HomeMy WebLinkAboutC2010-137 - 4/27/2010 - ApprovedTREATED WATER SUPPLY CONTRACT BETWEEN
THE CITY DF CARPUS CHRISTI
AND
NUECES COUNTY WATER CONTRQL AND 1MPR~VEMENT DISTRICT No. 4
THE STATE OF TEXAS §
§
COUNTY OF NUECES §
This Contract for the supply of treated water, made as of this ~ 1 day of April, 2a1 d,
by and between the City of Corpus Christi (City"}, a Texas home-rule municipal
corporation, whose address is P.C. Box 9277, Corpus Christi, Texas 78469-9277, and
acting through its duly authorized City Manager, or the City Manager's designee ("City
Manager"), which awns a regional water supply system that provides untreated raw
water and treated water to municipal and industrial customers, and Nueces County
Water Control and Imprv~ement District No. 4 ~"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 8284-'145,
Vernon's Ci~i1 Statutes, whose address is 3'f 5 South 9th Street, Part Aransas, Texas
78373, acting by and through its duly authorized representative ("District's
Representative"}.
This Contract amends the treated water contract dated January 5, '1978, between the
parties to this Contract, including the addendum identified as Exhibit A; and is the only
agreement of the parties relating to the sale, delivery, and use of treated water. Any
prior understandings or written or oral agreements between the parties relating tv the
sale and use of treated water are superseded by this contract.
The District wants to continue to divert and use treated water for resale for municipal
purposes, and the City desires to continue allowing or otherwise facilitating the delivery
and use of treated water by the District.
In consideration of the abase recitals and the mutual promises, covenants, and
agreements in the Contract, and for other good and ~aluahle consideration, the receipt
and sufficiency of which is acknowledged, the parties agree as follows:
'1. Term. This Contract becomes effective ^n May ~, 2g1Q, and continues in force and
effect for a period of thirty {3D} years.
2. Use and Quantity of Water.
a. The City agrees #o allow the District tv use cvnsumpti~ely, treated water for
municipal purposes, and to pay for, in the quantity as may be required by the ^istrict,
but not exceeding the total of gallons in a calendar year {January ~ to December 31 ]set
- - ~ ~ ~~ ~ ~~~~_i~~ched hereto and made a part hereof as-if set forth in full, and at
Drd. 02858? Page 1 of 14
0412711C
Nueces Cnty Water Cntr1 & I.D. #4 1N~~~
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a maximum rate of not more than the dally, monthly and annual flows set forth on said
Exhibit "A". Exhibit "A" shows flow requirements for the ^istrict based on population
projections provided by the Texas Water Development Board. The City and the ^istrict
will update Exhibit "A" every ten (14} years, which updated exhibit shall become a part
of this contract the same as if originally made a part thereof. It is the intent of the City tv
provide the District with an adequate amount of fresh potable water to allow for the
future growth in the District including those areas of the District that are within the city
limits of the City of Carpus Christi.
b. However, if an emergency situation arises, the City may deliver additional treated
water. The City's ^irectvr of Water Operations will determine how long the extra
deliveries will last, the rate at which deliveries will be increased, and whether the
increased deliveries will exceed the maximum annual flow during a calendar year.
Additionally, if an emergency situation arises, the City may reduce the amount of treated
water that it delivers to the District. The City's Director of Water Operations will
determine how Ivng the reduction in deliveries will Iasi, the rate at which deliveries will
be decreased, and advise the District. Any reduction in the delivery will proportionately
reduce the minimum amount of treated water that the District must take and pay for
under this agreement during the calendar year in which the deliveries are decreased.
c. Except as provided in subparagraph 2.b., if the District's projected needs far treated
water are expected to exceed the daily, monthly andlvr annual flows as shown vn
Exhibit "A", then in that event, the ^istrict will notify the ^irector of Water Operations of
the District's needs at least 3D days prior to date on which the increased deliveries are
needed. The Director of Water operations will determine whether there is sufficient
capacity within the system to a11ow an increased rate of delivery after considering the
City's planned needs and the needs of its other water customers. The Director of Water
Operations will determine whether water can be delivered at an increased rate and the
rate #o which deliveries will be increased, and notify the District's Representative of the
decision.
d. The District may request an increase in the amount of treated water delivered in a
year based ^n the extent of the uncommitted water available. The City will consider the
City's 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 Customer's annual
deliveries. However, the City is under no obligation tv authorize an increase in the
annual deliveries. 1n the event an increase in the annual deliveries is authorized, this
contract must be amended in writing to show the amount of increased deliveries and the
proportionate increase in the minimum amount of treated water the District must take yr
pay for.
e. Actual current and projected future deliveries are shown an Exhibit "A" attached to
and incorporated into this Contract.
f. Title to and possession of the treated water passes to the ^istrict at the point of
delivery.
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g. Any return flows to the Ivcal bays and estuaries inure to the benefit of the City, and
may be credited toward the City's obligations under the TCEG~ Agreed Order of April 28,
1995, which amended the operational procedures relating to Special Condition S.B,
Certificate of Adjudication No. 21-3214, and the Certificate of Adjudication. The City
recognizes that the ^istrict has reuse agreements with customers of the District to sell a
portion of the District's effluent. Notwithstanding anything to the contrary contained
herein, the City and the District agree that this contract does not prohibit the reuse of
effluent by the District. In the event a special condition causes the City to cut back vn
the amount of reuse a reuse customer of the City can receive, then, in that event, the
District shall cause its reuse customers tv cut back the amount of effluent they receive
proportionately, unless such a cut back would violate any existing reuse agreements it
has. The District agrees that any reuse agreements entered into by the ^istrict after the
effective date of this agreement will contain a provision providing for the reduction of the
amount of affluent that can betaken pursuant to the agreement in the event of a special
condition requiring the City tv cu# back on the amount of effluent a reuse customer can
take.
3. Point of Delivery. The City will deliver the treated water tv the existing delivery
point at the District's facility north of the City's fire station adjacent to Mustang island
State Park, and at any other points the City and ^istrict agree tv.
4. Measurement of Treated Water.
a. The treated water delivered under this Contract must be measured in U.S. standard
gallons by a suitable water meter ^r meters tv be installed and maintained by the City at
the point of delivery, which shall be accurate within 2°I°, either plus yr minus. The City's
Direc#or of Water Qperativns may specify the type of meter or meters tv be used and
the installation design of the meter or meters. Checks as tv the accuracy of the meter
^r meters will be made annually by the Director of Water ^perations, at the District's
expense. The City's Director of Water Operations will notify the ^istrict's Representative
in writing 10 days in advance of all annual checks and tests in order that the ^istrict
may have a representative present as a witness.
{1 } If either the City's Director of Water ^perativns yr 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 specia! test tv be made by the City.
{2} The expense of the special test of the meter or meters will be paid by the
party requesting the test.
{3} 1f, on any test, the meter tested is found tv be inaccurate by an amount
exceeding Z°I°, either plus yr minus, then any previous readings of the meter will
be corrected for any period of inaccurate measurement, which is definitely known
or agreed upon, but nv correction will extend back over a period beginning more
than 30 days prior tv the time when the inaccuracy was first made known by
either party to the other.
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{4} If, for any reason, the meter or meters are out of service so that the volume of
treated water delivered cannot be ascertained yr computed, the treated water
delivered during the period the meter ^r meters are out of service will be
estimated by the City's Director of Water ^perations, in consultation with the
^istrict's Representative, upon the basis of the best data available.
b. The City will read the meter yr meters ^n yr about the las# day of each month and
will determine from these readings the amount of treated water delivered tv the District.
Afl meter readings will be made available tv the ^istrict's Representative during the
City's office hours.
5. Price of Treated Water,
a. The price to be charged far #reated water sold by the City to the District is the
published rate for water service established by City ordinance, including the public
agency for resale treated water volume rates for water delivered through City-owned
facilities. The published rate at the origination of this agreement wild be calculated
utilizing the format developed by the rate consultant for the City and the rate consultant
used by the District. The rate model is set forth on a disk approved by the City Manager
for the City and the District Manager for the District, and is attached hereto as Exhibit
"B" acrd made a part hereof as if set forth in full. The rate mode! is a full cost of service
rate model and is the same model used and approved by the parties tv this contract for
the 2089-2g1fl fiscal year far the City. The raw water cost adjustment {"RWCA"} will be
calculated an an annual basis, and determined by dividing budgeted costs of raw water
and required debt service coverage and reserves, including, but not limited tv, reserves
for capital equipment repairs and replacement and far acquisition related to new yr
additional water supplies, by the projected sales of the system. The reserves included
in the RWCA for debt service coverage andlvr capital equipment repair and
replacement will be subject to the same iimitatians and provisions as the reserves
included within the treated water rate model. Further, the reserves far the acquisition
related to new ^r additional water supplies will be accounted for by the City in a
separate and distinct City General Ledger interest bearing account, and all interest
earnings will inure solely tv the benefit of the reserve account. The RWCA will be
adjusted vn a yearly basis to account far differences in volumes used in the prior
calculation and the actual volume of water sales for that year, and for difference in
budget tv actual casts. Changes in the raw water cost adjustment will calculated
automatically and billed tv the District and al! other raw water customers in a consistent
and uniform manner by the City.
City and the District agree that City shall have the right to change its method of billing ^r
the rate model set forth on Exhibit "6", but only if the new rate model adheres to the
general principles underlying the methodology previously agreed to by both parties for
calculating Wholesale Water Rates, and in particular the calculation of Wholesale Water
Rates shall incorporate the following principles:
^ Calculated using the cash basis of revenue requirement determination;
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^ Industry standards, as promulgated by the American Water Works Assaciatien
{"AWWA"}and edified in the AVWIIA M1 Manual, will be used in calculating rates;
^ Nv costs associated with the City's storm water utility will be included in the
Wheiesale Water Rate and recovered from the District, including any funds
needed to meet storm water debt service coverage requirements;
• The City wi11 be permitted to establish and maintain an operating reserve with a
target amount of 25°I° {i.e., 3 months} of annual operating expense far the fiscal
year of rate determination;
• The City wi11 be permitted to establish and maintain a capital replacement reserve
for the water utility equivalent to 2°I° of the curent Capital Improvements Program;
^ The City will be permitted to recover sufficient funds within the rates tv generate
debt service coverage equal to 1.35 times the then current annual debt service
requirement;
^ Water loss at the individual service function levels {i.e., raw, treatment, network,
distribution, etc.} will be recognized in calculating rates, and the District will not be
charged for any water lass attributable to customers taking service at the
distribution level;
^ Debt service and debt service coverage will be recognized and calculated at the
individual water utility service function levels {i.e., raw, treatment, network,
distribution, etc.};
^ Ta calculate the billing determinant volumes tv be used in the calculation of
wholesale water rates, the City will use athree-year average of billed water
consumption per connection, adjusted far known and measureable changes,
applied to the anticipated number of connections far the fiscal year, and,
• Tv determine system loss for rate calculation purposes, the City will use athree-
yearrolling average of actual loss an the cites distribution system to calculate loss
from the distribution system. 0.5°I°, 2.D°I°, and 1.5°Ifl will be used far diversion
lass, treatment loss, and network foss, respectively, until such time as the City
develops sufficient data to quantify the actual losses experienced at these
functional levels.
b. The actual methods for computing the untreated raw water cast adjustment is
established in a written policy filed with the City Secretary. A copy of the current policy
is attached as Exhibit "C". The City's Director of Water Operations will provide the
District's Representative with a copy of any modifications to the policy, which will then
be attached to this Contract as the new Exhibit "D".
c. When the City intends to change the rate, the City shall give the District n^#ice of the
proposed change, and any informatien necessary to evaluate the proposed rate thirty
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{3D} days before the change is to take effect. The District shall give good faith
consideration tv the proposed new rate and shall attempt to provide the City with its
comments on the proposed change not later than fifteen {15} days before the proposed
change is tv take effect. The City shall give good faith consideration tv the District's
comments, and may institute the new rate on the date the change is scheduled tv take
effect.
fi. Fixed Minimum obligation.
a. The District is obligated tv purchase, and pay for, an average of 25 million gallons of
treated water in each billing month calculated ^n a calendar year (January 1 to
^ecember 31 } during the term of this Contract or any renewal ^r extension of this
Contract, regardless of the amount of treated water used.
b. If the payment due the City from the District for treated water withdrawn during the
billing period under consideration exceeds the minimum, then payment must be made
far the amount of water billed by the City tv the District.
c. if the payment which would be due ^n the basis of treated water delivery is less than
the minimum, then the said minimum is nevertheless the amount due. This minimum
amount is intended tv cover the cost of meter readings, testing, billing, construction and
operation of the water treatment and transmission systems, and other costs, which will
continue whether any treated water is withdrawn by the District.
d. The District shall not be responsible far payment of the fixed minimum in any billing
month caused by an act or acts of Gad, unavoidable accident, acts of enemies, strikes,
fires, floods, vandalism, conservation of water, scheduled maintenance of the District's
transmission system, or by the City's inability to provide the water needed by the
^istric#. In the even# the District is responsible far the minimum payment provided for
herein and is not able tv take the minimum amount of treated water due tv an act yr
acts of God, unavoidable accident, acts of enemies, strikes, fires, floods, vandalism,
conservation of water, scheduled maintenance of the District's transmission system, or
by the City's inability to provide the water needed by the District, then, in that event, the
minimum payment will be prorated for the month in which one ar more of these events
occurs for the number of days that the District cannot take the minimum amount of
treated water from City, and the District will pay the fixed minimum on the remainder of
the days of the month.
e. Notwithstanding anything to the contrary contained herein, minimum costs shall
include the cost of the treated water as well as the raw water cost adjustment referred to
hereinabave.
7. Billing.
a. All treated water taken in any ^ne 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 the bill. Any clerical error in the bill or question regarding the bill is
not sufficient grounds tv delay payment by the ^istrict to the City. Any questions will be
Page 5 of 14
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properly settled under the terms of this Contract and by the agreement of both parties.
Any adjustments in the amount paid as a result of the 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 90 days after the billing
date is a "default" under Section 14 of this Contract. in the event it becomes necessary
to collect the 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 District's previous bill
plus a deposit, as a condition to furnishing treated water tv the District.
8. Restrictions on Resale.
a. It is understood that the ^istrict contemplates selling the treated water obtained
under this contract to its customers, same of whom will sub-meter or resell the water to
others. The District agrees that it will not sell water tv future customers unless they
comply with the District's Utility Water and Sewer Service Agreements. The City agrees
that it cannot provide treated or raw water tv customers located within area described in
the District's Certificates of Convenience and Necessity without the express written
consent of the District.
b. The ^istrict 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. Alternative Supplies. Nothing in this Contract prohibits the District from ^btaining
treated water from San Patricio Municipal Water ^istrict yr from developing alternative
supplies of treated or raw water but ^nly tv the extent that the alternative supply
exceeds the amount of water that the City is obligated to provide under this agreement.
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 ether future waters, whether surface waters yr
ground waters, obtained by the City, which are not under Contract to others, and which
are owned by the City, may be 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 ^utside 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 tv 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
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understood that this Contract is subject to the jurisdiction of the Texas Commission on
Environmental Quality ("TCEQ"}, any successor agency, yr any other regulatory
authority that may have jurisdiction over the matters. The District agrees to support any
future City requests to the TCEQ or other regulatory authorities for permission tv
acquire water rights or provide water to the District and other customers.
11. Water Conservation and Drought Contingency Measures.
a. The District acknowledges the terms of the TCEQ Agreed Order of April 28, 1995,
which amended the operational procedures relating to Special Condition 5.B, Certificate
of Adjudication No. 21-3214, and tl7e 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 tv 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 TCEQ
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, including any changes adapted by the City. The ^istrict also agrees tv 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 55-15fi of the Code of Ordinances for the City
of Corpus Christi, the District shall within 30 days of notice of any changes to the plan or
the implementation of any restrictions, surcharges, or rationing by the City, impose
similar restrictions, surcharges, ^r rationing measures ^n its customers. Any contract
far the resale of water famished by the District shall contain a similar condition. If for
whatever reason the District, yr its customer, is unable or unwilling to impose the
required restrictions, surcharges, ^r rationing measures within the required time period,
the District, or its customer, shall reduce its consumption of water from the system as
follows:
(1} During Condition I -- Water Shortage Possibility, deliveries from the system
shall be reduced by 1 g°I° from the average deliveries for the same month of the
year aver the previous three years.
{2} During Condition Ii -- Water Shortage Watch, deliveries from the system shall
be reduced by 20°I° from the average deliveries for the same month of the year
over the previous three years.
~3} During Condition III -- Water Shortage Warning, deliveries from the system
shall be reduced by 3D°I° from the average deliveries for the same month of the
year over the previous three years.
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~4} ^uring Condition IV -- Water Shortage Emergency, deliveries from the system
shall be reduced by 60°/o from the average deliveries for the same month of the
year over the previous three years.
c. If for whatever reason the ^istrict, 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 far all or a portion of its water
requirements, the ^istrict, or its customer, agrees nv# to request an increase in the
amount of water being diverted from the system should the ^istrict's, ar its customer's,
other svurce(s} of water fail to continue tv yield the amounts of water anticipated.
d. To the extent that the TCEG~ ^r other regulatory agency requires rationing of water in
a manner stricter than that imposed by the City, the District will comply with the stricter
method of rationing water.
e. The ^istrict shall furnish a copy of any ordinances, Orders, or Hales adopted by it or
its cus#omers that is adopted to implement the required restrictions, surcharges, or
rationing measures within the applicable jurisdiction. if far whatever reason the District,
or its customer, is unable or unwilling to impose the required restrictions, surcharges, or
ra#ivning measures, the City may audit the records of the District to ensure that the
District or its customer has reduced its deliveries by the amount required by this
paragraph, and upon determining that either the ^istrict or its customers have not
reduced that amount of water taken, the City may unilaterally implement reduced water
deliveries as specified in Section 1'l.b. of this Contract.
f. The failure of the ^istrict to comply with this Section of the Contract is a "default"
under Section t 5 of this Contract.
12. Carpus Christi's and District's Right to Sell.
a. The City retains the right to sell treated water at points and tv customers that are
located either within yr outside of the boundaries of the District ^n Mustang and Padre
Islands that are south of the delivery point, consistent with applicable law.
b. The District retains the right to sell treated water at points and to customers that are
located either within or outside of the boundaries of the City vn Mustang island and all
other customers that are north of the delivery point, consistent with applicable law.
c. The ^istrict shall maintain, operate, and repair the portions of the water mains and
related facilities constructed by the District that are north of the delivery point.
d. The City shall maintain, operate, repair and upgrade as needed those portions of the
water mains and related facilities constructed by the either the District ar the City that
are south of the delivery point in order to insure that the City can continue to provide an
adequate supply of water to the ^istrict. In conjunction with its operation and
maintenance of the water mains south of the delivery point, the City shall furnish a fresh
supply of potable water to the District using its water supply transmission infrastnacture
located on Padre and Mustang Island.
Page 9 of '14
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e. City and District agree that the price of water billed to the District will not include any
costs or charges for the collection and transmission of storm water within the city limits
of the City of Corpus Christi. Provided however, that the City reserves the right to
charge a storm water fee in the future to those customers of the District whale
properties are located within the city limits of the City,
13. Force Majeure. If the City or ^istrict is prevented, wholly ^r in part, from fulfilling
its obligations under this Contract by reason of any act of God, unavoidable accident,
acts of enemies, strikes, fires, floods, rationing, governmental restraint ar 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 the force majeure. Nv damage is
recoverable by the District from City by reason of the temporary suspension of delivery
of water due to arty of the causes above mentioned. If the City`s obligation is affected
by any of the causes, the City will promptly notify the District's Representative in writing,
giving full particulars of the farce majeure as soon as possible after the occurrence of
the cause or causes relied upon.
14. Resafutivn of Rate Disputes. In the event of any dispute as tv the rates being
charged, the City and the District agree that the dispute will be appealed to the TCEQ,
under applicable TCEQ rules, to the extent that the TCEQ has jurisdiction ever the
issue. The City and the District agree tv cooperate to satisfy any jurisdictivna!
requirements that the TCEQ may require far it tv determine the rate. In the event that
the TCEQ ^r another dispute resolution agency of the State of Texas fails or refuses to
hear an appeal of the wholesale water rate charged by the City, then, in that event, the
^istrict can contest the proposed wholesale water rate in the appropriate court in
Nueces County, Texas.
15. 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 far the default that the
party intends tv 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 ~9D}
days in which to cure the default, or if the default cannot be reasonably cured within the
ninety ~9Q} day period, the defaulting party shall use reasonable efforts to undertake to
cure the default within the ninety [9Q} day period. if the defaulting party dues not cure
the default and reimburse the party not in default far any and all cysts incurred as a
result of the breach within ninety ~9Q} days, or if the default cannot be reasonably cured
within the ninety (90} day period, if the defaulting party does not use reasonable efforts
tv undertake to cure the default and reimburse the party not in default for any and all
casts incurred as a result of the breach within the ninety ~9Q} day period, the party
claiming default may seek any remedy available at law or equity, including an action in
mandamus ar far specific performance.
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b. Nv waiver of any breach or default by any party ar of performance may be deemed a
waiver in the future, nor may any waiver be deemed or construed tv be waiver of
subsequent breach ar default of any kind, character, ^r description, under any
circumstances.
c. However, the right to cure a default may not prevent the City from enforcing Section
11 of this Contract if the City has imposed water conservation measures upon its
residents.
16. Assignment. 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.
17. 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
Gvntract by proper ordinance or resolution of its governing body {e.g., the City's City
Council and the District's Board of ^irectors}, 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 "E", and the District's authorization shall be Exhibit "F".
18. Notices and Addresses. Any notice, communication, or statement required tv 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 Water []apartment
Attn.: Director of Water Qperativns
2426 Holly Raad
Carpus Christi, Texas 78415
Phone: {361 } 826-1689
Fax: {361 } 826-4326
Nueces County Water Control and Improvement District No. 4
Attn.: District Manager
315 South 9th Street
Port Aransas, Texas 78373
Phone: {3fi1 } 749-52Q1
Fax: {3fi 1 } 749-5799
19. Regulatory Agencies. The District and City agree that the effectiveness of this
Contract is subject to the jurisdiction of the TCEQ and is dependent upon compliance
with the regulations in Title 31, Texas Administrative Code, Chapter 295 and 297,
Subchapter J., and any amendments thereto.
2Q. Periodic Review of Contract Pro--isians.
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[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 tv determine whether any changes should be made.
[h} The review of the Contract will include use of a cast of service study based an the
generally accepted principles for rate setting, recognizing that the cast 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 Worlcs Association's "Vllater 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
less or more than their proportional share of costs based upon total raw water sales,
and that public agency for resale customers taking water delivered through City-awned
facilities d^ not pay less than their proportiona4 share of costs based upon sales of
treated water delivered through City network facilities, and to ensure the District does
not pay mare than a just and reasonable rate for the water diverted. Notwithstanding
anything to the contrary contained herein, any change in methodology must be
approved by the District.
2'!. Ser-erabiiity. !n case any one or more provisions contained in this Contract is for
any reason held to be invalid, illegal, or unenforceable in any respect, the invalidity,
illegality, or unenforceability does not affect any other provision of this Contract, and this
Contract will be construed as if the invalid, illegal, or unenforceable provision had never
been contained in this Contract.
22. 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.
23. Modifications. Any amendments, ar 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.
24. Parties at Interest. This Contract is for the sole and exclusive benefit of the
parties, and shall never be construed tv confer any benefit on any third party. This
Contract will be binding upon and inure tv the benefit of the parties and their respective
successors and assigns where permitted by this Contract.
25. Texas Law tv Apply. This Contract will be construed under and in accordance
with the laws of the State of Texas.
2fi. 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.
27. Prior Agreements 5up~rseded. 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.
Page 12 of 14
NCWCIO No
28. All Agreements Contained in this Written Instrument. This Contract represents
the entire agreement between the District and City and supersedes all prier
negotiations, representations, ar agreements either oral ^r written.
The parties have executed this Contract in multiple counterparts, each executed copy
shall b c~}~sidered as an original, by their respective duly authorized representatives,
this ~r-day of , 201 q and is effective vn May '# , 201 Q.
THE "DISTRICT"
ATTEST
NUECES COUNTY WATER CONTROL
AND IMPROVEMENT DISTRICT No. 4
ti
By. By.
De x ark Y n
Finance ^irect r istrict a ager
A OW this a~~ day of April, 2Q1Q.
d ~S ~j~11THt]N~TE~
C es W. Zahn, Jr. ~T COtf~fCll.~~~[„~„
District's Attorney
SCR TAlR1'
ACKNOWLEDGMENT
THE STATE QF TEXAS §
§ .
COUNTY OF NUECES § ~ J
This instrument was acknowledged before me on the ~~ day of Apri# 2010, by Mark
Young, D}strict Manager, Nueces County Water Control and Imprv~em District No.4,
a political subdivision of the State of Texas, an behalf of the d~trict.
e.~R~,~U+ M4wIRUE YAhh~z L~RMA
r~ Halely Pub11C
~" ~~ " f 5TATE CF 7EiiA8
...~'~ M Comm. Exp. ~y•4~•2413
f~'~~o~„ /. Y
6LIC - STA
Page 13 of 14
~cwc!^ No
THE "CITY"
ATT 5T:
Armando Chapa
City Secretary
APPROVED: 2~ day of April, 2D1 D.
CRrf~ Va [ ~.
.r.~
~ City Attorney
ACKNOWLEDGMENT
THE STATE CF TEXAS §
COUNTY OF NUECES §
~~r'lUfiti?RIZft~
~r c~ulralL ...~~ ~~~~l,..
MR ~
s~c~~r-~~r .
This instrument was acknowledged before me on they~ day of Aprii, 201 Q, by 'Angel
R. Escobar, City Manager, City of Corpus Christi, on behalf of the municipal corporation.
NOTARY PUB C - 5TA OF TEXAS
THE CITY ^F CARPUS CHRISTI
~ ~~~
' gef R. Escobar
ity Manager
Page 14 of 14
NCWCID No
Exhibit A
MAXIMUM VULUMES MAXIMUM DRAFT RATES
Mon#hly Max Annual Max. Gallons 1 Hour Daily
Year (MG) (MG} (x 1 QQQ) (MGID}
2014-14 l31 l I68 191 4.22
2415-19 1 b4 145d 24Q 5.31
2024-24 193 17D3 284 6.28
2425-2g 22I 1949 327 7.23
2034-34 249 219Q 3b9 8.15
2035-40 277 2431 411 9.d8
These volumes are base on the 20Q9 Nueces County Water Control and Improvement
^istrict Water and Wastewater Facilities Master Plan using population prajectivns
established by the Texas Water De~elvpment Svard. The ^istrict wild periodically revise
these projected ~vlumes and draft rates as deemed necessary for the City to plan and
imprv~e existing infrastructure.
City of Carpus Christi
Raw Water Cost Calculations Procedures
To be filed with City Secretary
Revised Dct. 22, 2Da9
Policy Dk~jective: To ensure all water customers pay for the costs of raw water in direct
proportion to their relative share of system water used.
Overview of Procedure: A raw water cast per I,Oa~ gallons is computed annually
(RWCA}. The cast is determined by dividing all applicable budgeted raw water costs by
the total projected amount of water diverted based on a three year average, adjusted for
water losses and expected changes in customer base and use patterns. The RWCA is
computed using the City's Utility Rate Model. The components of the calculations are as
follows:
Raw Water Costs (Approved Annual Budget amounts):
(1 } LIITR4 Firm Neater Purchases. These are the scheduled payments to the LNRA
each year for firm water purchases.
(2} L1VRA Interruptible Water Purchases. Up to I2,fl0a acre-feet of water per
calendar year may be available for purchase based on Lake Texana conditions.
Per our agreement with LNRA, City will purchase it when available. Because
interruptible water is measured on a calendar year, it is passible to purchase more
than 12,Od~ acre-feet in a fiscal year, but this is unpredictable. 12,OD~ acre-feet is
used for budget purposes.
(3} NRA ~ & M. Annual contracted amount paid to Nueces River Authority.
(4} Bureau of Reclamation for Choke Canyon Dam. Scheduled principle and interest
payable on Choke Canyon Dam.
(5} Principal & Interest on Debt Service in proportion applicable to Raw Water.
Scheduled principle and interest payable to the Nueces River Au#hority, Lavaca-
Navidad River Authority, Utility Revenue Bands, and any other debt issued,
applied at the rate at which raw water projects were a proportion of total debt
issue.
(G} Public Works Group. The Public Works Group includes the Assistant City
Manager and other staff support associated with public utility activities, applied
in proportion to its application to raw water activities.
(7) Dther Interfund Charges. Includes items such as fleet purchases, Purchasing
allocation, and General Fund Administrative Services Transfer in proportion to its
application to raw water activities.
Exhibit C
($} Water Superintendent. Applied in proportion to its application to raw water
activities.
{9) Water utility Support Services Group. Payxall, accounts payable, & similar tasks
applied in proportion to its application to raw water activities.
(I Q} Water .Supply Development. All activity applies to raw water costs.
(11 } Environmental Studies. All such activity in the Water Dept. applies to raw
water costs, and includes outside professional services.
(12) Capital Outlay. At the discretion of the City, items with an acquisition
cost greater than $1 Qd,QOti which are not financed through debt may be
amortized aver their depreciable useful Iife in the RVNCA.
(13} Wesley Seale Dam ~peratrons cg Maintenance. These are operating costs
of the dam and city-owned property at Lake Corpus Christi.
(14) Choke Canyon operations & Maintenance. These are operating costs of
Choke Canyon Reservoir.
(15} Lake Texana Operations c4c Maintenance. These are casts of operating the
Mayor Mary Rhodes Pipeline and pumping stations.
(16} Rincon Bayou Pump Station Gperations & Maintenance. Delivers water
directly from Nueces River to Delta.
{17} Supplemental Water Sources. Operating and R&D expenses associated
with groundwater and other supplemental sources ^f water supply.
Offsetting Revenues (Approved Annual Budget amounts}:
(1$} Interest Income Earned on 1VRA Bonds. Represents interest income from
an interest-bearing security deposit required as a covenant of the NRA bond
issue.
(1 ~} Property Rental Revenue. Revenues earned from general property rental
and fees at Choke Canyon or Lake Carpus Christi.
(2Q} Qil and Gas Leases Revenues. Revenues earned from ail and gas leases at
Choke Canyon or Lake Corpus Christi.
(21 ] Reimbursements of Costs by Other Governmentsl.4gencies. Any raw
water costs directly reimbursed by another entity.
2
Dther factors:
{ZZ) Drativdown ar addition to Reserve. A raw water reserve has been
established as security against large swings in consumption yr casts in relation to
projections. Additions tv or drawdowns on the reserve are at the discretion of
management, and are used to help manage the RW rate.
X23) Increase over Cast of Service far coverage. Revenue bond covenants
require current year revenues cover a certain percentage of debt service, usually
1.Z5 times. City target is 1.35 times coverage.
(24} operating Fund ,balance. City will target 9~ days of budgeted operating
and maintenance costs to be maintained in Water operating fund unrestricted fund
balance. This fund balance is intended to provide far unplanned, unbudgeted
expenses and revenue shortfalls.
[25) Capital Reserves. After fiscal year-end, unrestricted fund balance in the
operating fund in excess of 90 days budgeted operating and maintenance costs
will be transferred to Capital Reserves funds in proportion to debt service
coverage allowance included in each cost center for rate calculation. A minimum
level of $Z million is targeted far Water's combined Capital Reserves. This
minimum level may be used for emergency capital repairs. Amounts above the
minimum are intended for cash funding of capital projects.
X26} Rate payers' Credit for Levelized Choke Carryon Debi Payments. 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 $3.245 million as a budgeted V4~ater Fund expense each
year. The reserve was built in the initial years when the scheduled debt service
payments were less than the budgeted $3.245 million. Now, as the payments are
larger than that, the difference in debt service payments are paid out of the
Reserve Fund. Since the Reserve Fund was funded by rate-payers, and was
completely funded prior to the institution of a Raw Water Cost Adjustment, only
rate-payers receive the credit to their RWCA far use of the Reserve Fund. The
annual credit equals scheduled principal and interest payments less $3.245
million.
(Z7) Imputed Interest. The City carxies the costs of capital projects through
cash in its Combined bank account until Revenue Bonds are issued for permanent
financing. There is a last cast to City residents as these funds cannot be invested.
Imputed interest is calculated at the prior 1 Z-month pooled fund interest rate,
applied to raw water projects not yet permanently funded, and using the
assumption that project cysts are incurred evenly throughout the year. Imputed
Interest is charged in RWCA only to JCL customers.
Projected Sales:
Three years of billing data is entered into the Utility Rate Model and averaged.
A new year of billing data may not be added every year, but overall sales volume
will be adjusted in the model based an expected changes in cus#omer base
(number of customers) and use per connection. In addition, water losses will be
3
applied to the consumption data by level of the water system responsible for the
lass, so that the volume used in calculating the RWCA rate applies RW costs to
actual gallons leaving the RW system and going forward directly to customers or
entering the treatment system. Because this applies RW casts to mare gallons
than are billable, last revenues due to water lasses are included as casts to be
recovered in rates charged far later levels in the water system (e.g. raw water
costs not recovered through RWCA due to network lasses are included as costs to
be recovered through rates charged to network customers; raw water costs not
recovered through RWCA due to distribution losses are included as costs to be
recovered through rates charged to distribution customers.}
4
City of Carpus Christi
Raw Water Cost Calculations
Detailed Procedures
To be filed with City Secretary,
As required under City Code Sec. 55-50 (b}
Aug 28, 2009
Policy ^l~jeetive: To erasure all water customers pay far the casts of raw water in direr!
praportiora to their relative share of system water used.
D~verview of Procedure: A raw water cost per 1,000 gallons is computed annually. The
cost is determined by dividing all applicable budge#ed raw water casts by the total
projected amount of water diverted. An annual adjustment is worked into raw water cost
to apply differences between budgeted and actual costs, and projected and actual water
consumed of the prior year. Components of the calculations are as follows:
Raw Water Casts:
{1) LNRA Firm Water Purchases $xxxx
{2} LNRA Interruptible Water Purchases $xxxx
{3} NRA - O & M per contract $xxxx
{4} Bureau of Reclamation for Choke Canyon $xxxx
(5} Principal & Interest on Debt Service in $xxxx
proportion applicable to Raw Water
{fi} Garwood Water Rights $xxxx
(7) Public Works Group $xxxx
{8} Other Interfund Charges $xxxx
{9) Water Superintendent $xxxx
(10) Water Utility Support Services Group
{ 11) Water Supply Development $xxxx
{ 12) Environmental Studies $xxxx
{13) Capital Outlay Items $xxxx
{14} Wesley Seale Dam Operations & Maintenance $xxxx
{15} Choke Canyon Reservoir Operations & Maint. $xxxx
{1 fi} Lake Texana Operations & Maintenance $xxxx
{17) Rincon Bayou Pump Station Operations &
Maintenance
{ 18) Supplemental Water Sources $xxxx
Subtotal
Less: Offsetting Revenues:
(1 g} Interest Income Earned on NRA Bands $xxxx
(20} Property Rental Revenue $xxxx
{21} Qil and Gas Lease Revenue ~ $xxxx
(22) Reimbursements of Raw Water Casts by $xxxx
Ratepayers Non-
Ratepayers
$xxxxxx $xxxxxx
other Agencies
Subtotal ($xxxx} ~$xxxx}
Net Raw Water Expenses, current year $xxxxx $xxxxx
(23) Adjustment for Prior Year's [fiver] Under $xxx $xxx
Collection
(24} Drawdvwn or addition to Reserve $xx $xx
X25} Direct casts subtotal $xxxxxx $xxxxxx
(25} Increase over COS for coverage $xxxxx $xxxxx
(27} Costs including coverage $xxxxxx $xxxxxx
{28} Rate-payers' Credit far Levelized Choke ($xxx) 0
Canyon Debt Payments
{29} Costs without Imputed interest {27} - (28} $xxxxxx $xxxxxx
[30} Projected Water Consumption in 1,x00 gg,ggg,ggg gg,ggg,ggg
gallons
RW unit cost with na Imputed Interest t29} $r.rrr $r.rrr
1(3a}
(31 } Imputed interest $xx $xx
RW unit cost with Imputed interest X31} 1 $s.sss $s.sss
{3U}
Raw Water Costs ~Appraved Annual Budget amounts}:
~ 1 } LNRA Frrm Water Purchases. These are the scheduled payments to the LNRA
each year for firm water purchases.
(2) L1iIR4 ,Interruptible Water Purchases. Up to 12,000 acre-feet of water per
calendar year may be available far purchase based on Lake Texana conditions.
Per our agreement with LNRA, City will purchase it when available. Because
interruptible water is measured on a calendar year, it is possible tv purchase more
than 12,000 acre-feet in a fiscal year, but this is unpredictable. I2,000 acre-feet is
used for budget purposes.
(3} NRA D 8c M. Annual contracted amount paid to Nueces River Authority.
{4} Bureau of Reclamation for Choke Canyon Dam. Scheduled principle and interest
payable on Choke Canyon Dam.
(5} Principal car Interest on Debt Service in proportion applicable to Raw Water.
Scheduled principle and interest payable to the Nueces River Authority, Lavaca-
Navidad River Authority, and on Utility Revenue Bands, applied at the rate at
which raw water projects were a proportion of total bond issue.
(5} Garwood Water Rights. Water rights were purchased for $13.9 million in 1999.
Cost is amortized over the 40 year term of the water right agreement.
2
(7} Public Works Group. The Public Works Group includes the Assistant City
Manager and other staff support associated with public utility activities, applied
in proportion to its application to raw water activities.
(8} Other Interfund Charges. Includes items such as fleet purchases, Purchasing
allocation, and General Fund Administrative Services Transfer in proportion to its
application to raw water activities.
(R} Water Superintendent. Applied in proportion to its application to raw water
activities.
(10} Water ~Ttility Suppar•t Services Group. Payroll, accounts payable, &
similar tasks applied in proportion to its application to raw water activities.
~ 11 } Water Supply Development. Ali activity applies tv raw water casts.
(12} Environmental Studies. All such activity in the Water Dept. applies to raw
water costs, and includes outside professional services.
(13} Capita! Outlay. Items with an acquisition cost greater than $104,000
which are not financed through debt are amortized over their depreciable useful
life. one halfyear amortization is applied ix- the year of acquisition.
(14} Wesley Seale Dam Operations & 11~Iaintenance. These are operating costs
of the dam.
(1 S} Choke Canyon Operations & 11~faintenance. These are operating casts of
Choke Canyon Reservoir.
(15} Lake Texana Operations & Maintenance. These are costs of operating the
Mayer Mary Rhodes Pipeline and pumping stations.
(17} Rincan Bayou Pump Station Operations c4~ Maintenance. Delivers water
directly from Nueces River to Delta.
(18} Supplemental Water Sources. operating and R&D expenses associated
with groundwater and ether supplemental sources of water supply.
Gffsetting Revenues (Approved Annual Budget amounts}:
(19} Interest Income Earned an IVR~4 Bonds. Represents interest income from
an interest-bearing security deposit required as a covenant of the NRA bond
issue.
X20} Property Rental Revenue. Revenues earned from general property rental
at Choke Canyon ar Lake Carpus Christi.
(2I } ~i1 and Gas Leases Revenues. Revenues earned from oil and gas leases at
Choke Canyon or Lake Carpus Christi.
X22) Reimbursements of Costs by Other GovernmeratslAgencies. Any raw
water costs directly reimbursed by another entity.
Calculating the Raw Water Cost per 1,000 gallons:
X23} .adjustment far Prior Year's Over) ~Inder Collection. At fiscal year-end,
actual raw water expenses and offsetting revenues through tine (22} will be
compared to actual collections of RWCA. The difference, either positive or
negative, is entered as an adjustment to be applied in the next fiscal year. This
method captures the variance in actual to budgeted expenditures and offsetting
revenues, and the variance in actual to projec#ed water consumption.
{24} Drayvdown yr addition to Reserve. A raw water reserve has been
established as security against large swings in consumption or costs in relation to
projections. Additions to or drawdowns on the reserve are at the discretion of
management, and are used to help manage the RW rate.
{25} Subtotal
(26) Increase over Cost of Service for coverage. Revenue bond covenants
require current year revenues cover a certain percentage of debt service, usually
1.25 times. City target is 1.35 times coverage, with excess to be used to fund
capital reserves. Excess Capital Reserves in the Water Fund will be used to cash-
fund capital projects.
(27} Subtotal
[28} Rate payers' Creditfor LeveIized Choke Canyon debt Payments. The
Choke Canyon Reserve Fund was established to levelize the escalating payments
to the Bureau of Reclamation. This reserve was created by establishing a
ievelized paymen# of $3.245 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 $3.245 million. Now, as the payments are
larger than that, the difference in debt service payments are paid out of the
Reserve Fund. Since the Reserve Fund was funded by rate-payers, and was
completely funded prior to the institution of a Raw Water Cost Adjustment, only
rate-payers receive the credit to their RWCA for use of the Reserve Fund. The
amount entered here equals scheduled principal and interest payments less $3.245
million.
(29) Costs without Imputed Interest
(30) Projected Water Consumption. Based on historical analysis.
(31 } Imputed Interest. The City carries the costs of capital projects through
cash in its Combined bank account until Revenue Bonds are issued for permanent
f nancing. There is a lost cost to City residents as these funds cannot be invested.
4
Imputed interest is calculated at the prior 12-month pooled fund interest rate,
applied to raw water projects not yet permanently funded, assuming project costs
are incurred evenly throughout the year.
S