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HomeMy WebLinkAbout13000 ORD - 02/04/1976' JRH:hb:12 /10 /75:1et AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A CONTRACT BETWEEN THE CITY OF CORPUS CHRISTI AND THE NDECES RIVER AUTHORITY CONCERNING THE CHORE CANYON RESERVOIR PROJECT IN SUBSTANTIALLY THE FORM ATTACHED HERETO AND MADE A PART HEREOF, MARRED EXHIBIT "A ". BE IT ORDAINED BY THE CITY COUNCIL OF TEE CITY OF CORPUS CHRISTI, SECTION 1. That the City Manager be and he is hereby authorized to execute a contract between the City of Corpus Christi and the Nueces River Authority concerning the Nueces River Reclamation Project (Choke Canyon Reservoir Project), in substantially the form attached hereto and made a part hereof, marked Exhibit "A". 13000 CONTRACT BETWEEN NUECES RIVER AUTHORITY AND CITY OF CORPUS CHRISTI ON NUECES RIVER RECLAMATION PROJECT, TEXAS (CHORE CANYON RESERVOIR PROJECT) r x,��,eiTA � TABLE OF CONTENTS Page ARTICLE 1. GENERAL PROVISIONS 1 -6 Section 1.01. Purpose of Contract 1 Section 1.02. Definitions. 1 -4 Section 1.03. Arbitration. 4 -5 ' 4ection•1.04. Venue 5 -6 Section 1.05. Fiscal Year. 6 Section 1.06. Interpretation. 6 Section 1.07. Amendments. 6 ARTICLE 2. RECITALS AND GENERAL AGREEMENTS. 6 -11 Section 2.01. General Recitals. 6 -7 Section.2.02. Participation by the.Parties 7 -8 Section 2.03.- Additional Water Rights Required 8 Section 2.04. Termination. of Project. 8,9 -10 Section 2.05. Prior Obligations of City's Waterworks. 10 Section'•2.06. No Taxation Required. 10 Section 2.07. Significance of "Pre - Operating" and "Operating" Categories 10 -11 ARTICLE 3.. PRE- OPERATING ACTIVITIES: 11 -16 FINANCING REIMBURSABLE COSTS.- Section 3.01. Payment of Reimbursable Costs. 11 -12 Section 3.02. Fund- Advancement. 12 -13 Section 3.03. Payment on Municipal and Industrial Water Supply Costs. 13 -14 Section 3.04. Payment on Recreation, Fish and:Wildlife Costs. 14 Section 3.05. 4evenue Sources Pledged. 14 =15 ' i ' `b ii Page Section 3.06. City's Obligation on Bonds. 15 -16 Section 3.07. Annual Budgeting by City.. 16 Section 3.08.. Financing to be Expedited. 16• ARTICLE 4. OTHER PRE - OPERATING ACTIVITIES. 16 -19 Section 4.01. Designation as Joint Contracting Entities. .16 Section 4.02. Water Rights. 16 -17 Section 4.03. Other Peimits and Authorizations. 18 Section 4.04. Construction Decisions. 18 -19 Section 4:05. Pre- Operating Payments. 19 .ARTICLE 5. OPERATING PHASE. 19 -34 Section 5.01. Operation of Project. 19,20 -21 Section 5.02. Water Sales. 21 -22 Section 5.03. O &M Expenses. 22 -24 Section 5.04. O &M Budget. 25 -27` Section 5.05. Supporting Services. 27 -29 - Section 5.06: Additional Services and Facilities. 29 -30 Section 5.07. Operation and Maintenance After .Federal Obligations Fulfilled. 30 -31 Section 5.08: Delinquency in Payments. 31 - Section 5.09. Water Use Information. 31 -32 Section 5.10. .Indemnification. 32 -34 ARTICLE 6.• ASSIGNMENT, CONTRACT TERM AND CONTRACT PROCEDURES. 34 -36 Section 6.Oi. Assignment. 34 Section 6.02. Notices. 34 -35 ii u !i Section 6.03. Term. Section 6.04. Severability. Section 6.05. Force Majeure. Section 6.06. Effective Date of Contract Provisions. EXECUTION- • rF •, • 35 35 35 -36 36 37 r- CONTRACT BETV79EN NUECES RIVER AUTHORITY AND CITY OF CORPUS CHRISTI ON NUECES RIVER RECLAMATION PROJECT, TEXAS (CHOKE CANYON RESERVOIR PROJECT),_ This Contract is between the Nueces River Authority, a conservation and reclamation.district and political subdivision of the State of Texas (hereafter the "Authority "), and the City of Corpus Christi, Texas, a municipal corporation in Nueces County, Texas (hereafter the "City "). For and in consideration of the mutual agreements, conditions, covenants and terms contained herein, and the mutual benefits which will accrue to the parties hereto, and other good and valuable consideration between the parties hereto, the Authority and the City mutually contract and agree as follows: ARTICLE 1. GENERAL PROVISIONS Section 1.01. Purpose of Contract. This Contract is the initial agreement between Authority and City.concerning the Nueces River Reclamation Project, Texas, also known as the Choke Canyon ?Reservoir Project, to be'located on the Frio River in Live Oak and McMullen Counties, Texas. The purpose of this Contract is,to set forth basic considerations and agreements concerning, inter alia, the financing, . construction, operation and maintenance of the Project. Section 1.02. Definitions, in this Contract, unless the context requires a different definition: (1) "Authority" means the Nueces River Authority. (2) "City" means the City of Corpus Christi. (3) "United States" means the United States of America, including the Secretary of the United States Department of the Interior or his duly authorized representative. (4) "Development•Board" means the Texas Water Development Board. (5) "Commission" means the Texas Water Rights Commission. (6) "Quality Board" means the Texas Water Quality Board. .(7) "Project" means all features comprising the Nueces River Reclamation Project, Texas, authorized by the Act of Congress approved October 27, 1974 (Public Law 93 -493), and constructed or provided under the terms of the Federal Contract;- also known as the Choke Canyon Reservoir Project. (8) "Federal Contract" means the proposed agreement being negotiated between the United States of America, City of Corpus Christi, Texas, and the Nueces River Authority, - providing -for the construction, operation and maintenance of the Nueces River Reclamation Project,.Texas, a draft copy of which agreement dated December 2, 1974, and entitled "Contract among the United States of America, City of•Corpus Christi, Texas and the Nueces River Authority, Nueces River Reclamation Project, Texas" has been furnished to each of the parties hereto. (9) "Contract" means this "Contract Between Nueces River Authority and the City of Corpus Christi on Nueces River Re- clamation Project, Texas.(Choke Canyon Reservoir Project)." (10) "Construction Costs" means actual costs incurred 2 in construction of the Project. (11) "Federal Authorizing Act" means the Act of Congress approved October 27, 1974 (Public Law 93 -493) which authorizes the Nueces.Rivet Reclamation Project, Texas. (12) "Works" means all works or facilities of the Project together with land and rights -of -way for such works. (13) "Operation and Maintenance" ( "O &M ") means and includes normal and reasonable care, control, operation, maintenance, and replacement of the Project Works and shall include O &M of recreation and fish and wildlife facilities, payment of miscellaneous costs, accumulation of reserve funds,,and payment of all additional O &M costs as herein provided. (14) "Project Water" means water available for use through the Project Works, (15) "Pre- Operating Phase" means the period of time from the date of execution of this contract to the time when the care,'operation and maintenance of the Works or any part thereof are transferred by the United States to the Authority or the City, or to both. (16) "Operating Phase" means the period of time from the time the care, operation and maintenance of the Works or any part thereof are transferred by the'United.States to the Authority or the City, or to both, until the termination of this Contract.- (17) "Fund Advancement Contract" means the proposed agreement.being negotiated between the United States and 3 City and Authority providing for the advancement of funds for construction of the Nueces River Federal Reclamation Project, Texas. (18) "Reimbursable Costs" means the portion of Construction Costs the City and the Authority are obligated to pay the . United States under the terms of the Fund Advancement Contract and the Federal Contract. (19) "RFW Component" means the recreation and fish and . wildlife features of the.Projbct, which are.constructed or provided under the terms of the Federal Contract. (20) "Life of the Project" means the period of time the .Project exists and is capable of providing water supply for use of the parties holding the right of use of the Project's conservation storage capacity. (21) "Bonds" means collectively the bonds issued by- Authority pursuant to this Contract, whether in one or more installments, and includes any bonds which might be issued fo; completion of the Project and bonds issued to refund any such bonds. Section 1.03. Arbitration. (a) In the event and during the period of time that O &M responsibilities are transferred to Authority, then any controversy between the parties hereto, or their respective successors, representatives, agents or assigns,-involving the interpretation, construction•or application of any of the terms or provisions of this Contract enumerated in Sub- section (b) of this Section,• shall on the written request of 4 one party served upon the other be submitted to.arbitration. Except as otherwise expressly provided in this Section, the arbitration shall be conducted in accordance with and governed by the provisions of the Texas General Arbitration Act," Article 224•, et seq., V.T.C.S. After written request for arbitration has been served, each.party shall have twenty (20) days in which to select one person as.an arbitrator to hear and determine the controversy•or claim. Each.of the two arbitrators so chosen shall promptly select a third impartial arbitrator to serve with them. The decision of a majority of the arbitrators on any controversy or claim submitted to them shall be final and conclusive upon the parties.' The expenses of arbitration shall be borne by the parties in such proportion as the arbitrators shall decide. (b) The controversies or claims to which this Section- applies are only those arising out of or relating to: .(1) Operation and Maintenance of the Project described in Section 5.01 of this Contract. (2) Appproval of the O6M budget contained in Section 5.04 of this Contract. (3) Operation and Maintenance after Federal obligations are fulfilled as described in Section 5.07 of this Contract. Section 1.04. Venue. Venue of all suits between the parties hereto, or their respective successors, representatives,. agents or assigns, arising out of or relating -to the subject matter of this Contract, or any breach thereof, shall be in 5 /61' courts of competent jurisdiction in Travis County, Texas. In the event there are multiple parties plaintiff or defendant, either party to this Contract may request a severance of the portion"of the cause of action or issues involving the parties hereto, or their respective successors, agents, representatives, or assigns, and the other-party shall not oppose the request. Without limiting the foregoing, the severance may be requested on the basis of venue or to permit arbitration, as authorized in.Section 1.03. Section 1.05. Fiscal Year.- The fiscal year for this Contract and the Project shall be the calendar year unless otherwise.mutually agreed upon by the City Manager of City and the Executive Director of Authority. Section 1.06. Interpretation. The headings which have been used throughout this Contract have been inserted for administrative convenience only and do not constitute-matter to be construed in interpreting this'Contract. Section 1.07, Amendments. This Contract may be amended or modified by the parties hereto -from time to time, but only by a written instrument executed by'the parties; provided, however, that no amendment or modification may be made which. would adversely affect the rights of the holders of bonds issued in connection with the Project. ' ARTICLE 2. RECITALS AND GENERAL AGREEMENTS. Section 2.01. General Recitals. 6 (a) Authority and City will hereafter authorize the execution of the Federal Contract, and, if.necessary, ..the Fund Advancement Contract, for the financing, construction, operation and maintenance of the Project. A part of the consideration for the execution of the Federal Contract, and, if necessary, the Fund Advancement Contract, by Authority and City is predicated on the mutual undertakings, obligations and covenants set forth in this Contract'. °(b) Authority and City have been designated by the Commission as the Cooperating Local Sponsors for the Project. They have been cooperating and agree to continue to cooperate fully in accomplishing the necessary authorization for and the financing, construction, operation and maintenance of the Project. The parties agree to consult.and communicate with-each other on a continuing basis with respect to any and all activities either or both of.them may undertake in furtherance of-the Project. {c) Authority and City desire by this agreement to establish their rights in the use of water available from the Project and to resolve other matters as set forth herein to the end that there be express agreement between the parties on matters germane to the Project as the same affects the relationship between Authority and City in their joint undertaking. Section 2.02. Participation by the Parties. Authority and City each represent to the other that it is empowered by law to participate in-the development, financing, acquisition, 7 construction, operation and maintenance of the Project and related facilities and services, and to execute this Contract and other agreements and documents as are or may hereafter be required to accomplish the same; and that its participation in the Project and execution.of this Contract have beet duly authorized by action of its governing body. Authority and City each agree to furnish to the other such.documentation or evidence of its authority to so participate and execute .the contracts and other agreements as the other party may reasonably request, and to take and perform such other and further actions and execute such other agreements and documents . as maybe reasonably required to carry out the provisions of.' this Contract. Section 2.03. Additional water Rights Required. Authority and City acknowledge it will be necessary to apply for and obtain separate and additional water rights through the Commission to authorize the appropriation of water for the operation-of the Project as.provided for in Section 4.02 of this Contract. Section 2.04. Termination of Projecto (a) At any time following the first advance of funds by Authority or City to'the United States and'until Congress first appropriates construction funds, City may direct the Secretary of Interior to terminate activities then in progress . on the Project. (b) In the event activities on the Project by the United States are halted for any reason prior to its completion, 8 City will be entitled to any unexpended balances of the funds so advanced and all contracts and property rights, data, drawings or other items of value, which may be returned or assigned to the parties by the United States pursuant to the procedures.set forth in the Federal Contract. In such event, Authority shall use any funds remaining from the sale of its bonds for payment of interest and principal for such bonds and shall incur no further expenditures of any nature against the Project. City shall remain liable for all remaining principal and interest payments and other costs-on the.bonds issued for the Project by City and Authority as the same become due and payable. (c) If activities on the Project by the United States are halted prior to its completion, City shall have the right, subject only to the rules of the Commission and the rights of Authority, to decide whether or not a water reservoir project at substantially the same location•as the Project shall be constructed or, if the construction has already commenced, completed. Such decisions by City shall preserve for Authority-an undivided - ownership Interest,- as set forth in Section 4.02, in the water stored or to be stored in such a water reservoir project, and shall also preserve continuing financial support by City for Authority during the pre- operating period as set forth in Section 4.05 and during the operating stage as set forth in Section 5.05' to such extent as is feasible and appropriate as•may be determined by-the Commission and to such extent the agreement 9 is not contrary to law. Decision of City not to parti- cipate in a continuation of the Project or another water supply project at substantially the same location will not act.to prevent Authority from proceeding on its own if it chooses to do so. Section 2.05. Prior Obligations of City's Waterworks Stem. City represents and covenants that the water.suppiy and water supply facilities and services,to be obtained pursuant to this Contract are essential and necessary to-the op @ration of City and its waterworks system, and that all payments to be made hereunder by it will.constitute reasonable and necessary legal expenses of City's waterworks system within the meaning of the provisions .of all City Ordinances and Resolutions authorizing the.issuance of all waterworks _ system revenue bond issues of City, with the effect that City's obligation to make payments from its waterworks system revenues under this Contract shall not have priority over its obligations to make payments'of the principal of and interest on any and all of its waterworks system revenue bonds. Section 2.06. No Taxation Required.- Authority shall never have the right to demand payment of the amounts due under this Contract from funds raised or to be raised from taxation by City. Section 2.07. Significance of "Pre- Operating" and "Operating "•Cate ories. The activities and undertakings identified in Articles 3 and 4 of this Contract are those 10 which would normally be initiated in the'Pre- Operating Phase of the Project, and the activities and undertakings identified in Article 5 are those which would normally be initiated in the Operating Phase. They are categorized in this matter for convenience only. Several of the activities or under- takings could occur in or extend into a phase different from the ones in which they.are categorized. No limitation on or restriction of any of these activities or undertakings is intended should that occur. ARTICLE 3. PRE - OPERATING ACTIVITIES: FINANCING REIMBURSABLE COSTS Section 3.01. Payment of Reimbursable Costs. Under the Federal Contract, the parties are obligated to make annual or other periodic installment payments -to the United States for Reimbursable Costs allocated to municipal and industrial water supply, after deducting the advance funding payment referred to in Section 3.02, Subsections (a)-and (b), below. The financing and payment of Reimbursable- Costs, except funds advanced under the Fund Advancement Contract, shall be accomplished by City. Under the Federal Contract, the parties are also.obligated to make annual or other periodic installment payments to the United' States on the Reimbursable Costs allocated to the RFW Com- ponent. Such payments for the RFW Component will be made by the entity responsible for operation and maintenance of the RFW Component unless other arrangements for such payments • 11 are made between the parties. All costs for operating Fish, Wildlife and Recreation facilities required by the Unitgd States or approved by City which are not payable from user- fees shall be paid by City as a cost of its water system. Section 3.02. Fund Advancement. (a) City will make.initial cash advances, of Reimbursable Costs in a total aggregate amount of approximately $900,000 for use by the United States to. initiate the Project. City is not obligated to make such cash advances after July 1, 1976, and the manner of making and the timing of the cash advances shall be determined by City and the United States. The cash advances shall be a credit against the advance funding payment provided in Subsection (b) below, toward that part of the Reimbursable Costs allocated to municipal and industrial water supply, and Authority shall reimburse City for such cash advances out of the proceeds of the first installment of bonds issued pursuant to Subsection (b) -. (b) Pursuant to the Fund.Advancement.Contract, Authority will issue revenue bonds to make the advance funding payment to the United States of approximately $18,250,000 toward that part of the Reimbursable Cost's allocated to municipal . -and industrial water supply, less the initial cash advances of Reimbursable Costs made by City pursuant to Subsection (a), above. The first installment or issue of bonds shall include funds necessary to repay City.for the initial cash advances of Reimbursable Costs made pursuant to Subsection (a), above, to pay interest on the bonds until revenues 12 ` yw pledged for the payment of the bonds are adequate to pay interest costs as they accrue; and to pay other costs related to the bond issue, including without limitation engineering, legal, fiscal and administrative expenses, and contingencies. Upon execution.of the Fund Advancement Contract, the Federal Contract and this Contract, Authority shall proceed to authorize and issue its revenue bonds at such times and in such amounts as may be required to fulfill the commitments of'City and Authority for advance funding of the part of the Reimbursable Costs allocated'to municipal and industrial water supply. (c) Authority and City shall have joint control of all fiscal arrangements in connection with the sale of the bonds 'for the Project including interest rates and maturities, and each shall have the right to approve or disapprove any of such arrangements. (d) City shall have the right at its option to control the investment and reinvestment of any bond reserve fund or funds which may required by the bond indenture or reso- lution for Authority's bonds, and to use any of the interest or income therefrom as may be authorized by such indenture or resolution; provided that City shall assure that funds will be made available when and as required to fulfill the 'Authority's obligations under the indenture or-resolution. Section 3.03. Payment on Municipal and Industrial Water Supply Costs. The bonds for municipal and industrial water supply.referred to in Section 3.02(b) shall be secured 13 • C by a pledge of: (1) The revenues of City's waterworks system remaining after paying (i) all expenses of operation and maintenance of said system; (ii) all debt service, reserve, and other requirements in connection with City's waterworks system revenue bonds now or hereafter outstanding; (iii) all pay- ments due to the United States under the Federal Contract; and (iv) all payments for O &M costs allocable to municipal and industrial water supply as provided in Section 5.03 of this Contract. This obligation is subject, however, to the provisions of Sections 2.05 and 2.06 of this Contract; and (2) Net revenues if any, from sales of Project Water by Authority, but excluding payments to Authority by City pursuant to Section 5.05(b) of this Contract. Section 3.04. .Payment on Recreation, Fish and Wildlife Costs. The obligation to the United States relating to Reimbursable -Costs for the RFW Component referred to in Section 3.01 shall be secured by a pledge of revenues re= ceived by Authority or City, or both,-from entrance and user fees or charges collected for use.of recreation and fish and wildlife enhancement facilities of the Project in accordance with the provisions of the Federal Water Project Recreation Act (70 Stat. 213). Section 3.05. Revenue Sources Pledged. Authority and City hereby pledge the revenues, income and funds identified in Sections 3.03 and 3.04 to the payment of the bonds and obligations. to which the revenues, income and funds respec- • •14 tively pertain,•and agree to make the payments for the said bonds and obligations when and. as required by the bond indenture or resolution, the Federal.Contract, and this Contract. Section 3.06. City's Obligation on Bonds. (a) Recognizing the fact that-City. urgently requires; the water supply and water supply facilities and services covered by this Contract,"and that such water supply and water supply facilities and services are-necessary for actual use and for stand -by purposes;-and further recog -•• nizing that Authority will use the payments.received from City hereunder to pay, secure, and finance the issuance of bonds, it is hereby agreed that if and when any'bonds.issued by the Authority are delivered, City shall be obligated to make the payments of debt service requirements on the bonds issued by the Authority as provided by this Contract to pay the principal, interest, and other requirements of the bonds regardless of•whether or.not Authority actually.provides euch'water supply and water supply facilities and services, or.whether or not City actually receives or uses.such water supply and water supply facilities and services; and the holders of the bonds shall be entitled to rely on the foregoing, agreement and representation, regardless of any other contract or agreement between Authority and City, or any other party, and regardless of the performance, validity, or enforceability of the remainder of this Contract, or.of any other.contract or agreement between Authority and City, or any other party: 15 (b) Until the bonds issued by Authority have been retired, City shall make payments to Authority for the debt service requirements.specified in the bond resolution for the payment of the bonds and accumulation of reserve funds as provided therein and required thereby. Section 3.07. Annual Budgeting by City. City shall make provision in each annual City budget for the payment of all amounts required to be paid by City under this Contract..' Section 3.08. Financing to be Expedited. The parties 'covenant and agree to fulfill promptly their respective financing commitments and obligations under the Fund Advance- ment and Federal Contracts, this.Contract, and the Federal Authorizing Act so as to insure orderly progress in the construction of the Project. ARTICLE 4. OTHER PRE - OPERATING ACTIVITIES Section 4.01. Designation as Joint Contracting Entities. The parties'shall request the United State's to designate them together as the joint contracting entities on the Project, as authorized by the Federal Authorizing Act. Section 4.02. Water Rights. (a) At the earliest appropriate time after the execution of this Contract, City and Authority shall jointly apply. =to the Commission for a water permit for the Choke Canyon Reservoir Project. It is agreed that such application shall not seek to .increase or decrease City's water rights under Permit No. 933. Nothing contained herein or in the appli- 16 cation to the Commission shall be considered as an admission on the part of Authority as to the validity or value of Permit No. 933. (b) The permit application for the Choke Canyon Reservoir Project shall seek.a conservation storage capacity of approximately 700,000 acre feet in the Project reservoir, the diversion and use of the reservoir's dependable yield-as .determined by the United States of approximately 139,000 acre feet per annum from joint operation under year 2010 conditions, the use of the bed and banks of the Frio and Nueces Rivers to transport water to authorized points of diversion downstream, and if authorized by the Commission, the coordinated operation of the Choke Canyon Reservoir and Lake Corpus Christi, and other provisions to accomplish the purposes of the Project. (c) The parties covenant and agree that as between. themselves any water permit or permits relating to the Project,.including the rights to impound water in the Project reservoir, and to take, divert and use water therein or .therefrom for any purpose which may be obtained from the Commission, shall be owned in perpetuity by City and Autho- rity as tenants in common, with City owning and holding an undivided 80% interest therein and.Authority owning and holding an undivided 20% interest. (d) The parties recognize that the rights granted and. approved by the Commission may be other than those applied for because of recognition of prior water rights, differences 17 in computations of water supply, and other reasons. However, the parties agree that they shall seek from the Commission the rights and the percentage division in the water rights described in this Section. Section 4.03. Other Permits and Authorizations: The party responsible for the care, operation and maintenance of the Project pursuant to Section 5.01(a) of this Contract, after review and consultation with the other.party, shall (except as provided in Section 4.02) make and prosecute all applications for permits or grants of authority which may'be required to construct or* operate the project, including but not limited to the following: (1) Applications to the Quality Board for waste discharge permits. (2) Applications to the Environmental Protection' Agency for waste discharge permits. (3) Applications to the Texas Air Control Board for construction and operating permits pursuant to.Sections 3.27 and 3.28, Article 4477 -5, V.T.C.S. (4) Applications to the United States Army Corp of Engineers for dredging and filling permits.' Section 4.04. Construction Decisions. All decisions regarding construction of 'the Project which are within the jurisdiction of Authority and City to decide shall be made by.mutual.agreement. If Authority and City cannot reach. mutual•agteement on any matter affecting the cost of the Project to City, then the decision of City shall be final. 18 v" Authority's decision shall be final as to any Fish, Wildlife and Recreation facility for which Authority or any entity other than City has operation and mairitenance.or capital repayment obligations. Section 4.05. Pre - Operating Payments. For services to be rendered by Authority during the pre- operating phase, City will pay Authority the following amounts on the 1st day of January*in each of the following years, except that payment for 1976 will be made immediately following the date of execution of this Contract: Calendar Year Amount 1976 $25,000 1977 .25,000 1978 '35,060 1979 35,000 1980 40,000 . and on the 1st day of.January of .each year thereafter, inbreasing at $5,000 per year until the.end of the pre - operating period.* Amounts in excess of $40,000 per annum will only be due if they are specifically requested by 'Authority's Hoard of Directors and if the Board certifies that the amount in excess of $40,000 is necessary for operating expenditures of Authority, but not to exceed $100,000. ARTICLE 5. OPERATING PHASE Section 5.01. Operation of Project. (a) City shall be responsible for the care, operation, 19 I and maintenance of the Project and any additional facilities unless responsibility therefor is transferred to Authority by amendment to this Contract. The care,'operation, and maintenance of the Project and additional facilities shall be' carried out in compliance with the applicable requirements of the United States, the Commission, and other governmental . agencies having jurisdiction, and in compliance with the requirements of the Federal Contract arid this Contract. (b) The timing and rate of diverting, releasing or t&king'Project Water for any purpose .shall be controlled and directed by City. (c) Authority and City agree to use their best efforts to encourage the safeguarding.and improvement of the- quality of water stored and to be stored in the Project. However, this provision is not a matter of indemnity between the parties and the indemnification provisions of *Section 5.10 of this Contract do not apply to this Subsection (c). (d) Except as provided in Subsection (b), above, in the event of any conflict between.the operation and mainten- ••ance requirements of the United States, the Commission, other governmental agencies, the Federal- Contract and this. Contract, Authority and City shall resolve the same by' mutual agreement..Tf time factors or other circumstances make necessary the taking of action before Authority and City can resolve the matter by mutual agreement, the party responsible for a particular O &M activity may proceed in the manner which in its judgment it deems most appropriate 20 under the circumstances, and shall promptly notify the other party of the action taken. Section 5.02. Water Sales, (a) For the life of the Project, City shall have the right to dispose of all of the water produced by the Project, whether the.Project is operated as an individual unit or in systems with Lake Corpus Christi. All water sales shall be contracted by City; provided however, if future circum- stances warrant, the parties may by separate, mutual agreement establish conditions and procedures under which Authority may contract for the sale of water. (b) City hereby covenants and agrees that it will fix, charge and collect rates for sale of water in such amounts. as will produce revenues sufficient to provide for making all payments required to be made by City under this Contract. (c) City agrees to contract to sell Project Water for, municipal and industrial purposes to any requesting govern- mental entity, without discrimination, in Nueces, San Antonio= Nueces, and Nueces -Rio Grande Zone No. l basins as designated .by Development Board by Resolution 'No. 66 -9 adopted on May 17, 1966, but no such governmental entity shall be assured of Project Water in excess of the ratio which the population of the area served by the governmental entity purchasing water bears to the total population of the areas served by all governmental entities supplied from-the Project and Lake Corpus Christi and each such contract will require approval by the Commission. Should any such governmental entity so request, any dispute alleging discrimination as to price or . 21 • • quality shall be referred to Commission for a determination, which determination shall be final unless appealed to a court of competent jurisdiction in Travis County, Texas. (d) All government entities purchasing Project.Water shall agree that•should there be a shortage in the basic supply.of water.which requires the restriction or curtailing of use of such water among City and other governmental entities purchasing the water, at the discretion of City Council of Corpus Christi the priority shall be given to-the use of the available water for municipal purposes, over the* use of such water for industrial or other purposes. To the extent•that water is available during such periods of shor- tages for industrial purposes, City and Authority agree that preference in the use of water for industrial purposes may be given to the present customers of water for industrial . purposes located within the boundaries-of the Lower Nueces River Water Supply District for the remaining life of City's - contract with such District, and all other customers of -water for industrial purposes shall be entitled to water for industrial purposes on a prorated basis to that a reduction in the supply of water for industrial purposes for each industrial water supply customer will be proportional to the customer's normal use. Section 5.03. O &M Expenses. (a) The payment of O &M expenses shall be accomplished through City unless the responsibility for 0 &M is transferred and. assigned to Authority by amendment to this contract. If 22 so transferred and assigned, Authority shall receive, invest, disburse and otherwise administer the funds and accounts required to fulfill the O &A commitments of City and Authority under the Federal Contract. The features involved in O &M for purposes of this Contract include but are not neces- sarily limited to the following: (1) O &M costs allocable to the municipal and industrial.water supply from the Project; (2) O &M costs allocable to the RFW Component of the Project; (3) Costs incurred by the United states for work involved in administration and supervision of the Federal Contract; and (4) All other.costs associated with the Project not otherwise provided for in this Contract which may be charged to Authority or-City by the United States under the Federal Contract, whether identified herein or not: (b) Authority and City pledge to the payment of the O &M costs identified in paragraphs (1), (3) and (4) of Subsection (a) of this Section the following: (1) The revenues of•City's waterworks system remaining after paying all expenses of operation and maintenance of said system, all debt service, reserve, and other require- ments in connection with City's waterworks system bonds now or hereafter outstanding; and all payments due to the United States under the Federal Contract; this obligation is subject, however, to the provisions of sections 2.05 and 2.06 of this Contract; and 23 r%' (2) Net revenues, if-any, from sales of Project Water by Authority but excluding payments to Authority by- City pursuant to Section 5.05(b) of this Contract. (c) Authority and City pledge to the payment of the O &M costs identified in paragraph (2) of Subsection (a).of this.Section the following: (1) .Revenues received. by Authority or City,.or both, from entrance and user fees or charges.collected for- use of recreation and fish and wildlife enhancement facil- ities of the Project; and (2) Any other revenues, income or funds which,may be'made'available by the parties for such purpose. (d) Authority and City hereby pledge the revenues,. income and funds indentified in.Subsections (b) and (c).of this Section to the payment of the O &M'costs to which the revenues, income and funds respectively pertain, and agree.. to make the payments for O &M costs when and as required by the Federal Contract and this Contract. City further agrees that if the revenues, income and-funds so pledged are at-any time insufficient to meet O &M expenses of City and Authority under the Federal Contract and this Contract,'-* City will pay such additional amounts otherwise available from its water system to meet such O &M expenses, subject, however, to the provisions of Sections 2:05 and 2.06 of this Contract. 24 Section 5.04. O &M Budget. (a) In the event and during the period O &M respon- sibility is transferred to Authority, as provided in Section 5.01(a), Authority shall at least 60'days prior to the date the Operating Phase commences and at least 60 days prior to the beginning of each fiscal year thereafter, prepare and present an O &M expense budget for the Project to City for the immediately ensuing fiscal period. The budget shall set forth all O &M expenses known or reasonably foreseen by the Authority for•suchensuing.fiscal period. The budget shall . ;show the O &M expenses which City is.obligated to pay and shall specify the manner in which City shall pay the expenses. Unless otherwise provided, City'.s payments of O &M expenses -shall be made in equal monthly installments, with the first installment being due and payable on the first day of the' first month of the fiscal period to which the budget pertains. (b) Within 60 days'after its receipt, City shall notify Authority that City concurs in the budget, in which event the budget shall become operational for the fiscal period to which it pertains; or that City disagrees with certain provisions of the budget, which shall be itemized in writing. If City fails to notify the Authority'of its decision within 60 days after City receives the budget from 'the Authority, the budget shall be considered approved by the City and shall become operational for the fiscal period to which it pertains. If City notifies Authority -in writing within the 60 day period.that it disagrees with certain 25 items in the budget, the parties shall confer to resolve the - differences so that the budget may become operational for the fiscal period to which it pertains. If no agreement is reached by the start of the fiscal period to which the -budget pertains, the budget for the immediately preceding fiscal. - period shall be automatically extended into the new fiscal period until the differences are resolved. If the differences are not resolved within 30 days after the fiscal period starts, the matter may be referred to arbitration ,pursuant -to Section 1.03 of this Contract. (c) Authority may make reallocations and adjustments between items in the budget and may make additional expen= ditures up to 10a in excess of any budget account when necessary to accommodate reasonable variations in the Autho- rity's day -to -day operations under this Contract,.or because of increases in O&M costs, or for other good and sufficient: reasons. Expenditures which.cause or will cause the total, amount of the budget to be exceeded may not be made without . the prior approval of the City;-.provided, however, in the event of an unforeseen emergency which requires immediate action and requires.the making of an expenditure or finan- cial commitment not provided for, pr in excess of the amount authorized by the budget or this Contract, Authority may proceed to meet the emergency and shall notify City promptly of the action taken and the reasons therefor. Authority shall follow up with a written report to City after the emergency has-been met, detailing the-origin or cause of the 26 emergency, the actions taken, and the actual cost or best estimate of the cost thereof. (d) At the close of each fiscal period, the actual O &M expense of the Project for such fiscal period shall be determined by Authority. If.the actual O &M expense exceeds the amount used in establishing City's O &M payments, such excess shall be billed to City and City shall pay such amount within 30 days of receipt of such bill if the excess amount represents emergency expenditures as set forth in Subsection (c)-of this Section-or was previously approved by City. If the actual O &M expense is less than the amount used in establishing the O &M payments to the Authority, the Authority shall credit City in the following year's budget the excess amount paid by City. Section 5.05. Supporting Services-.. (a) Authority has heretofore rendered special services and will continue to do so during the life of this Project in water resource and water quality planning for the entire Nueces River Basin, and also in financing this Project and future improvements thereto, all of which are of direct.and . significant benefit to City, its inhabitants and its water customers. (b) In consideration of such services and for Autho- rity's 20o undivided interest'in Project Water, City hereby agrees to pay Authority during the operating phase the greater of the following sums: 27 (1) a sum equal to $100,000 per calendar year without any escalation for cost of living or otherwise; or (2) $1.00 per million gallons of water for all raw water sold or used each calendar year for municipal and industrial purposes from the Project and Lake Corpus Christi, including raw water used by the City,.but excluding any water released for the bays and estuaries and any other water released to the stream but not sold; the rate of $1.00 per million gallons of water shall be adjusted each calendar year by an amount equal in percentage to the percentage rise in the U.S.-Consumer Price Index (or the cost -of- living index which in the future may replace or supersede the U.S. Consumer Price Index) in the calendar year in question, with the Consumer Price Index for 1976 being the index on which such•idjustments shall be based. (c) Payments required in Subsection (b), above,,shall be paid quarterly in the following manner: (1) Within 30 days'following the last day of each. calendar quarter, City will pay an amount calculated as set 'forth in paragraph (2) of Subsection (b) based on volume'of water sold.in the preceding quarter. (2) If the amount previously paid in the calendar year plus the payment calculated in paragraph (1) does not . equal at least $25,000 times the number of quarters to date in the calendar year, the City shall pay an additional amount equal to the difference. (3) Payment for the fourth quarter shall be only 28 that amount necessary to provide the total annual payment due as set forth in Subsection (b), above. (d)' The payments specified in this Section.shall be in addition to all other payment obligations of City specified or provided in -this Contract. Authority may use the income realized pursuant to this Section for any lawful purpose, as Authority may determine, including without limitation the general operating and administrative expenses of Authority. Section 5.06. Additional Services and Facilities. (a) The entity responsible for O &M shall provide or authorize or approve the providing of.services and facilities- relating to the Project in addition to those specified in this Contractor required by the Federal Contract. Such Additional services and facilities may include, by way of example but not by way of limitation: (1) .Recreational facilities and services over and above-those provided pursuant to the Federal Contract; (2) Fish'and wildlife facilities and services over and above those provided pursuant to the Federal Contract; (3) Water pollution control services and facilities, including regulation of private sewage facilities pursuant to Section 21.083, Water Code, or other applicable law; (4) Concessions for food, beverages, lodging, camping, boating, recreation, and other services; and (5) Water diversion, treatment and distribution facilities on Project lands and rights -of -way. (b) Any.such additional services and facilities shall •29 be provided, operated and maintained in compliance with the applicable requirements of the United States, the Commission, the Quality Board, and other governmental agencies having jurisdiction, and in compliance with the requirements of .this Contract.• (c) Except as.otherwise directed by higher authority;' any additional facilities and services shall be established at the locations, and constructed, provided, operated and maintained in a manner approved or authorized by the entity responsible for O &M. (d) The entity responsible for O &M may seek the support and cooperation as appropriate, of any governmental igencies and public and private entities in developing, providing, constructing, acquiring; operating, maintaining and financing the cost of such additional services and facilities, including without limitation the United States, the Quality Board,. the Texas Parks and Wildlife Department, and the Development Board. Section 5.07. Operation and Maintenance After Federal Obligations Fulfilled. (a) The provisions in this Section apply.after all of the bonds issued by Authority pursuant to.the Fund 'Advancement and Federal Contracts have been fully paid, including any refunding bonds issued thereon, and after all repayment obligations to the United States for reimbursable costs tinder the Federal Contract have been fully paid or otherwise satisfied. 30 (b) After the occurrence of the events identified in Subsection (a), above, the parties-shall provide for the payment of the continuing O &M costs in the manner provided in Sections 5.03 and 5.04, above. If.there is a necessity for major reconstruction or repair of any of the facilities constituting the Project and such reconstruction or repair is required by the United States or approved by City, the cost shall be paid out of any funds allocated and set aside for such purpose by the parties through the budget process or otherwise. To the extent such funds are not adequate, the cost of such reconstruction or repair shall be paid by City. Section 5.08. Delinquency in Payments. In the event City fails to make to Authority when due any payment re-. quIred by this Contract, interest on such amount shall accrue at the rate of ten percent (104) per annum from the date such payment became due until paid in full with interest as herein- specified. In the event any such payment becomes overdue, Authority may, at its option, discontinue all or any services to City under this Contract until the amount due Authority is paid in full with interest as herein speci- fied; provided, however, that any such-discontinuance of service shall not relieve City of the obligation to pay other amounts due under this Contract. Section 5.09. Water Use Information. Each party shall furnish to the other a copy of any annual water service report it files with the Commission. The parties shall 31 comply with-the Commission's requirements in regard to metering water, keeping records and reporting to the Com- mission in regard to sales, diversions and uses of Project Water. The parties shall have access to all diversion measuring devices installed by either or by.any customer of City or of Authority using Project Water and Authority's and City's future contracts with customers for Project Water shall so provide. The parties shall also have access to all books and records relating to sales,•uses and diversions of Project-Water at all reasonable times. Section 5.10. Indemnification. (a) As used in -this Section, the term "claims" means claims, demands, causes of action, damages, liabilities and expenses, including reasonable attorney's fees. (b) The provisions in this Section apply only during the Operating Phase. (c) The following indemnification provisions apply during the periods the City has the responsibility for the care, operation and maintenance of the Project: (1) City agrees to indemnify and save and hold harmless the Authority, its officers, directors, agents, attorneys and employees from and against all claims that may arise as a result of any undertaking, act or omission, whether negligent or not, which is done or omitted to be done by the City or any of its officers,•councilmen, agents, attorneys and employees, in operating and maintaining the project and any additional services and facilities provided . 32 by the City pursuant to Section 5.06 of this Contract, or in diverting, releasing or taking Project Water, or in making Project Water available to others. (2) Authority agrees to indemnify and save and hold harmless the City, its officers, councilmen, agents, attorneys and employees from and against all claims that may arise as a result of any undertaking, act or omission, ' whether negligent or not, which is done-or omitted to be done by Authority or any of its officers, directors, agents, -attorneys and employees in operating and maintaining any additional services and facilities provided by Authority pursuant to Section 5.06 of this Contract. (d) The following indemnification provisions apply during the-periods the responsibility for the care, operation and maintenance of the Project has been transferred to Authority as provided in Section 5.01(a) of this Contract: (1) City agrees to indemnify and save and hold harmless Authority, its officers, directors, agents, attorneys and employees from and against all claims that may arise as a result of any undertaking, act or omission, whether negligent or'not, which'is done or omitted to be done by City or.Authority.or any of their officers, directors, councilmen, agents, attorneys and employees iii diverting, releasing or taking Project Water.at the direction or request of City pursuant to Section 5.01(1?) of this Contract; or which is done or omitted to be done by City or any of its officers, councilmen, agents, attorneys'and employees in 33 operating and maintaining any additional services and ' facilities provided by the City pursuant to Section 5.06 of this Contract. (2) Except as provided in paragraph (1) above, Authority agrees to indemnify and save and hold harmless City, its officers, councilmen, agents, attorneys and employees from and against all claims that may arise as a result of any undertaking, actor omission, whether negligent or not, which is done or omitted to be done by'Authority or any'of its officers, directors, agents, attorneys and employees in operating and maintaining the project and any additional services and facilities provided by Authority pursuant to Section 5.06 of -this Contract. ARTICLE 6. ASSIGNMENT, CONTRACT TERM AND CONTRACT PROCEDURES Section 6.01. Assignment. This Contract or any rights acquired hereunder shall not be assigned, in whole or in part, by either party without the express consent in writing of the other party. However, City agrees to the pledge by Authority of City-revenues pledged by City in this Contract for Authority'siMbt service in issuing bonds pursuant to the Fund. Advancement Contract. Section 6.02: Notices. Any notice required or which may be given pursuant to this Contract shall, until due notice has.been given of a change of address, be sent by certified mail,-postage prepaid, to the following addresses: 34 Mayor City Manager City of Corpus Christi City of Corpus Christi City Hall Box 9277 City Hall Box 9277 Corpus Christi, Texas 78408 Corpus Christi, Texas 78408 President Executive Director Nueces River Authority Nueces River Authority P. O. Box 349 P. O. Box 349 Uvalde, Texas 78801, Uvalde, Texas 78801 Section 6.03. Term. (a) City has the right to terminate this Contract at any time if Authority has not sold.its first issue of bonds within 6 months after City in writing has requested • it to do so pursuant to Section 3.02(b) wherein Authority is . obligated to sell bonds. (b) Subject to the provisions of Subsection (a), above, this Contract shall continue in force and effect at least until the bonds required to fulfill the obligation -s of the parties under the Fund Advancement and Federal Contract and this Contract and any refunding bonds issued in lieu thereof are paid, and until the reimbursable cost obligations to the United States are paid or otherwise satisfied, and for so long thereafter as City shall take Project Water. Section 6.04. Severability. If any obligation or covenant of either party hereto shall ever be held invalid, the remaining provisions of this Contract shall continue to be binding and enforceable. Section 6.05. Force Majeure. To the extent that either party to this Contract shall be wholly'or partially prevented from the performance within a time specified of any obligation or duty placed on such party by reason of or 35 • through strikes, stoppage of labor,,riot, fire, flood, invasion, insurrection, accident, the order of any court, judge or civil authority,.the Act of God, or any cause reasonably beyond such party's control and not attributable to its neglect, then, and in such event upon prompt written notice by the party making the claim to the other party, the time for the performance of such obligation or duty shall be suspended until such disability to. perform is removed, except payments due by City under this Contract, regardless of the availability of water. •A party rendered unable to fulfill any obligation•by reason'of uncontrollable causes shall exercise due diligence to remove such inability with all reasonable dispatch. Section 6.06. Effective Date of Contract Provisions. (a) The following provisions of this Contract are effective and enforceable on the date-of its execution:- Article 1,.Article 2, Section 3.02(a); Section 3.07, Section 3.08, Article 4, and Article 6. (b) The other provisions of this Contract become effective and enforceable when both parties have executed the Federal Contract and the Commission has issued 'a permit for the Project which is acceptable to the parties. EXECUTED IN MULTIPLE COUNTERPARTS, each of which is an original, this day of 1976. Z NUECES RIVER AUTHORITY BY: President, Board of Directors ATTEST: SEAL Secretary CITY OF CORPUS CHRISTI BY: City Manager ATTEST: SEAL Secretary The agreement in Section 1.03 of this Contract providing fqr the.submission of certain controversies under this Contract to arbitration has been concluded upon advice of counsel for the City and the Authority as' evidenced by their signatures below. ATTORNEY FOR CITY ATTORNEY FOR AUTHORITY. 37 THAT THE FOREGOINO,ORDId1ANC vAa READ FO THE FIR T TIME AND PASSED TO ITS SECOND READING ON THIS THE FOLLOWING VOTE: �Q DAY OF 19� BY TXE JASON LueY OP. BILL TIPTON EDUARDO DE ASES RUTH GILL BOB GULLEY GAGE LOZANO, SR. EDWARD L. SAMPLE THAT THE FOREGOING ORDINANCE WAS BEAD FD THE SECO D TIME AND ASSED TO ITS THIRD READING ON THIS THE DAY OF FOLLOWING VOTE: �9z BY THE JASON LUBY OR. BILL TIPTON EDUARDO DE ASES RUTH GILL BOB GULLEY GABE LOZANO, SR. EDWARD L. SAMPLE THAT THE FOR DING ORDI FINALLY ON THIS THEDAY 0 MASON LUST DR. BILL TIPTON EDUARDO DE ASES RUTH GILL BOB GULLEY GAGE LOZANO, SR. EDWARD L. SAMPLE PASSED AND APPROVED, TNI ATTEST: Y SECRETARY VD:ED: OF 1975; *,ATT,..,Jy IE T RD TIME AND PASSED 9BY THE FOLLOWING VOTE: C2--" MA OR THE CITY OF CORPUS CHRISTI, TEXAS MOTION G / /I moved and''54"P/17 seconded the motion that the contract attached to the ordinance authorizing execution of said contract between the City of Corpus Christi and the Nueces River Authority concerning the Choke Canyon Reservoir Project, said ordinance having been read on the first two of three readings on December 10, 1975, and on December 17, 1975, be amended prior to its third and final reading as more fully set forth in the copy of contract attached hereto and made a part hereof by reference for all intents and purposes as if copied verbatim herein. Motion passed unanimously. 11/5/75 F i'El Draft Per Townn_nd 9/20/7 Is and 10/31/75 letter. Inter - lineations and page inserts prepared in December, 1975. � wt CONTRACT BETWEEN NUECES RIVER AUTHORITY AND CITY OF CORPUS CHRISTI ON NUECES RIVER RECLAMATION PROJECT, TEXAS (CHOKE CANYON RESERWR PROJECT) - - - -- -- — Underline— _Additions;' ---------- - - - --- = Tike =t ou_fi = -De etions 1 TABLE OF CONTENTS i. Page ARTICLE 1. GENERAL PROVISIONS. 1 -6 Section 1.01. Purpose of Contract. 1 Section 1.02. Definitions. 1 -4 Section 1.03. Arbitration. 4 -5 Section 1.04. Venue. 5 -6 Section 1.05. Fiscal Year. 6 Section 1.06. Interpretation. 6 Section 1.07. Amendments. 6- ARTICLE 2. RECITALS AND GENERAL AGREEMENTS. 6 -10 Section 2.01. General Recitals. 6-7 Section 2.02.- Participation by the Parties. 7 -8 - Add' Section 2.03./ Water Rights ,. a 1-reC 8 Section 2.04. Teimination.of Project. 8 -9 Section 2.05. Prior Obligations of City's Waterworks. 9 Section 2.06. No Taxation Required. 9 Section 2.07. Significance of "Pre - Operating" and "Operating" Categories. 9 -10 ARTICLE 3. PRE- OPERATING ACTIVITIES: FINANCING REIMBURSABLE COSTS. 10 -15 Section 3.01. Payment of Reimbursable Costs. 10 -11 Section 3.02. Fund- Advancement. 11 -12 Section 3.03. Payment on Municipal and Industrial Water Supply Costs. 12 -13 Section 3.04. Payment on Recreation, Fish and Wildlife Costs. .13 Section 3.05. Revenue Sources Pledged. 13 -14 i. W Section 3.06. City's Obligation on Bonds. 14 Section 3.07. Annual Budgeting by City. 15 Section 3.08. Financing to be Expedited. 15 ARTICLE 4. OTHER PRE - OPERATING ACTIVITIES. 15 -18 Section 4.01. Designation as Joint Contracting - Entities. 15 Section 4.02. .Water Rights. 15 -16 Section 4.03. Other Permits and T^� = ^- Authorizations- 16 -17 Section 4.04. Construction Decisions. 17 See *iea - 4.45-. Otke-z -Pe�ati.-t -s ,-m �- Grr�rt�-o-f- s po jzct = Slpe�� ± = =-7 -tam -. -r7 Section M;. M;. Pre- Operating Payments. 17 -18 ARTICLE S. OPERATING PHASE. 18 -28 Section 5.01. Operation of Project. 18 719 Section 5.02. Water Sales. 19 Section 5.03. O&M Expenses. 19 -21 Section 5.04. O &M Budget. 21 -23 Section 5.05. Supporting Services. 24 -25 Section 5.06. Additional Services and Facilities. 25 -26 Section 5.07. Operation and Maintenance After Federal Obligations Fulfilled. 26 -27 Section 5.08. Delinquency in Payments. 27 Section 5.09. Water Use Information. 27 Section 5.10. Indemnification. 27 -28 ARTICLE 6. ASSIGNMENT, CONTRACT TERM AND CONTRACT PROCEDURES. 28 -32 Section 6.01. Assignment. 28 -29• ii. h Section 6.02. Notices. P9 Section 6.03. Term. 29 Section 6.04. Severability. 29 -30 Section 6.05. Force Majeure. 30 . �f�eceive`da�e -�) _ _ '31 Section 6.06. [- Zaeaut -.on of Contract .Provisions ) -� -SXE 031`_g iii. CONTRACT BETWEEN NUECES RIVER AUTHORITY AND CITY OF CORPUS CHRISTI ON NUECES RIVER RECLAMATION PROJECT, TEXAS (CHOKE CANYON RESERVOIR PROJECT) This Contract is between the Nueces River Authority, a . conservation and reclamation district and political subdivision of the State of Texas (hereafter the "Authority "), and the City of Corpus Christi, Texas;/ municipal corporation in Nueces County, Texas (hereafter the "City "). For and in consideration of the mutual agreement] conditions, covenants and terms contained herein, and the mutual benefits which will accrue to the parties follows: ARTICLE 1. GENERAL PROVISIONS Section 1.01. Purpose of Contract. This Contract is the initial agreement between Authority and City concerning the Nueces River Reclamation Project, Texas, also known as the Choke Canyon Reservoir Project, to be located on.the Frio River in Live Oak and McMullen Counties, Texas. The purpose of this Contract is to set forth basic considerations and agreements concerning, inter alia, the financing, construction, operation.and maintenance of the Project. Section 1.02. Definitions. In this Contract, unless the context requires a different definition: (1) "Authority" means the Nueces River Authority. (2) "City" means the City of Corpus Christi. (3) "United States" means the.United States of America, including the Secretary of the United States Department of the Interior or his duly authorized representative. ` (4) "Development Board" means the Texas Water Development Board. (5) "Commission" means the Texas Water.Rights Commission. (6) "Quality Board" means the Texas Water Quality Board. (7) "Project" means all features comprising the Nueces River Reclamation Project, Texas, authorized by the Act of Congress approved October 27, 1974 (Public Law 93 -493), and constructed or provided under the terms of the Federal Contract; also known as the Choke Canyon Reservoir Project. (8) "Federal.Contract" means the proposed agreement being negotiated between the United States of America, City of Corpus Christi, Texas, and the Nueces River Authority, providing for the construction, operation and maintenance of the Nueces River Reclamation Project, Texas, a draft copy of which agreement dated December 2, 1974, and entitled "Contract among the United States of America, City of Corpus Christi, Texas and the Nueces River Authority, Nueces River Reclamation Project, Texas" has been furnished to each of the parties hereto. (9) "Contract" means this "Contract Between Nueces River Authority and the City of Corpus Christi on Nueces River Re- clamation Project, Texas (Choke Canyon Reservoir Project)." (10) "Construction Costs" means actual costs incurred in construction of the Project. 2 s • (11) "Federal Authorizing Act" means the Act of Congress approved October 27, 1974 (Public Law 93 -493) which authorizes the Nueces River Reclamation Project, Texas. (12) "Works" means all works or facilities of the Project together with land and rights -of -way for such works. (13) "Operation and Maintenance" ( "O &M ") means and includes normal and reasonable care, control, operation, maintenance, and replacement of the Project Works and shall include O &M of re- creation and fish and wildlife facilities,' payment of miscellaneous costs, accumulation of'reserve funds, and payment of all additional O &M costs as herein provided. (14) "Project Water" means water available for use through the Project Works. (15) "Pre-operating c hase" means the period of time from the of -eff-e� date of /this contract to the time when the care, operation and maintenance of the Works or any part thereof are transferred by the United States to the Authori ,-;-an 'the City! o •to..bot (16) "Operating Phase" means the period of time from'the time the care, operation and maintenance of the Works or any part or thereof are transferred by the United States to the Authority;;;X or° M both, the City, until he termination of this Contract. (17) "Fund Advancement Contract" means the proposed agreement being negotiated between the United States and City and Authority providing for the advancement of funds for construction of the Nueces River Federal Reclamation Project, Texas. (18) "Reimbursable Costs" means the portion of Construction 3 s. 7IJ Costs the City and the Authority are obligated to pay the United States under the terms of the'Fund Advancement Contract and the Federal Contract. (19) "RFW Component" means the recreation and fish and wildlife features of the Project which are constructed or provided under the terms of the Federal Contract. (20) "Life of the Project" means the period of time the Project exists and is capable o£'providing water supply for use of the parties holding the right of use of the Project's conser- vation storage capacity. (21) "Bonds" means collectively the bonds issued by the Authority pursuant to this Contract, whether in one or more installments, and includes any bonds which might be issued for completion of the Project and bonds issued to refund any such bonds. Section 1.03.. Arbitration. (a) #ny controversy between.the parties hereto, or their respective successors, representatives, agents or assigns, involving the interpretation, construction or application of any of the terms or provisions of this Contract enumerated in Sub - section (b) of this Section, shall on the written request of one party served upon the other be submitted to arbitration. Except as otherwise expressly provided in this Section, the arbitration shall be conducted in accordance with and governed by the pro- visions of the Texas General Arbitration Act, Article 224, et seq., v.T.C.S. After written request for arbitration has been In the event Banc are transferred to the autnoriLy, u & M responsiuii.L served, each party shall have twenty (20) days in which to select one person as an arbitrator to hear and determine the controversy or claim. Each of the two arbitrators so chosen shall promptly select a third impartial arbitrator to serve with them. The decision of a majority of the arbitrators on any controversy or claim submitted to them shall be final and conclusive upon the parties. The expenses of arbitration shall he born e by the parties in such proportion as the arbitrators shall decide. (b) The controversies or claims to which this section- applies are only those arising out of or relating to: (1) Operation and Maintenance of.the Project described in Section 5.01 of this Contract. (2) Approval of the O &M budget contained in section 5.04 of this Contract. (3) Operation and Maintenance after Federal obligations are fulfilled as described in section 5.07 of this Contract. Section 1.04. Venue. Venue of all suits between the parties hereto, or their respective successors, representatives, agents or assigns, arising out of or relating to the subject matter of this Contract, or any breach thereof, shall be in courts of competent jurisdiction in Travis County, Texas. In the event there are multiple parties plaintiff or defendant, either party to this Contract may request a severance of the portion of the cause of action or issues involving the parties hereto, or their respective successors, agents, representatives, or assigns, and the other party shall not appose the request. Without limiting 5 the foregoing, the severance may be requested on the basis of venue or to permit arbitration, as authorized in Section 1.03, Section 1.05. Fiscal Year. The fiscal year for this — $Contract and the Project shall be the lenlda AS gab 7 .s��e� ,rise- mn�nn�3y- agreed- iapem -i� _'�� '—'�. Section 1.06. Interpretation. The headings which have been used throughout this Contract have been inserted for administrative convenience only and do not constitute matter to be construed in .interpreting this Contract. Section 1.07. Amendments. This Contract may be amended or modified by the parties hereto from time to time, but only by a written instrument executed by the parties; provided, however, that no amendment or modification may be made which would adversely affect the rights of the holders of bonds issued in connection with the Project. ARTICLE 2. RECITALS AND GENERAL AGREEMENTS. Section 2.01. General Recitals. _ (a) Authority Tand_City will hereafter authorize the and if necessa the-Fund- vancemen on act' execution of the Federal Contract, for theyconstruction, operation fi5ancing; and maintenance of the Project. A art of the consideration for and -if necessa ,- a un vancement Contrac the execution of the Federal Contract, y Authority and City is predicated on the mutual undertakings, obligations and covenants set forth in this Contract. (b) Authority and City have been designated by the Commission as the Cooperating Local Sponsors for the Project. They have been 6 cooperating and agree to continue to cooperate fully in accomplishir the necessary authorization for and the financing, construction, operation and maintenance of the Project. The parties agree to consult and communicate with each other on a continuing basis with respect to any and all activities either or both of them may undertake in furtherance of the Project. (c) Authority and City desire by this agreement to establish their rights in the use of water available from the Project and to resolve other matters as set forth herein to the end that there be express agreement between the parties on matters germane --� to the raXjProject as the same affects the relationship between Authority and City in their joint undertaking. Section 2.02. Participation by the Parties. Authority and City each represent to the other that it is empowered by law to. participate in the development, financing, acquisition, construction operation and maintenance of the Project and related facilities and services, and to execute this Contract and other agreements and documents as are or may hereafter be required to accomplish, the same; and that its participation in the Project and execution of this Contract have-been duly authorized by action of its governing body. Authority and'City each agree to furnish to the other such documentation or evidence of its-authority to so mind other �Lagreements7 participate and execute ' hi-- .,, ..ontra as the other party may reasonably request, and to take and perform such other and further actions and execute such other agreements and documents as may be reasonably required to carry out the provisions of this 7 Contract. Ad cruiReatiired, Section 2.03. /Water Rights. Authority and City acknowledge it will be necessary to apply for and obtain separate and additional water rights through the Commission to authorize the appropriation of water for the operation of the Project as provided for in Section 4.02 of this Contract. Section 2.04. Termination of Project. (a) At any time following the first advance of funds by Authority or City to the United States and until Congress first -appropriates construction funds, City may direct the Secretary of- interior to terminate activities then in progress on the Project. activities on (b) In the event eeRet*vet -.on — the Project by the fare United Sts s-#"s -halt d for an reason prior to its completion, Cit wi g �ntit�Ied to an the % United- Skates- wall - return- *o-Ea -tgr- unexpended balances of the �3+ funds so advanced and ass -iqn to -£itp all contracts and property rights,_ data, drawings or other items of value which may be .ze - - d�r� assigned to the parties by the United States pursuant to the procedures set forth in the Federal Contract. in such event, Authority shall use any funds remaining from the sale of.its bonds for payment of interest and principal for such bonds and shall incur no further expenditures of any nature against the and interest payments /as the same sha3.3 nt become due and payae. activities on ar (c) If /eBAstruation -ef the Project by the United States piior -. -to' its coo 4, halted a City shall have the right,subject only to the rules of the Water Rights Commission and the cease. at�a3 rights of Authority,to decide whether or not c a water reservoir 8 to such extent as is feasible and appropriate as may De determined by the Commission and to such extent the agree- , ':.ent is not contrary to law. project at substantiall the same location as the Project shall be ^onstructeor; >- i�,constr_ s a ready- .com_menced� completed. Such decisions by the City shall preserve for Authority an 4.02, in N ������ thP'es �e }eg stored /and continuing financial support by City Mi— during the pre - operating period as set forth in Section 4.06 and during the operating stage as set forth in Section 5 . 054 Decision _of=tbM, not =tq�,participate in continuation of the oject r- water'- suppyZy "proYec� at substant %aarly the yam oca�io will not act to prevent Authority from proceeding on-Its-own if it chooses to do so. Section 2.05. Prior'Obligations of City's Waterworks System. City represents and covenants that the water supply and water supply facilities and services to be obtained pursuant to this Contract are essential and necessary to the operation of City and its - waterworks system, and that all payments to be made hereunder by it will constitute reasonable and necessary legal expenses of City's waterworks system within the meaning of.the provisions of all City Ordinances and Resolutions authorizing the is of all waterworks system revenue bond issues of.City, with the effect that City's obligation to make payments from its waterworks system revenues under this Contract shall not have priority over its obligations to make payments of the principal of and interest on any and all of its waterworks system revenue bonds. Section 2.06. No Taxation Required. Authority shall never have the right to demand payment of the amounts due under this Contract from funds raised or to be raised from taxation by City. Section 2.07. Significance of "Pre - operating" and "Operating" F] Categories. The activities and undertakings identified in Articles 3 and 4 of this Contract are those which would normally be initiated in the Pre - Operating Phase of the Project, and the activities and undertakings identified in Article 5 are those which would normally be initiated in the Operating Phase. They are categorized in this matter for convenience only. Several of the activities or undertakings could occur in or extend into a phase different from the ones in which they are categorized. No limitation on or restriction of any of these activities or undertakings is intended should that occur. ARTICLE 3. PRE- OPERATING ACTIVITIES:_ FINANCING REIMBURSABLE COSTS Section 3.01. Payment of Reimbursable Costs. Under the ob i a_e Federal Contract, the parties ar -aut3wrr -Zra to make annual or other periodic.installment payments to the United States for eimbursable4;sts allocated to municipal and industrial water supply, after deduc�t_i�ng.,the advance funding payment referred to ��ubsectionsr in Section 3.02, sl(a) and (b), below., The financing and payment of Reimbursable Costs, except funds advanced under the Fund Advancement Contract, shall be accomplished by the City. Under the Federal Contract, the parties are also obligated to make annual or other periodic installment payments to the United States on the the eimbursable��psts allocated to the RFW Component. Such payments for the RFW Component will be made by the entity responsible for operation and maintenance of the RFW Component unless other arrangements for such payments are made between the parties. All costs for operating Fish, Wildlife and Recreation 10 7 • facilities required by the United States or approved by City which are not payable from user fees shall be paid by City as a cost of its water system. Section 3.02. .Fund Advancement. (a) City will make initial cash advances of Reimbursable Costs in a total aggregate amount of approximately $900,000 for use-by the United States to initiate the Project. City is not obligated to make such cash advances after July 1; 1976, and the manner of making and the timing of the cash advances shall be determined by City and the United States. The cash advances shall bea credit against the advance funding payment provided in Subsection paFagapi(b), below, toward that part of the Reimbursable Costs allocated to municipal and industrial water supply, and Authority shall reimburse City for such cash advances out of the proceeds of the first installment of bonds issued pursuant to `� lrsr� (b) . (b) Pursuant to the Fund Advancement Contract, Authority will issue revenue bonds to make the advance funding payment to the United States of approximately $18,250,000 toward that part of the Reimbursable Costs allocated to municipal and industrial water supply, less the'initial�cash, advances of Reimbursable Costs made by City pursuant to,p — gr ; a), above. The first installment or issue of bonds shall include funds necessary to repay City for the initial cash advances of Reimbursable Costs made pursuant to, .r- ���(a), above; to pay.interest on the bonds until revenues pledged for the payment of the bonds are • 11 adequate to pay interest costs as they accrue; and to pay other costs related to the bond issue, including without limitation engineering, legal, fiscal and administrative expenses, and contingencies. Upon execution of the Fund Advancement Contract, the Federal Contract and this Contract, Authority shall proceed to authorize and issue its revenue bonds at such times and in such amounts as'may be required to fulfill the commitments of City and Authority for advance funding of the part of the Reim - bursable Costs allocated to municipal and industrial water supply. (c) Authority and City shall have joint control of all fiscal arrangements-in connection with the sale of the bonds for the Project including interest rates and maturities, and each shall have the right to approve or disapprove any of such ar- rangements. (d) City shall have the right at its option to control the investment and reinvestment of any bond reserve fund or funds which may be required by the bond indenture or resolution for Authority's bonds,.and to use any of the interest or income therefrom as ma be authorized_bl± suds- .i.ndentuse-- oz=esol Lion; or- funds = a ny - interest _or - income.�therefrom p provided that City shall assure -#ed /will b�vaslable when MSC and as required to fulfill the Authority's obligations under the indenture or resolution. Section 3.03. Payment on Municipal and Industrial Water Supply Costs. The bonds for municipal and industrial water supply referred to in_,, - - -_ � Section 3.02 -( 12 • • shall be secured by a pledge of: (1) The revenues of City's waterworks system remaining (i after pa ing all _ expenses of operation and maintenance of said system; All debt service, reserve, and other requirements in connection with City's waterworks system revenue bonds now or iii hereafter outstanding; a 1 payments.due to the United States iV � under the Federal Contract; an a 1 payments for .06M costs allocable to municipal and industrial water supply.as provided in Section 5.03 of this Contract. This obligation is subject", however, to the provisions of Section 2.06. of this Contract;. and (2) Net revenues, if any, from sales of Project .Water by' rbat�eRCludirr �'" "� eats � td- `Autho - �f •-- ursvant Authority, jt6 :- Sectioa--5 =05ib A '.`r_h; s nntrac� Section 3.04. Payment on Recreation, Fish and Wildlife Costs. The obligation to the United States relating to Reimbursable Costs for the RFW Component referred'to.in Section 3.O1 shall be secured by a pledge of revenues received by Authority or City, or both, from entrance and user fees or charges collected for use of. recreation and fish and wildlife enhancement facilities of the Project in accordance with the provisions of the Federal Water Project Recreation Act (90 Stat..,213). Section 3.05. Revenue Sources'Pledged. Authority and City ,. hereby pledge the revenues, income and funds identified in- Sections 3.03 and 3.04 to the payment of the bonds and obligations to which.:the revenues, income and funds respectively pertain, and agree to make the payments for the said bonds.and obligations when and as required by the bond indenture or resolution, the 13 Federal Contract, and this Contract. Section 3.06. City's Obligation on Bonds. (a) Recognizing the. fact that City urgently requires the water supply and water supply. facilities and services covered by this Contract, and that such water supply and water supply facilities and services are necessary for actual use and for stand -by purposes; and further recognizing that Authority will' . use the payments received from City hereunder to pay, secure, -. and finance the iss�u cc •of. n , it is hereby agreed that' if . and when any bonds are delivered,)�City -s obligated_to make ;___ on the bon s -Jssue . bv�he�� thorst the payments of bt _grvice lequirements /as provided by this Contract to pay the•principal, interest, and other requirements of the bonds regardless of whether or not Authority actually provides such water supply and water supply facilities and services, or whether.or not City actually receives or uses such' water supply and water supply facilities and services; and the. holders of the bonds shall be entitled to .rely on the foregoing. agreement and representation, regardless of any other contract or agreement between Authority and City, or any other party, and regardless of the performance,validity, or. enforceability of the . remainder of this Contract., .or of any other contract or agreement between Authority and City, or any other party. (b) Until- the -bonds/- retired, ity shall make ,,. .,_to the Authority payments /for the ? )5�bt,�kervide,fjk�quirements specified in the bond. resolution for the payment of the bonds and accumulation of reserve funds as provided therein and required thereby. . 14 ao Lning conrainea ne ein or In L11L "pp : .Lj Llon Lo Lne commission shall be considered as an admission on the part of Authority as the validity or value of Permit 'No. 933. Section 3.07. Annual Budgeting by City. City shall make provision in each annual City budget for the payment of all amounts required to be paid by City under this Contract. Section 3.08. Financing to be Expedited. The parties covenant and agree to fulfill promptly their respective financing commitments and obligations under the Fund Advancement and . Federal Contracts, this Contract, and the Federal Authorizing Act so as to insure orderly progress in the construction of the Project. ARTICLE 4. OTHER PRE - OPERATING ACTIVITIES Section 4.01. Designation as Joint Contracting Entities. The parties shall request the United States to designate them together as the joint contracting entities on the Project; as authorized by the Federal Authorizing Act. Section 4.02. Water Rights. (a) At the earliest appropriate time after the execution of this Contract, the City and the Authority shall jointly apply to the Commission for a water permit for the Choke Canyon Reservoir Project_. It is agreed that such application shall not seek to increase or decrease the City's water rights under Permit No. 933 (b) The permit application for the Choke Canyon Reservoir Project shall seek a conservation storage capacity of approximately 700,000 - 69Gr2-00 acre feet in the Project reservoir, the diversion and use United States of the reservoir's dependable yield as determined by the /, of approximately 139,000 acre per annum feet /from joint operation under year 2010 conditions, the use of 15 the bed and banks of the Frio and Nueces Rivers to transport water to authorized points of diversion downstream, and if authorized. /421e�iv& by the Commission, the coordinated operation of the Choke Canyon Reservoir and Lake Corpus Christi, and other provisions, to accomplish the purposes of the Project. (c) The parties covenant and agree that as between themselves any water permit or permits relating to the Project, including p� the rights to impound water in the Project reservoir, h6 take, divert and use water therein or therefrom for any purpose which - may be obtained from the Commissio5 shall be owned in perpetuity. -by City and Authority as tenants in common, with City owning and holding an undivided 80% interest therein and Authority owning.and - holding an undivided 20% interest. (d) The parties recognize that the rights granted and approved by the Commission may be other than those applied for because of recognition of prior water rights, differences in . computations of water supply,.and other reasons. However, the parties agree that they shall seek from the Commission the rights and the percentage division in the water right described in this Section. Section 4.03. Other_ Permits and Grants of Pro ect - Pre - 1 a er review an c Tdz iali-Autktrrity, IA 4r! Operating Stage. The City shall, make and prosecute all applications IRA for permits or grants of authority which may be re ed to i r��fe or operate -except as provided in Section g4 2 above, r construct/the Project, /including but not limited to the following: �'i�l/i55O61 (1) Applications to the Texas Water Quality Board for waste Io 0 3 discharge permits. - - 16 • • NAA Section 4.03. Other Permits and Authorizations. The party responsible for the care, operation and maintenance of the Project pursuant to Section 5.01(a) of this Contract, after review and con- sultation with the other party, shall (except as provided in Section 4.02) make and prosecute all applications for permits or grants of j authority which may be required to construct or operate the project, including but not limited to the following: (1) Applications to the Texas Water Quality Board for wasteI discharge permits. (2) Applications to the Environmental Protection Agency for waste discharge permits. (3) Applications to the Texas Air Control Board for construc- tion and operating permits pursuant to Sections 3.27 and 3.28, Article 4477 75, V.T.C.S. s E ". (4) Applications to the United States Army Corp of Engineers c. for dredging and filling permits. 1 J 16A ee p. (2) Applications to the Environmental Protection Agency for k4 t 11 fP waste discharge permits. raf%; (3) Applications to the Texas Air Control Board for , Sec. construction permits pursuant to Sections 3.27 and 3.28, Art. 4477 -5, 9.T.C.S. Section 4.04. Construction Decisions. All decisions regarding-.construction of the Project which are within the p. r 7q �. - AAllQn jurisdiction of Authority and City to decide shall be made by or 414 mutual agreement. If.Authorit and City cannot reach m tual on any matter affecting the cos of theroject to the City, ���r��fe agreemenfi, then the decision of City. shall be final. However, #,Yre- par.#�s agree -6Yra Authority's decision shall be final as to r Sec• any Fish, wildlife and Recreation facility for which Authority or Gov. any entity other than City has operation and maintenance or capital repayment obligations. SeFStacrrt�.-0rr -fir �c nth -an&- Gramts- a € -Prejeet. ��li lcf•�6'�Q @.--�ie•�Z3'L••�'�• 1' e• 9ji@/ 1S97e13�e- f9r- p1'OJCCt- 66M- 3�SL�j. 1 and proseaLfte a1-,r1-tivns- for -permits -and -grants- of- =Uior-bty- -may- -be -reqtrrred -&r- desirable -to - carry- eat -its resporreiiril�i:i�s -5 Section 4.Ojs. Pre- Operating Payments. For services to be bv rit phase, render -e . urIng the pre - operating /p&r -oa, City will pay Authority(IhO following amounts-. �thd" lst c `, f"_ , _ uar ^in` each of_ the o3lolw= "inQ °ye �2•cca�� �hR �V^`en•��. ��i-t ,�ul a ./ alen ar Year Jwnount 1976 $25, 000 �� Le.,4+.4. 1977 25,000 17 Section 4.04. Construction Decisio (a) As used in this Section, the term "construction" refers o labor and mechanical activities on the site of the Project irectly involved in excava- tion and land preparation for, and ' the actual construction of: r, (1) the dam, water diversio and related facilities, and r JC (2) the recreation and,fi and wildlife facilities, fencing, I road construction d related facilities required by ` } the United State (b) All decisions garding construction of the Project whichl`° are within the jurisdi ion of Authority and City to decide shall F be made by mutual a Bement. If Authority and City cannot reach mutual agreement o any construction matter affecting the cost of the Project to a City, then the decision of City shall be final. Authority's d ision shall be final as to any Fish, Wildlife and Recreation cility for which Authority or any entity other than Cit has operat' n and maintenance or capital repayment obligations. 17A 1978 35,000 1979 35,000 -0n t �a89 ac a0�000 hn thereafter increasing at $5,000 per year until the end of the pre - operating period. Amounts in excess of $40,000 per annum will only be due if they are specifically requested by the Authority's Board of Directors and if the Board certifies that the amount in excess of $400000 is necessary for operating ex- penditures of the Authority, but not to exceed $100,000. ARTICLE 5. OPERATING PHASE Section 5.01. Operation of Project. (a) City shall be responsible for the care, - operation, and maintenance of the Project and any additional facilities unless �zes- �"'s�i3�i �� therefor ] tha- anee is transferred to Authority by amendment to this Contract. }' The care, operation, and maintenance of the Project and additional facilities.shall be carried out in compliance with the applicable requirements of the United States, the - Commission, and other governmental agencies having jurisdiction, and is compliance with the requirements of the Federal Contract and this Contract. (b) The timing and rate of diverting, releasing or taking Project Water for.any purpose shall be controlled and directed by the City. and the Pit eree td-ti,aa -their � ct of rtc .(c) The AuthOr�t _ - _� „� �� „5 era•,ausG acc cv- F�r�� ty of wa stored and to be 4. ie factors or othera- lzcua3s ances ari -on oeiorg rnp AnLnorlry -ano zne-��,ry- __ra�� ,r- c�v�ve �.ne �guaY: agreement thefi_- part}�responsble fox .a particular 0 &,NTa_ 'ity magma proceed in-�t)ie manner-- which a.n.o.its.�udgment:�t- deems most___a��opria_t'e_ . er t e circumstances. an� ,sTia�l.�promptl3r�nnti- fy,��: atite�. par v�n� tYt'ac€iotr : taken : YA (d) Except as provided in Subsection (b), above, in the event of any conflict between the operation and maintenance requirements of the United States, the Commission, other gov- ernmental agencies, the Federal Contract and this Contract, Authority and City, shall resolve the same by mutual agreement. Section 5.02.. WAter Sales. (a) For the life of the Project, City shall have the right dispose of to/Lisa all of the water produced by the Project, whether the Project is operated as an individual unit or in systems with Lake Corpus Christi. All water sales shall be contracted by--the City; provided however, if future circumstances warrant, the parties may by separate, mutual agreement establish conditions and pro- cedures under which Authority may contract for the sale of.water. (b) City hereby covenants and agrees that it will fix, charge and collect rates for sale of water in such amounts as will produce revenues sufficient to provide for making all payments required to be made by City under this Contract. (c) (d) Unsert Page 19(a7 Section 5.03. O &M Expenses. (a) -The payment of O &M expenses shall be accomplished sp�ssibiii hey ` =for 'Ot through City unless t mss- transferred and assigned to Authority by amendment to this contract. If so transferred and assigned,Authority shall receive, invest, disburse and otherwise administer the funds and accounts required to fulfill the O&M commitments of City and Authority under the Federal Contract. The features involved in O &M for purposes of this Contract include but are not necessarily limited to the following: SECTION 5.02 -f or-munic:ip8an �a t set =strial _ ur ores (c) City -r.e contract t make ojectrater_ to a� requesting without discrimination, governmental entity in Nueces, San Antonio-Nueces, and Nueces -Rio Grande Zone No. 1 basins as designated by Development Board by Resolution No. 66-9 adopted on May 17, 1966` ^*'- ' but no such governmental entity shall be assured�af ect Water in excess of the ratio which the aer.ved. by_.tTi � e:.. -�o e pQ�ulatioa of_the_ _-_ n�re�ing eater bears to the total population of the=4s� setve�� all governmental e s 1 supplied from the roject "and Lake Corpus Christi and each such contract will require approval by the Texas Water Rights Commission. Should ay such 0.1 -ire QaC es •LL•���� �� �+4a� governmental entity so request, any dispute alleging discrimination hal� be referred to Commission for a determination, which determination shall be final unless appealed to a court of competent jurisdiction in Travis County, (d) All governmental entities purchabing $roject Water shall agree that Pr 10 rG r should there be a shortage in toe basic supply of water which requires the " NR4 restriction or curtailing of any consumer of water within the city limits a Oerwo/v o£ Corpus Christi that, coincident with such restriction. or limitation. +s °® q air SeC, within Corpus Christi, purchaser will limit and restrict all of its customers, ��) both direct and indirect - through resale, to the same extent. �Ck 19 -A /M Section 5.02. Water Sales. (d) The City agrees that should there be a shortage in the basic supply of water available from the Project and Lake Corpus Christi which requires rationing or otherwise curtailing the use of such water among the City and other governmental entities pur- chasing the water, priority shall be given to the use of the available water for municipal purposes, over the use of such water for industrial or other purposes. /To the extent that water is available during such period: of shortages for industrial pur- poses, the City and the Authority agree that preference in the use of water for industrial purposes may be given to the present cus- tomers of water for industrial purposes located within the boun- daries of the Lower Nueces River Water Supply District, and all I i �I ti �I p� other customers of water for industrial purposes shall be entitled i o�CA to water for industrial purposes on a pro- rated.basis so that a @I '1 reduction in the supply of water for industrial purposes for each industrial water supply customer will be proportional to the customer's normal use. v ©X so V e 19B 7 UJ ` (1) O &M costs allocable to the municipal and industrial water supply from the Project; (2) O &M costs allocable to. the RFw Componentlf_eaLvr_� of the Project; (3) Costs incurred by the United States for work involved in administration and supervision of the Federal Contract; and (4) All other costs associated with the Project not otherwise provided for in this Contract which may be charged to the Authority or the City by the United States under the.Federal Contract, whether identified herein or not_ (b) Authority and City pledge to the payment of the O &M costs identified in paragraphs (1), (3) and (4) of Subsection (a) - of this Section the following: (1) The revenues of City's waterworks system remaining after paying all expenses of operation and maintenance of said system, all debt service, reserve, and other requirements in connection with City's waterworks system bonds now or hereafter outstanding; and all payments due to the United States under the. Federal Contract; this obligation is subject, however, to the provisions of Section 2.05 of this Contract; and (2) Net revenues, if any,'from sales of Project Water by Authority but excluding payments to Authority by City pursuant to Section 5.05(b) of this Contract. (c) Authority and City pledge to the payment of the O &M costs identified in paragraph (2) of Subsection (a) of this 20 Section the following: (1) Revenues received by Authority or City, or both, from entrance and user fees or charges collected for use of rec- reation and fish and wildlife enhancement facilities of the - Project; and '(2)• Any other revenues, income or funds which may be made available by the parties for such purpose. (d) Authority and City hereby pledge the revenues, income and funds identified in Subsections (b) and (c)..of this Section to the payment of the O &M costs to which the revenues, - income and funds respectively pertain, and agree to make the payments for O&M costs when and as required by the Federal Contract and this Contract. The City further agrees that if the revenues, income and funds so pledged are at any time insufficient to meet O &M expenses of the City and the Authority under the Federal Contract and this Contract, the City will pay such additional amounts otherwise available from its water system to meet such O&M expenses subject, however, to the provisions of Section qf.aq'of this Contract. Section 5.04. - O&M'Mud etJ_ a 5 rin ..t a e= 6&' (al in the_e_v O &M-i sponsi ility is transferred to �®s> provide�n - Section` 5 � -MuEfforityj Authority shall at least 60 days prior to the date the Operating Phase commences and at least 60 days prior to the beginning of each fiscal year thereafter, prepare and present.an O &M expense budget for the Project to City for the immediately ensuing fiscal period. The budget shall set forth all O &M �—� expenses known or reasonably,for,by the Authority for such >` 21 ensuing fiscal period. The budget shall show the O&M expenses which City is obligated to pay and shall specify the manner in which City shall pay the expenses. Unless otherwise provided, =�8e City's payments of OEM expenses shall beCpa -1d —in equal monthly installments, with the first installment being due and payable on the first day of the first month of the fiscal period to which the budget pertains. (b) Within 60 days after its receipt, City shall notify Authority that City concurs in the budget, in which event the budget shall become operational for the fiscal period to which it pertains; or that City disagrees with certain provisions of the budget, which shall be itemized in writing. If City fails to notify the'Authority of its decision within 60 days after City receives the budget from the Authority, the budget shall be considered approved by the City and shall become operational for the fiscal period to which it pertains. If City notifies Authority in writing within the 60 day period that it disagrees with certain items in the budget, the parties shall confer to resolve the differences so that the budget may become operational for the fiscal period to which it pertains. If no agreement is reached by the start of the fiscal period to which the budget pertains, the budget for the immediately preceding fiscal period shall be automatically extended into the new fiscal period until the differences are resolved. If the differences are not resolved within 30 days after the fiscal period starts, - the matter may be referred to arbitration pursuant to Section 1_03 of this Contract. 22 (c) Authority may make reallocations and adjustments between items in the budget and may make additional expenditures up to 10% in excess of any budget account when necessary to ac- commodate reasonable variations in the Authority's day - today operations under this Contract, or because of increases in O &M costs, or for other good and sufficient reasons. Expenditures which cause or will cause the total amount of the budget to be exceeded may not be made without the prior approval of the City; provided, however, in the event of an unforeseen emergency-which requires immediate action and requires the making of an expenditure or financial commitment not provided for, or in excess of the amount authorized by the budget or this Contract, Authority-may proceed to meet the emergency and shall notify City promptly of the action taken and the reasons therefor. Authority shall follow up with a written report to City after the emergency has been met, detailing the origin or cause of the emergency, the actions taken, and the actual cost or best estimate of the cost thereof. (d) At the close of each fiscal period, the actual O&M expense of the Project for such fiscal period shall be determined ns ems; by Authority. If the actual O&M expense exceeded the amount-) In establishing City's O &M payments, such excess shall be billed to City and City shall pay such amount within'30 days of receipt of such bill if the excess amount represents emergency expenditures as set forth in�sser-t—(c) ly approved by City. If the actual O &M expense is less than the amount used in Ern' establishing sse paymente 'T r, r J.VULMM City in the following year's budget the excess amount paid by City. 23 Section 5.05. Supporting Services. (a) Authority has heretofore rendered special services and will continue to do so during the life of this Project in ,water resource and water quality planning for the entire Nueces River Basin, and also in financing this Project and future improvements thereto, all of which are of direct and significant benefit to City, its inhabitants and its water customers. (b) In consideration of such services and for the Nueces y� River Authority's 20% undivided interest in the Project Water, q14 the City hereby agrees to pay to the Authority, beginning when Or NO 1 Project Water is first available for City's use, a sum equal to t(ry4,fp without any escalation as to the cost.of living or (2) lOVisioh (1) $100,000 per annum/ er $1.00 per million gallons of water, updated full calendar . a✓ .56C. by the U.S. cost of living index with the first /year following execution of this 6 the _wee date of /the Contract as the base year, of all raw water sales for municipal and industrial purposes from the Project and Fake Corpus Christi, including raw water used by City,.but excluding any water released for the bays and estuaries and any other water released but not sold, whichever is greater. (c) �l�ay�merrts- egeegfierl- 4n- th4s- Sectipn-shai3-be-itr -"- }; to �bb-0 �laeF�aay3ner3t- ob��gateas-ef -eitp- specified _ar }isofidsc� iis - Cortpaet. (See Insert Page 24 $)\ The payments specified in this Section Shall be in (d) -TN_-g Tr-s eLurred- shaft- be-determined-on-thn-bagi. addition to all other payment obligations of City specified or of :s­ c: a L_s _sazZ m6nth -aad -shall - ge- paid-witk;n -39 -days -after provided in this Contract. tisa�nd of- _t4*e.- mGr*t_h -fo1- -which -payment- is-due. Authority may use the income realized pursuant to this Section for any lawful purpose, as Authority may determine, including without limitation 24 Section 5.05, Supporting Services. 1 (b) In consideration of such services and for Authority's 207. undivided interest in Project Water, City hereby agrees to pay Y Authority, (eginning� when Project Water is first available for _ �r City's use the greater of the following sums:. fi rl �I (1) a sum equal to $100,000 per calendar year without t; any escalation for cost of living or otherwise; or (2) $1.00 per million gallons of water for all raw water sold or used each calendar year for municipal and industrial purposes from the Project and Lake Corpus Christi, including raw water used by the City, but excluding any water released for the bays and estuaries and any other water released to the stream I but not sold; the rate of $1.00 per million gallons of water shall be adjusted each calendar year by an amount equal in percentage to the percentage rise I in the U.S. Consumer Price Index (or the cost -of- living J index which in the future may replace or supersedeI 3 the U.S. Consumer Price Index) in the calendar year �i in question, with the Consumer Price Index for 1976 being the index on which such adjustments shall be i based. 24A CC SECTION 5.05 ,t3bscction ' _- _ - (c) Payments required iif%gasagrapbd(by above shall be paid quarterly in the following manner: (1 -) Within 30 days following the last day of each calendar quarter, c 1on�bT1 �J.4fO City will pay an amount calculated as set forth in -Rre "eing vr�ased an volume of water sold in th�arIes quarter. ,(2,) If the amount previously -Raid in the calendar year plus the parr- — raPh „(1) 1 payment calculated in Idoes not equal -at least $25,000 times the number of quarters to date in the calendar year, the City shall pay an additional amount equal to the difference. Q') Payment for the fourth quarter shall be only that amount necessary to provide -the total annual payment due as set forth in °£Sum tion f , z agrapk 1(b) above. 24-B the general operating and administrative expenses of Authority. Section 5.06. Additional Services and Facilities. (a) The entity responsible for O &M shall provide or. authorize or approve the providing of services and facilities relating to the Project in addition to those specified in this Contract or required by the Federal Contract. Such additional services and facilities may include, by way of example but not by way of limitation: (1) Recreational facilities and services over and above those provided pursuant to the Federal Contract; ... (2) Fish and wildlife facilities and services over and above those provided pursuant to the Federal Contract; (3) Water pollution control services and facilities, including regulation of private sewage facilities pursuant to Section 21.083, Water Code, or other applicable law; (4) Concessions for food, beverages, lodging, camping, 'f boating, recreation, and other services; and (5) Water diversion, treatment and distribution facilities on Project lands and rights -of- way (b) Any such additional.services and facilities shall be . provided, operated and maintained in compliance with the appli cable requirements of the United States, the Commission, the Quality Board, and other governmental agencies having juris- diction, and in compliance with the requirements of this Contract. (c) Except as otherwise directed by higher authority, any additional facilities and services shall be established at the 25 s � locations, and constructed, provided, operated and maintained in the entity responsible a manner approved or authorized by- Ant-hor- J for 0 & M. (d) The entity responsible for O&M may seek the support and cooperation as appropriate, of any governmental agencies and public and private entities in developing, providing, constructing, acquiring,- operating, maintaining and financing the cost of such additional services and facilities, including without limitation the United States,,the Quality Board, the Texas Parks and Wildlife Department, and the Development Board. Section 5.07. Operation and Maintenance After Federal obligations Fulfilled. (a) The provisions in this Section apply after all of the bonds issued by Authority pursuant to the Fund Advancement and Federal Contracts have been fully paid, including any refunding bonds issued thereon, and after all repayment obligations to the United States for reimbursable costs under the Federal Contract have been fully paid or o•therwise.satisfied. �—� (b) After the occu-jence of the events identified in Subsection (a), above, the parties shall provide for the payment of the continuing O &M costs in the manner provided in Sections 5.03 and 5.04, above. If there is a necessity for major reconstruction or repair of any of the facilities constituting the Project and such reconstruction or repair is required by the United _States or approved by City; the cost shall be paid out of any funds allocated and set aside for such purpose by the parties through the budget process or otherwise. To the extent such funds are not 6aq uate, 26 the cost of such reconstruction or repair shall be paid by City. Section 5.08. Delinquency in Payments. In the event City fails to make to Authority when due any payment required by this Contract, interest on such amount shall accrue at the rate of ten percent'(10 %) per annum from the date such payment became due until paid-in full with interest as herein specified. In the event any_such payment becomes overdue, Authority may, at its option, discontinue all or any services to City under this Contract until the amount due Authority is paid in full with interest as herein specified; provided, however, that any such discontinuance of service shall not relieve City of the obligation to pay other amounts due under this Contract. Section 5.09. Water Use Information. Each party shall furnish to the other a copy of any annual water service report it _.. files with the Commission. The parties shall comply with.the Commission's requirements in regard to metering water, keeping records and reporting to the Commission in regard to sales, diversions and uses of Project Water. The parties shall have access to all diversion measuring devices installed by either or. by any customer of City or of Authority using Project Water and. Authority's and City's future contracts with customers for.. Project Water shall so provide. The parties shall also have access to all books and records relating to sales, uses and. y diversions of Project Water at all reasonable times. I �J a� Z8A Section 5.10. Indemnification. PP• �°• "^� o� (a) The provisions in this Section apply only during the r h rr/e Wovish% Foy' Ser- 27 a r Ak OVd�'� Y. - � Operating Phase. (b) City agrees to indemnify and save and hold harmless the Authority, its of f icers,, directors, agents, attorneys, and employees from and against all claims, demands,-causes of action, damages, liabilities and expenses that may arise as a result of any undertaking, act or omission, whether negligent or not,.which is done or omitted . to be done by City ar—Authority or any of their officers, ,!councilmen, agents, attorneys and in operating and maintaining the project,or employees,/ in diverting, releasing or taking Project Water at CHIC dixect7.'Ga -or regaest -of - Cttp- pnrquaat_ of (c) Except as provided in Subsection (b) of this Section, Authority agrees to indemnify and save and hold harmless City, its officers, councilmen, agents, attorneys, and employees from and against; all claims, demands, causes of.action, damages; " - liabilities and expenses that may arise as a result of any .. undertaking, act or omission, whether negligent or not, -which is done or omitted to be done by Authority or any of its officers, directors, agents, attorneys and employees.#--3-n- gating -and ma rtain#rg the - Praj-eet -and- any= additicaa i- sexvitees-avd- faeiiities gro+v3 r�iltlio�bacc -or -approve d- by- Astber4+y- TursuaMt - to- Seet-i_on 5246- 4Tf-- tM.e'- 0orttY -aet. ARTICLE 6. ASSIGNMENT, CONTRACT TERM AND CONTRACT PROCEDURES Section 6.01. Assignment. This Contract or any rights acquired hereunder shall not be assigned, in whole or in part, by 28 Section 5.10. Indemnification. I;I i (a) As used in this Section, the term "claims" means claims, I I � demands, causes of action, damages, liabilities and expenses, includ -i,, ing reasonable attorney's fees. f (b) The provisions in this Section apply only during the II ,r Operating Phase. (c) The following indemnification provisions apply during j the periods the City has the responsibility for the care, opera- tion and maintenance of the Project: f (1) City agrees to indemnify and save and hold harmless I• the Authority, its officers, directors, agents, attorneys and employees from and against all claims that may arise as a result of any undertaking, act or omission, whether negligent or not, which is done or omitted to be done by the City or any of its officers, council- IL II l9 { men, agents, attorneys and employees, in operating and maintaining the project and any additional services ltji and facilities provided by the City pursuant to Section 5.06 of this Contract, or in diverting, releasing or taking Project Water, or in making Project Water ; available to others. (2) Authority agrees to indemnify and save and hold harm- gl less the City, its officers, councilmen, agents, attorneys !i and employees from and against all claims that may 28 -A -1 28 -A -2 arise as a result of any undertaking, act or omisso whether negligent or not, which is done or omitted I to be done by Authority or any of its officers, directors, agents, attorneys and employees in operating II and maintaining any additional services and facilities provided by the Authority pursuant to 5.06 of this Contract. le ( d) The following indemnification provisions apply during the periods the responsibility for the care, operation and maintenance of the Project has been transferred to the Authority as provided in Section 5.01(a) of this Contract: (1) City agrees to indemnify and save and hold harmless I ! the Authority, its officers, directors, agents, attorneys and employees from and against all claims that may arise as a result of any undertaking, act tI " or omission, whether negligent or not, which is done C or omitted to be done by City or Authority or any *I of their officers, directors, councilmen, agents,'I attorneys and employees in diverting, releasing or taking Project Water.at the direction_or request of City pursuant to Section 5.01(b) of this Contract; .: or which is done or omitted to be done by City or any Y IF of its officers, councilmen, agents, attorneys and employees in operating and maintaining any additional! 28 -A -2 services and facilities provided by the City I pursuant to Section 5.06 of this contract. (2) Except as provided in paragraph (1) above, Authority RI agrees to indemnify and save and hold harmless City, �l its officers, councilmen, agents, attorneys and employees from and against all claims that may arise �I as a result of any undertaking, act or omission, I11 whether negligent or not, which is done or omitted to be done by Authority or any of its officers, directors, ! i agents and employees in operating and maintairil _ it;1 I 'ing the project and any additional services and - iJ facilities provided by Authority pursuant to Section �I 5.06 of this contract. 28 -A -3 • either party without the express consent in writing of the other party. However, City agrees to the pledge by Authority of City revenues pledged.by City in this Contract for Authority's debt service in issuing bonds pursuant to the Fund Advancement Contract. Section 6.02. Notices. Any notice required or which may be given pursuant to -this Contract shall, until due notice has been given of -a change of address, be sent by certified mail, postage prepaid, to the following addresses: Mayor City Manager City of Corpus Christi City of Corpus Christi City Hall Box 9277 City Hall Box 9277 - - Corpus Christi, Texas 78408 Corpus Christi, Texas 78408 President Executive Director Nueces River Authority Nueces River Authority P. O. Box 349 P. 0. Box 349 Uvalde, Texas -78801 IIvalde, Texas 78801 . Section 6.03. Term. (a) City has the right to terminate this Contract at any time =-�Lt- �f.�sta-Ir -1976, if the Authority has not sold its within 6 months after City in writing has requested it to first issue of bonds / by- the- tlsse- t}�ss_�sght- ss- eereis: do so pursuant to Section 3:02(b) wherein Authority is obligated to sell bonds._ - (b) Subject to the provisions of Subsection (a), above, this Contract shall continue in force and effect at least until' the bonds required to fulfill the obligations of the parties under the Fund Advancement and.Federal•Contracts and this Contract and any refunding bonds issued in lieu thereof are paid, and until the reimbursable cost obligations to the United States are paid or otherwise satisfied, and for so long thereafter as City shall take Project Water. Section 6.04. Severability. If any obligation or covenant 29 of either party hereto shall ever be held.invalid, the remaining provisions of this Contract shall continue to be binding and enforceable. Section 6.05. Force Ma'eure. To the extent that either Party to this Contract shall be wholly or partially prevented from the performance within a time specified of any obligation or duty placed on such party by reason of or through strikes, stoppage of labor,.riot, fire, flood, invasion, insurrection, accident, the order of any court.; judge or civil authority, the Act of God, or any cause reasonably beyond such party's control and not attributable to its neglect, then, and in such event upon prompt written notice by the party making the claim to the other party, the time for the performance of such obligation or duty shall be suspended until such disability to perform is removed, except payments due by City under this Contract, regardless of the availability of water. A party rendered unable to fulfill any obligation by reason of uncontrollable causes shall exercise due diligence to remove such inability with all reasonable dispatch. Xe Section 6.06. Execution of Contract. This Contract am -•a-1 P nf- has been executed by Authority by virtue of 6� action taken by its Board of Directors pursuant to law; and has ki kThziTe been executed by the City Manager of the City of Corpus Christi, Texas, and attested by its City Secretary, upon and by authority r 5ec. 60 of an Ordinance, after having been read at a meeting of 6 - the City Council of.the City of Corpus Christi; provided, however, the parties agree that before they shall be bound by this Contract, E ept as to Article 4, which shall become effective upon contract execution, / each must have executed the 30 • AM+ Section 6.06. Effective Date of Contract Provisions. (a) The following provisions of this Contract are effective ?' and enforceable on the date of its execution: Article 1, Article 2, Section 3.02(a), Section 3.07, Section 3.08, Article 4, and Articled Q 6. '� (b) The other provisions of this Contract become effective Sor and enforceable when both parties have executed the Federal Contract and the Texas Water Rights Commission has issued a permit for the Project which is acceptable to the parties, 30A -.0. % , • J70; Federal Contract relating to the Project and the Texas Water Rkrob Rights Commission shall have issued a permit for the Project Yp✓:Sioh which is acceptable -to the parties. y Sec. 4�o6 EXECUTED IN MULTIPLE COUNTERPARTS, each of which is-an original, this day of. NUECES RIVER AUTHORITY BY: President, Board of DIFectors ATTEST: (SEAL) Secretary CITY OF CORPUS CHRISTI BY:. City Manager ATTEST: (SEAL) Secretary CtlOn_ The agreement i this Contract providing for the submission of controversies under this Contract to arbitration has been concluded upon advice of counsel for the City and the Authority as evidenced b their signatures gnatures below. 31 s • ATTORNEY FOR CITY ATTORNEY FOR AUTHORITY 32