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HomeMy WebLinkAbout021485 RES - 09/22/1992} A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT FOR AN OPTION TO PURCHASE UP TO 35,000 ACRE-FEET OF WATER RIGHTS FROM GARWOOD IRRIGATION COMPANY. WHEREAS, present water supplies are insufficient to meet the future needs of Corpus Christi and surrounding communities; and WHEREAS, the health, welfare, and economic prosperity of our citizens depends upon acquiring adequate water supplies; and WHEREAS, acquisition of long-term water supplies is a lengthy process requiring responsible and prudent planning and action by our citizens and elected officials; and WHEREAS, the City of Corpus Christi has the opportunity to secure options on substantial additional water supplies and to participate in studies providing a sound basis for future decisions. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: The City Manager is hereby authorized to execute an agreement for an option to purchase up to 35,000 acre-feet of water rights from Garwood Irrigation Company, as set forth in the attached Exhibit A, incorporated herein. A F1EST: City Secretary MAYOR THE CI*Y�F CORPUS CHRISTI APPROVED: II DAY OF ,Sir r , 19 las James R. Bray, Jr., City Attorney By • R. City Attorney ORDS: 91182 021485 �1J111i�Y+,� 1 Corpus Christi, Texas G Z day of It The above resolution was passed by the following vote: Mary Rhodes Cezar Galindo Leo Guerrero Betty Jean Longoria Edward A. Martin Joe McComb Dr. David McNichols Clif Moss Mary Pat Slavik 066 T Cul 2 La* o 021485 Ex4: f,{- 4 - AGREEMENT BETWEEN THE CITY OF CORPUS CHRISTI AND GARWOOD IRRIGATION COMPANY This Agreement is entered into as of the 22nd day of September, 1992, by and between the City of Corpus Christi, Texas (the "City"), and Garwood Irrigation Company ("Garwood"). The City is a home rule city, organized and existing pursuant to the Constitution and laws of the State of Texas. Garwood is a Texas corporation. The city has concluded that substantial additional supplies of water are needed to satisfy projected demands for water for municipal and industrial purposes within the City and its service area. The City is seeking to identify potential additional supplies, secure options to acquire those supplies, and then, during the option period, study the feasibility of acquisition and development of those supplies. In pursuit of its goals, the City has recently acquired an option agreement originally entered into by and between the Port of Corpus Christi Authority and the Lavaca-Navidad River Authority ("LNRA") to purchase water from Lake Texana supplied by LNRA under Certificate of Adjudication No. 16-2095, as amended. The City also desires to investigate the potential for obtaining additional supplies of water from the Colorado River, either as an independent source of supply for the City, or as a source of supply to supplement or increase the amount of water that can be provided from Lake Texana. In furtherance of those desires, the City contacted Garwood to determine whether and to what extent Garwood may be able to assist. Garwood holds rights to use the waters of the Colorado River under Certificate of Adjudication No. 14-5434 ("Garwood's Right"), under which Garwood has the right to divert and use 168,000 acre- feet of water per year of the run -of -river flow of the Colorado River at a maximum diversion rate of 750 cubic feet per second for the irrigation of 32,000 acres of land within a much larger service area, with a priority date of November 1, 1900. Garwood's Right has the earliest priority date of all significant water rights in the Colorado River Basin. A substantial portion of Garwood's service area lies outside the Colorado River Basin. Garwood's system as it presently exists has the capacity, and it has been used historically, to divert and use in excess of 130,000 acre-feet of water per year for irrigation purposes. For various reasons, Garwood has not yet fully developed its pumping facilities and canal system to facilitate the diversion and use of 168,000 acre-feet of water per year, as authorized under Garwood's Right. Most importantly, a long-standing dispute with the Lower T Colorado River Authority ("LCRA") placed the nature and extent of Garwood's independent water rights under a cloud for many years, effectively preventing expansion. That cloud has recently been removed by the conclusion of the adjudication and the recent issuance on June 28, 1989 by the Texas Water Commission (the "Commission") of Garwood's Certificate of Adjudication No. 14-5434, and by Garwood and LCRA entering into an agreement dated as of December 10, 1987 (the "LCRA Agreement"). In the LCRA Agreement, LCRA, among other things, recognizes Garwood's independent water right and agrees to firm up that right, on an interruptible basis, with stored water from Lakes Travis and Buchanan. LCRA further agrees not to charge Garwood for any stored water that may be needed to firm up the supply of water available under Garwood's Right, for so long as Garwood maintains the low water dam that is authorized under Garwood's Right. The LCRA Agreement is not a part of this Agreement. Accordingly, Garwood is now free to pursue full development of its pumping facilities and canal system for irrigation purposes. Although the market for rice is not nearly as favorable today as it was years ago, when Garwood wanted to expand but was prevented from doing so, Garwood has nevertheless received several recent inquiries regarding expansion to supply water for rice irrigation. Additionally, increased use of water for other crops may also be feasible today. Before Garwood pursues full development of its pumping facilities, canal system and irrigation alternatives, the City desires to evaluate the use of a portion of Garwood's Right for municipal and industrial purposes. The City desires to secure by option the price and terms for purchase by the City of a portion of Garwood's Right, and to evaluate during the option period the feasibility of utilizing such right to supply additional water to the Corpus Christi area for municipal and industrial purposes. Garwood believes that the use of such water for such purposes would be in the public interest, that the sale of a relatively small portion of Garwood's Right at this time would not have any adverse impact on the farmers on Garwood's system, and that the sale of such a portion of Garwood's Right would in fact provide substantial benefits to Garwood's farmers. Accordingly, Garwood is willing to grant an option to the City to purchase such a portion of Garwood's Right and, during the option period, not commit in excess of the remaining portion of its right on a long-term basis for the irrigation of rice or other crops. NOW, THEREFORE, in consideration of the mutual benefits and covenants contained herein, the City and Garwood hereby agree as follows: 1. Grant of Option. Garwood hereby grants to the City an option (the "Option") to purchase up to a 35,000 acre -foot -per -year portion of Garwood's 168,000 acre -foot -per -year right. The City may purchase the entire 35,000 acre -foot -per -year portion or any -2- portion thereof; provided, however, that if the City purchases any portion of Garwood's Right, then the amount purchased shall- be at least a 20,000 acre -foot -per -year portion. The priority of the portion purchased by the City ("Corpus Christi's Right") shall be subordinate in time priority and all other respects to the portion retained by Garwood ("Garwood's Remaining Right"). The maximum authorized diversion rate under Garwood's Right (750 cfs) shall be divided proportionately (Garwood's Remaining Right + 168,000 for Garwood, and Corpus Christi's Right + 168,000 for the City). 2. Purchase Price. The one-time price to be paid by the City to Garwood for the purchase of Corpus Christi's Right (the "Purchase Price") shall be the product of $400.00 per acre-foot times the number of acre-feet specified by the City, in its written notice pursuant to Paragraph 5 or 6, below, as comprising the Corpus Christi Right. 3 Term of Option. The Option and this Agreement shall terminate without notice on March 1, 1994, unless the City before that date gives Garwood written notice to submit an application to amend Corpus Christi's right pursuant to Paragraph 6, below. 4. Option Payments. The City shall pay Garwood $20,000 upon execution of this Agreement, and the Monthly Payment (hereinafter defined) each month thereafter, each Monthly Payment being due and payable on the first day of each month beginning on October 1, 1992, with the final payment due on the earlier of the following dates: (1) the first day of the month during which Garwood receives payment of the Amount Due (hereinafter defined) as provided by Paragraph 5, below; or (2) the first day of the month during which the Option and this Agreement are terminated. The City shall not be relieved of its obligation to make any payments under this Paragraph by reason of it giving to Garwood written notice to submit an application to amend Corpus Christi's Right pursuant to Paragraph 6, below, or by it conditionally exercising the Option pursuant to Paragraph 7, below, or by the occurrence of the Final Commission Date as defined in Paragraph 7, below. The "Monthly Payment" shall be $10,000 for each payment due and payable on or prior to the Final Commission Date as defined in Paragraph 7, below, and $5,000 for each payment due and payable thereafter. 5. Exercise of option. At any time prior to termination of the Option and this Agreement, the City may exercise the Option by giving Garwood written notice of such exercise. The City shall pay Garwood the Amount Due within ninety (90) days after the date it so exercises the Option, or within ninety (90) days after the date it is deemed to exercise the Option pursuant to Paragraph 7, below. If the City has not previously given Garwood written notice to submit an application to amend Corpus Christi's Right pursuant to Paragraph 6, below, then the City, in its written notice of exercise of the Option, shall specify the number of acre-feet per year that comprises Corpus Christi's Right. The Amount Due at any time shall be the sum of the Purchase Price, plus all accrued -3- interest to that time on the Purchase Price pursuant to Paragraph 7, below, less all amounts paid to Garwood under Paragraph 4, above, less all amounts paid to Garwood as Reimbursable Application Costs under Paragraph 11, below. 6. Notice to Submit Application. At any time prior to termination of the Option and this Agreement, but in no event later than February 28, 1994, the City may give Garwood written notice to submit the application to amend Corpus Christi's right as described in Paragraph 11, below (the "Application"). In that notice, the City shall specify the number of acre-feet per year comprising Corpus Christi's Right. Upon receipt of such notice, or upon receipt of the City's written notice of exercise of the Option pursuant to Paragraph 5, above, whichever first occurs, Garwood shall divide Garwood's Right into two separate and distinct portions: one being Corpus Christi's Right, and the other being Garwood's Remaining Right. From and after the date of such division, Corpus Christi's Right shall be subordinate in time priority and all other respects to Garwood's Remaining Right. If the City gives Garwood the written notice specified above on or before February 28, 1994, then it shall also give to Garwood together with such notice evidence satisfactory to Garwood (the "Required Evidence") that the City has at that time the legal authority and financial ability to perform all obligations that it will or may thereafter incur under this Agreement including, without limitation, all obligations that the City will or may incur by its failure to give Garwood written notice of termination under paragraph 8, below, before the Date of Conditional Exercise (hereinafter defined) for any Order (hereinafter defined). Garwood's satisfaction with the evidence submitted by the City shall not be unreasonably withheld. 7. Conditional Exercise of Option. If the City does not give Garwood written notice of termination under Paragraph 8, below, before the Date of Conditional Exercise (hereinafter defined) for any Order (hereinafter defined), then, on that Date of Conditional Exercise the City shall automatically be deemed to have determined that Order to be acceptable to the City ("Accept- able Order") and to have conditionally exercised the Option. If the Option and this Agreement are not subsequently terminated by Garwood, and if the Acceptable Order remains unchanged by the Commission or any court, then the City shall be deemed to exercise the Option on the date that such Acceptable Order becomes final, as set forth below in this Paragraph 7. An "Order" is any decision or order of the Commission granting, denying or dismissing the Application in whole or in part. The "Date of Conditional Exercise" for any Order is the tenth day after the date that the City, or its attorney of record in the hearing or other proceeding before the Commission on the Application, is notified of that Order. -4 - r The Acceptable Order shall become final within the meaning of this Agreement upon the earliest of the following dates (the "Final Date"): (1) in the absence of a timely motion for rehearing complaining of the Acceptable Order, on the expiration of the period of time for filing such a motion for rehearing under Section 16(e) of the Administrative Procedure and Texas Register Act, art. 6252-13a, V.T.C.S. ("APTRA"); (2) in the absence of a timely petition to a District Court of Travis County appealing the Acceptable Order, on the expiration of the period of time for filing such a petition under Section 19(b) of APTRA; or (3) upon entry by any court of competent jurisdiction of a non -appealable judgment or order affirming the Acceptable Order, or upon any such judgment or order becoming non -appealable. Commencing on the Final Commission Date (hereinafter defined), interest shall accrue on the Purchase Price at the Interest Rate (hereinafter defined), until such time as the City fully exercises the Option by paying the Amount Due. The "Interest Rate" shall be the rate per annum equal to the lesser of: (1) the Prime Rate (hereinafter defined) of interest as it fluctuates, or (2) the maximum lawful rate which may be contracted for, charged, taken, received or reserved by Garwood in accordance with the applicable laws of the State of Texas (or applicable United States federal law to the extent that it permits Garwood to contract for, charge, take, receive or reserve a greater amount of interest than under Texas law), taking into account all charges made in connection with this Agreement which are treated as interest under applicable law. The "Prime Rate" shall mean the base rate of interest per annum established from time to time by Chemical Banking Corp., New York, New York ("Chemical Bank") and designated as its prime rate. Fluctuations in the Prime Rate shall become effective on the date each such change in such Prime Rate is established by Chemical Bank. The "Final Commission Date" shall be the earlier of the following dates: (1) in the absence of a timely motion for rehearing complaining of an Acceptable Order, on the expiration of the period of time for filing such a motion for rehearing under Section 16(e) of APTRA; or (2) if a motion for rehearing complain- ing of an Acceptable Order is filed timely, on the date of rendition of the Commission order overruling the motion for rehearing, or on the date the motion is overruled by operation of law. Nothing herein shall be construed as authorization for the City to delay payment of the Amount Due beyond ninety (90) days after the Final Date. 8. Termination of Option. The City may terminate the Option and this Agreement, by giving written notice of such termination to Garwood, at any time, except during any period of time beginning on the Date of Conditional Exercise with respect to any Acceptable Order as defined in Paragraph 7, above, and continuing for so long -5- as such Acceptable Order remains unchanged by the Commission or any court, and except as provided otherwise below in this Paragraph 8. If the City does not give Garwood written notice of termination prior to any such Date of Conditional Exercise, then the City may not thereafter terminate this Option and this Agreement while that Acceptable Order remains unchanged by the Commission or any court, and if that Acceptable Order thereafter becomes final, then the City shall automatically be deemed to fully exercise the option upon the Final Date and the City shall pay Garwood the Amount Due within ninety (90) days after that date. Garwood may terminate the Option and this Agreement, by giving written notice of termination to the City, at any time, except during any period of time beginning on the Final Commission Date with respect to any Acceptable Order as defined in Paragraph 7, above, with respect to any Acceptable Order, and continuing for so long as such Acceptable Order remains unchanged by the Commission or any court, and except as provided otherwise below in this Paragraph 8, if Garwood should conclude in good faith at that time that continuation of the Option and this Agreement is likely to result in a material, adverse impact on Garwood's Right or the use or supply of water thereunder. The Option and this Agreement shall terminate immediately upon the City's receipt of such notice. If any court in an appeal from an Acceptable Order remands the case to the Commission for the Commission to enter a new Order, then, except as provided otherwise below in this Paragraph 8, the Application shall be considered to be pending before the Commission prior to the Commission's entry of any Order and any Order subsequently entered by the Commission shall be subject to review by the City and Garwood pursuant to Paragraph 7, above. If any change is made to an Acceptable Order by the entry of an order by any court in an appeal from that Acceptable Order, and if the court does not remand the case to the Commission for the Commission to enter a new Order that will be subject to review by the City and Garwood pursuant to Paragraph 7, above, then the City may terminate this Option and this Agreement by giving Garwood written notice of termination within ten days after being notified of such order. If any change is made to an Acceptable Order by the entry of an order by any court in an appeal from that Acceptable Order, and if the court does not remand the case to the Commission for the Commission to enter a new Order that will be subject to review by the City and Garwood pursuant to Paragraph 7, above, then Garwood may terminate this Option and this Agreement by giving the City written notice of termination before the deadline for Garwood to appeal that order, if Garwood should conclude in good faith at that time that continuation of the Option and this Agreement is likely to result in a material, adverse impact on Garwood's Right or the use or supply of water thereunder. The Option and this Agreement shall terminate immediately upon the City's receipt of such notice. If neither party gives the other party notice of termination within the applicable time period for each party, then -6- the Acceptable Order as so revised shall thereafter be deemed to be the Acceptable Order, neither the City nor Garwood may thereaf- ter terminate this Option and this Agreement while such Acceptable Order remains unchanged by the Commission or any court and, if that Acceptable Order thereafter becomes final, then the City shall automatically be deemed to fully exercise the Option and this Agreement upon the Final Date and the City shall pay Garwood the Amount Due within ninety (90) days after that date. Garwood may terminate the Option and this Agreement, by giving written notice of termination to the City, at any time if the City fails to make timely payment of any of the payments required by Paragraphs 4, above, and 11, below. Garwood may terminate the Option and this Agreement, by giving written notice of termination to the City, at any time after thirty (30) days after the date that Garwood receives the City's notice to submit the Application under Paragraph 6, above, if, prior to that time, the City had not also given Garwood the Required Evidence under Paragraph 6, above. Garwood may terminate the Option and this Agreement, by giving written notice of termination to the City, at any time after three years from the date that Garwood receives the City's notice to submit the Application under Paragraph 6, above, if, prior to that time, the Commission had not entered any Order or, if it had entered an Order, no Final Commission Date with respect to any Acceptable Order had occurred. If a Final Commission Date with respect to an Acceptable Order does occur prior to termination of the Option and this Agreement, and if the Acceptable Order is appealed and the case is subsequently remanded to the Commission by any court for the Commission to enter a new Order that will be subject to review by the City and Garwood pursuant to Paragraph 7, above, then Garwood may terminate the Option and this Agreement by giving written notice to the City, at any time after five years from the date that Garwood receives the City's notice to submit the Application under Paragraph 6, above, if, at such time, there is no pending Order or, if there is such a pending Order, the Final Commission Date with respect to that Order has not yet occurred. Upon receipt of any notice of termination from Garwood, other than a notice of termination based on Garwood's concluding in good faith that continuation of the Option and this Agreement is likely to result in a material, adverse impact on Garwood's Right or the use or supply of water thereunder, the City shall have thirty (30) days to fully exercise the Option by giving Garwood written notice of such exercise pursuant to Paragraph 5, above. If the City does give Garwood such written notice of exercise, then the City, pursuant to Paragraph 5, above, shall pay Garwood the Amount Due within ninety (90) days after the date it gives such notice. If Garwood does not receive such written notice of exercise within such thirty -day period, the Option and this Agreement shall terminate in its entirety. The City shall not object to withdrawal -7- T of the Application by Garwood if the Option and this Agreement are terminated by either party pursuant to the terms of this Agreement. If the Option and this Agreement are terminated by either party pursuant to the terms of this Agreement, Garwood shall be entitled to retain all amounts paid by the City pursuant to this Agreement prior to such termination, and to recover from the City any amounts not paid but required to be paid pursuant to this Agreement prior to such termination. The City recognizes that the amounts to be retained by Garwood in the event of termination are in consideration of the extended period of time during which Garwood has agreed to refrain from committing in excess of Garwood's Remaining Right on a long term basis (that extended period of time began several years before the City finally entered into this Agreement, when the City first approached Garwood and requested it to hold a portion of its right in reserve for the City), and in consideration of the City's declining to purchase Corpus Christi's Right until the right is amended to its satisfac- tion, and in consideration of Garwood's agreeing to seek the amend- ment without any commitment from the City that it would purchase the right after the Commission acts. The City further recognizes that the amounts retained by Garwood in the event of termination should be the same regardless of which party terminates, so long as the termination is pursuant to this Agreement. 9. Conveyance of Right by Garwood. Upon receipt of payment of the Amount Due, Garwood shall convey Corpus Christi's Right, as it exists at that time (whether that be as it is created when Garwood divides Garwood's Right into two portions pursuant to Paragraph 6, above, or as it is amended by an Acceptable Order and subsequent court orders, if any, or as it is subject to amendment pursuant to a pending Application), to the City, by written conveyance in the form attached hereto as Exhibit 1 (the "Convey- ance Document"), modified and completed as set forth below. The Conveyance Document shall be modified and completed as appropriate to accurately reflect Corpus Christi's Right, and other relevant facts, as they exist at the time. The modifications and comple- tions shall include the following: provisions in the Conveyance Document that are within brackets shall be included as shown, modified, or deleted; numbers, dates or other information indicated as being needed shall be added; and choices indicated as needed to be made shall be made; all as appropriate to accurately reflect the facts as they exist at the time. Corpus Christi's Right, as conveyed to the City, shall prohibit the diversion of water from the point of diversion on the Colorado River authorized under Garwood's Right utilizing Garwood's pumping plant or otherwise, and the use of Garwood's canal system to convey such water, unless Garwood in its absolute discretion should agree otherwise. Corpus Christi's Right, as conveyed to the City, shall not be appurtenant in any respect to any of the facilities authorized or existing under Garwood's Right including, without limitation, Garwood's pumping facilities, canal system, and low water dam. Notwith- standing anything herein to the contrary, under no circumstances -8- I- f T shall Garwood be required at any time to convey Corpus Christi's Right to the City if, and to the extent that, the number of acre- feet authorized to be diverted and used annually under Garwood's Remaining Right, as it exists at that time or as it may exist after the conclusion of any administrative or judicial proceeding that is pending at that time, is less than 133,000 acre-feet per year. If Garwood does convey Corpus Christi's Right to the City pursuant to this Paragraph, then, except as provided otherwise in Paragraph 10, below, the Option and this Agreement shall terminate upon such conveyance, and upon such termination the foregoing sentence shall have no further force or effect whatsoever. 10. Pullin Station and Conveyance Facility. The City presently contemplates that it will construct a separate pump station and pipeline to convey water from the Colorado River to the City of Corpus Christi and its service area, either directly or via Lake Texana. At the present time, the City anticipates that the point of diversion for the pump station will be located on the west bank of the Colorado River, either on the small reservoir created by Garwood's low water dam, on land owned by Garwood, within Segment "A" as shown on Exhibit 2 attached hereto, or upstream of the small reservoir created by Garwood's low water dam, on land owned by third parties, within Segment "B" of the River as shown on Exhibit 3 attached hereto, or downstream of Garwood's low water dam, on land owned by third parties, within Segment "C" of the River as shown on Exhibit 4 attached hereto. Regardless of the location of the pump station, the conveyance of water from the Colorado River and from the pump station shall be by pipeline only, utilizing a route, design, and procedures for construction, operation, mainte- nance and repair that do not interfere with Garwood's irrigation and other operations. The City shall be responsible for obtaining all lands, easements and other interests in land necessary for such pump station and pipeline. If the City should decide that it desires to investigate seriously the question of whether it should locate its pump station on the reservoir created by Garwood's low water dam, then it shall so advise Garwood, and both parties agree to negotiate in good faith to determine whether they can agree upon the terms and conditions of an agreement that would allow the City to purchase from Garwood a portion of the land within Segment "A" for a pump station to pump the water available under Corpus Christi's Right. Any such agreement must include terms and conditions adequately addressing all relevant issues, including the following: the size, location, and configuration of the site; the price and other terms for the purchase of the site; the financial and other contributions by the City towards the maintenance, operation, repair, replacement and improvement of the dam; the financial and other contributions by the City towards the maintenance, repair and stabilization of the river banks abutting the small reservoir created by the dam and immediately downstream of the dam; and safeguards to insure that the construction, operation, maintenance and repair of the pump r -9- station, the intake to the pump station and the pipeline from the pump station will not interfere with any of Garwood's operations. The City agrees that, if for whatever reason it and Garwood are unable to reach such an agreement on or before the earliest of January 1, 1996, or the date the Option and this Agreement are terminated, or the Date of Conditional Exercise for any Order, then the City shall not construct any pump station, or locate any point of diversion for any pump station, anywhere on either bank of the Colorado River within a segment of the River upstream of Garwood's low water dam beginning at the dam and extending upstream to the most downstream point within Segment "B." 11. Amendment of Corvus Christi's Riaht. Upon Garwood's receipt from the City of both the written notice to submit the Application and the Required Evidence under Paragraph 6, above, Garwood, to the extent that it has not already done so before that time, shall promptly prepare and submit the Application to the Commission. Garwood shall thereafter pursue the Application before the Commission and assist the Commission in defending any Accept- able Order against challenges by others in the courts. The Application shall seek to amend Corpus Christi's Right to: (a) authorize the use of such water for municipal and industrial purposes; (b) authorize the diversion of such water from an undefined point of diversion on the west bank of the Colorado River within either Segment "A" on the Colorado River as shown on Exhibit 2, Segment "B" on the Colorado River as shown on Exhibit 3, or Segment "C" on the Colorado River as shown on Exhibit 4; (c) confirm that the right already exists, or grant the right, to divert such water from the Colorado River Basin and transfer it for use within Aransas, Atascosa, Bee, Duval, Jim Wells, Kleberg, Live Oak, McMullen, Nueces and San Patricio Counties; and (d) confirm that Corpus Christi's Right, as so amended, retains the November 1, 1900 priority date of Garwood's Right. The Application shall be reviewed and approved by the City before it is submitted to the Commission. The City agrees to seek intervention in any hearing or other proceeding on the Application as a party in support of the Applica- tion, to make its employees and consultants available to develop or assist in developing the necessary documents to be filed with the Commission as part of the Application or otherwise, to testify in support of the Application, and to otherwise support the Application, and to seek intervention in any appeal from an -10- 7 Acceptable Order as a party in support of such order, all at no cost to Garwood. The City shall reimburse Garwood for all reason- able and necessary costs incurred by Garwood in preparing, filing and pursuing such an amendment and in assisting the Commission in defending any Acceptable Order against challenges by others in the courts ("Reimbursable Application Costs"). Such costs shall include all reasonable and necessary costs incurred by Garwood for all legal, engineering and other assistance utilized by Garwood, as well as all expenses incurred by Garwood. Garwood shall submit an itemized bill to the City for all Reimbursable Application Costs on a monthly basis, and the City shall pay each bill within 30 days of receipt. Nothing in this Agreement shall prohibit or restrict Garwood in any way or at any time from seeking whatever amendments to Garwood's Water Right, and whatever modifications to Garwood's pumping facilities, canal system, and low water dam, that Garwood may desire. 12. LORA Aareement. By this Agreement, Garwood is not granting any option or conveying any interest whatsoever in its LCRA Agreement. No interest in the LCRA Agreement shall be deemed to be appurtenant to Corpus Christi's Right, or shall otherwise be conveyed to the City with Corpus Christi's Right. 13. Tailwater from Garwood's Irrigation Oaerations. Garwood shall not be required to maintain any flows into Lake Texana from any tailwater, surplus water or return flow water whatsoever from Garwood's irrigation operations, and Garwood reserves the right to maintain control of such waters and to use, reuse and consume them entirely for irrigation purposes prior to their flowing from Garwood's service area, as such service area is defined by Certifi- cate of Adjudication No. 14-5434. 14. Water Ouality. Garwood makes no representations whatso- ever with respect to the quality of water in the Colorado River, and it shall have no obligation whatsoever with respect to the quality of such waters. 15. No Third Party Beneficiary. The parties are entering into this Agreement solely for the benefit of themselves and agree that nothing herein shall be construed to confer any right, privilege or benefit on any person or entity other than the parties hereto and their successors and assigns. 16. No Assignment. The City may not assign any of its rights and obligations to any other person or entity without first obtaining Garwood's written consent, which Garwood in its absolute discretion may withhold. 17. Source of Funds. Any payment required to be made by the City shall be paid only from lawfully available funds; provided, however, before the City incurs any obligation pursuant to this Agreement to make a particular payment to Garwood, the City shall take all actions necessary to insure that sufficient funds are or -11- will be lawfully available to make the payment by the date required under this Agreement. No Debt (hereinafter defined) is created by the City by entering into this Agreement, and no Debt can be created by the City pursuant to this Agreement unless and until the City fails to give Garwood written notice of termination under Paragraph 8, below, before the Date of Conditional Exercise for any Order. "Debt" means the term "debt" as such term is used in Art. 11, Sec. 5, Constitution of the State of Texas. 18. Waiver. Any waiver at any time by either party with respect to a default or any other matter arising in connection with this Agreement shall not be deemed a waiver with respect to any subsequent default or matter. 19. Captions. The captions and headings appearing in this Agreement are inserted merely to facilitate reference and shall have no bearing upon the interpretation thereof. 20. Notice. Each notice under this Agreement shall be mailed by certified mail, return receipt requested, and shall be effective on the date actually received. All notices to the City shall be addressed to: Juan Garza City Manager City of Corpus Christi City Hall 1201 Leopard Corpus Christi, Texas 78401 and all notices to Garwood shall be addressed to: William N. Lehrer Chairman and Chief Executive Officer Garwood Irrigation Company P. O. Box 428 Garwood, Texas 77442 Either party may change its address by giving written notice of such change to the other party. -12- IN WITNESS WHEREOF, this Agreement is executed on behalf of the City and Garwood by their respective authorized officers, in multiple counterparts, each of which shall constitute an original. ATTEST: City Secretary ATTEST: Ikcy lati^cli2 Secretary Approved as to legal form: James H. Bray Jr., City Attorney CITY OF CORPUS CHRISTI, TEXAS By Juan Garza City Manager GARWOOD IRRIGATION COMPANY By �t�[ w c. 14 i z William N. Lehrer Chairman and Chief Executive Officer -13- STATE OF TEXAS COUNTY OF NUECES § BEFORE ME, the undersigned authority, on this day personally appeared Juan Garza, City Manager of the City of Corpus Christi, Texas, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity therein stated, and as the act and deed of said City of Corpus Christi, Texas as duly authorized by the City Council of said City. GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS THE day of September, 1992. STATE OF TEXAS COUNTY OF COLORADO § § NOTARY PUBLIC STATE OF TEXAS PRINTED NAME OF NOTARY My Commission Expires BEFORE ME, the undersigned authority, on this day personally appeared William N. Lehrer, Chairman and Chief Executive Officer of Garwood Irrigation Company, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity therein stat- ed, and as the act and deed of said Garwood Irrigation Company. GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS THE IQ,th day of September, 1992. MONICA 0. MAERTZ NOTARY PUBLIC STATE OF 0 6 s�t144 C93 7 F r NOTARY PUBLIC ST TE OFSTEXAS • PRINTED NAME OF NOTARY My Commission Expires -14- Exhibit 1 Exhibit 2 Exhibit 3 EXHIBITS Form of conveyance conveying Corpus Christi's Right to the City. Map defining Segment "A" of the Colorado River, on the reservoir created by Garwood's low water dam. Map defining Segment "B" of the Colorado River, upstream of the reservoir created by Garwood's low water dam. Exhibit 4 Map defining Segment "C" of the Colorado River, downstream of Garwood's low water dam. CONVEYANCE OF WATER RIGHT STATE OF TEXAS § § COUNTY OF COLORADO § This Conveyance of Water Right (this "Conveyance") is made as of , 19_, by GARWOOD IRRIGATION COMPANY ("Grant- or"), to THE CITY OF CORPUS CHRISTI ("Grantee"). This conveyance (this "Conveyance") is executed pursuant to the terms of that certain Agreement between Grantee and Grantor, entered into as of the day of September, 1992 (the "Agree- ment"). Pursuant to the terms of the Agreement, by notice dated , 19_, Grantee specified that Corpus Christi's Right (as defined in the Agreement) consisted of a [Acre -Feet Specifiedl acre -foot -per -year portion of Garwood's Right (as defined in the Agreement). The number of acre -feet -per -year so specified in the notice is hereinafter referred to as the "Acre - Feet Specified." Garwood's Right, as defined in the Agreement, is reflected by Certificate of Adjudication No. 14-5434, issued by the Texas Water Commission on June 28, 1989. A copy of that Certificate of Adjudication is attached hereto as Exhibit A. Pursuant to the terms of the Agreement, by instrument dated , 19_, Grantor divided Garwood's Right into two portions. Under one portion, defined in the Agreement as Corpus Christi's Right, Garwood [is or was] authorized to divert and use [Acre -Feet Specifiedl acre-feet of water per year from the Colorado EXHIBIT 1 Page 1 of 6 River for irrigation, at a rate of diversion not to exceed [Acre - Feet Specified = 16$.000 x 7501 cubic feet per second ("cfs"). Under the other portion, defined in the Agreement as Garwood's Remaining Right, Garwood is authorized to divert and use f168.000 - Acre -Feet Specified._ but in any event not less than 133.0001 acre- feet of water per year (such number of acre -feet -per -year is hereinafter referred to as the "Acre -Feet Remaining") from the Colorado River for irrigation, at a rate of diversion not to exceed (Acre -Feet Remaining = 168.000 x 750] cfs. From and after the date of such division of Garwood's Right, the Portion of Garwood's Right defined as Corpus Christi's Right has been, and it now is, subordinate, in time priority and all other respects, to the portion defined as Garwood's Remaining Right. Pursuant to the terms of the Agreement, the Purchase Price (as defined in the Agreement) for the purchase of Corpus Christi's Right is [S400.00 x Acre -Feet Specified], the date that Grantee exercised, or was deemed to have exercised, the Option (as defined in the Agreement) was , 19_, [the Final Commission Date (as defined in the Agreement) was , 19_, and the accrued interest on the Purchase Price from the Final Commis- sion Date to the date of payment of the Amount Due (as defined in the Agreement), the Reimbursable Application Costs (as defined in the Agreement), and the Amount Due, as of the date of this Convey- ance, are [S 1, [S T T r ], and [S 1, respectively.] EXHIBIT 1 Page 2 of 6 [Pursuant to the terms of the Agreement and the _, 19_ notice given by the City of Corpus Christi, Garwood submitted to the Texas Water Commission an application to amend Corpus Christi's Right (defined in the Agreement as the "Applica- tion"). The Application [is pending before the Water Commission, or was [granted or denied or dismissed] [in whole or in part] by the Water Commission by order dated , 19_ (the "Order")]. A copy of the Order is attached hereto as Exhibit B. The Order [became final on , 19_, or has not yet become final], as such term is defined in the Agreement.] For and in consideration of the sum of [the Amount Duel and other good and valuable consideration to Grantor paid by Grantee, the receipt of which is hereby acknowledged, Grantor does hereby grant, bargain, sell, convey and assign unto said Grantee, the Conveyed Water Right (hereinafter defined). The "Conveyed Water Right," as conveyed hereby, is Corpus Christi's Right as specified by Grantee by its notice dated , 19_, [as such right is amended by the Order or as such right may be amended by the Water Commission pursuant to the Application], [as such right was modified by court order and/or is subject to judicial review], [together with all rights and obligations of Grantor in the Application or in any appeals from the Order pending as of the date of this Conveyance], subject to the following limitations, conditions and restrictions: 1. The Conveyed Water Right, and the rights of Grantee and its successors -in -interest in and to the EXHIBIT 1 Page 3 of 6 I Conveyed Water Right, are, and shall hereafter continue to be, subordinate in time priority and all other respects to Garwood's Remaining Right, and to the rights of Grantor and its successors -in -interest in and to Garwood's Remaining Right. 2. The Conveyed Water Right is not, and shall hereafter continue not to be, appurtenant in any respect to any of the facilities authorized or existing under Garwood's Right including, without limitation, Garwood's pumping facilities, canal system, and low water dam. No interest in any lands or any facili- ty authorized or existing under Garwood's Right is hereby conveyed to Grantee. Unless Grantor in its absolute discretion should agree in writing other- wise, Grantee and its successors -in -interest are, and hereafter shall continue to be, prohibited from: a. diverting any water under the Conveyed Water Right from the point of diversion on the Colorado River authorized under Garwood's Right, utilizing Grantor's pumping facilities or otherwise; b. utilizing any portion of Grantor's canal system or other facilities to convey any water di- verted under the Conveyed Water Right; and EXHIBIT 1 Page 4 of 6 c. interfering in any way with Garwood's Remaining Right or the use or supply of water thereunder. TO HAVE AND TO HOLD, the Conveyed Water Right as conveyed herein, together with all and singular the rights and appurte- nances thereto in anywise belonging, except that which is reserved to Grantor and except that which is inconsistent in any way with any of the limitations, conditions and restrictions set forth in this Conveyance, unto the Grantee, its successors and assigns forever; and Grantor does hereby bind itself and its successors and assigns to warrant and forever defend the title to said Con- veyed Water Right unto the said Grantee, its successors and as- signs, against all persons whomsoever lawfully claiming or to claim the same or any part thereof, by, through or under it, said Grantor. Executed this day of , 19 GARWOOD IRRIGATION COMPANY By: ATTEST: EXHIBIT 1 Page 5 of 6 1 r 7 STATE OF TEXAS § COUNTY OF COLORADO BEFORE ME, the undersigned authority, on this day personally appeared Garwood Irrigation Company, known officer whose name is subscribed to acknowledged to me that he executed consideration therein expressed, and ed, and as the act and deed of said of to me to be the person and the foregoing instrument, and the same for the purposes and in the capacity therein stat - Garwood Irrigation Company. GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS THE day of , 19_ NOTARY PUBLIC STATE OF TEXAS PRINTED NAME OF NOTARY My Commission Expires EXHIBIT 1 Page 6 of 6 9/22/92' 12:44 HDR ENGINEERING • 8803839 - SEP -22-'92 TUE 12:18 ID:CH2M._HILL D/FW TEL NO:N14-395-0846 4 plot defining garment "A" at the Colorado give* 'Waft's of Garwood leripatiau Company's raw water Dam. iripv arts 4gwon 44w41 • ~"iii NO t$855 P02 D02 N. I '1 1*/ 4- )j Sam.ta( Kan ntlty Le*3ui Absrl.. Ne. 4e Data used on this Dlat va1 done by tape massora and aerial photograph information. Exact location of tract will be provided later by field survey and metas and bounds gaga Lit Lon. Sal; I r �!9r EXHIBIT 2 AN 19/22/9=' " 12:45 HDR ENGINEERING y 8803839 SEP -22-'92 TUE 12:18 ID:CH2M HILL D/FLJ NC TEL NO:N14-385-084\ p85$_P6- P03 1 INCH IN 2,000 FEET SEGMENT APPROX. 22 RIVER MILES TO COLUMBUS, TX sirt 13,000 ' R 2.46 RIVER MILES t. SCHISIT 3 SEGMENT "B" 22/32. ' 12:47 SEP -22-'92 TUE 12:19 ID:CH2MHILL D'FW HDR ENGINEERING + S803839 ' • • TEL NO:N14-385-0846 14, • NC ,. #SB55 PO4 D04 11 INCH - 2,006 FEET 1 \,./ / j o%t ,: 6' MO Guw BEGIN SEGMENT °C1-4 RIVER MILES DOWNSTREAM OF FM 960 BRIDGE P r • . M • Is? N • 'yr w -i .,' W e...I SEGMENT °C''. TO 8 MILES SOUTH OF BAY CITY,TX (APPROX.) EXHIBIT 4 QrrMFNT "C:"