Res 011-2011 2/15/2011 RESOLUTION NO. 11-2011
Resolution Approving A 20-Year Raw Water Purchase Contract To
Provide Water To The Red River Authority Of Texas For The Sale And
Purchase Of Raw Water From Lake Arrowhead
WHEREAS, the Red River Authority of Texas is organized and established under
provisions of the laws of the State of Texas; one of its activities is to provide treated water
to its water users within its authorized service area; and to provide this treated water it
can use raw water supplied by the City;
WHEREAS, the City owns several water reservoirs with capacity capable of
serving the present customers of the City and the estimated number of water users to be
served by the Red River Authority of Texas;
WHEREAS, the Red River Authority of Texas executed a water purchase contract
with the City on May 1, 1979, and subsequently agreed to multiple modifications thereto;
WHEREAS, the Board of Directors of the Red River Authority of Texas resolved,
on January 19, 2011, to authorize the attached Raw Water Purchase Contract;
WHEREAS, the Red River Authority of Texas is required by Texas Commission on
Environmental Quality ("TCEQ") regulations to implement and enforce the City's Water
Conservation and Drought Contingency Plan through all subsequent sales of the water
purchased from the City; and
WHEREAS, the City Council has examined the proposed Water Purchase
Contract between the City and the Red River Authority of Texas and determined that its
execution is in the best interest of the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WICHITA FALLS, TEXAS, THAT:
The attached Raw Water Purchase Contract with the Red River Authority of
Texas is hereby approved, and the City Manager is authorized to execute said document,
with such changes to form as are approved by the City Attorney.
PASSED AND APPROVED this the 15th day of February, 2011.
MAYOR
ATTEST:
,
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ity erk
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ltam� Water 1'urchase Ci�nUact
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TI IfS CnN'1'R��CT for thc salc an�l piirchase ol water is enlered into �iti of �he ,'�`� � day of
.,�z� y� ,� �.� r_c� , 20l 1, bet�veen thc City ol' 1ti°icliita f�alis. "Tex;ts, hereinafter referred to as "(: iY,�" nnil thi�
Red Rivcr AuthoritY of l�cx�ts, herein<tl reP�errctl tt� as "�1uthtn ..
��� HE-K�r�S, iAuthurii�- is org<inized and established under prc���isi��n; of thc la��s of the Statr ul� l r�as. CJnc uf Uir
dutics ul�,luthoriiy i� the cimsU�ucti�n �nil oper�tion ot a����iter trcatmcnt and distri��utiou syst�in s�r��in�� tiealer users
���ithin tl�ie certi1icated �re<i descrihed in thc ('crtitic�te of Com�enicnce� anil �ecc55it� �!��wnber 10202 (CCN) no4�� on
(il� in the oftice o1' ��luthority aiucl �rt llic `i�c�as �'un�iuis,ion �>n Iin�-ironmental Oualit��, and to accomplish this
��ur��ose. Authc,riry t��ill reyuirc a �u��ply ol' r�3��v water. to be u•eated at the �1uth�rity pl�nt locatcd ��t Lake
A rro�vl�cad;
1��HERE�AS, C'i[y c+wns water reservoirs ����ith capncit}' cnpabie �f scrving tile prescnt custoin�rs ul'the C'ity sv,ten��
au�d the estirnated nun�iber of �vater users to be ,erved h5� Autliority�;
WF(�P.[?�15, City rind Authorit,y iiiiti�lly cnte.r��l iutu x W.-�[er Pw�ch�ise C�mtract cm !�1�1�� I. 1979, nnd s��hsequently
,i,reed t� mttitiplc mi�dit7e�tioiu tu thc contract nncl ne�� couUacts, ancl Ihiti ec�ncr.�et r�pl�ecs all prii!r c.��nlracta
bet�reen rhe pnrlic� r�laitin� tu thc purclia;e ��I� ra�� ���uier ('�V'�'ater") I�r�m L>il:c r� I�or tl�e L�ke
;�rr��whc<id Area Arroivheact Itanch I�;stutcs Arc�i aiiid thc I.:al:c arr�����h��a�d titatc 1'uri<. �41�icl�i i; dc�,icled in
thc �ttachcil Servicr :1na t�1ap:
4V1 iit�me�liatel�' pri��r tci [hc effcetive cl�tc i�f tlii; �r�ntract. !�iiih��ri1� ���as not c�hiiw�ntcd to purelt�se l��'atcr
l�run� the Cily ��nd the Cit}' ��'<�s not c�bli���<ucJ to x�ll watrr to i1i.idu�ritv:
\��11I�.RI:AS, E�y resitlutit>n of Uie k�orircl c�f Directors of nuTliority et��etc�d Un [I'te f��� d��y oi'
---
` Csr-.�/._• 201L, it .iuthorized the continucd purchase of ���ter by Autliurit� �u��1er lhe teriris ��f Itiis ne��.
routuall�� agrde� upon 4�'ater Piu•ch<ise Cc,nu<2ci;
�V1Ih;RI�;i�S, Aiithrn•ih� �cill operate a��ater tr'catrncnt .tn�l Jistributiun s�,ten�, an�l ,ene the <uc:a cicscril�rd in lh�
�iluremei�fionecl CC"N: and
41�HGRL.�ti. Autlwrit�� i� re��uireil b� �I�c��is Cummis:i,�n ��n I-n��ir��nni��nta1 �)ualit�� (��l�Cl;(1 rr«ula�i��ns t��
impl�mcnt and rnlurce C'it���� Waler C��n,erv,iiion ancl I.)r�>>irht C��n�int�.cncy I'I,�tn tluough all subsequerii snles �if'
\1%;iirr ;ind :hall incli.icie ,uch ohli,;�tion in any suhsequcnt eontr�ct for salc tlial Auth��rit) niay c�ccutr �� ilh <tny thiril
partl' purchascr ol� \�'ater.
NO\V, "I'IiFiRI3�(1R1:, KNC)W ALL �ti�1t;N I3Y I 11LSL; PKLSk;N l'S, that It>r val�ie received, C'ity <ind Authority
mutually agree to thc followin„ to �vit:
1.0. I)i��cvsion Authurized. C.'ity �tiill sell and nuthorit�• will rurchasc r��v ��atcr pursuant to the tcnns and ��r��visions
of this contract.
1.1. lli+�ersiuu Puint. The di��ersi��n ��oint and point of dcliven o� tli�� ����itcr (i��mi Ihc C'i�r ;h,.�ll hc� ,it tlie C'it��-o���nec';
r.i�v water line tu I.»ke Arrowhead, I�cx�is, at ,� �uint,l�ctw��cn llic ('it�� int;ike �lructure nnd the_I_�il:c=�rr��whea�l,
I'�iiri�> S�atiun. ���<iter sh<ill bc ar��il�ibl� unClcr thc nornial uprratinu cun�liti�>ns ��i� U�e C�it} \n�' cl�i�uk,�• in lhc
e.�is[in� rap tiizc �nd Inc<ition on tl�� ra�� ���.ilrr linr �I��ill bc ��iUt tl�ie ���.���ru�al i�l (�il� Pithlic ti�"nrl�s I)irccli�r an�l a�
thc s�le ��xpc�ns� ��f thc ��uthurity.
1.2. �'la�imum llelit�er�� Olilig.uion. The M��xinnun Annu�l Qu�i�tit�- of r,nv wt�tc:r to be divcrte;d ('rom tl�e �vater
supply ,ystcm by �luthoritti' t'rom I_.al:c Arrowhc�d shall not cxccecl 1G,UUU,OQO gallous per monCh ("��tot�ihl��
Quantit�-") n<�l tc, exc-eed ,i maximum �f 13G,Op0,Q00 �allons 4�er year (`,�unual (�uantiiy"} io any Water Year unless
a`�reatrr anuiunt is <tpproved in writin�; hy City. `'�\`t�ler Yetir me,ins tltc period Octcibcr 1 of each c�ilendar year
. J:):la\ll�. i�I:tit��R! I�i.(it I Ic�..p�...,u��.I�v�..ncJN.�...i,Ih�.nr ,�t'�., ,,i�.I,�li�i�4bV.1C iol.i ...,,._,a
through Septembe►• 30 of the next following calendar year. Ti�e Monthfy Quantity is calculated as the amount of
water Authority consumes in a monthly billing cycle. Authority shall not take more than the Annual Quantity
without prior written consent of City. Authority agrees that City is under no obligation to provide Authority with a
sufticient amount of Water for Authority to meet its minimum production, storage, service pump, or pressure
maintenance requirements, or any other requirements imposed on Authority under 30 Texas Administrative Code,
Chapters 29Q or 291, or Any otl�er requirement of ]aw except as provided herein. Authority also agrees that City is
under no obligation to increase any of its water utility infrastructure or capacity in order to satisfy any of tl�e
provisions of this Contract.
1.3. Metering.
a. Authority shall furnish, install, operate and maintain at its own expense at the diversion point or treahnent plant,
the necessary metering equipment, including a meter house or pit, and required devices of standard type for properly
�neasuring and recording tlie quantity of raw water diverted. City and Authority shall agree on the type of any
replacement meter before purchase by Authority. Metering equipment shAil be calibrated by Authority whenever
requested by city, but not more frequently than once every 12 months. Within 30 days after sucl� calibration,
Autltority shall furnish a certification of such calibration to the Director of Public Works of City. A meter registering
not more than 2% above or below the i•ated capacity of the meter shall be deemed accurate. The previous reading of
any meter disclosed by test to be inaccurate shall be corrected for the 12 months previous to such test in accordance
with tlle percentage of inaccuracy found by such tests and existing records. If any meter fails to register for any
period, the amount of water furnished during sucti period shall be deemed to be the amount of water diverted in the
corresponding period immediately prior to the failure, based on existing records unless City and Authority shalt agree
in writing upon a different amount. If Authority's measuring equipment is out of service for 30 days or more, Ciiy
may purchase, install and maintain any rcquired measuring equipment, as deterniined by City, and charge the
expense therefore to Authority.
b. During any reasonable business hours, City shall have access to the metering eGuipment. City shal] further have
access to all records pertinent to detennining the measurement and quantity of water actually delivered. Authority
agrees that City may fumish, instail, operate and maintain check meters, should City so choose. Authority also agrees
that the design and construction of its diversion facility and metering eguipment will facilifiate City's installation and
operation of check meters.
c. City will read tlie Authority raw water meter on the first nonnal work day of each inontl� during the term of this
contract. Authority and City sl�all have free access to read meters daily if they so desire. City will provide Authority,
no later than the lOth day of each month, �vith an itemized statement showing the amount of raw water metered to
Authority during the preceding month and the resulting charges. Authority shalJ pay to City the amount of the
itemized statement no laier than the 20th day of the month in wl�ich the charges are billed.
d. "Business hours" are defined as between the hours of 8:00 a.m. and 5:00 p.m. CST. "Business work day" is
defined as weelc days tliat exclude federal and state holidays, and Saturdays and Sundays. Any day specified for
performance under the terms of this contract that falls on a weekend or holiday shall be performed not later than the
conclusion of the next successive business day.
1.4. Locations and Easements. The location of the Authority pump station, intake structure, treatment plant, and
elevated storage tanks sI�all be approved by the City, and the location of the treahnent plant and elevated storage
tanks shall be maintained and contained within the property currently leased to Autliority by the City pursuant to the
attached I.ease Agreement. The iocation of auy facility constructed subsequent to the date of this contract shall be
approved by tlie city and an easement or loiig term lease executed before detailed plans and specifications are made
or any construction begins.
1.41. k'ire Tap. The Authority is authorized to maintain its existing tap on the Lake Arrowhead Pump Station
Secondary Reservoir raw water line, for the use of the Arrowhead Ranch �states Voluntary Fire Department as a fill
point to suppress fires. The Authority shall maintain iis air gap at this connection to prevent backflow or
backsiphonage.
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1.5. Plans ancl Specii7catrons Approval. Pians and Specifications far new or additions to existing treatment plant,
intake structure and pumping facilities shall be approved by the city before advertising for construction, sucll
approval being for location and configuration in relation to leases and easements, and for other factors that may affect
the City operation and use of the reservoir And environs.
2.0. Water Rates. Until changed by City, the cost of raw water purchased by Authority sl�ali be $0.2783 per 1,000
gallons. The rates to Authority for Water shall be subject to change each year as a result of a cost-of-service study
using the rate principles in section 2.1. When a cost-of-service study is conducted, City will provide the results and
the new rates to Autl�ority. The new rates will become effective at the beginning of each Water Year. Adjustment to
rates does not constitute an amendment to the Contract. If Authority exceeds either the Montl�ly Quantity or the
Annual Quantity, the City shal[ be entitled to bill for sucll applicable monthly unapproved exceedance and Authority
hereby agrees to pay for such exceedance at 2.0 times the water rate for tile period of exceedance.
2.1. Annual Changes to Water Rates. Authority authorizes the rates for raw water to be changed annually, based on
the following rate setting principles:
a. Revenue requirements to be determined on utility basis at an ab eed test year's original Cost adjusted 30%
toward cun•ent cost to cover its cost and as compensation for ownership. The test year shall be the most
recent audited City fiscal year.
b. City to receive a Rate of Return on the agreed adjusted value Rate I3ase equal to a composite of the
utility's test year embedded cost of money weighted on the debt portion of cnpital invested in plant in service
and the utility's latest cost of money weighted on the remaining equity portion of plant in service to cover its
risks.
c. A[I existing reservoirs and associated facilities to be included in common rate base. Wholesale customers
as ,class (either raw water only, raw water transmitted, treated water only and transinitted trsated water) wilI
pay their proportionate share of all costs based on current use.
d. A flat rate (volume only), shall be charged, with alIocation of 100% current use to encourage conservation
and thereby resulting in efficient utilization of the water system; provided, however, that the amount billed
each month shall never be less than any agreed monthly minimum charge.
e. The risk of financing all future raw water trans►nission lines and reservoirs must be borne by the City
Water utility, and all costs wiIl be allocated to all wholesale customers on current use basis.
�ffective Date for New Rates: The rates will be considered changed on the monthly billing cycle for water
consumed within the first full monthly biIling cycle following the Notice of Rate Modification.
2.2. Disputed Rates. Autllority shall be governed by the provisioa�s of the Texas Water Code § 12.013(c) and
, Chapter 291 of the Te:cas Administrative Code and applicable (aw, as t11ey may be amended by the Texas Legislature
from time to time. Autliority stipulates and agrees that the rate, rate setting methods, and policies specified in this
Agreement are just, reasonable, and without discrimination. Further, if Authority believes that rates l�ave been
modified in a manner that fails to conform to the aforementioned pr or are otlierwise established i❑ a inanner
thaE is not just or reasonaUle, then Authority must send a written Notice of Appeal, containing the written approval of
a majority of the Directors, to the City's City Manager, within 30 calendar days after the City's written issuance of
the new rates to the Authority.
2.3. Additional Charges. In the event tliat any sales or use taxes, or ta�ces, assessments, or charges of any similar
nature are imposed on diverting, storing, delivering, gathering, impounding, taking, sel3ing, using, or consuming the
water received by Authority fro�n the Diversion Point, the amount of the tax, assessment, or charge shall be borne by
Authority, in addition to all other charges, and whenever City shali be rec�uired to pay, collect, or remit any tax,
C:IDOCUML-1�IZSCHRL-1\LOCALS—I\Temp�notes04512S1R-Red River Authority--with clianges to be like W VWSC••color removed.doc
assessment, or charge on water received by Authority, then Authority shali promptly pay or reimburse CiTy for the
tax, assessment, or charge in the manner directed by City.
2.4. Default in Payments. All amounts due and owing to City by Authority shall, if not paid when due, bear interest
at the Texas post judgment interes# rate set out in Tex. Finance Code § 3aa.oa3 ar any successor statute, fi•am the
date when due until paid. If any amount due and owing by Authority to City is placed with an attorney for collection,
Authority shall pay to City, in addition to all other payments provided for by this Agreement, including interest,
City's collection expenses, including court costs and attorneys' fees. City shall, to the extent permitted by law,
suspend delivery of Water from the Diversion Point to Authority if Authority remains delinquent in any payments
due hereunder for a period of 60 days and shall i�ot resume delivery of water while Authority is so delinauent and
may, at its option, terminate ti�is Agreement without further liabiiity to Authority. City shall pursue all legal remedies
against Authority to enforce and protect the riglits of City, City's customers, and the holders of City's bonds. It is
understood that the foregoing provisions are for the benefit of the holders of City's bonds.
3.0. Purpose and Place of Use. Authority shall not be rec�uired to furnish water to any resident of City. It is
expressly understood by the parties that the city is currently serving areas within Authority's service area. The parties
, hereby agree that City shall continue to serve these areas. If City extends its city limits, Authority will continue to
provide water to any cansumer of water from Authority unti( City is able to extend its own distribution system to
provide such customers with City's water. The water will be used for munici�al use and the service area of Authority
shall be restricted to the area as indicated in CCN No. 10202.
3.1. Subsequent Sales of Water/Connections. The City and Autharity agree tliat for any area of service being
provided by Authority that Authority will comply witl� applicable City procedures for purposes of connection and
coiznection approvals in any area lying within the City's �xtraTerritorial Jurisdiction (ETJ) boundary, within tl�e City
limits, or within property owned by the City. Authority expressly agrees that it will not furnish water to any property
with a structure that is not used solely for agricultural purposes without first requiring proof from the applicant that
the property to be serviced has been platted to the extent platting is required by Texas Loca! Government Code
Chapter 212. When a meter is approved by the Authority, such approval shal] be tied to the land where installed.
3.2. Reguired Statemeut of Waste�vater Dis�osaf aud Termination of Water Service by Authority apon
Nuisance Determination. Authority further agrees that it wil( not furnisl� water service to a user without first
requiring the applicant to eYecute a sworn statement at tl�e City/County I-Iealth Department requiring that any
wastewater generated from tlie use of the water supplied through this contract be disposed of in a manner consistent
with current Texas Commission on Environmental Quality ("TCEQ") or its successor agency regulations. Authority
agrees to terminate water service to any user, including Lake Arrowhead State Park, with a continuing, unabated
nuisance as defined under Texas Health & Safety Code Chapter 341, upon receiving writte�i notice requesting such
termination from the TCEQ or the TCEQ's designated representative.
3.3. Service to City-Owned Lake Arrowhead Prope►-ties. T'he Authority agees to provide natice to the City's
Lake Lot Coordinator of any request for new water service on City-owned and leased lots around Lake Arrowhead,
within 5 days after such request. The Authority agrees to terminate water service to any City-owned property when
notified of termination of a lease of such property by the City. The Authority furtI�er agrees to ter►tiinate wacer
service to any City-owned property with an unabated �iuisance as defined by the lease agreement for the City-owned
lot or the Rules and Regulations pertaining to Lake Arrowhead, upon receiving written notice from the City
requesting sucl� te►-mination.
4.0. Water Shortages. In the event of an extended sliortage of water, or tlle supply of water available to city is
otherwise diminished over an extended period of time so that it becomes necessary to ration the water sold to citizens
of City, the supply of raw water to Authority shall be reduced or diminished in the same ratio or proportion as the
supply to the citizens of Ci#y is reduced or dicninished pro rata in accorda�ice with Texas Water Code § 11.039.
4.1. Drought Contingency P1An.
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The Authority agrees to implement and enforce the City's Water Conservation and Drought Contingency Plan
through all subsequent sales of water and shall include such obligation in any subsequent contract for sale that
Autliority may execute with any third party purchaser of water. In addition, as a�ninimum, the Authority agrees to
initiate Stage 2 or above restrictions of the aforesaid Drought Cantingency Plan when the level of tl�e reservoir from
which this wat�r is being drafted is below 50% of the reservoir's capacity. Further, the Authority agrees to initiate at
least the restrictions of said Drought Contingency Plan that are being implemented within the City. The Authority
may implement �nore severe restrictions ti�an the City, but shall not enact less severe restrictions than are currently in
effect in the City. If Authority fails to implement a drought contingency pian with restrictions that emulate or exceed
City's Drought Contingency Plan wlien trigger conditions occur, then City's City Manager is authorized ta institute
rationing pursuant to this Agreement, as well as enforce any contractual, statatory, or common law remedies
availabte to City necessary to protect the public welfare. City's water made availabte to Authority when Authority is
not in compliance witli City's Water Conservation and Drought Contingency Plan will be reduced to the amount of
water that City's City Manager estimates would be necessary to satisfy Authority's demand if Authority was
operating in compliance with City's Drought Contingency Plans.
5.0. Rules t�nd Rcgulations. This contrACt is subject to sucli rules, regulations, oi• laws as may be a�plicable to
agreements ii� the State of Texas; city and Autliority will collaborate in obtaining such permits, certificates, or the
like, as may be required to comply herewith. In the event there is a future direct physical connectioc� between the
water supply distribution systems of City and Authority, Authority shall operate and maintain its portion of the water
supply distribution system in accordance with the standards of the Texas Depart�nent of Health, Texas Commission
on Lnvironmental Quality, Texas Health & Safety Code Seetion 341, Subchapter C, and applicable revisions of the
Plumbing Code of Ciiy as it may be amended from time to time. �
6.0. Term. This contraet shall extend for a term of 20 years from the date of contract execution. Unless a written
notice of non-renewal is sent by either party prior to expiration hereof, at the end of the original term, it shall then
automatically renew on a year-to-year basis. Upon written natice and opportunity to cure of not less than 20 business
dAys, either party inay cancel prior to expiration of a Eerm for breach or non-performance. The City may cancel this
contract at any time during any term af the contract i❑ tl�e event Authority fails to make any payment due hereunder
within 6Q days after same becomes due or, if the Autl�ority breaches any covenant herein otiler than payment of the
monthty statement, and such breach continues for 60 days after City gives Authority written notice thereof.
7.0. No Assignment or Discrimination. This contract shall not be assignable by either party without the ap�rovlI of
the other party. The parties hereto shall not discriminate against any employee or applicant for employment or
service because of race, religion, coior, sex, 11ati011ill Ori�in, age, or handicap.
8.0. Independent Contractor. Tliis contract is intended to create an independent contractor relationship, and the
employees of each party shall never be considered the employees of tl�e other party.
9.0. Notices to Aathority. No#ices by tlie parties to each other shalt be written and be provided to:
City of Wichita Falls
Director of Public Works
1300 7`�' Street
Wichita Falls, Texas 76307
If a document is sent via certified mail, notice shall be considered received by the Autiiority if a representative af the
Authority fails to sign for or accept said document within 5 days after receipt thereof.
10.0. Title to Water. Title for liability purposes to all water supplied liereunder to Autho►•ity shall be in City up to
the Point(s) of Delivery, at which point title shall pass to Authority. Notwithstanding, Authority will not obtain any
water rights in any wastewater effluent flows resulting frorn the water supplied pursuant to this contract or the
continuation thereof.
11.0. Compliance with Rules of Texas Commission on Environmental Qualify (TCEQ). The effectiveness of this
Agreement is dependent upon City and Authority eomplyi��g with the rules of the TCEQ (or its successor agency),
C:U�OCUME 4 5 1 2 518-Red River Autho�ity—wiih changes to be like W V WSC—color removed.doc
specificalty including the nales codified as Texas Administrative Code, Titte 30, §§ 295.101 and 297.101-.108 as of
the effective date of this Agreement. Within 3 business days of the effective date of this Agreement, City will Fle a
signed copy of this Agreement with the Executive Director of the Commission as required by the rules of the
Commission. Authority may continue diverting water from the Diversion Point unless City notifies Autlioriry that
City l�as received written notification from llie Commission that a copy of this Agreement has been received by the
Commission but not accepted for fi3ing. Authority shall submit written reports annually to the Commission, with a
copy to City, on forms provided by the Commission.
12.0 City and Author'rty Right to Execute other Water Supply Contracts. Each Party maintains its right to enter
into any other water supply contracts without restriction.
13.0. Location and Quantity of Water. Water supplied by City to Authority under this Agreement shall be water
stored by City in La[ce Arro�vliead and from no other source, unless City, at its sole discretion, decides to supply
water from anofil�er source availabie to City. City and Authority hereby agree that Authority shall have no right or
entitlement to any portion of City's water in Lake Arrowhead after the expiration of the term of this Agreement.
City will use its best efforts to remain in a�osition to furnish raw water su�cient for the reasonable demands of
Authority. City's agreement to provide water to Authority shall not be deemed a guacantee on City's part that any
particular quantity of water will be available, and the quantity of water taken shaIl at all times be subject to tl�e right
of City to reduce said quantity of watar as City, in its sole judgment, may deem necessary in order to meet City's
commitments under its existing contracts, comply with any order of any court or administrative body having
appropriate jurisdiction, reduce flooding, or prevent injury.
Authority recognizes City's rights to main#ain and operate the reservairs owned or used by City and its watsr
transportation facilities and at any and all times in the future to impound and release waters thereby in any lawful
manner and to any lawful extent City may see fit, and, except as otlierwise provided herein, there shall be no
obligation hereunder upon City to releass or not to release any impounded waters at any time or to maintain any
waters at any specified level. Further, if the permitted yield of Lake Arrowhead or the diversion point is reduced by
the 1'CEQ, City reseives die right to decrease the contract quantity by a like percentage.
Authority is solely responsible for all losses from h'ansportation and evapotranspiration after the water passes
tllrough the diversion point frorn Lake Arrowhead.
14.0. RAW WATER QUAI,ITY. THE WATER WHICH CITY OFP'ERS TO SELL TD AUTHORITY IS NON-
POTABLB, RAW, AND UNTREATED. AUTHORITY HAS SATISFIED TTSEL� THAT SUCH WATEK IS
SUITABLE FOR ITS NEEDS. CITY EXPI2ESSLY DISCLATMS ANY WARRANTY AS TO THE QUALITY OF
TI� RAW WATER UR SUITABILITY OF Tf-lE RAW WATER FOR ITS INTENDED PURPOSE. CITY
EXPRESSLY DISCLAIMS TH� WARRANTIES OF MERCHANTABILITY AND FITN�SS. AUTHORITY
AGREES THAT ANY VARiATION IN THE QUALITY OR CHARACTERISTICS OF THE RAW WAT�R
OFFERED FOR SALE AS PROVTD�D BY THIS AGREEMENT SHALL NOT ENTITLE AUTHORITY TD
AVOID OR LZMIT ITS UBLIGATION TO MAKE PAYMENTS PROVID�D FOR BY THIS AGREEMENT.
TE-iERE ARE NO WARRANTIES WI-�CH EXTEND B�YOND THT DESCRIPTION CONTATNED IN '1 HIS
AGREEM�NT. AUTHORITY ASSUMES FULL RESPOIVSIBILI'TY WITH RESPECT TO THE TREATMENT
OF TI-�E WATER PRIOR T� ITS DISTRIBU"I'ION FOR � CONSLJNIPTION OR ANY OTHER USES.
15.0. No Third-P�rty Benefciaries.
Tilis Agreement shalI innre only to the benefit of the parties hereto, and third persons not privy hereto shail not, in
any form or manner, be considered third-party beneficiaries of this Agreement. Each party hereto shall be solely
responsible for the fuI�llment of its customer contracts or comm'rtments, and City shal] not be construed to be
responsible for Authority's contracts or commitments by virlue of this Agreement or any provision cantained herein.
16.0. Choice of Venue.
All acts performable under the terms of this AgreemenE and all amounts due under tl�is Agreement, including, but not
limited to, payments due under this Agreement or damages for the breach of this Agreement, shall be paid and be due
in Wichita County, Texas, said Wichita County, Texas, being the place of performance agreed to by the parties to this
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Agreement. In the event that any legaf proceeding is brought to enforce this Agreement or any provision hereof, the
same shall be brought solely in Wichita County, Texas.
17.0. Pledge of Revenue.
Authority represents and covenants that all payments to be made by it under this Agreement shall constitute
reasonable a�td necessary "operating expenses" of its system as defined in Tex, Gov't. Code Ann. §§ 1502,056-.058,
and that all such payments will be made from the revenues of its water system. Authority represents and has
determined that the water supply to be obtained from Latce Arrowl�ead is absolutely necessary and essential to the
present and future operation of its water system and is the only available arid adequate source of supply of water
therefore, and, accordingly, all payments required by this Agreement to be macfe by Authority shall constittrte
reasonable and necessary operating expenses of Authority's system or systems as described above with the effect that
the obligation to make such payments from revenues of such system or systems shall have priority over any
obligation to make any payments from such revenues, whether of principai, interest, or both, with respect to all bonds
heretofore or l�ereafter issued by Authority with tlie exception of any loan to Authority from the United States of
America or State of Texas for financing Authority's water system. Witll respect to Authority's obligations to the
United States of America or State of Texas for financing Authority's water system, the City and the United States of
America and State of Texas shall have equal priority. Autllarity agrees th►•oughout the term of this Agreement to
continuously oparate and maintain its water system and to fix and coilect such rates and charges for water services to
be supplied by its water system as wi[1 produce revenues in an amount equal to At least (i) all of its payments under
this Agreement and (ii) aIl other amounts as required by the provisions of the ordinances or resoIutions authorizing
its revenue bonds or other oUligations now or hereafter outstanding. Unless otherwise specifically p► in writing
by subsec�uent agreement between City and Authority, atl payments due by Authority are to be made from the
revenues and income received by Authority from the ow►iership and operation of its water system.
18.0. Insurance and Tndemnity. Aud�ority sllall continuously maintain valid (iability insurance covering all of its
operations of at least $500,000 per incident and $1,OOQ,000 in the aggregate, naming the City as an additional insured
and providing a waiver of subrogation in favor of the City. Authority si�all provide the City with copies of the policy
and certificate of insurance within 72 l�ours of the City's demand for a copy of said policy and/or certificate. The
Autharity's failure to maintain such insurance and endorsements as rec�uired above shall constitute a breach of this
contract, and if Authority fails to maintain such insurance, ti�en Authority s1ial1 defend, indemnify and hold har�nless
City and City's ofFicers, agents, and employees from all suits, actions, or claims of any character, naine and
description including attorneys' fees and expenses brought for any injuries to persons or damages to property in
connection �vith the perfonnance or attempted perfonnance of this contract. Authority shall further indemnify the
City for any liability to the City accun as a result of the Authority's negligent or wrongfial acts or omissions.
19.0. Amendments to be in Writing. The parties to this contract agree tl�at they have read all provisions of this
contract and any exhibits hereto. This contract and any e�ibits hereto are tlie complete and exclusive statements of
the terms agreed upon, superseding all prior agreements or statements, either written or oral, No modification,
amendment, or addition to this contract is valid unless in writing and signed by all parties hereto, except that rates
may be established by the City as provided above.
20.0. Severabiliiy. If any of tlie provisions of this contract (other than the rates and obligation to pay for the water}
shall be invalid or unenforceable, same shall not invalidate or affect the validity and enforceability of any other
provision, which provisions shall remain in force and effect.
21.0. No City Liability. City shall never be Iiable to Authority for any shortage of water, failure of any part of
system, condition of the water, strike, disaster, government action, or any other conditio» that affects water suppIy or
usefulness far any purpose. City disclaims any and all warranties with respect to the water supplied �ursuant to this
contract.
22.0. No Waiver. Failure of either party to enforce a provision of this contract shall not waive any future right to
enforce that provision.
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23.0. Interpretatiun and Recitals. This contract shal[ be considered to be mutually drafted in accordance with
negotiation betwee❑ the parties hereto. Accordingly, it shall not be interpreted against either party on the basis that
said party supplied its language.
IN WITNESS WHEREOF, the parties hereto, acting under autliority of their respective governing bodies, have
caused this contract to be duly executed in three counterparts, each of which shall constitute an original.
Re 'ver Autho,•ity� exas �� City of Wichita Falls
C� _ � ,.�.�
r ,u`��5 btl �.m I��i 1 -�.�;�rx l N1ar'. Darron Leiker, City Manager
(seal} (seal)
A EST: ' ATTEST:
�
Lydia Oz�ma, City Clerk
APPROVED AS TO FORM:
Miles Risley, City Attorney
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