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HomeMy WebLinkAbout022859 ORD - 03/04/1997AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A RAW WATER SUPPLY CONTRACT WITH THE SAN PATRICIO MUNICIPAL WATER DISTRICT; PROVIDING FOR PUBLICATION; AND DECLARING AN EMERGENCY. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. The City Manager is authorized to execute a new raw water supply contract with the San Patricio Municipal Water District, a substantial copy of which is attached hereto as Exhibit A. SECTION 2. Publication shall be made in the official publication of the City of Corpus Christi as required by the City Charter of the City of Corpus Christi. SECTION 3. That upon written request of the Mayor or five Council members, copy attached, to find and declare an emergency due to the need for immediate action necessary for the efficient and effective administration of City affairs, such finding of an emergency is made and declared requiring suspension of the Charter rule as to consideration and voting upon ordinances at two regular meetings so that thi,s/, //ordinance is passed and shall take effect upon first reading as an emergency measure this the 4H day of � lay, 1997. ATTEST Ci y ecretary APPROVED: This as day of February, 1997: Ja M' . Bray, Jr. d City A orney R73706C2.058 THE CITY OF CORPUS CHRISTI Mayor The City of Corpus Christi Ni ROBLMEC 022859 Corpus Christi, Texas day of Pah CA , 19 Q% TO THE MEMBERS OF THE CITY COUNCIL Corpus Christi, Texas For the reasons set forth in the emergency clause of the foregoing ordinance an emergency exists requiring suspension of the Charter rule as to consideration and voting upon ordinances at two regular meetings: I/we, therefore, request that you suspend said Charter rule and pass this ordinance finally on the date it is introduced, or at the present meeting of the City Council. Respectfully, Respectfully, Council Members �.z MAYOR THE CITY F CORPUS CHRISTI The above ordinance was passed by the following vote: Mary Rhodes /� Dr. Jack Best l ,C calk Betty Black Melody Cooper0al tSt l.1— Tony Heldenfels `'/ ,p Betty Jean Longoria John Longoria Edward A. Martin Dr. David McNichols \forms\045 +)22859 RAW WATER SUPPLY CONTRACT BETWEEN THE CITY OF CORPUS CHRISTI AND SAN PATRICIO MUNICIPAL WATER DISTRICT THE STATE OF TEXAS } COUNTY OF NUECES } This Contract for the supply of untreated raw water, made as of this day of , 1997, by and between the City of Corpus Christi ("City"), a Texas home -rule municipal corporation, whose address is P.O. Box 9277, Corpus Christi, Texas 78469- 9277, and acting through its duly authorized City Manager, or the City Manager's designee ("City Manager"), which owns a regional water supply system that provides untreated raw water and treated water to municipal and industrial customers, and San Patricio Municipal Water District ("District"), a conservation and reclamation district and political subdivision of the State of Texas, created by the State of Texas under Article XVI, Section 59, Texas Constitution, and Article 8280-145, Vernon's Civil Statutes, whose address is Drawer S, Ingleside, Texas 78362, acting by and through its duly authorized representative ("District's Representative"). This Contract supersedes and replaces the untreated raw water contract dated June 21, 1984, between the parties to this Contract. This Contract is the only agreement of the parties relating to the sale, diversion, and use of untreated raw water. Any prior understandings or written or oral agreements between the parties are superseded by this Contract. The District desires to continue to divert and use untreated raw water for resale for municipal and industrial purposes, and the City desires to continue allowing or otherwise facilitating the diversion and use of untreated raw water by the District. R73706A8.058 Page 1 of 17 In consideration of the above recitals and the mutual promises, covenants, and agreements, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows: 1. Term. This Contract continues in perpetuity from the date of final approval of this Contract, and is subject to the "Remedies Upon Default" and "Periodic Review of Contract Provisions" contained in Sections 14 and 20 of this Contract. 2. Use and Quantity of Water. a. The City agrees to allow the District to divert, and use consumptively, untreated raw water from the Nueces River and Lake Texana pipeline for municipal and industrial purposes in such quantity as may be required by the District, but not exceeding a total of 30,000 acre feet in a calendar year (January 1 to December 31). Not more than 8,400 acre feet may be diverted from the Lake Texana pipeline in any calendar year. Under typical operating procedures, the maximum rate of diversion from the Nueces River will not exceed 18,100 gallons per minute, and the maximum rate of diversion from the Lake Texana pipeline will not exceed 10,425 gallons per minute. b. Because of the critical need of the City to balance its releases of water at the Wesley Seale Dam and its diversions from Lake Texana with the diversions of raw untreated by the City, the District, and the City's other customers, the District shall notify the City's Water Superintendent prior to any change in its rate of diversion. The notification must indicate the time the rate of diversion will change, the new rate of diversion in gallons per minute, and the period of time diversions will be made at the new rate. The City's Water Superintendent and the District's Representative will determine the method and procedures for providing this information. The methods and procedures will be agreed to in writing, and the agreement will be attached to this Contract as Exhibit "A". R73706A8.058 Page 2 of 17 c. However, if an emergency situation arises, the District may divert untreated raw water at a higher rate of diversion, as long as the District notifies the shift supervisor on duty at the City's Wesley Seale Dam by telephone, (512) 547-2122, and sends the notifications required by Section 2.b. of this Contract, as soon as possible, but in no case not later than two hours after the rate of diversion is increased by the District. The District's Representative and the City's Water Superintendent will determine how long the increased diversions will last and the rate at which diversion will be increased. However, the District may not divert more than 30,000 acre feet during the calendar year from the Nueces River or more than 8,400 acre feet during the calendar year from the Lake Texana pipeline. d. Except as provided in subsection 2.b., if the District's projected needs require it to divert more than 14,000 gallons per minute from the Nueces River or 5,210 gallons per minute from the Lake Texana pipeline on a continuing basis, the District's Representative will notify the City's Water Superintendent of any planned increase in pump capacity or diversion rate at least 90 days prior to increasing the rate of diversion. The Water Superintendent will determine whether there is sufficient capacity within the system to allow an increased rate of diversion after considering the City's planned needs and the needs of its other water customers. If any increase is authorized, the Water Superintendent will determine the rate at which diversion may be increased to, and will notify the District's Representative of the decision. e. The District may request an increase in the total volume of annual diversions allowed based on the extent of then uncommitted available water. The City will consider its planned needs, the needs of its other water customers, and the needs of other communities in the region before committing to any increase in the District's annual diversions. However, the City is under R73706A8.058 Page 3 of 17 no obligation to authorize an increase in the annual diversion rate. This Contract must be amended in writing to authorize an increase in the District's annual diversion. g. Actual current and projected future diversions are shown on Exhibit "B" attached to and incorporated into this Contract. h. Title to and possession of the untreated raw water passes to the District at the point of diversion. i. Before the District diverts any water from the Lake Texana pipeline, the City and District shall notify the Lavaca-Navidad River Authority (LNRA) of the District's planned use of the water and request an opinion from LNRA on whether or not the District's proposed use of water from the Lake Texana pipeline will jeopardize the tax exempt status of the LNRA bonds. If LNRA provides a determination that the use of water from the Lake Texana pipeline by the District will jeopardize the tax exempt status of its bonds, the District will not divert any water from the Lake Texana pipeline, until the use of water by the District has been authorized by LNRA. 3. Point of Diversion. a. The District will divert the untreated raw water from the Nueces River by means of a stationary pump located at its existing pumping station, which is located on the north bank of the Nueces River, upstream and within 500 feet of the Calallen channel diversion dam and reservoir, as described on Exhibit "C". b. The District will divert the untreated raw water from the Lake Texana pipeline by a means and at a location agreed to in writing by the City's Water Superintendent and the District's Representative. The agreement will be attached to this Contract as Exhibit "D". 4. Measurement of Raw Water. a. The untreated raw water delivered under this Contract must be measured in U.S. standard gallons by a suitable water meter or meters to be installed and R73706A8.058 Page 4 of 17 maintained by the District at the point of diversion, which shall be accurate within 2%, either plus or minus. The City's Water Superintendent may specify the type of meter or meters to be used and the installation design of the meter or meters. Checks as to the accuracy of the meter or meters will be made semi-annually by the Water Superintendent, at the City's expense. The Water Superintendent will notify the District's Representative in writing 10 days in advance of all semi-annual checks and tests in order that the District may have a representative present as a witness. (1) If either the City's Water Superintendent or District's Representative, at any time, notifies the other that it desires a special test of any meter, the parties will cooperate in arranging for a special test to be made by the City. (2) The expense of the special test of the meter or meters will be paid by the party requesting such test. (3) If, on any test, the meter tested is found to be inaccurate by an amount exceeding 2%, either plus or minus, then any previous readings of such meter will be corrected for any period of inaccurate measurement, which is definitely known or agreed upon, but no such correction will extend back over a period beginning more than 30 days prior to the time when such inaccuracy was first made known by either party to the other. (4) If, for any reason, the meter or meters are out of service so that the volume of untreated raw water delivered cannot be ascertained or computed, the untreated raw water delivered during the period such meter or meters are out of service will be estimated by the City's Water Superintendent, in consultation with the District's Representative, upon the basis of the best data available. R73706A8.058 Page 5 of 17 b. The City will read the meter or meters on or about the last day of each month and will determine from these readings the amount of untreated raw water delivered to the District. All meter readings will be made available to the District's Representatives during the City's reasonable office hours. c. The District shall provide a rate -of -flow and volume diverted data by means of a signal compatible with the City of Corpus Christi Supervisory Control and Data Acquisition System (SCADA). The method and means of providing this data and signal must be agreed to in writing by the City's Water Superintendent and the District's Representative. The agreement will be attached to this Contract as Exhibit "E". The District shall pay the costs of any equipment or software, including programing, necessary to allow the receipt of a compatible signal and data by the City's SCADA. If either party changes its current system, so the data and signal produced or received is incompatible with the other party's system, the party changing its system shall bear the costs of any equipment or software, including programing, to allow the transfer of compatible data between the two systems. 5. Price of Raw Water. a. The price to be charged for untreated raw water sold by the City to the District is the published rate for raw water service plus the raw water cost adjustment that are in effect at the time of diversion. The raw water cost adjustment ("RWCA") will be calculated on a monthly basis, and determined by dividing the most recently available costs of raw water by the system -wide average volume of untreated raw water sales for the prior twelve month period. The RWCA will be adjusted on a monthly basis to account for differences in volumes used in the prior calculation and the actual volume of water sales for that month. A copy of the current water rate and raw water cost adjustment ordinance is attached as Exhibit "F". Changes in the raw water cost adjustment are automatic, and the District will be billed the R73706A8.058 Page 6 of 17 adjusted rate. The ordinance is subject to change at the discretion of the City Council. The City's Water Superintendent will provide the District's Representative with a copy of any modifications to the ordinance, which will be attached to this Contract as the new Exhibit "F". b. The actual methods for computing the untreated raw water cost adjustment is established in a written policy filed with the City Secretary. A copy of the current policy is attached as Exhibit "G". The City's Water Superintendent will provide the District's Representative with a copy of any modifications to the policy, which will be attached to this Contract as the new Exhibit "G". 6. Fixed Minimum Obligation. a. The District is not obligated to purchase any minimum amount of untreated raw water in any billing month during the period of this Contract or any renewal or extension thereof, but the District must pay the City the rate for raw water service (currently $202.733 per month). The rate for raw water service is adjusted annually on August 1st to reflect any general percentage increases applied to water rates applicable within the City, and be effective August 1st annually, regardless of whether any untreated raw water is used. b. The rate for raw water service is intended to cover the cost of meter readings, testing, billing, and other costs, which will continue whether any untreated raw water is withdrawn by the District. The monthly service charge does not include the costs of any untreated raw water diverted by the District. 7. Billing. a. All untreated raw water taken in any one calendar month will be billed between the first and tenth of the next succeeding calendar month, and the District will pay the bill within 10 days of the receipt of such bill. Any clerical error in the bill or minor question regarding the bill is not sufficient grounds to delay payment by the District to the City. Any such questions, will be properly settled under the terms of this Contract and by the agreement of both R73706A8.058 Page 7 of 17 parties. Any adjustments in the amount paid as a result of such agreement will be added to or deducted from the following month's bill. b. Any failure by the District to pay the monthly billing within 30 days after such billing date is a "default" under Section 14 of this Contract. In the event it becomes necessary to collect such charges through any Court procedure, the City is entitled to also recover reasonable attorney's fees. If the District fails to pay its water bills, the City may require the payment in advance of each monthly water bill based on the Districts previous bill, plus a deposit, as a condition to furnishing untreated raw water to the District. 8. Restrictions on Resale. a. It is understood that the District contemplates treating some of the untreated raw water obtained under this contract and selling both untreated raw water, treated (filtered) water, and treated potable water. The treated potable water is sold to customers, who will in turn resell the potable water to others. The District agrees that it will not sell water to future customers unless they comply with "Requirements for Review and Approval for Water Systems Connected to San Patricio Municipal Water District Transmission System," Exhibit "H" to this contract and incorporated by reference to this contract for all purposes. b. The District agrees to bind its future customers and its existing customers upon contract renewals to the terms of this contract and to request its existing customers to honor all conditions of this contract until their contract with the District is renewed. All resale agreements, both future and existing, shall ensure that the provisions of Section 11 of this contract, Water Conservation and Drought Contingency Measures, are included in the resale contracts. 9. Fixed Minimum Obligation - The District is obligated and hereby agrees to purchase all of its water from the City, except untreated water obtained from existing and future wells within the boundaries of those counties in which the District has jurisdiction, or supplemental surface R73706A8.058 Page 8 of 17 water which might be available at a future date from a watershed other than the Nueces River; provided however, that in the event the District desires to purchase untreated water from other watershed sources during the remaining debt term of the Choke Canyon Reservoir and of the Lake Texana and Garwood water supply facilities, that the District obtain written approval thereof from the City. 10. Water Rights. It is mutually agreed and understood that Lake Corpus Christi and Choke Canyon Reservoir waters, any currently developed ground water, water acquired by the City from the Lavaca-Navidad River Authority, water rights obtained from the Garwood Irrigation Company, and other future waters, whether surface waters or ground waters, obtained by the City, which are not under Contract to others, and which are owned by the City, may used to supply water during the time this Contract remains in force. Further, that this Contract is subject to the City's responsibility and obligation to provide water to municipal and industrial consumers within the Corpus Christi city limits and other municipal and industrial consumers outside its city limits. Subject to Section 11, Water Conservation and Drought Contingency Measures, the City binds and obligates itself, however, to take the necessary actions within its power and to make the necessary applications to obtain whatever additional water rights as may be necessary to adequately meet the needs of its existing contracts, this Contract, and any future contractual obligations of the City. It is also mutually agreed and understood that this Contract is subject to the jurisdiction of the Texas Natural Resources Conservation Commission, or any successor agency, ("TNRCC"), or any other regulatory authority that may have jurisdiction over such matters. The District agrees to support any future City requests to the TNRCC or other regulatory authorities for permission to acquire water rights or provide water to the District and other customers. R73706A8.058 Page 9 of 17 11. Water Conservation and Drought Contingency Measures. a. The District acknowledges the terms of the TNRCC Agreed Order of April 28, 1995, which amended the operational procedures relating to Special Condition 5.B, Certificate of Adjudication No. 21- 3214, and the City's responsibilities under both the Agreed Order and the Certificate of Adjudication. The District recognizes that the Agreed Order and Certificate of Adjudication may be amended in the future. The agreed order requires the City to provide in any future contracts or any amendments, modifications, or changes to existing contracts the condition that all wholesale customers and any subsequent wholesale customers must develop and have in effect a water conservation and drought management plan consistent with the City plan as required by the TNRCC rule. Therefore, the District agrees that during the term of this contract, it shall have in effect a water conservation and drought management plan consistent with the City's plan. The District also agrees to bind future customers and its existing customers upon contract renewals to develop and have in effect a water conservation and drought management plan consistent with the City plan. b. If the City implements any measures under it Water Conservation and Drought Contingency Plan, adopted under Section 55-156 of the Code of Ordinances for the City of Corpus Christi, the District shall within 30 days of notice of the implementation of any restrictions, surcharges, or rationing by the City, impose similar restrictions, surcharges, or rationing measures on its customers. Any contract for the resale of water furnished by the District shall contain a similar condition. If for whatever reason the District, or its customer, is unable or unwilling to impose the required restrictions, surcharges, or rationing measures within the required time period, the District, or its customer, shall reduce its consumption of water from the system as follows: R73706A8.058 Page 10 of 17 (1) During Condition I -- Water Shortage Possibility, diversions from the system shall be reduced by 10% from the average diversions for the same month of the year over the previous three years. (2) During Condition II -- Water Shortage Watch, diversions from the system shall be reduced by 20% from the average diversions for the same month of the year over the previous three years. (3) During Condition III -- Water Shortage Warning, diversions from the system shall be reduced by 30% from the average diversions for the same month of the year over the previous three years. (4) During Condition IV -- Water Shortage Emergency, diversions from the system shall be reduced by 60% from the average diversions for the same month of the year over the previous three years. c. If for whatever reason the District, or its customer, is unable or unwilling to impose the required restrictions, surcharges, or rationing measures within the required time period, but relies upon other sources of water for all or a portion of its water requirements, the District, or its customer, agrees not to request an increase in the amount of water being diverted from the system should the Districts, or its customer's, other source(s) of water fail to continue to yield the amounts of water anticipated. d. To the extent that the TNRCC or other regulatory agency requires rationing of water in a manner stricter than that imposed by the City, the District will comply with such stricter method of rationing water. e. The District shall furnish a copy of any ordinances, orders, or rules adopted by it or its customers that is adopted to implement the required restrictions, surcharges, or rationing R73706A8.058 Page 11 of 17 measures within the applicable jurisdiction. If for whatever reason the District, or its customer, is unable or unwilling to impose the required restrictions, surcharges, or rationing measures, the City may audit the records of the District to ensure that the District or its customer has reduced its diversions by the amount required by this Section. f. The failure of the District to comply with this Section of the Contract is a "default" under Section 14 of this Contract. 12. Relocation. If the City determines that it is necessary to adjust or relocate any or all of the facilities constructed by the District in order to repair, alter or reconstruct the Calallen channel diversion dam or other City facilities used to deliver water under this Contract, the District shall bear the full cost of such adjustments or relocations of District facilities. The City will give due and careful consideration to the location of the District's facilities and will, within the limits of sound engineering and ultimate total project cost to all agencies, minimize the required relocation of the facilities of the District. 13. Corpus Christi Right to Sell. The City and the District retain the right to sell untreated water at points and to customers that are located either within or outside of the boundaries of the District, consistent with applicable law, and they will consult with each other about plans for extensions into new areas. 14. Force Majeure. If the City or District are prevented, wholly or in part, from fulfilling its obligations under this Contract by reason of any act of God, unavoidable accident, acts of enemies, strikes, fires, floods, conservation of water for those with superior and legal rights to such water, governmental restraint or regulation, other causes of force majeure, or by reason of circumstances reasonably beyond its control, then the obligations of City or District, as provided in this Contract, are temporarily suspended during continuation of such force majeure. No R73706A8.058 Page 12 of 17 damage is recoverable by the District from City by reason of the temporary suspension of delivery of water due to any of the causes above mentioned. If the City's obligation is affected by any of such causes, the City will promptly notify the District's Representative in writing, giving full particulars of such force majeure as soon as possible after the occurrence of the cause or causes relied upon. 15. Resolution of Rate Disputes. In the event of any dispute as to the rates being charged, the City and the District agree that the dispute will be appealed to the TNRCC, under applicable TNRCC rules, to the extent that the TNRCC has jurisdiction over the issue. The City and the District agree to cooperate to satisfy any jurisdictional requirements that the TNRCC may require for it to determine the rate. In the event the TNRCC does not have jurisdiction or refuses to hear the dispute, either party may bring an action in court to settle the dispute. 16. Remedies Upon Default. a. If either party determines that the other party is in default under this Contract, the party claiming default by the other party shall give written notice to the other party, which states specifically the nature of the default and the remedy for the default that the party intends to seek. The notice must be mailed to the defaulting party at the address provided in Section 18 of this Contract. The defaulting party has or will have ninety (90) days in which to cure the default, or if such default cannot be reasonably cured within such ninety (90) day period, the defaulting party shall use reasonable efforts to undertake to cure such default within such ninety (90) day period. If the defaulting party does not cure the default and reimburse the party not in default for any and all costs incurred as a result of the breach within ninety (90) days, or if the default cannot be reasonably cured within such ninety (90) day period, if the defaulting party does not use reasonable efforts to undertake to cure the default and reimburse the party not in default for any and all costs incurred as a result of the breach within R73706A8.058 Page 13 of 17 such ninety (90) day period, the party claiming default may seek any remedy available at law or equity, including an action in mandamus or for specific performance. b. No waiver of any breach or default by any party or of performance may be deemed a waiver in the future, nor may any waiver be deemed or construed to be waiver of subsequent breach or default of any kind, character, or description, under any circumstances. 17. Assignability. This Contract may not be assigned by the District without the prior written consent of the governing body of the City, which consent will not be unreasonably withheld. 18. Attorney's Fees. If any legal action is brought by either party, it is expressly agreed that the prevailing party in such legal action is entitled to recover from the other party reasonable attorney's fees and expert witness fees, in addition to any other relief that may be awarded. For the purpose of this Section, the prevailing party is the party who obtains the net damage recovery, or the party in whose favor final judgment is entered. If declaratory or injunctive relief alone is granted, the court may determine which, if either, of the parties is considered to be the prevailing party. The amount of reasonable attorney's fees must be determined by the court, in the trial of such action or in a separate action brought for that purpose. Attorneys fees awarded under the provisions of this Section are in addition to any other relief that may be awarded. 19. Authority to Execute. Both parties represent that the individual signing this Contract on behalf of each of the parties has been duly authorized to execute this Contract by proper ordinance or resolution of its governing body (e.g., the City's City Council and the District's Board of Directors), and certified copies of the authorizations have been provided to the other party for attachment to this Contract. The City's authorization shall be Exhibit "I", and the District's authorization shall be Exhibit "J". R73706A8.058 Page 14 of 17 20. Notices and Addresses. Any notice, communication, or statement required to be given pursuant to this Contract will be in writing and deemed to have been received when delivered in person or three (3) days after mailing if sent by certified mail, postage prepaid, return receipt requested, to the address of the respective party indicated below: City of Corpus Christi Attn.: Water Superintendent P. O. Box 9277 Corpus Christi, Texas 78469-9277 Phone: (512)857-1881 Fax: (512)857-1889 San Patricio Municipal Water District Attn: Executive Director P.O. Drawer S Ingleside, Texas 78362 Phone: (512)643-6521 Fax: (512) 643-9093 21. Regulatory Agencies. The District and City agree that the effectiveness of this Contract is subject to the jurisdiction of the Texas Natural Resource Conservation Commission and is dependent upon compliance with the regulations in Title 31, Texas Administrative Code, Chapter 295 and 297, Subchapter J., and any amendments thereto. 22. Periodic Review of Contract Provisions. (a) The District and City shall review the terms of this Contract whenever a change in circumstances may require an amendment, but shall review the Contract at least every five (5) years to determine whether any changes should be made. (b) The review of the Contract will include use of a cost of service study based on the generally accepted principles for rate setting, recognizing that the cost of raw water adjustment used in this Contract was specifically tailored on a cash basis, with use of a depreciation factor for major capital expenditures, not made with borrowed funds. It does not include a rate of return normally used in a utility basis system. The American Water Works Associations's "Water Rates" (M-1) publication will be used as a reference in this review. The review will be used to ensure that all water customers do not pay not less than their proportional share of costs R73706A8.058 Page 15 of 17 based upon total raw water sales, and to ensure the District does not pay more than a just and reasonable rate for the raw water diverted. 23. Severability. In case any one or more provisions contained in this Contract is for any reason held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability does not affect any other provision hereof, and this Contract will be construed as if such invalid, illegal, or unenforceable provision had never been contained in this Contract. 24. Captions. All titles of the sections of this Contract have been inserted for convenience of reference only and are not considered a part of this Contract and in no way will they affect the interpretation of any provisions of this Contract. 25. Modifications. Any amendments, or alternative or supplementary agreements, to this Contract must be made in writing and duly executed by an authorized representative or agent of each of the parties to this Contract. 26. Parties at Interest. This Contract is for the sole and exclusive benefit of the parties, and shall never be construed to confer any benefit on any third party. This Contract will be binding upon and inure to the benefit of the parties and their respective successors and assigns where permitted by this Contract. 27. Texas Law to Apply. This Contract will be construed under and in accordance with the laws of the State of Texas. 28. Venue. Any action or proceedings relating to this Contract must be taken in Nueces County, Texas. The parties agree that the courts in Nueces County, Texas, shall have exclusive jurisdiction over this agreement. R73706A8A58 Page 16 of 17 29. Prior Agreements Superseded. This Contract constitutes the sole and only agreement of the parties and supersedes any prior understandings or written or oral agreements between the parties respecting the within subject matter. 30. All Agreements Contained in this Written Instrument. This Contract represents the entire agreement between the District and City and supersedes all prior negotiations, representations, or agreements either oral or written. The parties have executed this Contract in multiple counterparts, each executed copy shall be considered as an original, by their respective duly authorized representatives, this day of , 1997. ATTEST: San Patricio Municipal Water District By: By: Nelda Flinn Gene Dressen Secretary/Treasurer President STATE OF TEXAS COUNTY OF SAN PATRICIO ACKNOWLEDGMENT } } This instrument was acknowledged before me on the day of , 1997, by Gene Dressen, President of the San Patricio Municipal Water District, a political subdivision of the State of Texas, on behalf of said district. Name: Notary Public, State of Texas My Commission Expires: ATTEST: THE CITY OF CORPUS CHRISTI Armando Chapa, City Secretary Bill Hennings, City Manager R73706A8.058 Page 17 of 17 APPROVED: day of , 1997. James R. Bray Jr., City Attorney By: R. Jay Reining, Assistant City Attorney STATE OF TEXAS COUNTY OF NUECES } } ACKNOWLEDGMENT This instrument was acknowledged before me on the day of , 1997, by Bill Hennings, City Manager of the City of Corpus Christi, on behalf of the City. R73706A8.058 Page 18 of 17 SAN PATRICIO MUNCIPAL WATER DISTRICT Raw Water Contract Exhibit A (Reference Section 2b) Notification Procedures on Pump Changes This is an administrative item to be developed jointly with the City of Corpus Christi Water Department and the San Patricio Municipal Water District. SAN PATRICIO MUNCIPAL WATER DISTRICT Raw Water Contract Exhibit B (Reference Section 2g) Historical Sales of Raw Water San Patricio Municipal Water District Raw Water Sales Month Gallons 1/97 341,494,000 12/96 314,996,000 11/96 391,026,000 10/96 418,233,000 9/96 318,558,000 8/96 482,697,000 7/96 610,824,000 6/96 536,181,000 5/96 507,254,000 4/96 445,146,000 3/96 460,217,000 2/96 436,837,000 1/96 408,468,000 12/95 311,597,000 11/95 337,372,000 10/95 437,734,000 9/95 401,118,000 8/95 456,145,000 7/95 522,371,000 6/95 418,983,000 5/95 446,842,000 4/95 348,207,000 3/95 312,313,000 2/95 320,925,000 1/95 335,739,000 SAN PATRICIO MUNCIPAL WATER DISTRICT Raw Water Contract Exhibit C (Reference Section 3a) Location of Raw Water Pump Facility on the Nueces River Schematic drawing will be developed. SAN PATRICIO MUNCIPAL WATER DISTRICT Raw Water Contract Exhibit D (Reference Section 3b) Location of Raw Water Pump Facility on the Lake Texana Pipeline Schematic drawing will be developed after the diversion point is determined. SAN PATRICIO MUNCIPAL WATER DISTRICT Raw Water Contract Exhibit E (Reference Section 4c) Provision Regarding Remote Monitoring An administrative will be developed jointly with the San Patricio Municipal Water District. SAN PATRICIO MUNCIPAL WATER DISTRICT Raw Water Contract Exhibit F (Reference Section 5a) Ordinances on Treated Water Rates and Raw Water Cost Adjustments AN ORDINANCE AMENDING SECTION 55-50 OF THE CODE OF ORDINANCES, CITY OF CORPUS CHRISTI, REGARDING WATER RATES AND RAW WATER COST ADJUSTMENT; PROVIDING FOR SEVERANCE; PROVIDING FOR PUBLICATION; AND DECLARING AN EMERGENCY. WHEREAS, the City Council has determined, based on discussions with the City's rate consultants, reports from City Staff, and deliberations of the City Council, that the design for water rates within the City's water distribution system should be modified to charge all customers the same amount for raw water on a direct pass through basis. WHEREAS, the City Council fords that the rate structure for the costs of raw water adopted by Ordinance 022741 on November 12, 1996, needs to be adjusted to dampen the changes in rates that could occur because of the timing of routine contracts for various investigatory, consultant, and legal services; and WHEREAS, the City Council desires to ensure that the costs of raw water are sufficient, equitable, and consistent in application to each class of customers, and is not unreasonably preferential, prejudicial, or discriminatory. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: - SECTION 1. That the Code of Ordinances, Chapter 55, Utilities, Article III, Water Rates and Charges, Section 55-50(b), on file with the City Secretary, is revised to read as follows: Sec. 55-50. Schedule of water rates. (a) Rates Base rates for water service. The rates for water service are as follows: (1) Monthly Minimum Charges a. Metered Treated Water Customers Meter Size (Inches) Inside City Limits Outside City Limits Residential R73702A5.028 022832 2 5/8" - 3/4" 34.503 $4 531 $9:669 $9.617 6.756 Minimum annual service charge, domestic 67.578 Commercial 5/8" - 3/4" 6:591 13.07 6 543 13.645 Residential & Commercial 1" 21.458 10.521 10 469 21.406 1-1/2" 35.656 17.578 17.526 1.5.604 2" 17:3+9 55.127 27.26/ 55.075 3" 97483 196.250 97.831 196.206 4" 111.667 223.837 111.615 223.785 6" 167.753 336.022 167.701 135 970 8" and larger 60':397 251.911 251.889 504.34 b. Untreated Water Customers Minimum monthly service charge, industrial $202.733 Minimum monthly service charge, domestic 6.756 Minimum annual service charge, domestic 67.578 R73702A5.028 3 (2) Monthly Volume Charges Per 1,000 Gallons Residential Rate *Use the Minimum Charges in Subsection (a)(1). b. Commercial Rate Inside City Limits Outside City Limits First 2,000 Gallons Minimum* Minimum* Next 4,000 Gallons 51.`95 $37389 $1369 $32.83. Next 85,000 Gallons 3.094 Next 9,000 Gallons 47729 1.395 3.309 1.703 3.2$3 Next 900,000 Gallons 47086 2 Next 15,000 Gallons 1.060 2.237 3.309 2.211 3,283 Next 20,000 Gallons 1.328 2.732 3.309 1 .3 02 2.746 3.283 0.832 0.551 Over 50,000 Gallons 3.309 3.309 3.283 3.281 *Use the Minimum Charges in Subsection (a)(1). b. Commercial Rate * Use the Minimum Charges in Subsection (a)(1). R73702A5.028 Inside City Limits Outside City Limits First 2,000 Gallons Minimum* Minimum* Next 13,000 Gallons 51.595 53.44) $1.569 $1.417 Next 85,000 Gallons 3.094 4 1.395 1.068 Next 900,000 Gallons 47086 2 1.060 2,385 Next 9,000,000 Gallons 0.055 1.328 0232 1 .3 02 Over 10,000,000 Gallons 075.74 0.832 0.551 4.806 * Use the Minimum Charges in Subsection (a)(1). R73702A5.028 4 c. Capacity -Volume Treated Water Rates 1. Capacity Charges 2. Volume Charge Inside City Limits Outside City Limits Volume charge for all water per 1,000 gallons $0.121 $0.091 $97229 $0.203 3. Minimum Charge The minimum monthly charge shall be the sum of the capacity charges. d. Public Agency for Resale Treated Water Rates Treated water rates purchased by a public agency for resale are hereby set as follows: Cost Per 1,000 Gallons First 2,000 Gallons Minimum* R73702A5.028 Inside City Limits Outside City Limits Rate per month per $12.458 81.87848 1,000 gallons/day of' maximum day capacity requirement $12.432 $13.82.2 Rate per month per $4-968 $1.737 1,000 gallons/day of excess hourly capacity requirement (in excess of maximum day capacity requirement) $1.042 $1.711 2. Volume Charge Inside City Limits Outside City Limits Volume charge for all water per 1,000 gallons $0.121 $0.091 $97229 $0.203 3. Minimum Charge The minimum monthly charge shall be the sum of the capacity charges. d. Public Agency for Resale Treated Water Rates Treated water rates purchased by a public agency for resale are hereby set as follows: Cost Per 1,000 Gallons First 2,000 Gallons Minimum* R73702A5.028 5 Next 13,000 Gallons t1541 $1.515 Next 85,000 Gallons 4-484 1.355 Next 900,000 Gallons 1.046 1.020 Next 9,000,000 Gallons 0:831 0505 Over 10,000,000 Gallons 0.SM 1521 * Use the Minimum Charges in Subsection (a)(1). (b) Raw water cost adjustment (RWCAI. The In addition to the charges for the base rates for water service. established in subsection (a) of this sectio will be added to each conZi n&s bill. raw roster: The ta„u . f ,,. , .... a RWCA will be based on actual system -wide raw water diversion sales This raw %}.tta wi* adjmtnsent The RWCA will be calculated on a monthly basis. The actual methods for computing the RWCA .u. . I. .... ._ ... shall be established in a written City Policy approved by the City Manager and filed with the City Secretary. Prior to its effective date, the City Policy must be provided to the City Council. When preparing the City Policy, the Assistant City Manager, Public Works and Utilities shall: (1) • y•: K : •• • ,- •'1. • r•. At; y 1- C . - 1-. 61Y.•- 1 -n -./•'.t: Gl • 1-.••• ►. -1111,•1.11.1 W Use the annual budgeted cost of debt service proportioned into equal charges over a twelve month period. (2j (31 Expenditures for capital items shall be adjusted as follows: a. The expense of acquiring a capital item that cost not more than $50,000 shall be charged to the month in which the expenditure is made. R73702A5.028 6 b. The expense of acquiring a capital item that cost more than $50,000, but not more than $100,000 shall be proportioned into equal charges over a twelve month period. c. The expense of acquiring a capital item that cost more than $100,000 shall be amortized, and the expenses proportioned into equal monthly charges over the number of years used to calculate depreciation expenses. (33 441 All operating and maintenance expenditures shall be charged in the month the expenditure is made, except expenditures associated withanivai contracts shall bg proportioned over a twelve month perind (4) (51 All expenses for consultants, engineering, and legal services, and administration shall be'-- - proportioned into eoual mon hly ch rgesased on th annual b udget for the line item used to and the activity. New apybwuriatio s shall portioned to he rem ;Hing mon sin shall he reconciled with the budgeted amounts used in the prior fiscalyear's calculations. Any adjustments shall be proportioned over the next twelve month ballad. (5) (e Expenses related to the acquisition and transportation of emergency water supplies shall be charged to the month in which the expenditure is made. in Make a monthly adjustment to account for anv over or under collections that may have res ult d from hanges in he vol ime of war r salcss. (c) Definitions. "Costs of raw water" is the total of all costs of acquiring, producing, storing, conserving, and transporting untreated water from its source to the City's treatment facility and.all other points of diversion. These costs include, but are not limited to the costs of: Construction, including debt service iLscrvc 1'anl, operation, and maintenance of dams and reservoirs. Construction, including debt service, operation, and maintenance of raw water supply transmission pipelines. Construction, including debt service, operation, and maintenance of wells. R73702A5.028 7 Construction, including debt service, operation, and maintenance of facilities capable of converting wastewater effluent, salt water, and brackish ground water into water suitable for municipal, industrial, or agricultural uses. Acquisition of new water supplies and water rights. Payments to the P.L. 104-318 Alternative Water Supply Acquisition and Facilities Construction Special Fund. Construction, operation, and maintenance of facilities to reduce water losses from water resources due to evaporation or the release of water from a reservoir due to the operation of law. Acquisition and transportation of emergency water supplies, including the costs of transporting water by vessel or pipelines from other regions. Water supply development and protection, including consultants' studies and reports, investigations, legal fees, court costs, and any other costs related to the development or protection of the water supply. Administrative costs, including overhead and the portion of the City's general administrative costs applicable to the activities enumerated in this definition. SECTION 2. That the additional rate increases provided in Section 5 of Ordinance 021814 on December 14, 1993, shall apply to the rates for water service in Section 55-50(a) of the Code of Ordinances, as amended by Section 1 of this ordinance. SECTION 3. If for any reason any section, paragraph, subdivision, clause, phrase, word or provision of this ordinance shall be held invalid or unconstitutional by final judgment of a court of competent jurisdiction, it shall not affect any other section, paragraph, subdivision, clause, phrase, word or provision of this ordinance, for it is the definite intent of this City Council that every section, paragraph, subdivision, clause, phrase, word or provision hereof be given full force and effect for its purpose. SECTION 4. Publication shall be made in the official publication of the City of Corpus Christi as required by the City Charter of the City of Corpus Christi. SECTION 5. That upon written request of the Mayor or five Council members, copy attached, to find and declare an emergency due to the need for immediate action necessary for the efficient and effective administration of City affairs, such finding of an emergency is made and R73102A5.028 8 declared requiring suspension of the Charter rule as to consideration and voting upon ordinances at two regular meetings so that ordinance ' passed and shall take effect upon first reading as an emergency measure this the day of1997. City Secretary APPROVED: This .2 X qday of J R., „n r y , 1997: James R. Bray, City Attorney By: • R. Jay Assi • • t ty Attorney R73702A5.028 THE ��CITY OF CORPUS CHRISTI Mayor The City of Co 1pa§ Christi 9 Corpus Christi, Texas day of IIA _/._/._, 1997 TO THE ME 1: ERS OF THE CITY COUNCIL Corpus Christi, Texas For the reasons set forth in the emergency clause of the foregoing ordinance an emergency exists requiring suspension of the Charter rule as to consideration and voting upon ordinances at two regular meetings: IJwe, therefore, request that you suspend said Charter rule and pass this ordinance finally on the date it is introduced, or at the present meeting of the City Council. Respectfully, Respectfully, aur MAYOR` THE CITY 0 RPUS CHRISTI COUNCIL MEMBERS The above ordinance was passed by the following vote: Mary Rhodes Dr. Jack Best Betty Black Melody Cooper Tony Heldenfels Betty Jean Longoria John Longoria Edward A. Martin Dr. David McNichols R73702A5.028 022632 SAN PATRICIO MUNCIPAL WATER DISTRICT Raw Water Contract Exhibit G (Reference Section 5b) Procedures Used to Calculate Raw Water Cost Adjustments RAW WATER COST CALCULATIONS Detailed Monthly Procedures January 24, 1997 POLICY OBJECTIVE: To ensure all water customers pay for the costs of raw water in direct proportion to their relative share of system water used With this policy, all water customers on a rate schedule will be charged the same unit cost of raw water.' This is achieved by separating customer bills into two components: (1) the cost of raw water and (2) the cost of water service. The cost of raw water includes all expenses associated with developing, acquiring, or delivering raw water. Overview of procedures. A raw water cost per 1,000 gallons is computed each month. The cost is determined by dividing all applicable raw water costs by the total amount of raw water diverted. BACKGROUND Ordinance 022741 adopted the concept of the "raw water pass-through." This ordinance, adopted by the City Council on November 12, 1996, was effective for all water sold subsequent to January 1, 1997. Establishing an initial raw water cost required one-time rate schedule adjustments. Prior to the "Raw Water Pass-through" ordinance, the water rate schedule aggregated the cost of raw water and the cost of water service. The November 12, 1996 ordinance separated water charges into the two components: (1) raw water costs and (2) cost of water service. To separate these costs: (a) the actual cost of raw water per 1,000 gallons was computed for Fiscal Year 1995-96; and, (b) the existing water rate schedules were reduced by the amount of the calculated raw water unit cost. The unit cost of raw water was calculated to be $0.2539 per 1,000 gallons for Fiscal Year 1995- 96 (see Attachment). As a result, the rate schedule for all customer classes was reduced by $0.25 for each 1,000 gallons (actual cost was rounded to nearest cern). This includes all customers except raw water =stomas. These customers are charged the full raw water car because they do nes receive the benefit of the Choke Canyon Esaow Fmd that was established to Myelin the annual contribution towards the Choke Canyon debt service payments. Raw water =stomas have been charged on the basis of costs in=ured, and are not charged according to the rate schedule. This issue is discussed on pages 7- 8. Raw Water Cost Calculation Procedures Page 2 of 8 Therefore, for example, the following "one time" rate schedule adjustments were made to ICL Residential rates: Prior to adjustment After adjustment • Minimum charge for 1' 2,000 gallons 55.083 54.583 [55.083 - 2(.25)] First 4,000 gallons 1.845 1.595 [1.845 - .2500 Next 9,000 gallons 1.979 1.729 [1.979 - .2500] Next 15,000 gallons 2.487 2.237 [2.487 - .2500) Next 20,000 gallons 2.982 2.732 [2.982 - .2500] Over 50,000 gallons 3.559 3.309 [3.559 - .2500] Similar adjustments were made to all other rate schedules. All raw water customers will be charged the computed raw water cost since there are no treatment and distribution costs involved for these customers. The adjustments described above were estimates pending determination of the actual cost of raw water for November 1996. The November 1996 cost was actually 50.2760 for rate -payers. Therefore a subsequent adjustment to the rate schedule was required; the cost of service rates were reduced by an additional $0.026. OVERVIEW OF PROCEDURES A raw water unit cost will be recalculated every mouth. Raw water costs will be determined every month based on actual expenses incurred for variable expenses, and based on budgeted expenses for certain cost categories not likely to vary significantly from month-to-month. Units of water consumed will be based on a 12 -month moving average of the total system -wide volume of water sold. A monthly raw water cost adjustment is required to ensure the City neither over -collects or under -collects. This adjustment is needed because raw water costs associated with previous months are applied to consumption levels occurring in subsequent months. Each month, when the raw water cost is re -computed, actual raw -water revenues of the prior month will be compared to that month's calculated raw water costs. If actual raw water revenues billed exceed actual costs, there will be an "over -collection"; if actual revenues billed are less than actual costs, there will be an `under -collation". As a rule, if the actual total conniption is less than the 12 -month moving average, revenues will not cover costs and there will be an upward adjustment the following month. u; on the other hand, actual total consumption exceeds the 12 -month moving average, revenues will exceed costs and there will be a credit towards the following month's costs. Raw Water Cost Calculaion Procedures Page 3 of 8 An annual adjustment is required to reconcile budgeted expenses with actual expenses. Certain raw water costs used are based on budgeted amounts.2 The adjustment required for the next fiscal year will be divided by 12 in order to make the adjustment each month. RAW WATER COST CALCULATION DETAILED PROCEDURES Provided below are actual raw water costs for the month of November 1996. Costs are divided into two sections: (1) "Costs that are fixed for the year" and (2) "Costs that vary each month." Raw Water Unit Costs for November 1996 Costs that re fixed jar the year: (1) LNRA Water Purchase 5117,237 (2) NRA - 0 & M per contract 8,750 (3) Bureau of Reclamation or Public Law Fund 331,659 (4) NRA Debt Service 74,543 (5) Debt Service: 1990 refunding applicable portion 49,626 (6) Debt Service: 1994 revenue bond, applicable portion 18.322 (7) Debt Service: 1995 revenue bond, applicable portion 11,004 (8) General Fund administration 11,621 (9) Public Worb Group 3,777 (10)Otherinterfaod charges 769 (11) Water Superintendent 11,758 (12) Water Superintendent - capital outlay 60 (13)Regional Water Director (Water Supply Development) 102,693 (14)Euvimomental Stadia 10,833 Subtotal 5752,652 Less offsetting revenues: (15) Interest income earned on NRA bonds $4,908 (16)Property rental revenue 2,173 (17)0i1 and gas lease raven= 200 Subtotal (7,281) Other costs: (18) Wesley Seale Dam Operations* Maintenance 559,370 (19) Wesley Seale Dam Capital Outlay 16,130 (20) Choke Canyon Reservoir Operations & Maintemmce 29,418 (21) Choke Canyon Reservoir Capita Outlay 0 (22) Water Supply Capita Onday 4,718 (23) Supplemental Wells (Water R. & D) 11,242 Subtotal 120.878 (24) NET RAW WATER EXPENSES FOR MONf( 5866.249 a These cost elements are described in the following detailed procerhues; they are those con elements described as "costs that are fixed for the year." Raw Water Cost Calculation Procures Page 4 of 8 (25) Water consumed in thousands of gallons (12 month moving average) 2916,516 (26)Raw Water Cost per 1,000 gallons (5866,249/2,916,516) 50.2970 (27) Rate -payer's credit for levelized Chloe Canyon debt payments 7.07% (28)RAW WATER COST PER 1,000 GALLONS NET OF CREDIT 50.2760 Costs that are fixed for the year. items 1-14. These are costs either known in advance for the year (such as debt service payments) or other costs not likely to vary significantly during the year. The budgeted amounts are spread evenly to each month of the fiscal year. To ensure that expenses in this category are neither overstated or understated, budgeted amounts are reconciled to actual expenses after the last month of each fiscal year.' If there is an amendment to the annual adopted budget, the amount of the amendment will be added to the annual budget. The amount of the amendment will be spread evenly over the number of months remaining in the fiscal year. (1) LNRA Water Purchases. These are the scheduled payments to the LNRA each year for water. (2) NRA O&M. These are annual contracted amounts paid to the Nueces River Authority. (3) Bureau of Reclamation or Public Law Fund These are the scheduled amounts payable to the Bureau of Reclamation for Choke Canyon Dam or, in the years for which the debt service was deferred, the funds that would otherwise have been paid but rather placed into the Public Law Fund. All amounts placed in the Public Law Fund must be used entirely for purposes of acquiring water. (4) NRA Debt Service. Scheduled principal and interest payments to the Nueces River Authority. (5) Principal and Interest on the 1990 Utility Refunding Bonds The amount recorded as a raw water cost is 22.8% of the debt service. The percentage used represents only the portion applicable to raw water costs (specifically Choke Canyon projects). (6) Principal and Interest on the 1994 Utility Revenue Bonds. The amount recorded as a raw water cost represents 22% of the total principal and interest. This percentage was determined by calculating the percentage of the total issue that relates to raw water projects. These projects include 31.445M for the Wesley Seale Gates and SIM for the effluent return pilot project.' Numbers below in parenthesis refer to the items listed above for November 1996 costs The total bond issue was 511.1 million; raw water projects totaled 52.445 minion; S11.1M divided by 32.445 M - 223. Raw Water Cost Calculation Procedures Page 5 of 8 (7) Principal and Interest on the 1995 Utility Revenue Bonds The amount recorded as a raw water cost represents 12% of the total principal and interest.' (8) General Fund administration It is assumed that 7% of the activities included in the General Fund overhead allocation apply to raw water issues. This percentage will be evaluated annually. (9) Public Works Group. The Public Works Group includes the Assistant City Manager and other staff support associated with public utility activities. The estimated percentage of time devoted to raw raw issues is 25%. This percentage is applied to the Water Utilities share of the budgeted expenses for the Public Works Group. The percentage will be evaluated annually. (10) Other interfund charges. The amount included as a raw water cost includes only those items directly associated with raw water activities. For FY 1996-97 the only item included is a crane to be purchased for Wesley Seale Dam at a cost of 3123,000. Since this item exceeds 3100,000, the cost is included as a raw water cost dement in the amount that will be recorded as depreciation expense for the year. For depreciation purposes, the "half-year" convention is used. This assumes the item was purchased midyear, therefore, 50% of the animal depreciation expense is used the first year. In the case of the 3123,000 crane budgeted for FY 1996-97 the annual depreciation expense is 318,450. The depreciation rate is 15% (which is 6.67 years). Since the half-year convention is used, the annual depreciation cost for FY 1996-97 is $9,225. This cost is allocated to each month at the amount of 5769. (11) Water Superintendent. The estimated percentage of the Superintendent's time devoted to new water supplies and raw water is 10% for FY 1996-97. This percentage will be evaluated annually. (12) Water Superintendent - Capital Outlay. See item 11 above. (13) Regional Water Director. The entire activity is devoted to water supply issues. (14) Enviromnental studies. Outside professional services associated with water supply issues. Included for Fiscal Year 1996-97, for example, me salinity monitoring and data collection studies and dissolved oxygen monitoring and data collection. ' The total bond lame au 512.4 million; specific water supply Palma included S1.5M for Wesley Seale gatex S1.5M divided by 512.4M = 12%. Raw Water Cost Calculation Procedures Page 6 of 8 Offsetting Revenues: items 1S - 17. All revenues associated with raw water facilities are credited to raw water expenses. (15) Interest Income Earned on NRA Bonds. All revenues associated with raw water activities are credited to raw water expenses. Interest income earned on NRA bonds is actually credited quarterly; therefore the annual revenue is credited to expenses each month based on the budgeted amount. (16) 011 and Gas Lease revenues. Revenues earned from oil and gas leases at Choke Canyon or Lake Corpus Christi (17) Property rental revenue. Revenues earned from general property rental at Choke Canyon or Lake Corpus Christi. Costs that vary each month: items 18 - 23 These costs exhibit more variation. Actual expenses are recorded as raw water cost components, with exceptions as noted below. (18) Wesley Seale Dam 0 & M. These are the operating costs of the dam. An adjustment is made to levelize payments towards annual contracts. For FY 1996-97 the annual contracts to the TNRCC and Department of the Interior total 5111,237. These costs are allocated equally to each month at the amount of 59,270. (19) Wesley Seale Dam Capital Outlay. Capital outlays 550,000 or Tess are included in full in the costs of the applicable month. Outlays greater than 550,000 but less than 5100,000 are prorated to monthly raw water costs over a 12 month period Capital outlays 3100,000 and greater are prorated to monthly raw water costs over the pine number of periods used to calculate depreciation expense. (20) Choke Canyon Reservoir 0 & M. These are the operating costs of the reservoir. Just as in the case of Wesley Seale Dam, annual contracts are allocated to each month. (21) Choke Canyon Reservoir Capital Outlay. Capital purchases for the reservoir. (22) Water supply capital outlay. Capital outlay for wells. For FY 1996-97, October expenses included 556,613 to rehabilitate wells. Since this capital outlay exceeds 550,000 the costs are . allocated to a 12 -month period beginning in the month the expense was incurred. The monthly allocation is $4,718 (23) Supplemental wells Operating expenses associated with the City's wells. The primary cost element is electricity. Raw Water Cost Calculation Procedures Page 7 of 8 Elements used to calculate the raw water cost per 1,000 gallons: items 24 - 28 (24) Net raw water expenses. This is the net of all costs, revenues, and adjustments. (25) Water sales — 12 month moving average. The purpose of a moving average is to smooth out the impact of seasonal fluctuations. It is calculated by adding actual water sales for the 12 most recent months and dividing the sum by 12. (26) Raw water cost per 1,000 gallons. This is the cost figure that will be used to determine the monthly raw water cost for purposes of customer billing. (27) Ratepayer's credit for levelized Choke Canyon debt payments. Background. The Choke Canyon Reserve Fund was established to levelize the escalating payments to the Bureau of Reclamation,. This reserve was created by establishing a levelized payment of S3.245 million as a budgeted Water Fund expense each year. The reserve was built in the initial years when the scheduled debt service payments were less than the budgeted 53.245 million. Beginning in FY 1995-96 the scheduled debt service payment exceeded 53.245 million; the difference was to be funded through the reserve fund that was built in the earlier years. All rate -payers therefore "own" this reserve fimd. Calculation of the adjusted raw water cost for all rate -payers. The raw water cost calculation procedures continue the levelized approach, even though the scheduled debt service payments were deferred for five years, beginning in FY 1996-97. One condition of the deferral was that the scheduled payments are to be used towards ensuring an adequate water supply. Therefore the following cost adjustment is made to the calculated raw water cost for all rate -payers for FY 1996-97: Scheduled debt service payment - I.evelized payment amount • Total Expense credit for rate -payers due to the Reserve Fund Monthly expense credit for ratepayers % Raw water cost reduction in November 1996 doe to expense credit: Total raw water costs for November 1996 - Expo= credit for rate-payets • Novembers net raw water cats to recover from charges The percentage credit reduction for rate payers: 53,979,904 3.243000 5734,904% 61,242 (734,904 / 12 25 61,242) 5866.249 01.242 5805,007 7% (61,242 / 866,249 = 790 The ratepayer's % credit for levelized Bureau of Reclamation Debt Service payments This is the percentage reduction in the monthly raw water cost due to the Choke Canyon Reserve. It is calculated each month by dividing the total raw water costs by the monthly expense credit. Raw Water Cost Calculation Procedures Page 8 of 8 (28) Ratepayer's adjusted raw water unit cost. This is the amount charged as the "raw water cost" to all rate -payers. It is the actual monthly raw water cost per 1,000 gallons less the percentage credit reduction described above. Routine adjustments to ensure the City neither over -collects or under -collects. Monthly adjustment for over/under collection. This is an adjustment made each month. The adjustment is needed because raw water costs associated with previous months are applied to consumption occurring during a subsequent month. At the end of each month the net difference between actual raw water costs and raw water revenues billed is determined. The net difference is used to adjust the raw water costs of the next month. Adjustment for prior year actual cost vs. Budget. At the end of each fiscal year, a reconciliation will be made between the actual expenditures and the budget for those expense items inchided in the "costs that are fixed for the year." Any differences will be spread over the subsequent twelve months. ATTACHMENT Raw Water Costs for Fiscal Year 1995-96 (1) LNRA Water purchases $1,178,771 (2) NRA - O & M per contract 102,928 (3) Bureau of Reclamation or PL Fund. 3,730,172 (4) NRA Debt Service 771,949 (5) Debt service: 1990 rduoding. 595,515 (6) Debt service: 1994 revamp bond 222,220 (7) Debt service: 1995 revenue bond 140,087 (8) General fired adminisaation 136,563 (9) Public works group 19,420 (10) Other interf z d charges 39,600 (11) Water superintendent. 139,464 (12) Water sups nten&at-captal outlay 3,004 (13) Regional water director (water supply development) 1,100,965 (14) Environmental studies 30,195 (15) Interest income earned on NRA Bonds (58,406) (16) Oil and gas lease revenues (4,084) (17) Property rental revenues (35,266) (18) Wesley Seale Dam 0 & M 604,377 (19) Wesley Seale Dam Capital Outlay 20,668 (20) Chole: Canyon Reservoir 0 & M 325,969 (21) Supplemental wells (water R & D) 74,717 Total expenses for FY 1995-96 59,151,078 Total water sold in thtw:ands of gallons 36,043,893 Raw water cost per 1,000 gallons 50.2539 SAN PATRICIO MUNCIPAL WATER DISTRICT Raw Water Contract Exhibit H (Reference Section 8) "Requirements for Review and Approval for Water Systems Connected to San Patricio Municipal Water Transmission System" REQUIREMENTS FOR REVIEW AND APPROVAL FOR WATER SYSTEMS CONNECTED TO S.P.M.W.D. WATER TRANSMISSION SYSTEM. 1. General: - These requirements are adopted to give guidance to prospective water customers of the District who wish to receive permission to connect to the District's water transmission system and become a water customer of the District. They have been reviewed by and incorporated into a water purchase agreement with the City of Corpus Christi, and are intended to provide for the safe and adequate development of treated water distribution systems._in_the San Patricio County area served by the District. Requests for exceptions to these requirements must be reviewed by the District Manager and approved by the Board of Directors and the City of Corpus Christi. 2 Connections to District Transmission System - ;:o connection to the District's transmission facilities will be made to serve individual residences. Prospective customers must be Districts or non-profit corporations organized for the purpose of purchasing water fres, a supply source and selling water to individual users and enabled to properly manage the proposed water distribution system on a continuing basis for the benefit c.n1 protection of the sinal con:ju:::er. Wherever an area can be served by extension of an existing water distribution system this will be encouraged. If such service is not possible, a request -1- for service directly from the District will be received. A pre -planning conference with District staff is required to enolore the feasibility of any proposed water system connection. The District's basic interests of maintaining adequate water service to its customers, protecting water quality, and assisting in the proper planning and development of land in its service area will be addressed at this conference. Following this conference, the Board of Directors of the District will determine the feasibility of the proposed service and notify the party proposing the connection. If the Board of Directors makes a favorable finding regarding feasibility, a contract delineating the terms of the proposed water service will be negotiated. No request for connection to an area within an existing city limit will be_received, and no request for connection to an area within the ETJ of any city will be received unless requested or approved by that city. Two types of service are recognized, and requests nay be made for either type. Type A Service is for rural users, and is limited to proposals for individual service to tracts of land of ten (10) acres or larger. Type B Service is for Districts or non-profit corporations serving "subdivision -type" users, and is limited to proposals for individual service to tracts of land larger than 20,000 sq. ft. and smaller than ten acres. ft` -ler t;_rprov.:JS or ;i;reements Peguireri - Following receipt of a avorable determination of feasibility by the Board of Directors of he District, the party requesting approval for connection shall -2- satisfy the District that the following approvals or agreements ha•;e bean obtained: a. Texas Department of Health approval of the proposed distribution system. b. San Patricio County approval, relating to platting, road crossings, health concerns, and other items. c. Texas Department of highways and Public Transportation approval of any highway crossings. d. Railroad approval of any railroad crossings. 4. Basic Connection Detail - All connections shall incorporate the following: a. 7tjmysical air gap between the transmission line and the customer's facilities. b. A meter as specified by the District, to be set, owned and maintained by the District and located at the District transmission line. c. Ground storage of an amount equal to the projected daily maximum demand of the connected system at a date 5 years from the date of connection_ d. All other items as required for approval of the connected system by the Texas Department of Health and San Patricio County. d. Provision for adequate operation and maintenance of the water system, including organizational requirements and identified responsibility. -3- 5. Fire Protection - For all development, the provi on of fire protection is encouraged. Such provision would include written agreement with an existing municipality or private or volunteer fire -fighting organization acceptable to the District, and placing of fire hydrants as required by Section 9. If such provision is not possible, Type A or B service will be allowed provided that restrictions are placed in both the deeds and on the recorded plat prohibiting resubdivision to a smaller lot size as long as no fire protection system exists. For Type A service, the system may be sized to meet all non -fire uses. For Type B service, the system must be sized to include fire flow requirements, and all portions of the water system shall be constructed in accordance with these requirements except that placing of fire hydrants and connected valves may be deferred. Location of tees in mains shall be as required for future hydrant location. There shall be a draft connection located at the ground water storage tank for refilling truck -mounted water tanks. 6. Main Sizing - Main sizing will be governed by the proposed layout of the area and by the requirement for fire hydrant spacing. The fclicwing rules will apply: a. Mains for Type A Service, (rural users with minimum tract size 10 acres) shall be sized to meet the system need, respecting State Health Department minianum requirements, b. Mains for Type B Service shall be sized to meet fire flow -4- requirements, and shall be 6" minimum size. c. 6" mains shall be no longer than 1200 feet when supported at each end by 8" mains or larger. Deadend 6" mains shall pe rio longer than 500 feet. d. 8" mains are required for all lines over 1200 feet in length. e. The size of the main supply line to an area shall be determined based on the future fire. flow requirements of the area. 7. Location --Water mains shall be located in -such a manner that access for future maintenance is assured. Easements a minimum of 10 feet wide are required for platted tracts, whether or not a public ag-ency is to maintain the system. When a water main is placed parallel to another utility line and at or near the same grade, it shall have a minimum,of 7' horizontal separation, (9' wall to wall when the other utility is a sanitary sewer). A minimum of 6" vertical clearance, between intersecting lines is required. When the intersecting line is a sanitary sewer, joints in the sewer line must be pressure type within to feet of the water main. For newly platted areas, when the water main is located less than. 4' from a street richt-of-way line, an additional 5' of easement shall be provided. All service meters shall be set in public right-of-way or in designated easements. 8. Denth of Cover - Depth of cover of water lines shall be 36" minimum from natural ground in easements or from average flow -5- lino of dit ^ in road rights-of-way. Additional cover :all be allowed for road crossings or other special conditions as required. 9. Pine - All pipe materials shall be AWWA Specification. Asbestos cement, PVC, or ductile iron are approved. Pipe shall be adequate for 150 psi working pressure. Asbestos cement pipe may be used in 6" or larger sizes. All ductile iron pipe shall be loose wrapped.in 6 mil black polyethylene. Pipe shall be carefully laid using granular bedding material and properly backfilled. 10. valves - The maximum distance between valves shall be 1000 feet. At line intersections there shall be one less valve than the number of lines leading away from the intersection (two valves_a.t a tee, three valves at a cross). Valves shall be AWWA Specification gate valves and shall be installed complete with valve box and cover. 11. f'•re ilvd&antca - Fire hydrants shall be spaced such that all residential lots are within 500 feet of a hydrant, and shall be set on a 6" line or larger. Hydrants shall be AWWA Specification and shall have hose and steamer connections of the pattern to be used by the fire fighting authority. Location shall be as required by the County. Where fire hydrants are not initially set, 2" flushing valves and lines shall be installed at 1000 foot intervals. These lines terminate in a hose connection encased in an appropriately sized box. 12 Fittinns - Fittings shall be ductile iron, all -bell or mechanical joint, and shall be properly restrained. All plugs -6- shall be furnished with restraining clamp. 13. Stne1 Pipe Snncinl Sectinaa - Steel pipe may be used for ditch crossings and other special installations. It shall be welded pipe and shall be adequately protected against corrosion. It shall be electrically insulated from other conducting pipe materials. 14. Nigh Density }?esidential_gcr_higjn Risk Commercial DeveTormenf- - The following special considerations apply: a. Fire protection must be furnished. Plans for water system, including fire hydrant locations and specifications, must be approved by the fire fighting authority. b. Fire hydrant spacing shall not exceed 350 feet. Fire hydrant leads shall be no longer than 50 feet. Hydrant locations shall be in protected areas, and shall be continuously accessible to pumper trucks. c. Minimum line size is 6". Sizing of system shall be based on required fire flows. d. Easement width and building line placement shall assure that no building is constructed within 10 feet of the centerline of a proposed water line. e. All meters shall be set within public right-of-way. 15. Gnnergl Lgvo'st and System Circulation -The overall layout of the system should be to provide a maximum degree of circulation of water to prevent future problems with taste, odor, color, or loss of chlorine residual due to stagnation. Multiple points of -7- feed to the system are prctcrable. Fire hydrants and flushing valves should be so located that all portions of the system may -be periodically flushed. Where dead-end lines are unavoidable, they shall be valved at the main line and furnished with a flushing valve at the end of the line. Consideration should be given to providing for future extensions of the system. 16. Tntercnnnectior.s - Interconnection with any other water system is prohibited, unless specific variance is given by the District. No interconnection shall be made with any system fed by a water well. -8- SAN PATRICIO MUNCIPAL WATER DISTRICT Raw Water Contract Exhibit I (Reference Section 19) City of Corpus Christi Authorization to Sign Contract The ordinance adopted by the City Council authorizing the City Manager to execute the contract. Will be attached after the motion is adopted. SAN PATRICIO MUNCIPAL WATER DISTRICT Raw Water Contract Exhibit d (Reference Section 19) San Patricio Municipal Water District Authorization to Sign Contract Resolution adopted by the San Patricio Municipal Water District CERTIFICATE OF RESOLUTION THE STATE OF TEXAS } } COUNTY OF SAN PATRICIO } We, the undersigned officers of the Board of Directors of the SAN PATRICIO MUNICIPAL WATER DISTRICT, hereby certify as follows: 1. The Board of Directors of said District convened in SPECIAL MEETING, on the 25th day of February, 1997, at the Offices of the District, Highway 361, Ingleside, Texas 78362; and the roll was called of the duly constituted officers and members of said Board, to -wit: Gene Dressen President Billie Jo Tennill Vice President Herbert O. Grebe, Jr. Director Elton L. Mayer Director Gilbert Mircovich Director A. L. Nelson Director and all of said persons were present, thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written RESOLUTION APPROVING TREATED WATER SUPPLY CONTRACT WITH THE CITY OF CORPUS CHRISTI was duly introduced for the consideration of said Board. It was then duly moved and seconded that said Resolution be passed; and, after due discussion, said motion, carrying with the adoption of said Resolution, prevailed and carried by the following vote: AYES: All members of said Board shown present above voted "Aye". NOES: None 2. That a true, full, and correct copy of the aforesaid Resolution passed at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; that said Resolution has been duly recorded in said Board's minutes of said meeting; that the above and foregoing paragraph is a true, full, and correct excerpt from said Board's minutes of said meeting pertaining to the passage of said Resolution; that the persons named in the above and foregoing paragraphs are the duly chosen, qualified, and acting officers and members of said Board as indicated therein; that each PAGE 1 OF 3 CON -1300013 ZO"d £606 £b9 Zis "45!-0 ..4ateM o1 -Dined ues vsZ=ii L6-9Z-qed of the officers and members of said Board was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid meeting, and that said Resolution would be introduced and considered for passage at said meeting and each of said officers and members consented, in advance, to the holding of said meeting for such purpose; that said meeting was open to the public as required by law; and that public notice of the time, place, and subject of said meeting was given as required by Chapter 551, Government Code, as amended. SIGNED AND SEALED the 25th day of February, 1997. c - -`C%�aG retary President [SEAL] £O'd E606 £b9 ZIS PAGE 2 0P 3 CON -130.013 -a.s!_p ..iatef OLzi„t}ed ueS vO£=ii L6 -SZ -440A RESOLUTION OF THE BOARD OF DIRECTORS SAN PATRICIO MUNICIPAL WATER DISTRICT February 25, 1997 BE IT RESOLVED that the term of the Treated Water Supply Contract Between the City of Corpus Christi and the San Patricio Municipal Water District as approved at the Special Meeting of the Board of Directors on Tuesday, February 18, 1997 be changed from perpetuity to thirty (30) years or until the expiration of any liability for any bonds or other funding obligations related to the District's present project, whichever is later, and that Exhibit "A", (a description of the District's present project), be included with all other Exhibits being given new letter designations, and; BE IT FURTHER RESOLVED that such change in term and addition of Exhibit "A" is hereby approved and that the contract as thereby modified, full copy attached, is approved, and; BE IT FURTHER RESOLVED that Gene Dressen, President of the Board of Directors, is hereby authorized to sign said contract on behalf of the San Patricio Municipal Water District. [SEAL] PAGE 3 OF 3 CON -1300013 tO'd E606 £b9 ZtS 'tSL❑ aa3eM OIOL.fled ueS vO£=ii L6-SZ-qad State of Texas County of Nueces 1 1 PUBLISHER'S AFFIDAVIT CITY OF CORPUS CHRISTI ss: Ad # 1184846 PO# Before me, the undersigned, a Notary Public, this day personally came Darrell G. Coleman, who being first duly sworn, according to law, says that he is Vice - President and Chief Financial Officer of the Corpus Christi Caller -Times, a daily newspaper published at Corpus Christi in said County and State, generally circulated in Aransas, Bee, Brooks, Duval, Jim Hogg, Jim Wells, Karnes, Kenedy, Kleberg, Live Oak, Nueces, Refugio San Patricio, Victoria and Webb Counties, and that the publication of, NOTICE OF PASSAGE OF ORDINANCE NO. 022859 which the annexed is a true copy, was inserted in the Corpus Christi Caller -Times on the 10TH day(s) of MARCH, 1996. ONE 1 Time(s) $31.04 \4, HAR•• SO: 1� it Jr • 1 -t_ CO -C-6 '_`-�K- 2; 0 0: /, r .•:* = Notary Public, Nueces County, Texas 4 444 Of ,y 4C2 Vi e -President and Chid ei in'anci Subscribed and sworn to before me this 13TH day(s) of March, 1997. '1"1/11111001 4� CONNIE HARALSON Print or Type Name of Notary Public My commission expires on 5/14/97.