HomeMy WebLinkAboutC2018-419 - 8/28/2018 - Approved 1
SECOND AMENDMENT TO AND EXTENSION OF THE CONTRACT BETWEEN
THE CITY OF CORPUS CHRISTI AND
SAN PATRICIO MUNICIPAL WATER DISTRICT FOR SUPPLY OF TREATED WATER
Whereas, on March 17, 1997, the City of Corpus Christi ("City") and San Patricio Municipal
Water District ("District") entered into a Treated Water Supply Contract with a term of 30
years; and
Whereas, effective August 13, 2013, the City and the District entered into a Settlement
Agreement and Mutual Release which amended the foregoing Treated Water Supply Contract,
and the Treated Water Supply Contract, as amended by the Settlement Agreement and Mutual
Release, is hereinafter referred to as the Contract; and
Whereas, the Contract provides for the City to provide the District with 10,000 acre feet of
treated water on annual basis;
Whereas, the parties desire to further amend the Contract regarding quantity and price of
water and also extend the Contract as amended;
In consideration of the above recitals and the mutual promises, covenants, and agreements,
and for other good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree to amend sections of the Contract and add new sections to
the Contract.
This Second Amendment to and Extension of the Contract between the City and the District
(herein "Second Amendment and Extension") amends the Contract Section 1 (Term); Section 2
(Use and Quantity of Water); Section 3 (Point of Delivery); Section 6 (Fixed Minimum
Obligation); Section 13 (Force Majeure) and Section 14 (Resolution of Rate Disputes), and adds
new Section 30 (Backflow Prevention Devices and Other Regulatory Requirements); Section 31
(Required Notices); Section 32 (District Service Obligations-Service Areas); and Section 33
(Required Statement Regarding Effectiveness of Contract), to read as follows:
1. TERM.
The term of the Contract is amended and extended to continue for an additional forty
(40) years from the Effective Date of this Second Amendment and Extension. After such
additional forty-year term, the term of this Contract shall be renewed for additional
terms of ten (10) years each, only upon written agreement by both Parties.
2. USE AND QUANTITY OF TREATED WATER.
a. Subject to and as limited by the provisions of Section 6 below, the City agrees to
2018-419 ivert, and use consumptively, treated water for municipal and
8/28/18
M2018-150
San Patricio Water District
SCANNFD
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industrial purposes in such quantity as may be required by the District, but not
exceeding a total of 37,000-acre feet (10,000 acre feet of which shall be designated as
Reserve Capacity as set forth in Section 6(a) below) in a calendar year (January 1 to
December 31). Treated water includes water treated at the City's O.N. Stevens Water
Treatment Plant and may also include any other treated water available from any other
City facility, so long as it is potable quality.
b. However, if an emergency situation arises, the City may deliver additional treated
water. The City Manager or designee ("City Manager") will determine how long the
extra deliveries will last, the rate at which deliveries will be increased, and whether the
increased deliveries will exceed 37,000-acre feet during a calendar year.
c. Except as provided in subparagraph 2.b., if the District's projected needs for treated
water exceed 23,000 gallons per minute, the District will notify the City Manager of the
District's needs at least 90 days prior to date on which the increased deliveries are
needed. The District agrees to provide at least 2 years advance notice if requested
increase exceeds 20% of amount stated in subparagraph 2.a. The City Manager will
determine whether there is sufficient capacity within the system to allow an increased
rate of delivery after considering the City's planned needs and the needs of its other
water customers. The City Manager will determine whether water can be delivered at
an increased rate and the rate to 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 on the extent of then uncommitted available water. The City Manager 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
District's annual deliveries. However, the City is under no obligation to authorize an
increase in the annual deliveries. In event an increase in the annual deliveries is
authorized, this contract must be amended in writing to show the amount of increased
deliveries.
e. Title to and possession of the treated water passes to the District at the points of
delivery.
3. TWO POINTS OF DELIVERY OF TREATED WATER.
The City will deliver the treated water to the existing delivery point at the City's J.W.
Cunningham facility, and to the additional delivery point described on Exhibit "A" /or
any other delivery points agreed to by letter agreement of the City Manager and the
District Executive Director.
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6. RESERVE CAPACITY, CAPACITY FOR DESIGNATED CUSTOMER AND FIXED
MINIMUM OBLIGATION OF TREATED WATER TO SERVE DESIGNATED CUSTOMER.
a. Out of the total 37,000 acre feet of treated water capacity set forth in Section 2
above, 10,000 acre-feet of treated water capacity is hereby designated as "Reserve
Capacity". Except for emergencies subject to Section 2(b) above, the District shall
provide at least 2 years' advance written notice to the City of the District's intent to
utilize the Reserve Capacity prior to use by the District.
b. The remainder of the 37,000 acre feet of treated water capacity set forth in
Section 2 above, being 27,000 acre feet, shall be made available to the District by the
City only for the period of time during which the contract between the District and Gulf
Coast Growth Ventures LLC ("Designated Customer") is in effect. SPMWD must provide
the City at least 90 days advance written notice prior to SPMWD actually taking any
portion of the 27,000 acre feet.
c. Commencing on January 1, 2023, and continuing so long as the contract between the
District and its Designated Customer is in effect, the District is obligated to purchase
minimum of 15,000 acre-feet per calendar year ("Take-or-pay Amount") at the monthly
take or pay rate for public agency for resale, as adopted by City ordinance and which is
in effect at the time of delivery. Notwithstanding the foregoing sentence, if the
Designated Customer makes technological or other improvements or changes to
operations of its facility that will result in a reduced anticipated water usage, and
provided the Designated Customer provides documentation of such a change, then the
City and District agree to review such documentation and to negotiate changes to this
Contract to reduce the 27,000 acre feet commitment in Section 6(b) above and the
minimum take or pay purchase requirement in this Section 6(c). In addition, if the City is
unable due to drought conditions to provide sufficient treated water to the District in an
amount at least equal to the District's then-existing minimum purchase requirements,
the District shall only be required to pay for the actual amount of treated water
delivered by the City. Once the provisions of the preceding paragraph are in effect, for
any calendar year in which District has purchased less than the take-or-pay amount, City
shall invoice District for the difference between the actual amount of treated water
purchased during that calendar year and the take-or-pay amount.
If Designated Customer's Facility (which is located in San Patricio County,
bounded on the east by FM 2986, bounded on the north by US 181, bounded on the
west by CR 3677 and bounded on the south by CR 1612) is prevented from operating
fully due by reason of a force majeure event(s) described in Section 13 and during a
calendar year in which the District has purchased less than the Take-or-pay Amount,
then subject to City's receipt of required notice and City's concurrence of the existence
of a qualifying force majeure event, which concurrence by the City shall not be
unreasonably withheld, the calculation to determine the difference between the actual
amount of treated water purchased during that calendar year and the Take-or-pay
amount shall be adjusted to actual use and prorated to reflect the period of such down
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time; however any such adjustment(s) shall be for actual period of down time, not to
exceed maximum of six months ("Period of Take-or-Pay Adjustment"). Subject to
City's concurrence of a qualifying force majeure event, the Period of Take or Pay
Adjustment initiates as of the date of the qualifying force majeure event. Immediately
upon the conclusion of the Period of Take-or-Pay Adjustment,the District must resume
payment of the Take-or-Pay Amount even if the qualifying force majeure event
continues beyond the maximum six month Period of Take-or-Pay Adjustment.
d. 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 for the amount due.
13. FORCE MAJEURE. If the City or District is prevented, wholly or in part, from
fulfilling its obligations under this Contract by reason of any act of God, unavoidable
accident, acts of enemies, strikes, fires, floods, conservation of water for those with
superior and legal rights to such water, governmental restraint or regulation, other
causes of force majeure, or by reason of circumstances reasonably beyond its control,
then the obligations of City or District, as provided in this Contract, are temporarily
suspended during continuation of such force majeure. No damage is recoverable by the
District from City by reason of the temporary suspension of delivery of water due to any
of the causes above mentioned. If the City's obligation is affected by any of such causes,
the City will promptly notify the District's Representative in writing, giving full
particulars of such majeure as soon as possible after the occurrence of the cause or
causes relied upon.
If Designated Customer's Facility (which is located in San Patricio County,
bounded on the east by FM 2986, bounded on the north by US 181, bounded on the
west by CR 3677 and bounded on the south by CR 1612) is prevented from operating
fully by reason of acts of God, unavoidable accident, acts of the public enemy, strikes,
floods, fires, governmental restraint or regulations, or for any other cause beyond
Designated Customer's control, then subject to the District's providing 30 days' notice
to the City of said event, the District's minimum take or pay purchase obligations will
be adjusted to reflect the actual use during such force majeure(s) per the terms of
Section 6(c).
14. RESOLUTION OF DISPUTES.
In the event of any dispute between the parties under this Contract, the parties shall
first attempt in good faith to settle and resolve such dispute. The party shall provide
written notice of the dispute and allow at least 30 days for written response prior to
initiating any further action. If dispute cannot be resolved by mutual agreement,then
resolution shall be in accordance with applicable law.
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The parties agree to further amend the Contract by adding new Sections 30 through 33 to the
Contract to read as follows:
30. BACKFLOW PREVENTION DEVICES AND OTHER REGULATORY REQUIREMENTS
a. District shall design, construct, operate, and maintain its water system in
compliance with all applicable Federal, State and local laws.
b. District shall ensure that all connections with the City water system contain
backflow prevention device and/or air gaps consistent with City Plumbing Code
requirements and in compliance with State laws. Notwithstanding the foregoing, the
City agrees to provide District with a variance, if such variance is approved by the Texas
Commission on Environmental Quality ("TCEQ"), for the air gap installation at the
storage tank at the District's Designated Customer's Facility to allow for less than two
pipe diameters between the top of the tank and the water surface due to the large 48"
diameter of the pipe. District shall not allow any other party to connect with the City
water system. The City reserves the right to immediately disconnect water connections
in violation of this requirement without any notice to District and without any penalty or
liability to City.
c. District grants the City and its officers agents employees to go upon District
property at any time to inspect for compliance with these requirements.
31. REQUIRED NOTICES
a. District shall notify City in writing at least two weeks prior to making any change
in its planned diversion rates, not to exceed the maximum diversion rates specified in
this Contract. Such notice shall include District's anticipated diversion rate.
b. District shall provide to City a demand or use schedule that estimates District's
annual usage, and any increases to it over time ("Demand Schedule"). District shall
update its Demand Schedule and provide to City not less than once a year or following
written request from City.
c. District shall provide copies of any termination notice received from the District's
Designated Customer within 10 business days of the District's receipt of such notice.
32. DISTRICT SERVICE OBLIGATIONS—SERVICE AREAS
District agrees to make its treated water available for sale to the City and treat the City
the same as any other treated water customer within San Patricio County.
33. REQUIRED STATEMENT REGARDING EFFECTIVENESS OF CONTRACT.
This Contract's effectiveness is dependent upon the compliance by the City and the
District with 30 Texas Administrative Code 295.101 and Chapter 297, Subchapter J of
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Title 30 of the Texas Administrative Code (relating to Water Supply Contracts and
Amendments).
All other terms and conditions of the previously executed Contract between the parties which
are not inconsistent herewith shall continue in full force and effect.
By signatures below, the parties agree that the Contract as amended by this Amendment and
Extension Agreement, constitutes the sole and only agreement of the parties and supersedes
any prior understandings or written or oral agreements or settlement agreement between the
parties respecting the within subject matters.
The parties have executed this Amendment and Extension Agreement in multiple counterparts,
and each executed copy shall be considered as an original, with all terms effective as of date of
last signature ("Effective Date").
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SAN PATRICIO MUNICIPAL WATER DISTRICT
By: , 24‘?2,g. M'.0
President
ATTEST:
By: a-e---c---41-- -9--.--(2_,‘,.. ..„___ __________
Secretary/Treasurer
ACKNOWLEDGMENT
STATE OF TEXAS
COUNTY OF SAN PATRICIO
This instrument was acknowledged before me on the " day of (-161-- , 2018
by f<<l 00—i2if►n4 President of the San Patricio Municipal Water District, on behalf of said
district, after approval of the Board of Directors on 4ff{'Z-2 , 2018.
Notary Public
,,~Pa 'P a�,:, KAREN IVEY >
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S*: Notary Public
1‘ STATE OF TEXAS >
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CITY OF CORPUS CHRISTI /
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Samuel eith Selman
Manager Assistant C:ttyA rney
Interim City g For City^.tior., y
ATTEST:
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Rebecca Huerta, Secretary !? ���
ACKNOWLEDGMENT
STATE OF TEXAS
COUNTY OF NUECES
This instrument was acknowledged before me on the J day of , 01
by Samuel Keith Selman, Interim City Manager of the City of Corpus Christi, Tex s, on behalf of
said city, after approval of the City Council on August 28, 2018.
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Digitally signed by REVISION DATE SAN PATRICIO MUNICIPAL WATER DISTRICT
James Schwarz,Pl. DATE FILENAME REVISION NUMBER
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