HomeMy WebLinkAbout13183 ORD - 05/19/1976M:hb:S /19/76:lst
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AN ORDINANCE
AUTHORIZING THE CITY MANAGER TO EXECUTE CONTRACT
BETWEEN THE NUECES RIVER AUTHORITY AND THE CITY
OF CORPUS CHRISTI ON NUECES RIVER RECLAMATION
PROJECT, TEXAS (CHORE CANYON RESERVOIR PROJECT),
AS MORE FULLY SET FORTH IN THE PROPOSED CONTRACT,
A SUBSTANTIAL COPY THEREOF BEING ATTACHED HERETO
AND MADE A PART HEREOF, MARKED EXHIBIT "A ".
WHEREAS, under date of February 18, 1976, by authority of
Ordinance No. 13000, the City of Corpus Christi entered into a contract
with the Nueces River Authority concerning construction of the Nueces
River Reclamation Project, Texas, also (mown as the Choke Canyon Reservoir
Project; and
WHEREAS, it is deemed advisable to amend the aforesaid contract,
so as to provide additional security behind the proposed bonds of the
Nueces River Authority:
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF CORPUS CHRISTI, TEXAS:
SECTION 1. That the City Manager be and he is hereby authorized
to execute contract between the Nueces River Authority and the City of Corpus
Christi concerning the Nueces River Reclamation Project, Texas (Choke
Canyon Reservoir Project), amending the contract executed on February 18,
1976, by authority of Ordinance No. 13000, passed and approved by the City
Council on February 4, 1976, a substantial copy of the proposed contract
being attached hereto, marked Exhibit "A", and made a part hereof.
MICRoFl4ft
401V 1' 1980
13183
CONTRACT BETWEEN
NUECES RIVER AUTHORITY AND CITY OF CORPUS CHRISTI
ON NUECES RIVER RECLAMATION PROJECT, TEXAS
(CHORE CANYON RESERVOIR PROJECT)
TABLE OF CONTENTS
ARTICLE 1. GENERAL PROVISIONS.
1 -7
Section
1.01.
Purpose of Contract.
1
Section
1.02.
Definitions.
1 -4
Section
1.03.
Arbitration.
5 -6
Section
1.04.
Venue.
6
Section
1.05.
Fiscal Year.
6
Section
1.06.
Interpretation.
6
Section
1.07.
Amendments.
6 -7
ARTICLE 2. RECITALS AND GENERAL AGREEMENTS.
7 -11
Section
2.01.
General Recitals.
7 -8
Section
2.02.
Participation by the Parties.
8
Section
2.03.
Additional Water Rights Required.
8
Section
2.04.
Termination of Project.
9 -10
Section
2.05.
Prior Obligations of City's
Waterworks.
10 -11
Section
2.06.
No Taxation Required.
11
Section
2.07.
Significance of "Pre- Operating"
and "Operating" Categories.
11
ARTICLE 3. PRE - OPERATING ACTIVITIES: FINANCING
REIMBURSABLE COSTS.
11 -16
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.
14
Section
3.04.
Payment on Recreation, Fish
and Wildlife Costs.
14
i
Section
3.05.
Revenue Sources Pledged.
14
Section
3.06.
City's Obligation to Make
Payments.
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 -20
Section
4.01.
Designation as Joint Contracting
Entities.
16 -17
Section
4.02.
Water Rights.
17 -18
Section
4.03.
Other Permits and
Authorizations.
18 -19
Section
4.04.
Construction Decisions.
19
Section
4.05.
Pre- Operating Payments.
19 -20
ARTICLE 5. OPERATING
PHASE.
20 -34
Section
5.01.
Operation of Project.
20 -21
Section
5.02.
Water Sales.
21 -23
Section
5.03.
O &M Expenses.
23 -25
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.
31
Section
5.08.
Delinquency in Payments.
31 -32
Section
5.09.
Water Use Information.
32
Section
5.10.
Indemnification.
32 -34
ii
7
ARTICLE 6. ASSIGNMENT, CONTRACT TERM AND CONTRACT
PROCEDURES.
Section 6.01. Assignment.
Section 6.02. Notices.
Section 6.03. Term.
Section 6.04. Severability.
Section 6.05. Force Majeure.
Section 6.06. Effective Date of Contract
Provisions.
EXECUTION
iii
35 -38
35
35
35 -36
36
36
37
37 -38
•
CONTRACT BETWEEN
NUECES RIVER AUTHORITY AND CITY OF CORPUS CHRISTI
ON NUECES RIVER RECLAMATION PROJECT, TEXAS
(CHOICE 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 or any successor agency having appropriate jurisdiction
now exercised by said Board.
(5) "Commission" means the Texas Water Rights Commission
or any successor agency having appropriate jurisdiction now
exercised by said Commission.
(6) "Quality Board" means the Texas Water Quality Board
or any successor agency having appropriate jurisdiction now
exercised by said 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.
2
(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.
(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 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
3
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 agreement
dated December 30, 1975, between the United States and City
providing for the advancement of funds for construction of
the Nueces River Federal Reclamation Project, Texas.
(18) "Reimbursable Costs" means the portion of Con-
struction 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 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
for completion of the Project and bonds issued to refund any
such bonds.
(22) "Bond Resolution" means the bond resolution or
resolutions and Indenture or Indentures authorizing the
issuance of and securing the Bonds and all amendments thereof
and supplements thereto.
4
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
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) Approval of the O &M budget contained in
5
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 defen-
dant, 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 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
6
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 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
7
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,
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 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 may be 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.
8
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.
(b) In the event activities on the Project by the
United States are halted for any reason prior to its completion,
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
9
• r0
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
is not contrary to law. Decision of City not to participate
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
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 except for those for
recreation, fish and wildlife will constitute operating
expenses of City's waterworks system within the meaning of
the provisions of all City ordinances and resolutions authorizing
the issuance of its revenue bonds, payable from revenues of
its waterworks system, with the effect that City's obligation
to make payments from its waterworks system revenues under
this Contract shall have priority over its obligations to
10
make payments'of the principal of and interest on any and
all of such 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" 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 under-
takings could occur in or extend into a phase different from
the one 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
11
s •
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 Component. Such
payments for the RFW Component will be made by the entity
responsible for operation and maintenance of the RFW Com-
ponent unless other arrangements for such payments are made
between the parties. All costs for operating Fish, Wildlife.
and Recreation 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 has made a commitment in the Fund Advancement
Contract to advance certain monies to the United States to
provide part of the funds in the amount of approximately
Eighteen Million Two Hundred Fifty Thousand Dollars ($18,250,000)
for constructing the project. Such advancement is consistent
with the Federal Contract.
(b) Authority will issue revenue Bonds to make the
advance funding payment to the United States which City does
not provide from other sources. The first installment or
issue of Bonds shall include funds necessary to pay interest
on the Bonds until revenues 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
12
without limitation engineering, legal, fiscal and admini-
strative expenses, and contingencies. Upon execution of 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. Each resolution and indenture authorizing
and securing the Bonds shall be approved by the City.
(d) No investments or determinations of the amounts
and times of transmittals to the United States in accordance
with the Fund Advancement Contract and the Federal Contract
of monies constituting proceeds from the sale of bonds or
those on deposit in any fund created pursuant to the Bond
Resolution shall be made without concurrence of the City and
such investments and determinations of the amounts and times
of such transmittals to the United States shall be made by
the Authority when requested by the City. Payments of such
funds into an escrow account or accounts from which the
United States has authority to withdraw for project expen-
ditures, shall be made by the Authority as requested by the
City.
13
Section 3.03. Payment on Municipal and Industrial
Water Supply Costs. The Bonds shall be secured by a pledge
of the payments made by City pursuant to this Contract and
such payments shall be made by the City from the revenues
of the City's waterworks system as an operating expense of
such system as provided in Section 2.05, and net revenues
from sales, if any, 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-
tively pertain, and agree to make the payments for the said
Bonds and obligations when and as required by the Bond
Resolution. the Federal Contract, and this Contract.
14
•
Section 3.06. City's Obligation to Make Payments.
(a) City shall make payments to the Authority hereunder
in amounts (1) sufficient to pay the principal and interest
of the Bonds as each comes due and matures, (2) and all
other payments required of the Authority by the Bond Resolution
to be made, including but not limited to deposits required
therein to be made to funds established by the Bond Resolution,
and the charges of the place or places of payment for the
Bonds.
(b) The payments made by City pursuant to (a) of this
Section shall be made to a trustee for the benefit of the
holders of the Bonds, if so provided in the Bond Resolution.
Such payments by the City shall be made in a timely manner
in order to meet the Authority's obligation to pay principal
of and interest on the Bonds in accordance with the Bond
Resolution.
(c) 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, if and when the Bonds are delivered to the purchasers
thereof, City shall be obligated to make to the Authority
the payments herein required regardless of whether or not
15
•
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 represen-
tation, 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.
(d) The payments required by (a) of this section shall
be made so long as any of the Bonds remain outstanding and
unpaid.
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 States to designate
them together as the joint contracting entities on the
16
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-
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
17
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
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.
(1) 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.
18
•
(4) Applications to the United States Army Corps 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
agreement on any matter affecting the cost of the Project to
City, then the decision of City shall be final. 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 maintenance 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 35,000
1979 35,000
1980 40,000
and on the 1st day of January of each year 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 Authority's Board of Directors and
if the Board certifies that the amount in excess of $40,000 is
19
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, 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 com-
pliance 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
and this Contract.
(b) The timing and rate of diverting, releasing or taking
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 maintenance
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. If time factors_
20
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
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 circumstances 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 (1) all
payments required to be made by City under this Contract, and (2)
other costs of operating and maintaining its waterworks system,'
and (3) payments of principal of and interest on all bonds here-
tofore or hereafter issued by City payable from the revenues of
such system.
(c) City agrees to contract to sell Project Water for
municipal and industrial purposes to any requesting governmental
entity, without discrimination, in Nueces, San Antonio - Nueces and
Nueces -Rio Grande Zone No. 1 basins as designated by Development
21
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 Com-
mission. Should any such governmental entity so request,
any dispute alleging discrimination as to price or 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 shortages
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
22
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 so that a re-
duction 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 O &M is 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:
(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
23
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;
and
(2) Net revenues from sales, if any, of Project
water by Authority but excluding payments to Authority by
City pursuant to Section 5.05(b) of this Contract and payments
for debt service pursuant to Sections 3.03 and 3.06.
(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
24
at any time insufficient to meet 0 &M expenses which City and
Authority are obligated to pay 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 Section 2.06 of this
Contract.
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 such 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, City's payments of 0 &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
25
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.
(c) Authority may make reallocations and adjustments
between items in the budget and may make additional expen-
ditures up to 10% 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-
26
cial 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 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. Sporting 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
27
significant benefit to City, its inhabitants and its water
customers.
(b) In consideration of such services and for Autho-
rity's 20% undivided interest in Project Water, City hereby
agrees to pay Authority during the operating phase the
greater of the following sums:
(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 adjustments 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
2B
water sold iri 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
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 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;
29
(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
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 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.
30
Section 5.07. 02eration 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 otherwise
satisfied.
(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 (10 %) per annum from the
date such payment became due until paid in full with interest
31
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
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.
32
(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
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:
33
(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 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 of its
officers, councilmen, agents, attorneys and employees in
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, 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 the project and any additional
services and facilities provided by Authority pursuant to
Section 5.06 of this Contract.
34
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'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 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 obligations of
35
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
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.
36
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.
NUECES RIVER AUTHORITY
BY:
President, Board of
ATTEST: Directors
SEAL) Secretary
ATTEST:
(SEAL) Secretary
CITY OF CORPUS CHRISTI
BY:
37
City Manager
APPROVED AS TO FORM:
City Attorney
APPROVED:
Director of Finance
The agreement in Section 1.03 of thi3 Contract providing
for the submission of certain controversi s under this
Contract to arbitration has been concludel upon advice of
counsel for the City and the Authority as evidenced by their
signatures below.
ATTORNEY FOR CITY
ATTORNEY FOR AUTHORITY
ATTEST:
Mayor
City Secretary The City of Corpus Christi, Texas
38
THAT THE FOREGOING ORDINANCE WAS READ FO THC FIRST TIME AND PASSED
TO ITS SECOND READING ON THIS TNE 7tA DAY OF 1J� BT THE
FOLLOWING VOTE:
JASON LUST
7P. BILL TIPTON
EDUARDO DE ASES
RUTH GILL
BOB GALLEY
GABS LOZANO, SR.
EDWARD L. SAMPLE
THAT THE FOREGOING ORDINANCE WAS R AD FO T E SECOND TIME AN PA33ED
TO ITS THIRD READING ON THIS THE�DAY OF 19 BY 7ME
FOLLOWING VOTE:
JASON Luer
OR. BILL TIPTON
EDUARDO DE ASES
RUTH GILL
801 GULLEY alv�l
GABE LOZANO, SR.
EDWARD L. SAMPLE
TNAT THE FOREG01 G ORDI
FINALLY ON THIS THEDAY 0
JASON LUBY
DR. BILL TIPTON
EDUARDO DE ASES
RUTH GILL
BGB GALLEY
GABE LOZANO, SR.
EDWARD L. SAMPLE
PASSED AND APPROVED, TNI
ATTEST:
C Y SECRE ARY • -
APMFVED:
__L _DAY OF
L ►. �.. _ . Ii► .%:.
6. Ir
D PASSED
LOWING VOTE:
19 Z"'
MA OR
CITY OF CORPUS CHRISTI, TEXAS