF EITHER PARTY, AN EXTENSION OF THE TERM OF THIS AGREEMENT WILL BE THE SUBJECT OF NEGOTIATION BETWEEN THE PARTIES AND EXTENDED UPON SUCH TERMS AS ARE AGREED UPON BY THE PARTIES AT THAT TIME, PROVIDED SUCH REQUEST FOR NEGOTIATION IS COMMUNICATED IN WRITING AT LEAST TWO (2) YEARS PRIOR TO THE TERMINATION OF THIS AGREEMENT. THIS PROVISION SHALL NOT LIMIT THE RIGHT OF CORPUS CHRISTI TO EXERCISE ITS OPTION TO PURCHASE THE REYNOLDS TRANSMISSION PIPELINE UNDER SECTION 13 OF THE REYNOLDS - CORPUS CHRISTI CONTRACT OR THE RIGHT OF CORPUS CHRISTI TO INITIATE NEGOTIATIONS FOR THE ACQUISITION OF THE SAN PATRICIO FACILITIES. SECTION 31. AUTHORITY TO EXECUTE - IN ORDER TO MAKE THIS CONTRACT FULLY BINDING, EACH OF THE PARTIES HAS BEEN DULY AUTHORIZED HEREUNTO AND IN THE EXECUTION HEREOF BY PROPER ORDINANCE OR RESOLUTION OF THE RESPECTIVE GOVERNING BODY AND CERTIFIED COPIES FURNISHED BY EACH PARTY TO THE OTHER PARTY FOR ATTACHMENT HERETO. AND THE APPROVAL THEREOF BY THE GOVERNING BODY OF THE DISTRICT SHALL LIKEWISE HAVE BEEN GIVEN THROUGH AN APPROPRIATE RESOLUTION, CERTIFIED COPIES OF WHICH SHALL HAVE BEEN GIVEN TO THE PARTIES TO THIS CONTRACT. SECTION 32. CONSTRUCTION OF CONTRACT - PROVISIONS STATED UNDER THE CAPTION OF "UNTREATED WATER" APPLY ONLY TO UNTREATED WATER. PROVISIONS UNDER THE CAPTION OF "TREATED WATER11 APPLY ONLY TO TREATED WATER. PROVISIONS UNDER THE CAPTION OF "GENERAL PROVISIONS19 APPLY TO BOTH TREATED AND UNTREATED WATER AND TO ALL ASPECTS OF THE CONTRACT. SECTION 33. ALL AGREEMENTS CONTAINED IN THIS WRITTEN INSTRUMENT - IT IS AGREED BY THE PARTIES HERETO THAT THIS INSTRUMENT CONTAINS IN WRIT- ING ALL OF THE AGREEMENTS BETWEEN THE PARTIES HERETO AND THAT NOTHING -22- 7 -1 -63 (EXCEPT THOSE THINGS REQUIRED BY LAW) NOT INCORPORATED HEREIN OR BY REFERENCE SHALL BE BINDING ON THE PARTIES. IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS INSTRU- MENT TO BE EXECUTED IN SEVERAL COUNTERPARTS, EACH COPY OF WHICH SO EXECUTED SHALL BE CONSIDERED AS AN ORIGINAL, BY THEIR RESPECTIVE DULY AUTHORIZED REPRESENTATIVES, THIS THE DAY OF , 1963. CITY OF CORPUS CHRISTI, TEXAS ATTEST: BY CITY MANAGER CITY SECRETARY OF CORPUS CHRISTI APPROVED AS TO LEGAL FORM THIS THE DAY OF MAY, 1963: CITY ATTORNEY APPROVED ON THE DATE OF EXECUTION: DIRECTOR OF FINANCE SAN PATRICIO MUNICIPAL WATER DISTRICT ATTEST: BY PRESIDENT SECRETARY APPROVED BY: LOWER NUECES RIVER WATER SUPPLY DISTRICT ATTEST: BY PRESIDENT SECRETARY APPROVED AS TO LEGAL FORM THIS THE DAY OF MAY, 1963: ATTORNEY FOR LOWER NUECES RIVER WATER SUPPLY DISTRICT CORPUS CHRISTI, TEXAS //\ / DAY OF 9z� TO THE MEMBERS OF THE CITY COUNCIL CORPUS CHRISTI, TEXAS FOR THE REASONS SET FORTH IN THE EMERGENCY CLAUSE OF THE FORE- GOING ORDINANCE, A PUBLIC EMERGENCY AND IMPERATIVE NECESSITY EXIST FOR THE SUSPENSION OF THE CHARTER RULE OR REQUIREMENT THAT NO ORDINANCE OR RESOLUTION SHALL BE PASSED FINALLY ON THE DATE IT IS INTRODUCED, AND THAT SUCH ORDINANCE OR RESOLUTION SHALL BE READ AT THREE MEETINGS OF THE CITY COUNCIL; I, THEREFORE, HEREBY REQUEST THAT YOU SUSPEND SAID CHARTER RULE OR REQUIREMENT AND PASS THIS ORDINANCE FINALLY ON THE DATE IT IS INTRO- DUCED, OR AT THE PRESENT MEETING OF THE CITY COUNCIL. RESPECTFULLY, R THE CITY OF CORPUS CHRISTI, TEXAS. THE CHARTER RULE WAS SUSPENDED BY THE FOLLOWING VOTE: JAMES L. BARNARD JAMES H. YOUNG JACK R. BLACKMON ✓ �,l JOSE R. DELEON ✓^ �/� M. P. MALDONADO W. J. ROBERTS W. H. WALLACE, JR. / THE ABOVE ORDINANCE WAS PASSED BY THE FOLLO ING VOTE: JAMES L. BARNARD ✓ JAMES H. YOUNG JACK R. BLACKMON JOSE R. DELEON M. P. MALDONADO /✓ W. J. ROBERTS V W. H. WALLACE, JR.