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Res 059-2003 5/20/2003RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, APPROVING A WATER PURCHASE CONTRACT WITH THE CITY OF BURKBURNETT; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS RESOLUTION WAS PASSED WAS OPEN TO THE PUBLIC AS REQUIRED BY LAW. WHEREAS, the City of Wichita Falls and the City of Burkburnett wish to enter into a Water Purchase Contract; and WHEREAS, the City of Burkburnett requires an additional supply of water to be in complliance with the Texas Commission on Environmental Quality rules; and WHEREAS, the City of Burkburnett has requested a contract for this purpose; and WHEREAS, the Council examined a proposed contract for the Water Purchase Contract between the City and the City of Burkburnett. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, THAT: SECT 1 . The water purchase contract between the City of Wichita Falls and the City of Burkburnett is hereby approved, and the City Manager is authorized to execute the same for the City of Wichita Falls. S ECTION 2 . It is hereby officially found and determined that the meeting at which this resolution was passed was open to the public as required by law. PASSED AND APPROVED this the 20th day of May, 2003. MAYOR ATTEST: WATER PURCHASE CONTRACT THIS CONTRACT for the sale and purchase of water is entered into as of the 19` day of March 2003, between the CITY of Wichita Falls, Texas, hereinafter referred to as the "CITY" and the CITY of BURKBURNETT, hereinafter referred to as "BURKBURNETT ". WITNESSETH: WHEREAS, BURKBURNETT is a municipal corporation organized and established under the provisions of the laws of the State of Texas. One of the duties of BURKBURNETT is the construction and operation of a water supply distribution system serving water users within the area described in plans now on file in the office of BURKBURNETT and to accomplish this purpose, BURKBURNETT will require a supply of treated water; and, WHEREAS, the CITY owns several water reservoirs with capacities capable of serving the present customers of the CITY system and the estimated number of water users to be served by BURKBURNETT shown in the plans of the system now on file in the office of BURKBURNETT; and, WHEREAS, by Resolution No. 1397, enacted on the 6th day of March, 1973, by the CITY, which authorized the CITY to sell water to BURKBURNETT; and WHEREAS, by Resolution No. 0, enacted on the 19`" day of March, 1973, by BURKBURNETT, which authorized BURKBURNETT to purchase water from CITY; and, NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, THAT for value received, the CITY and BURKBURNETT mutually agree to the following, to -wit: S ection 1.0 CITY shall deliver water to the agreed delivery point for sale to BURKBURNETT in sufficient quantities to meet BURKBURNETT's needs and BURKBURNETT shall be permitted to take same for resale to consumers, subject only to the terms and provisions of this Contract. S ection 1.1 Water delivered shall be of the same quality the CITY furnishes to residents of CITY and at a pressure the CITY attempts to maintain in the operation of its transmission and distribution facilities at the points of delivery to its own users. Emergency failures shall excuse the CITY from this provision for a reasonable period of time to restore service. S ection 1.2 Delivery point is located at the elevated storage tank at Puckett Road and Hooper Drive. S ection 1.3 BURKBURNETT shall have the responsibility to transport the Water from the Delivery Point to its consumers, including imparting additional pressure to adequately serve BURKBURNETT's consumers. BURKBURNETT shall provide at its own expense necessary transmission capacity from and storage capacity at the Delivery Point to prevent abnormal demands by BURKBURNETT. These demands shall be such that the maximum hourly rate on the maximum day shall not be more than the maximum days flow divided by 24. If a mechanical facility is required to abate the abnormal demands of BURKBURNETT, BURKBURNETT will install a rate of flow controlling valve to control the maximum hourly flow to the maximum day flow divided by 24. S ection 1.4 BURKBURNETT shall furnish, install, operate and maintain at its own expense at their south extraterritorial jurisdiction limit line or another approved location, the necessary demand metering equipment, including a meter house or pit, and required devices of standard type for properly measuring and recording the quantity of Water taken by BURKBURNETT. CITY and BURKBURNETT shall agree to the type and location of all meters. BURKBURNETT shall calibrate such metering equipment whenever requested by the CITY, but not more frequently than once every twelve (12) months. A meter registering not more than two per cent (2 %) above or below the test result of the rated capacity of the meter shall be deemed to be accurate. The previous reading of any meter disclosed by test to be inaccurate shall be corrected for the twelve (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 pumped in the corresponding period immediately prior to the failure, based on existing records unless CITY and BURKBURNETT shall agree upon a different amount. S ection 1.5 CITY has purchased the equivalent of an eight -inch (8 ") capacity in the transmission line from Delivery Point to Metering Point. CITY has the right, through its Director of Public Works, to authorize connections to the transmission line between Delivery Point and Metering Point (south extraterritorial jurisdiction line of BURKBURNETT). Sectio 1.6 Connections to the transmission line by the CITY as authorized in Section 1.5 shall be made for total water usage up to and including the estimated capacity of an eight inch (8 ") water main (1,600,000 gallons per day). This amount may be increased or decreased by mutual agreement of both parties and at this time both parties agree to increase this amount to 2,600,000 gallons per day. Sectio 17 : CITY shall be responsible for maintenance of the transmission line from Delivery Point to Metering Point, shall be responsible to make and maintain connections to the transmission line from Delivery Point to Metering Point; install and maintain meters; read meters, bill and collect fees based upon the then CITY water rates. CITY shall also retain the right to charge and collect pro rata fees for such connections between Delivery Point and Metering Point. CITY shall maintain all fire hydrants on the transmission line between Delivery Point and Metering Point and shall have the use of water from such hydrants for fire fighting purposes. S ection 1.8 All services on BURKBURNETT's system shall be separately metered. S ection 1.9 Maximum amount of water to be furnished by CITY to BURKBURNETT will not exceed 3,300,000 gallons (441,176 CF) per day (increased from 2,493,000 gal / 333,333 CF per day). Any water consumed in excess of this allotment will be charged a 100% penalty. In the event of an emergency, CITY may consider a request by BURKBURNETT for an increase in the maximum amount of water to be furnished. If such emergency increase in maximum amount of water is approved, it will be temporary and for a specific duration of time. The maximum amount of water approved for use for any year shall in no event be greater than the capacity of the BURKBURNETT transmission pipe line and the then existing capacity of the CITY water system. Section 2.0 The cost of water purchased by BURKBURNETT shall be based on the following rate setting principles, which are consistent with other similar water purchase agreements entered into by CITY. 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 a class (either raw water only, raw water transmitted, treated water only — sole source, treated water only — peak supply 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 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. Changes in the rate setting principles may be made by mutual written agreement at any time. This water rate is subject to modification annually for all water bills rendered after April 30 of each year. All changes in rates will take place after the rate study is approved by the CITY Council of Wichita Falls and will not require an amendment to this contract. S ection 2.1 The cost of water purchased by BURKBURNETT shall be $.8225 per CCF initially. The rates to BURKBURNETT shall be subject to change each year as a result of a cost -of- service study using the rate principles in Section 2.0. When a cost - of- service study is conducted, CITY will provide the results and the new rates to BURKBURNETT. The new rates will then be billed on the first billing date occurring not less than sixty (60) days after BURKBURNETT receives such rates. Rates are subject to change in the first year of this contract. S ection 2.2 The CITY will read the BURKBURNETT meter each month during the term of this Contract. BURKBURNETT and CITY shall have free access to read meters daily, if they so desire. The CITY will provide BURKBURNETT with an itemized statement of the amount of water metered to BURKBURNETT during the preceding month. BURKBURNETT shall pay to the CITY the amount of the itemized statement for any month not later than the due date posted on the bill. A late payment fee of 5% will be charged on all accounts 30 days past due. S ection 3.0 This Contract shall extend for a term of Twenty (20) years from the date of this contract. At the expiration of the term of this Contract, it may be renewed or extended for such term or terms, as the CITY and BURKBURNETT may agree upon. CITY may cancel this Contract at any time during the life of the Contract in the event BURKBURNETT fails to make any payment due hereunder within sixty (60) days after same becomes due; or, if BURKBURNETT breaches any covenant herein other than payment of the monthly statement, and such breach continues for sixty (60) days after CITY gives BURKBURNETT written notice thereof. S ection 4.0 BURKBURNETT shall not be required to furnish water to any resident of CITY. If the CITY extends its CITY limits to include any consumer of water from BUURKBURNETT, BURKBURNETT will continue to provide Water to such consumer until the CITY is able to extend its own water distribution systems to provide such consumer with water. S ection 5.0 BURKBURNETT shall permit the water to be used only for normal residential, commercial and municipal purposes. Unless written permission is obtained from CITY, water shall not be used for agriculture irrigation. Except for contracts between BURKBURNETT and others in existence at the time of executing this contract, BURKBURNETT shall not sell water to any other private or governmental party for resale to third parties. No connections to the transmission main shall be allowed within the CITY limits of Wichita Falls except as provided for in Section 1.5. S ection 5.1 It is distinctly understood between parties hereto that CITY owes its primary obligation and duty to the citizens of Wichita Falls; 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 is becomes necessary to ration the water sold to citizens of Wichita Falls, the supply of water to BURKBURNETT's consumers shall be reduced or diminished by a pro rata curtailment of wholesale customers based on their contractual limits as provided in Texas Water Code § 11.039. If BURKBURNETT exceeds their allotment, they will be charged a 100% penalty on all water consumed over their limit. S ection 52 BURKBURNETT will implement a Water Conservation Plan, a Drought Contingency Plan or other water conservation measures using the applicable elements of 30 TAC 288. S ection 6.0 This Contract is subject to such rules, regulations or laws, as may be applicable to similar agreements in the State of Texas. The CITY and BURKBURNETT will collaborate in obtaining such permits, certificates, or the like, as may be required to comply herewith. Where a direct physical connection exists between the Water Supply Distribution Systems of the CITY and BURKBURNETT, BURKBURNETT shall operate and maintain its portion of the Water Supply Distribution System in accordance with the standards of the Texas Commission on Environmental Quality, in compliance with Texas Health and Safety Code, and in compliance with applicable provisions of the Plumbing Code of the CITY. S ection 6.1 CITY shall have the authority and responsibility of inspection to determine that no cross connections or condition of backflow or back - siphonage exist on that portion of the system receiving water under pressure from the Wichita Falls water mains. The CITY shall have the authority to disconnect the Water until correction within the system is made. The CITY shall also have the right to suspend delivery of Water in the event BURKBURNETT fails to construct, maintain and operate its portion of the Water Distribution System in substantial compliance with such standards referred to hereinabove. Provided, however, unless substantial non - compliance constitutes a safety and /or health hazard, the CITY shall not suspend the delivery of Water without first notifying BURKBURNETT in writing of such non - compliance and affording BURKBURNETT a reasonable opportunity to correct such non - compliance. Provided, further, in no event shall the CITY suspend delivery of water to any portion of BURKBURNETT's system not necessary in isolating the location of such non- compliance. S ection 7.0 Any amendment to this Contract shall be in writing and executed by both CITY and BURKBURNETT. S ection 8.0: This contract sets aside and takes the place of the previous Water Purchase Contract between CITY and BURKBURNETT, dated March 19, 1973, with eleven (11) amendments. S ection 9.0 In the event of any occurrence rendering the CITY of BURKBURNETT incapable of performing under this Contract, any successor of BURKBURNETT, whether the result of legal process, assignment, or otherwise, shall succeed to the rights of BURKBURNETT hereunder. S ection 9.1 If any of the provisions of this contract 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. IN WITNESS WHEREOF, the parties hereto, acting under authority 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 WICHITA FALLS, TEXAS Locn City Manager ATTEST: City Clerk CITY OF BURKBURNETT, TEXAS In City Manager ATTEST: City Secretary