Res 005-2016 1/5/2016PAGE 1 OF 10 PAGES
Resolution No. 05-2016_
Resolution authorizing the City Manager to execute a Raw Water
Purchase Contract with the City of Archer City, Texas
WHEREAS, the City of Wichita Falls has an existing Raw Water Purchase
Contract with the City of Archer City Texas; and,
WHEREAS, the current raw water purchase contract is set to expire on
September 29, 2016.
WHEREAS, in order to maintain a reliable water supply , the City of Archer City
must have a new raw water contract; and,
WHEREAS, the City of Wichita Falls finds no impact to the overall reliability of
its water supply.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WICHITA FALLS, TEXAS, THAT:
The City Manager is authorized to execute a Raw Water Purchase Contract with
the City of Archer City, Texas.
PASSED AND APPROVED this the 5th day of January, 2016.
______________________________
M A Y O R
ATTEST:
____________________
City Clerk
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AGENDA ITEM NO.10C
Raw Water Purchase Contract
THIS CONTRACT for the sale and purchase of water is entered into as of the __th day of _____________, 2016,
between the City of Wichita Falls, Texas, hereinafter referred to as "City", and the City of Archer City Texas,
hereinafter referred to as "Customer.”
WHEREAS, Customer is organized and established under provisions of the laws of the State of Texas. One of the
duties of Customer is the operation of a water distribution system serving water users within Customer’s authorized
service area, CCN 10250, and to accomplish this purpose, Customer requires a supply of raw water;
WHEREAS, City owns water reservoirs with capacity capable of serving the present customers of the City system and
the estimated number of water users to be served by Customer;
WHEREAS, City and Customer initially entered into a Water Purchase Contract on September 29, 1976, and
subsequently agreed to multiple modifications to the contract and new contracts, and this contract replaces all prior
contracts between the parties relating to the purchase of raw water (“Water”) from Lake Kickapoo .
WHEREAS, immediately prior to the effective date of this contract, Customer was not obligated to purchase water
from the City and the City was not obligated to sell water to Customer;
WHEREAS, by resolution of the City Council of Customer enacted on the __ day of ________________, 2016, it
authorized the continued purchase of water by Customer under the terms of this new, mutually agreed upon Water
Purchase Contract;
WHEREAS, Customer will operate a water treatment and distribution system, and serve the area described in the
aforementioned CCN 10250 ; and
WHEREAS, Customer is required by Texas Commission on Environmental Quality (“TCEQ”) regulations to
implement and enforce 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 Customer may execute with any third
party purchaser of Water.
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that for value received, City and Customer
mutually agree to the following, to wit:
1.0. Diversion Authorized. City will sell and Customer will purchase raw water pursuant to the terms and provisions
of this contract.
1.1. Diversion Point. The diversion point and point of delivery of the water from the City shall be at the Customer -
owned raw water Intake Structure at Lake Kickapoo, Any change in the existing Intake Structure and location of the
raw water line shall be with the approval of City Public Works Director and at the sole expense of the Customer.
1.2. Maximum Delivery Obligation. The Maximum Annual Quantity of raw water to be diverted from the water
supply system by Customer from Lake Kickapoo shall not exceed 22,000,000 gallons per month (“Monthly Quantity”)
not to exceed a maximum of 150,000,000 gallons per year (“Annual Quantity”) in any Water Year unless a greater
amount is approved in writing by City. “Water Year” means the period October 1 of each calendar year through
September 30 of the next following calendar year. The Monthly Quantity is calculated as the amount of water
Customer consumes in a monthly billing cycle. Customer shall not take more than the Annual Quantity without prior
written consent of City. Customer agrees that City is under no obligation to provide Customer with a sufficient
amount of Water for Customer to meet its minimum production, storage, service pump, or pressure maintenance
requirements, or any other requirements imposed on Customer under 30 Texas Administrative Code, Chapters 290 or
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AGENDA ITEM NO.10C
291, or any other requirement of law except as provided herein. Customer also agrees that City is under no obligation
to increase any of its water utility infrastructure or capacity in order to satisfy any of the provisions of this C ontract.
1.3. Metering.
a. Customer shall furnish, install, operate and maintain at its own expense at the diversion point, the necessary
metering equipment, including a meter house or pit, and required devices of standard type for properly measuring and
recording the quantity of raw water diverted. City and Customer shall agree on the type of any replacement meter
before purchase by Customer. Metering equipment shall be calibrated by Customer whenever requested by city, but
not more frequently than once every 12 months. Within 30 days after such calibration, Customer 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 rated 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 the 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 such 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 Customer shall agree in writing upon a
different amount. If Customer’s measuring equipment is out of service for 30 days or more, City may purchase, install
and maintain any required measuring equipment, as determined by City, and charge the expense therefore to Customer.
b. During any reasonable business hours, City shall have access to the metering equipment. City shall further have
access to all records pertinent to determining the measurement and quantity of water actually delivered. Customer
agrees that City may furnish, install, operate and maintain check meters, should City so choose. Customer also agrees
that the design and construction of its diversion facility and metering equipment will facilitate City’s installation and
operation of check meters.
c. City will read the Customer raw water meter on the first normal work day of each month during the term of this
contract. Customer and City shall have free access to read meters daily if they so desire. City will provide Customer,
no later than the 10th day of each month, with an itemized statement showing the amount of raw water metered to
Customer during the preceding month and the resulting charges. Customer shall pay to City the amount of the itemized
statement no later than the 20th day of the month in which the charges are b illed.
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 week days that 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 Customer pump station, intake structure, shall be maintained and
contained within the property currently leased to Customer by the City pursuant to the attached Lease Agreement.
The location of any facility constructed subsequent to the date of this contract shall be approved by the city and an
easement or long term lease executed before detailed plans and specifications are made or any construction begins.
1.5. Plans and Specifications Approval. Plans and Specifications for new or additions to existing intake structure and
pumping facilities shall be approved by the city before advertising for construction, such 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 Customer shall be $0.4528 per 1,000
gallons. The rates to Customer 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 Customer. The new rates will become effective at the beginning of each Water Year. Adjustment to rates
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AGENDA ITEM NO.10C
does not constitute an amendment to the Contract. If Customer exceeds either the Monthly Quantity or the Annual
Quantity, the City shall be entitled to bill for such applicable monthly unapproved exceedance and Customer hereby
agrees to pay for such exceedance at 2.0 times the water rate for the period of exceedance.
2.1. Annual Changes to Water Rates. Customer 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 agreed test year's original Cost adjusted 30%
toward current 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 Base equal to a composite of the utility's
test year embedded cost of money weighted on the debt portion of capital 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. All 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 transmitted treated water) will pay
their proportionate share of all costs based on current use.
d. A flat rate (volume only), shall be charged, with allocation 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 transmission lines and reservoirs must be borne by the City Water
utility, and all costs will be allocated to all wholesale customers on current use basis.
Effective Date for New Rates: The rates will be considered changed on the monthly billing cycle for water consumed
within the first full monthly billing cycle following the Notice of Rate Modification.
2.2. Disputed Rates. Customer shall be governed by the provisions of the Texas Water Code § 12.013(c) and Chapter
291 of the Texas Administrative Code and applicable law, as they may be amended by the Texas Legislature from time
to time. Customer stipulates and agrees that the rate, rate setting methods, and policies specified in this Agreement are
just, reasonable, and without discrimination. Further, if Customer believes that rates have been modified in a manner
that fails to conform to the aforementioned principles or are otherwise established in a manner that is not just or
reasonable, then Customer 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
Customer.
2.3. Additional Charges. In the event that any sales or use taxes, or taxes, assessments, or charges of any similar
nature are imposed on diverting, storing, delivering, gathering, impounding, taking, selling, using, or consuming the
water received by Customer from the Diversion Point, the amount of the tax, assessment, or charge shall be borne by
Customer, in addition to all other charges, and whenever City shall be required to pay, collect, or remit any tax,
assessment, or charge on water received by Customer, then Customer shall 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 Customer shall, if not paid when due, bear interest at
the Texas post-judgment interest rate set out in Tex. Finance Code § 304.003, or any successor statute, from the date
when due until paid. If any amount due and owing by Customer to City is placed with an attorney for collection,
Customer 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
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AGENDA ITEM NO.10C
delivery of Water from the Diversion Point to Customer if Cus tomer remains delinquent in any payments due
hereunder for a period of 60 days and shall not resume delivery of water while Customer is so delinquent and may, at
its option, terminate this Agreement without further liability to Customer. City shall pursue all legal remedies against
Customer to enforce and protect the rights 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. The water will be used for municipal use and the service area of Customer shall be
restricted to the area as indicated in CCN No. 10250.
3.1. Subsequent Sales of Water/Connections. The City and Customer agree that for any area of service being
provided by Customer that Customer will comply with applicable City procedures for purposes of connection and
connection approvals in any area lying within the City's ExtraTerritorial Jurisdiction (ETJ) boundary, within the City
limits, or within property owned by the City. Customer 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 Local Government Code
Chapter 212. When a meter is approved by the Customer, such approval shall be tied to the land where installed.
4.0. Water Shortages. In the event of an extended shortage of water, or the 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 Customer shall be reduced or diminished in the same ratio or propor tion as the supply
to the citizens of City is reduced or diminished pro rata in accordance with Texas Water Code § 11.039.
4.1. Drought Contingency Plan.
The Customer 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 Customer may
execute with any third party purchaser of water. In addition, as a minimum, the Customer agrees to initiate Stage 2 or
above restrictions of the aforesaid Drought Contingency Plan when the level of the reservoir from which this water is
being drafted is below 50% of the reservoir’s capacity. Further, the Customer agrees to initiate at least the restrictions
of said Drought Contingency Plan that are being implemented within the City. The Customer may implement more
severe restrictions than the City, but shall not enact less severe restrictions than are currently in effect in the City. If
Customer fails to implement a drought contingency plan with restrictions that emulate or exceed City’s Drought
Contingency Plan when trigger conditions occur, then City's City Manager is authorized to institute rationing pursuant
to this Agreement, as well as enforce any contractual, statutory, or common law remedies available to City necessary
to protect the public welfare. City’s water made available to Customer when Customer is not in compliance with 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 Customer’s demand if Customer was operating in compliance with City’s
Drought Contingency Plans.
5.0. Rules and Regulations. This contract is subject to such rules, regulations, or laws as ma y be applicable to
agreements in the State of Texas; city and Customer 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 connection between the water
supply distribution systems of City and Customer, Customer shall operate and maintain its portion of the water supply
distribution system in accordance with the standards of the Texas Department of Health, Texas Commission on
Environmental Quality, Texas Health & Safety Code Section 341, Subchapter C, and applicable revisions of the
Plumbing Code of City as it may be amended from time to time.
6.0. Term. This contract shall extend for a term of 40 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
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AGENDA ITEM NO.10C
automatically renew on a year -to-year basis. Upon written notice and opportunity to cure of not less than 20 business
days, either party may cancel prior to expiration of a term for breach or non-performance. The City may cancel this
contract at any time during any term of the contract in the event Customer fails to make any payment due hereunder
within 60 days after same becomes due or, if the Customer breaches any covenant herein other than payment of the
monthly statement, and such breach continues for 60 days after City gives Customer written notice thereof.
7.0. No Assignment or Discrimination. This contract shall not be assignable by either party without the approval of
the other party, except Archer City may assign and/or mortgage this agreement to the United States of America, acting
through the Rural Utilities Service of the United States Department of Agriculture or any successor agency. The
parties hereto shall not discriminate against any employee or applicant for employment or service because of race,
religion, color, sex, national origin, age, or handicap.
8.0. Independent Contractor. This contract is intended to create an independent contractor relationship, and the
employees of each party shall never be considered the employees of the other party.
9.0. Notices to Customer. Notices by the parties to each other shall be written and be provided to:
__________________________ City of Wichita Falls
__________________________ Director of Public Works
__________________________ 1300 7th Street
Wichita Falls, Texas 76307
If a document is sent via certified mail, notice shall be considered received by the Customer if a representative of the
Customer 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 hereunder to Customer shall be in City up to the
Diversion Point, at which point title shall pass to Customer. Notwithstanding, Customer will not obtain any water
rights in any wastewater effluent flows resulting from the water supplied pursuant to this contract or the continuation
thereof.
11.0. Compliance with Rules of Texas Commission on Environmental Quality (TCEQ). The effectiveness of this
Agreement is dependent upon City and Customer complying with the rules of the TCEQ (or its successor agency),
specifically including the rules codified as Texas Administrative Code, Title 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 file a
signed copy of this Agreement with the Executive Director of the Commission as required by the rules of the
Commission. Customer may continue diverting water from the Diversion Point unless City notifies Customer that City
has received written notification from the Commission that a copy of this Agreement has been received by the
Commission but not accepted for filing. Customer shall submit written reports annually to the Commission, with a
copy to City, on forms provided by the Commission.
12.0 City and Customer 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 Customer under this Agreement shall be water
stored by City in Lake Kickapoo and from no other source, unless City, at its sole discretion, decides to supply water
from another source available to City. City and Customer hereby agree that Customer shall have no right or entitlement
to any portion of City’s water in Lake Kickapoo after the expiration of the term of this Agreement. City will use its
best efforts to remain in a position to furnish raw water sufficient for the reasonable demands of Customer. City's
agreement to provide water to Customer shall not be deemed a guarantee on City's part that any particular quantity of
water will be available, and the quantity of water taken shall at all times be subject to the right of City to reduce said
quantity of water as City, in its sole judgment, may deem necessary in order to meet City's commitments under its
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AGENDA ITEM NO.10C
existing contracts, comply with any order of any court or administrative body having appropriate jurisdiction, reduce
flooding, or prevent injury.
Customer recognizes City's rights to maintain and operate the reservoirs owned or used by City and its water
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 otherwise provided herein, there shall be no obligation
hereunder upon City to release 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 Kickapoo or the diversion point is reduced by the TCEQ, City
reserves the right to decrease the contract quantity by a like percentage.
Customer is solely responsible for all losses from transportation and evapotranspiration after the water passes through
the diversion point from Lake Kickapoo.
14.0. RAW WATER QUALITY. THE WATER WHICH CITY OFFERS TO SELL TO CUSTOMER IS NON-
POTABLE, RAW, AND UNTREATED. CUSTOMER HAS SATISFIED ITSELF THAT SUCH WATER IS
SUITABLE FOR ITS NEEDS. CITY EXPRESSLY DISCLAIMS ANY WARRANTY AS TO THE QUALITY OF
THE RAW WATER OR SUITABILITY OF THE RAW WATER FOR ITS INTENDED PURPOSE. CITY
EXPRESSLY DISCLAIMS THE WARRANTIES OF MERCHANTABILITY AND FITNESS. CUSTOMER
AGREES THAT ANY VARIATION IN THE QUALITY OR CHARACTERISTICS OF THE RAW WATER
OFFERED FOR SALE AS PROVIDED BY THIS AGREEMENT SHALL NOT ENTITLE CUSTOMER TO
AVOID OR LIMIT ITS OBLIGATION TO MAKE PAYMENTS PROVIDED FOR BY THIS AGREEMENT.
THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION CONTAINED IN THIS
AGREEMENT. CUSTOMER ASSUMES FULL RESPONSIBILITY WITH RESPECT TO THE TREATMENT
OF THE WATER PRIOR TO ITS DISTRIBUTION FOR HUMAN CONSUMPTION OR ANY OTHER USES.
15.0. No Third-Party Beneficiaries.
This Agreement shall inure only to the benefit of the parties hereto, and third persons not privy hereto shall not, in any
form or manner, be considered third-party beneficiaries of this Agreement. Each party hereto shall be solely
responsible for the fulfillment of its customer contracts or commitments, and City shall not be construed to be
responsible for Customer’s contracts or commitments by virtue of this Agreement or any provision contained herein.
16.0. Choice of Venue.
All acts performable under the terms of this Agreement and all amounts due under this 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
Agreement. In the event that any legal 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.
Customer represents and covenants that all payments to be made by it under this Agreement shall constitute reasonable
and 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. Customer represents and has determined that the
water supply to be obtained from Lake Kickapoo is absolutely necessary and essential to the present and future
operation of its water system and is the only available and adequate source of supply of water therefore, and,
accordingly, all payments required by this Agreement to be made by Customer shall constitute reasonable and
necessary operating expenses of Customer’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 principal, interest, or both, with respect to all bonds heretofore or hereafter
issued by Customer with the exception of any loan to Customer from the United States of America or State of Texas
for financing Customer’s water system. With respect to Customer’s obligations to the United States of America or
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AGENDA ITEM NO.10C
State of Texas for financing Customer’s water system, the City and the United States of America and State of Texas
shall have equal priority. Customer agrees throughout the term of this Agreement to continuously operate and maintain
its water system and to fix and collect such rates and charges for water services to be supplied by its water system as
will produce revenues in an amount equal to at least (i) all of its payments under this Agreement and (ii) all other
amounts as required by the provisions of the ordinances or resolutions authorizing its revenue bonds or other
obligations now or hereafter outstanding. Unless otherwise specifically provided in writing by subsequent agreement
between City and Customer, all payments due by Customer are to be made from the revenues and income received by
Customer from the ownership and operation of its water system.
18.0. Insurance and Indemnity. Customer shall continuously maintain valid liability insurance covering all of its
operations of at least $500,000 per incident and $1,000,000 in the aggregate, naming the City as an additional insured
and providing a waiver of subrogation in favor of the City. Customer shall provide the City with copies of the policy
and certificate of insurance within 72 hours of the City’s demand for a copy of said policy and/or certificate. The
Customer’s failure to maintain such insurance and endorsements as required above shall constitute a breach of this
contract, and if Customer fails to maintain such insurance, then Customer shall defend, indemnify and hold harmless
City and City’s officers, agents, and employees from all suits, actions, or claims of any character, name and
description including attorneys' fees and expenses brought for any injuries to persons or damages to property in
connection with the performance or attempted performance of this contract. Customer shall further indemnify the City
for any liability to the City occurring as a result of the Customer’s negligent or wrongful acts or omissions.
19.0. Amendments to be in Writing. The parties to this contract agree that they have read all provisions of this
contract and any exhibits hereto. This contract and any exhibits hereto are the 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. Severability. If any of the 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 liable to Customer for any shortage of water, failure of any part of system,
condition of the water, strike, disaster, government action, or any other condition that affects water supply or
usefulness for any purpose. City disclaims any and all warranties with respect to the water supplied pursuant 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.
23.0. Interpretation and Recitals. This contract shall be considered to be mutually drafted in accordance with
negotiation between 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 Customer of their respective governing bodies, have
caused this contract to be duly executed in three counterparts, each of which shall constitute an original.
City of Archer City Texas City of Wichita Falls
________________________________ ________________________________
________________________________ Darron Leiker, City Manager
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AGENDA ITEM NO.10C
(seal) (seal)
ATTEST: ATTEST:
________________________________ ________________________________
Tracy Norr, City Clerk
APPROVED AS TO FORM:
________________________________
Kinley Hegglund, City Attorney