Ordinance No. 16,026 ORDINANCE NO. 16,026
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS,
AUTHORIZING A WATER SUPPLY AND WASTE DISPOSAL AGREEMENT
WITH HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 555; AND
PROVIDING FOR THE EFFECTIVE DATE THEREOF.
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BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:
Section 1: That the City Council of the City of Baytown hereby authorizes and directs the
City Manager to execute a Water Supply and Waste Disposal Agreement with Harris County Municipal
Utility District No. 555. Said agreement is attached as Exhibit "A" and incorporated herein for all intents
and purposes.
Section 2: This ordinance shall take effect immediately from and after its passage by the
City Council of the City of Baytown.
INTRODUCED, READ and PASSED, by the affi vote of the City Council of the City of
Baytown this the 121h day of December, 2024.
?��Py?TCN;y �1�r NDON CAPETILLO, Mayor
A-TNEST:
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APPROVED AS rO F RM:
SCOTT LE ONI , City Attorney
Utility Agreement- IUD 555.doc
EXHIBIT "A"
WATER SUPPLY AND WASTE DISPOSAL AGREEMENT
BETWEEN
THE CITY OF BAYTOWN,TEXAS AND
HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 555
This Water Supply and Waste Disposal Agreement (this "Agreement") is made and
entered into as of , 2024,by and between the City of Baytown,Texas,a municipal
corporation and home-rule city located in Harris County, Texas, and Chambers County, Texas
(the "City"), and Harris County Municipal Utility District No. 555, a body politic and corporate
and a governmental agency of the State of Texas, organized under and governed by the
provisions of Article XVI,Section 59 of the Texas Constitution, Chapter 8042 of the Texas Special
District Local Laws Code and Chapters 49 and 54,Texas Water Code (the "District").
1. The City is a municipal corporation and home-rule city located in Harris County,
Texas, and Chambers County,Texas. The City owns, operates and maintains a water supply and
distribution system supplying water to residents of the City.
2. The District is a municipal utility district, organized and existing under Article
XVI,Section 59 of the Texas Constitution, Chapter 8042,Texas Special District Local Laws Code,
and Chapters 49 and 54,Texas Water Code.
3. The District will own or lease a water distribution system and a waste collection
system serving the Service Area (hereinafter defined) and desires to purchase treated water for
the Service Area and to purchase treatment and disposal of waste generated within the Service
Area.
4. The District is empowered to supply water for municipal uses, domestic uses,
power and commercial purposes and all other beneficial uses or controls;and to collect,transport,
process, dispose of, and control all domestic or commercial waste whether in fluid, solid or
composite state.
5. The District is authorized to purchase,construct,acquire,own,maintain,repair or
improve or extend inside and outside its boundaries any and all works, improvements, facilities
and plants, necessary and incidental to the supply of water and the collection, transportation,
processing,disposition and control of all waste.
6. All or part of the Service Area lies within the extraterritorial jurisdiction of the City
as established by Chapter 42 of the Texas Local Government Code, as amended. The parties
acknowledge the possibility that the City may annex the Service Area during the term of this
Agreement. In addition,the parties desire to avoid overlapping responsibilities for utility service.
7. The parties have determined that they are authorized to enter into this Agreement
by the Constitution and the laws of the State of Texas, including,without limitation, Texas Local
Government Code Section 552.001 and Texas Water Code Section 49.213, as same may be from
time to time amended.
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Utility Agreement-MUD 555-proposed
NOW THEREFORE, for and in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto do mutually agree as follows:
AGREEMENT
ARTICLE I
DEFINITIONS AND EXHIBITS
1.01 Definitions.The terms and expressions used in this Agreement, unless the context
clearly shows otherwise, and in addition to other defined terms herein, have the following
meanings:
"Alteration" or "Alter' shall mean modifying, improving, replacing, expanding,
extending, or making other changes to a facility, exclusive of maintenance repairs which are
preventative in nature.
"City's System" shall mean the systems for the supply and distribution of water and for
the collection, transportation and treatment of wastewater and any extensions thereof and
additions thereto, currently serving or that may be constructed to serve the City.
"Director" shall mean the Director of Public Works/Engineering of the City of Baytown,
or his designee.
"District's System" shall mean the systems for the distribution of water and any
extensions thereof and additions thereto, to be constructed to serve the District, including those
lines and facilities necessary for the transportation and distribution of water from the Water Point
of Connection with the City's System throughout the District's System, and the transportation of
waste from dwellings and buildings connected to the District's System to the Wastewater Point
of Connection with the City's System.
"Impact Fee" means a charge or assessment imposed by the City against new
development in order to generate revenue for funding or recouping the costs of capital
improvements or facility expansions necessitated by and attributable to the new development in
accordance with Chapter 395 of the Texas Local Government Code.
"Industrial Waste" shall mean waste resulting from any process of industry,
manufacturing, trade or business from the development of any natural resource, or any mixture
of the waste with water or normal wastewater, or distinct from normal wastewater.
"Infiltration Water" shall mean water or other waste which enters a sanitary sewer system
by means other than by a permitted connection; "infiltration water" includes water which leaks
into a sanitary sewer system.
"Points of Connections" shall mean those locations and improvements necessary for the
water and waste connections of the City's System and the District's System as set forth herein.
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Utility Agreement-MUD 555-proposed
"Prohibited Waste" shall be those discharges prescribed by the City of Baytown's
Industrial Waste Ordinance as set forth in Article V of Chapter 98 of the Code of Ordinances of
the City of Baytown,a copy of which is attached hereto as Exhibit"D" and for all purposes made
a part of this Agreement. All future amendments to the City's Industrial Waste Ordinance shall
apply to this agreement when such amendments are adopted.
"Service Area" shall mean the area within the boundaries of the District consisting of
approximately 119.3 acres, more particularly described on Exhibit"A," which is attached hereto
and incorporated herein for all intents and purposes, which shall include gp to 421 single-family
detached dwelling units.
"Sewage" shall mean the liquid and water-carried domestic waste discharged for sanitary
conveniences of dwellings and buildings connected to a sanitary sewer collection system,
excluding industrial wastewater discharged into sanitary sewers and in which the average
concentration of total suspended solids is not more than 250 mg/I and B.O.D. is not more than
250 mg/I.
"TCEQ" shall mean the Texas Commission on Environmental Quality or its successor
agency.
"Treatment Plant" or "Plant" shall mean either the appropriate wastewater treatment
plant, as determined by the City, including all additions or modifications thereto which may
occur subsequent to the execution of this Agreement.
"Waste" shall mean sewage collected by a sanitary sewer system together with such
infiltration water as may be present,provided that such system is constructed in compliance with
City Specifications and continually and promptly maintained and repaired.
"Wastewater Point of Connection" shall mean the wastewater point of connection from
the City's System to the District's System,which will be at a mutually agreed upon location.
"Water" shall mean potable water meeting the minimum drinking water standards
prescribed by Texas Department of Health Resources and TCEQ, and their successor agencies.
"Water Point of Delivery" shall mean the water supply point of connection from the City's
System to the District's System,which will be at a mutually agreed upon location.
1.02 Exhibits. The following Exhibits attached or to be attached to this Agreement
are a part of this Agreement as though fully incorporated herein.
Exhibit A Service Area (District Property)
Exhibit B District Rate Order
Exhibit C City's Present Water Service Ordinance
Exhibit D City's Present Sewer Service Ordinance
Exhibit E Amendatory Contract between the City of Houston
and the San Jacinto River Authority
ARTICLE II
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CONSTRUCTION OF IMPROVEMENTS BY DISTRICT
2.01 District's System. The District shall acquire or construct, or cause to be acquired
or constructed, the District's System. No cost of the District's acquisition or construction of the
District's System, including engineering fees, the acquisition of any lands or easements in
connection therewith,and obtaining the approval of any regulatory agency,shall be borne by the
City.
2.02 City Approval of Plans and Specifications. Prior to the initiation of any
construction of the District's System, the engineers of the District shall submit to the Director for
written approval the plans and specifications for the District's System. No construction of the
District's System shall begin until such plans and specifications are approved in writing by the
Director.The District's Engineer will provide the City,upon completion of the construction, with
one set of"as built" drawings sealed by a licensed engineer in the State of Texas, which meet the
approval of the Director and certification that the District's System was built in accordance with
the City's standard plans and specifications and as indicated in the
"as built" drawings. The District will likewise obtain approval for and supply the City with "as
built" drawings, sealed by a licensed engineer in the State of Texas, and similar certification for
any subsequent alterations or modifications made to the District's System during the term of this
Agreement.
2.03 Inspection. The District specifically grants the City the right to inspect at any time
any and all construction of the District's System in order to determine whether such construction
is in conformance with the City's standards and the approved plans and specifications. Should
all or any portion of the District's System be found by the Director not to conform with the City's
standards or the approved plans and specifications, then the District shall immediately upon
receiving written notice from the City of such non-conformance take those remedial steps
necessary to meet the required standards, regardless of when such non-conformity is detected.
The District's System must be brought into conformity with the City's standards and the
approved plans and specifications within forty-five (45) days of the District's receipt of written
notice of non-conformance, unless an extension is approved in writing by the Director. Failure to
adequately and timely remedy the District's System shall be construed as an Event of Default for
which no additional opportunity to cure shall be given.
2.04 Points of Connection. The Water Point of Connection and Wastewater Point of
Connection between the City's System and the District's System shall be approved by the Director
and shall not be changed without prior written approval of the Director.
2.05 Completion of Construction. Upon completion of the construction provided for in
Section 2.01 and subject to the terms of this Agreement, both the City and the District agree as
follows: (i) the City shall deliver to the District and the District shall accept from the City water
in quantities as specified in Article IV herein, and (ii) the City shall receive from the District and
the District shall discharge such volumes of waste at such times and in such quantities as
provided in Article IV of this Agreement,for the price and at the point or points of delivery herein
provided, consistent with other limitations as stated herein.
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2.06 Commencement of Use of Points of Connection. The Water Point of Connection
and Wastewater Point of Connection shall be placed into operation only upon the inspection and
approval of the Points of Connection and the District's System by the City and the District.
Furthermore, the City reserves the right to reject any Points of Connection designated by the
District which would, in effect, interfere with or increase the cost of any other facilities or
operations which the City might wish to construct or implement, or plan to construct or
implement,or which would adversely affect the City's ability to provide water services to any of
its customers.
2.07 Meters.
(a) Water Measuring Equipment.The District will,at its sole cost and expense,furnish
and install or contract with the City to furnish and install at any and all Points of Connection all
measuring equipment as may be required by the City, including, but not limited to, meters,
totalizers and devices of standard type for measuring and recording accurately the quantity of
water delivered within an accuracy tolerance of two percent (2%) plus or minus for a given rate
of flow. It is expressly understood and agreed by the parties hereto that a master meter(s),with a
double- backflow preventer at the Water Point of Connection and measuring total flow through
the Water Point of Connection having an accuracy tolerance of two percent (2%) plus or minus
for a given rate of flow, is required and must be approved and inspected by the City prior to the
City being obligated under this Agreement to deliver any water to the District. The District shall
also install, operate and maintain or contract with the City to install, operate and maintain, as
required by the City, pressure regulating devices and equipment at the Water Point of
Connection. Such measuring equipment shall be approved by the City; and after the City's
approval of the installation, the same shall become the property of the City.
(1) Inspection.During all reasonable hours,the City and the District shall have
access to such measuring equipment so installed.The City shall have access
to all records pertinent to determining the measurement and quantity of
treated water actually delivered hereunder, but the reading of the meters
for purposes of billing shall be done by the District.
(2) Calibration. After approved installation thereof, the City shall perform, at
its own cost and expense, periodic calibration tests on the primary
measuring equipment so installed in order to maintain the accuracy
tolerance within the guarantees of the manufacturer thereof,not to exceed
tolerance of two percent (2%), at least once every twelve (12) months. At
reasonable intervals, the City agrees to properly check and calibrate the
flow recording the totalizing measuring equipment for the purpose of
ascertaining its condition of accuracy.The City agrees to notify the District
at least forty-eight(48) hours in advance of the time any test is to be made,
to permit the District to observe such test and to furnish the District with a
copy of the results of all checks and calibration tests performed on said
measuring equipment. If any tests or calibration checks show a condition
of inaccuracy, adjustments shall be made immediately by the City so said
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measuring equipment will register correctly within the aforesaid accuracy
tolerance. The District shall have the right to independently check said
measuring equipment at any time upon at least forty-eight (48) hours'
notification to the Director.
(3) Check Meters.The City may install,at its own cost and expense,such check
meters in the District's pipeline as may be deemed appropriate, and the
District shall have the right of ingress and egress to such check meters
during all reasonable hours; provided, however, that the billing
computation shall be on the basis of the results of the measuring equipment
set forth in Section 2.07(a) hereinabove.
(4) Inaccuracy Adjustments. If, upon any test, the percentage of inaccuracy of
any measuring equipment is found to be in excess of five percent (5%) for
the aforesaid given rate of flow,then the District's account shall be adjusted
for a period extending back to the time when such inaccuracy began, if
such time is ascertainable. If such time is not ascertainable, for a period
extending back one-half (lh) of the time elapsed since the date of the last
test,or,the date of the last adjustment to correct the registration,whichever
is later,but not to exceed one hundred twenty (120) days. If,for any reason,
the measuring equipment is out of service or out of repair and the amount
of treated water delivered cannot be ascertained or computed from the
reading thereof, water delivered during the period shall be estimated and
agreed upon by the parties hereto on the basis of the best data available.
(5) Independent Check of Metering Equipment. In the event of a dispute
between the District and the City as to the accuracy of the testing
equipment used by the City to conduct the test of accuracy upon the meters
being used, an independent check may be mutually agreed upon between
the District and the City to be conducted by an independent measuring
equipment company suitable to both the District and the City, the cost of
such test to be at the District's sole expense.
(6) "Given Rate of Flow." As used in this Article,the expression"given rate of
flow" means the total quantities of treated water delivered during the
preceding period (usually a calendar month) as reflected by the recording
devices, divided by the number of days in the period.
ARTICLE III
OWNERSHIP,OPERATION AND MAINTENANCE OF SYSTEMS
3.01 District's System. The District shall own,operate and maintain at its sole cost and
expense the District's System and will promptly repair any of its facilities so as to prevent leakage.
However, should the District fail to operate and maintain the District's System in a manner
consistent with sound engineering principles; and should such failure become a danger to the
continued proper operation of any portion of the City's System as determined at the sole
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discretion of the City, then such failure shall be considered an Event of Default. It is expressly
understood and agreed that the City, at any time upon written notice to the District, may take
whatever steps it believes are necessary to preserve the integrity of the City's System, including,
but not limited to, discontinuing services.
3.02 City's Utility Requirements. The District covenants and agrees to comply with the
City's Plumbing Code, Chapter 109 and Chapter 126, Article V, Division 4 of the City's Code of
Ordinances and all amendments thereto (the"Utility Requirements"), for water distribution and
sanitary sewer facilities and agrees not to permit plumbing work relating to water or sewer
service or allow connection to the District's System except in compliance with the Utility
Requirements and Chapter 18, Article IV of the Code of Ordinances and all amendments thereto
(the "Plumbing Code"), and after inspection and approval by the District's operator or other
authorized representative. The District shall, after such inspection and approval and prior to
service to the facility, submit to the City an affidavit of inspection certifying that all the Utility
Requirements have been satisfied.
The District further agrees that all plumbing connections shall be maintained in
compliance with the Utility Requirements and the Plumbing Code of the City. In order to enforce
this provision, the City inspectors shall be permitted to act for and on behalf of the District or in
lieu of the District's operator, and the District will enforce any written notice issued by such
inspectors. The District will be charged an inspection fee in the amount specified in Section 2-595
of the Code of Ordinances, as amended, for each inspection made by the City pursuant to this
provision. If any such notices are not complied with, the District shall discontinue service when
this may be legally done pursuant to the District's Rate Order upon the request of the City to do
so. A copy of such rate order is attached hereto as Exhibit "B" and incorporated herein for all
intents and purposes. Failure of the City to act on behalf or in lieu of the District shall not be
construed as a waiver of the right to so act in the future or to exercise any right or remedy
occurring as a result of the District's default.
Should the District for any reason fail to enforce the standards established by the Utility
Requirements or Plumbing Code for water or should the District fail to comply with the foregoing
provisions of this section, such failure shall be an Event of Default.
3.03 Outside Service Contracts. The District agrees that should the District desire to
delegate responsibility for maintenance or for supervision of the District's System to any
individual or entity other than its own employees holding any permit or certificate required by
law or a sewage plant operator holding a valid certificate of competency issued under the
direction of the TCEQ as required by Texas Water Code Section 26.0301,as amended,or any other
permit or certificate required by law, then any such proposed service arrangement, by written
contract or otherwise, must be approved in writing by the Director, whose consent shall not be
unreasonably withheld, prior to execution by the parties. Failure of the District to submit any
such proposed service agreement to the Director prior to its execution shall be considered an
Event of Default. Any outside service agreement, whether submitted to the City or not, shall
contain a clause terminating the service agreement as to the District on the date of dissolution of
the District by the City.
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Utility Agreement-MUD 555-proposed
3.04 Title to and Responsibility for Water.Title to,possession,and control of water shall
remain in the City, or its assigns, to the Water Point of Delivery where title to, possession, and
control of water delivered under this Agreement shall pass from the City to the District; and the
District will take such title,possession and control at the Water Point of Delivery. As between the
parties hereto, the City shall be in exclusive control and possession of the water deliverable
hereunder and solely responsible for any damage or injury caused thereby until the same shall
have been delivered to the District at the Water Point of Delivery,after which delivery the District
shall be in exclusive control and possession thereof and solely responsible for any injury or
damage caused thereby,and such party respectively shall save and hold the other party harmless
from all claims, demands, and causes of action which may arise while said water is under its
respective ownership and control.The City shall not be responsible in damages for any failure to
supply water or for interruption of the water furnished hereunder. The District agrees to save
harmless the City from all damage to real and personal property occasioned or caused by the
making of the water connection or connections herein referred to or caused by the furnishing of
water hereunder, and shall also save and keep harmless the City from all damage of any kind,
nature and description which may arise as the result of the making of this Agreement.
3.05 Industrial Waste. The District shall not discharge any Industrial Waste or
prohibited waste into the City's System.
3.06 Waste to Comply with City Ordinance. Discharges of waste into the District's
System shall comply with all applicable City Ordinances. The District is obligated to assume the
responsibility to enforce the applicable City Ordinances with respect to impermissible discharges
of Industrial and Prohibited Wastes originating from within the District. Failure of the District to
enforce said City Ordinances to the satisfaction of the City shall be considered an Event of Default.
3.07 Seepage and Infiltration. The District agrees that it will adopt and enforce written
rules, regulations, and provisions to ensure that connections to the District System will be such
as to prevent as much as feasibly possible the discharge into the District System of anything
except sewage; and in particular, but without limitation thereto, that no drains shall be installed
or connected in such a manner that any rainwater or other surface waters are permitted to enter
the District's System; and, in addition, that adequate safeguards will be taken to prevent any
abnormal seepage or infiltration or discharge of any solid matter into the District System. The
District agrees that throughout the term of this Agreement, the District will promulgate and
enforce an active program to reduce the inflow and infiltration into the City's System.
Additionally, the District shall, upon request, tender to the City a report at on the progress of
such program. Within ninety (90) days following the date of i) execution of this Agreement by
the City or ii) the District's adoption of such rules,regulations,and provisions,whichever is later,
the District shall supply the Director with a copy of such rules, regulations, and Contracts
provisions, including a statement of measures designed to enforce such provisions. The District
shall initiate whatever lawful actions are necessary to disconnect any customer who, following
reasonable written notice, refuses to remove noncompliant connections. The District will inspect
all connections at the time made and continue to monitor the District's System as a whole to detect
infiltration and unpermitted connections at to continuously maintain the District's System so as
to prevent any abnormal seepage or infiltration or discharge of any solid matter into the District
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Utility Agreement-MUD 555-proposed
System. Failure to do so shall be an Event of Default notwithstanding any payments pursuant to
the following paragraph.
In the event excess infiltration or abnormal seepage or the discharge of solid matter or
surface water into the District's System is present, the District covenants and agrees to pay the
additional charges provided for in Article V herein for such excess infiltration. It is further agreed
that the City's inspectors shall have the right to make such inspections as are necessary to ensure
that the District is making adequate and proper repairs for the purpose of safeguarding the City's
System.
3.08 Participation in State and Federal Grant Programs; Contribution to Costs. The
District recognizes that the City may participate in a federally funded grant program for the
construction of sewage treatment plants under the provisions of the Federal Water Pollution
Control Act, P.L. 92-500, as amended. Furthermore, the District recognizes that the City may in
the future participate in similar federal or state programs. As part of such programs, and
consistent with the City's successful participation and sharing in grant funds, certain
responsibilities may be imposed upon the City with respect to compliance with state and/or
federal rules and regulations regarding contributors to the City's System. The District recognizes
that by virtue of this Agreement,it is a contributor to the City's System and,as a contributor,shall
be required to take all necessary steps to enable the City to continue to comply with such
programs and to bear the District's pro rata share of the expense of such compliance. More
specifically, the District authorizes the City and its representatives to enter District property and
to conduct those tests, including, but not limited to, infiltration/inflow analyses, smoke tests,
and/or other similar analyses as required under the provisions of the Federal Water Pollution
Control Act and the City's Federal Grant Agreements to characterize the condition of the District's
System. The District agrees to pay costs of such analyses of the District's System not refunded by
the state or federal government to the City,within forty-five (45) days of receipt of an invoice for
the same. In addition,the District agrees to pay within forty-five(45) days of receipt of an invoice
the unrefunded costs of any remedial measures necessary to improve the District's System in
order to comply with state or federal requirements and agrees to see that such remedial measures
are timely taken. Such steps are not exclusive, and the District agrees to take all steps necessary
to assure the City's compliance with such programs. Failure of the District to comply with this
section shall constitute an Event of Default.
3.09 Delivery of and Title to Waste. Title to all Waste to be treated hereunder shall
remain in a particular party so long as such waste remains on such party's side of the Wastewater
Point of Connection. Upon passing through the Wastewater Point of Connection, title thereto
shall pass to the other party; however, the City shall be under no responsibility to accept those
waste materials which do not conform with the quality or quantity standards as otherwise
specified herein, including"Prohibited Waste."
ARTICLE IV
QUANTITY AND CAPACITY
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Utility Agreement-MUD 555-proposed
4.01 General. All services to be provided by the City herein shall be expressly subject
to the payment of the appropriate impact fees, without credit and/or reimbursement, and other
costs specified in this Agreement and the City's Code of Ordinances.
(a) Water. Subject to the terms and conditions of this Agreement, the City
agrees to sell and deliver (or cause to be delivered) to the District, the District's water
requirements of treated water, and the District agrees to purchase from City the District's
treated water requirements for resale during the term of this Agreement for water services
to be supplied in the Service Area, subject to the limitations expressed hereinabove. The
District's total treated water requirements shall mean the total quantity of treated water
the District needs to conduct operations, use or resell within the Service Area. The
maximum amount of total treated water that the City shall be obligated to provide shall
be the actual number of equivalent single-family connections ("ESFCs")multiplied by 400
gpd /ESFC. It is stipulated that the District's total treated water requirements shall not
exceed 400 gpd multiplied by:
1. the number of ESFCs necessary to serve any undeveloped property
included within the Service Area for which a preliminary plat has been
approved by the City,plus
2. the number of ESFCs necessary to serve property previously developed or
currently under development within the Service Area;
provided, however, that in no event shall the District's total treated water requirements exceed
421 ESFCs. In the event an approved preliminary plat expires, the District's total treated water
requirements shall be reduced by the number of ESFCs associated with the expired preliminary
plat.
(b) Waste. In consideration of the compensation stated herein, the City shall
accept and treat waste from the District and the District shall have the privilege of
discharging waste into the City's System for the District to conduct operations, use or
resell within the Service Area.The maximum amount of wastewater that the City shall be
obligated to accept shall be the actual number of equivalent single-family connections
("ESFCs") multiplied by 300 gpd /ESFC; but shall not exceed 300 gpd/ESFC multiplied
by:
1. the number of ESFCs necessary to serve any undeveloped property
included within the Service Area for which a preliminary plat has been
approved by the City,plus
2. the number of ESFCs necessary to serve property previously developed or
currently under development within the Service Area;
provided, however, that in no event shall the District's total discharge exceed 126,300
gallons per day average daily flow (representing connections for the Service Area
described in Article I) based upon 300gpd/ESFC. In the event an approved preliminary
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plat expires, the District's total wastewater requirements shall be reduced by the number
of ESFCs associated with the expired preliminary plat.
4.02 Adjusted Quantity. It is expressly understood and agreed that,commencing three
years after approval of each final plat of the Property,the quantities calculated in accordance with
Section 4.01 and the capacities reserved in Section 4.03 be adjusted annually to a quantity that
equals one hundred ten percent (110%) of the actual number of ESFCs in the Service Area;
provided that the actual quantity does not exceed the quantity as calculated in accordance with
Section 4.01.
Additionally, it is expressly understood and agreed that:
(i) commencing three (3) years after final plat approval of the last phase of the
development of the Property or
(ii) if there is no preliminary plat filed within three(3)years after the most recent final
plat approval,
the quantities specified in Section 4.01 shall be adjusted annually if the actual usage during the
previous 12-month period is less than ninety percent(90%') of the quantity calculated pursuant to
Section 4.01. In such event, the quantity shall be reduced to one hundred ten percent (110%) of
the actual usage in the Service Area.
4.03 Capacity Reserved.The City covenants and agrees that upon receipt of impact fees
as provided for in Section 5.01 of this Agreement, the City shall endeavor to reserve for the
exclusive benefit of the District the capacity in its water supply facilities sufficient to supply and
treat the quantities established in Section 4.01 of this Agreement and as adjusted in Section 4.02.
However, the District shall not be guaranteed any specific quantity or pressure of water for the
services to be provided herein by the City if the City's water supply is limited or when the
District's equipment may become inoperative due to unforeseen breakdown or scheduled
maintenance and repairs;and the City is in no case to be held to any liability for failure to furnish
any specific amount or pressure of water or to furnish any specific capacity in its Plant for the
District.
4.04 Service Contracts with Other Entities. The District shall not permit any entity
located outside the Service Area to connect to the District's System during the term of this
Agreement without the express prior written consent of the City. Failure to comply with this
provision shall constitute an Event of Default.
ARTICLE V
PAYMENT AND TERMS
5.01 Impact Fees. The District shall pay to the City impact fees pursuant to Article IV,
Chapter 114 of the Code of Ordinances,Baytown,Texas,to purchase water capacity from the City
to serve the Service Area.The impact fees may be adjusted from time to time by the City Council,
and the District shall be required to pay the rate in effect at the time payment is due.
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a. Water Impact Fee. The water impact fee shall be one hundred twenty-five
percent (125°0) of the water impact fee pursuant to Section 114-99(b) of the City of
Baytown Code of Ordinances for each equivalent single-family connection ("ESFC")
charged to development within the City at the time of collection. The water impact fee
shall be collected at the time the Developer submits each final plat.
b. Wastewater Impact Fee. The wastewater impact fee shall be one hundred
twenty-five percent (125°0) of the wastewater impact fee pursuant to Section 114-99 (b) of
the City of Baytown Code of Ordinances for equivalent single-family connection("ESFC")
charged to development within the City at the time of collection. The wastewater impact
fee shall be collected at the time the developer submits each final plat.
5.02 Monthly Service Charge.The District shall pay to the City in monthly installments
the following:
(a) Water Service Charge. A service charge (to cover the City's operation and
maintenance) equal to the City's minimum charge and additional charges, if any, applied to the
actual quantity of treated water delivered to the District during the month in question per
connection. The charge shall be calculated on the basis of the metered water use and otherwise
for each user connected to the District's System, consistent with the provisions for such
calculation found in the City's Water Service Rate Ordinance,which may be amended from time
to time. A copy of the City's present rate ordinance for water service, as set forth in Chapter 98,
Article III of the Code of Ordinances of the City of Baytown, in effect as of the date of this
Agreement, is attached as Exhibit C,and incorporated herein.
The District agrees that the payment due herein shall be calculated by using the water delivered
as measured by i) the master meter(s) installed pursuant to Section 2.07(a) or ii) individual
residential/commercial meters, whichever is greater. Should a disparity between the master
meter(s) and meters of the individual residences or commercial developments exist and the
master meter(s) records a greater water usage, the District shall be responsible for the payment
of the amount of water usage indicated by the master meter(s) at the rate hereinabove expressed.
(1) As used in this subsection (a), the term "day" shall mean a period
of twenty-four(24) consecutive hours beginning at eight o'clock(8:00) a.m.on one
calendar day and ending at eight o'clock (8:00) a.m. on the next succeeding
calendar day. The term "month" shall mean a period beginning at eight o'clock
(8:00) a.m. on the first day of a calendar month and ending at eight o'clock (8:00)
a.m. on the first day of the next succeeding calendar month, except that the first
month or partial month shall begin on the day of the initial delivery of water
hereunder, and the minimum monthly payment,if any, shall be prorated for such
partial month.
(2) The measuring equipment used for the measurement of treated water
shall be read by the District on the last day of each month (or at such period of
frequency arranged between the parties) at eight o'clock (8:00) a.m., or as near
thereto as reasonably practicable; and on such day, the District shall account and
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certify to the City the amount of treated water delivered to the District.
Additionally on that day, the District shall render to the City an accounting of the
service charges as provided in Section 5.04. On receipt of the above-described
accounting,the Director will bill the District for the service charges accrued during
the preceding month. Payment by the District to the City shall be made within
forty-five (45) days following the receipt of the bill.
(b) Wastewater Service Charge. The wastewater service charge shall be calculated
monthly (i) on the basis of the metered water use as measured by the master meter(s) less the
District's irrigation meter usage, (ii) on a per-connection basis, and (iii) in accordance with the
provisions and rates in the City's Sewer Service Rate Ordinance, which may be amended from
time to time. The usage per user connection shall be calculated by dividing the total metered
water usage less the total metered irrigation meter usage, by the number of users in the District
as reported by the District to the City. A copy of the City's present rate ordinance for sanitary
sewer service, as set forth in Chapter 98, Article IV of the Code of Ordinances of the City of
Baytown, in effect as of the date of this Agreement, is attached as Exhibit D, and incorporated
herein.
5.03 Right of Inspection.The City shall have the right at any time by actual count or by
an inspection of the District's books, records and accounts to determine the number of water
and/or sewer connections served by the District, and the District shall have the right at any time
to inspect the City's books, records and accounts to verify the charges levied by the City. It shall
be the duty of the parties to cooperate fully with each other in any such count,inspection or audit.
All books, records and accounts shall be open for inspection at all reasonable hours for any
authorized representative of the parties.
5.04 Reporting Requirements. Each month, the District shall provide to the City an
operating report concerning the prior month's operations in a form approved by the City's
Director of Finance. After receipt of each operating report, the City will generate an invoice
specifying the amount due and owing for the report period.
5.05 Billing and Payments. Beginning on the date when the City first commences
providing services to the District, the District shall account and certify to the City the number of
connections in use on said first day;and thereafter,the District shall render to the City an the
day of each month an accounting of the service charges as provided in Section 5.04. On receipt
of the above-described accounting, the Director will bill the District for the service charges
accrued during the preceding month. Payment by the District to the City shall be made within
forty-five (45) days following the receipt of the bill.
Any sums payable by the District to the City under this Agreement which are not paid
within forty-five (45) days following the receipt of the bill shall bear interest in accordance with
Section 2251.025,Texas Government Code. If the District defaults on the payment of any bill, and
the amount so past due and unpaid, including interest thereon, is collected by the City by suit,
there shall be reasonable attorneys' fees added thereto for collection thereof by suit. Failure to
pay charges when due shall constitute an Event of Default. Notwithstanding any of the above, in
the event the District fails to tender payment of any amount when due and such failure continues
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for forty-five (45) after notice in writing to the District of such default, the City may suspend
delivery of services offered hereunder, but the exercise of such right shall be in addition to any
other remedy available to the City.
5.06 Service Charge Modifications. Although the City believes that the present charges
for such services as set forth herein are fair and reasonable, nonetheless, the parties realize that
due to unforeseen contingencies, the City may increase the charges for such services, whether by
amendment of the rate schedule for like services outside the City limits upon which the service
charges levied hereunder are based, or by other means.
5.07 Operating Expense and Covenants as to Rates.The sums to be paid the City by the
District under the terms of this Agreement are declared by the District to be an essential cost of
operating and maintaining the District's System as a part of the District's System, and such costs
shall be first charged upon the gross revenues received from the District's System as a part of the
District's System, and such costs shall be a first charge upon the gross revenues received from the
District's operation of said system. The District agrees to establish and maintain rates sufficient
to pay all costs and expenses of operation and maintenance of the District's System.
5.08 Events of Default. An Event of Default, as stated from time to time herein, shall
constitute a material breach of this Agreement. For any material breach of this Agreement, the
City may, and the District explicitly recognizes the City's right to, terminate service under this
Agreement and to seek all remedies at law or in equity necessary to enforce the provision(s)
violated; provided, however, that this Agreement shall not be terminated prior to the City's
giving forty-five (45) days' written notice to the District of the Event of Default complained of
and a reasonable opportunity for the District to cure said default, or,if not curable in that time as
determined at the sole discretion of the City, to commence substantial curative efforts within
forty-five (45) days and faithfully prosecute the same. Termination of service pursuant to this
section shall not limit either party to any other remedy at law or in equity.
ARTICLE VI
PERFORMANCE REGARDING TREATED WATER SERVICES
The City covenants and agrees that it will not contract for the sale of water to other users
to such an extent or for such quantities as to impair the City's ability to perform fully and
punctually its obligations to the District under this Agreement. In case of temporary shortage of
water notwithstanding the City's compliance with the provisions of this Article, the City shall
distribute the available supply as provided by the laws of the State of Texas. It is specifically
agreed and understood that this Agreement contemplates that the District will resell the water
purchased pursuant to the terms hereof.
Pursuant to the Amendatory Contract entered into by the City of Houston and the San
Jacinto River Authority, a copy of which is attached hereto as Exhibit D and incorporated herein
for all intents and purposes, and not withstanding any other provision of this Agreement to the
contrary, the District covenants and agrees that it takes the treated water under this Agreement
from the City for solely municipal purposes,as such term is defined by the TCEQ rules,currently
in effect or hereinafter amended, and no other purposes. Such treated water shall be sold,
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distributed or used and ultimately consumed only for residential household and municipal
purposes exclusively within the District's Service Area.
The District understands and agrees that the City,the Baytown Area Water Authority, the
City of Houston or the San Jacinto River Authority, or any combination thereof, may enforce the
covenants contained in this Article by an action brought directly against the District. In the event
that the City maintains any legal proceeding to enforce such covenants, the District agrees to
indemnify the City in the amount of all expenses relating to the legal proceeding, including, but
not limited to,costs of court and reasonable attorney's fees.
The District acknowledges that the City may be liable to the Baytown Area Water
Authority,the City of Houston and/or the San Jacinto River Authority for monetary damages in
the event that the District or any purchaser of water from or through the District fails to comply
with the restrictions and limitations on the sale of water set out in this Article. The District
acknowledges that such monetary damages would amount to seventy-five percent (75%) of the
consideration or revenue received by the City for the estimated amount of water distributed,sold
or used in violation of such restrictions or limitations plus all litigation expenses, reasonable
attorney fees, and all other remedies available to the Baytown Area Water Authority, the City of
Houston and/or the San Jacinto River Authority. The District hereby agrees to fully indemnify,
hold harmless and defend the City from and against any such expenses and liability which the
City might incur or any loss the City might suffer as a result of any failure by the District or any
purchaser of water from or through the District,to comply with such restrictions and limitations.
The District further agrees to include covenants in any sales or contracts for sale of water by the
District to any other entity to ensure that said other entity will likewise indemnify,hold harmless
and defend the City. The District agrees to submit the wording of such covenants for the written
approval of the City prior to entering into such contracts.
The District acknowledges that the City of Houston may be liable to the San Jacinto
River authority for monetary damages in the event that the District or any purchaser of water
from or through the District fails to comply with the restrictions and limitations on the sale of
water set out in this Article. The District acknowledges that such monetary damages would
amount to seventy- five percent (75%) of the consideration or revenue received by the City of
Houston for the estimated amount of water distributed, sold or used in violation of such
restrictions or limitations plus all litigation expenses, reasonable attorney fees, and all other
remedies available to the San Jacinto River Authority. The District hereby agrees to fully
indemnify, hold harmless and defend the City of Houston from and against any such expenses
and liability which the City of Houston might incur or any loss the City of Houston might
suffer as a result of any failure by the District or any purchaser of water from or through the
District, to comply with such restrictions and limitations. The District further agrees to
include covenants in any sales or contracts for sale of water by the District to any other entity
to ensure that said other entity will likewise indemnify, hold harmless and defend the City of
Houston. The District agrees to submit the wording of such covenants for the written approval
of the City prior to entering into such contracts.
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On or before the first anniversary of the date this Agreement is signed, the District shall
approve and implement and throughout the term hereof remain in full compliance with a water
conservation program in accordance with the requirements of the TCEQ. Such plan and any
amendments thereto shall be submitted to the appropriate authority as required by state law for
review and approval. In the event that the TCEQ adopts new requirements, the District shall
adopt an amended plan and submit same to the appropriate authority for review and approval.
Within forty-five (45)-days after the term of this Agreement, the District shall furnish the
City with a statement,under oath,showing the quantities and sources of all water for use or resale
by the District.
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.01 Force Majeure. In the event any party is rendered unable, wholly or in part, by
force majeure to carry out any of its obligations under this Agreement, it is agreed that on such
party's giving written notice and full particulars of such force majeure in writing or by telegraph
to the other party as soon as possible after the occurrence of the cause relied upon, then the
obligations of the party giving such notice, to the extent it is affected by force majeure and to the
extent that due diligence is being used to resume performance at the earliest practicable time,
shall be suspended during the continuance of any inability but for no longer period. Such cause
shall as far as possible be remedied with all reasonable dispatch.
The term"force majeure," as used herein,shall include, but not be limited to,acts of God,
strikes, lockouts or other industrial disturbances, acts of the public enemy, war, blockades,
insurrections, riots, epidemics, landslides, lightening, earthquakes, fires, storms, floods,
washouts, droughts, tornadoes, hurricanes, arrests and restraints of governments and people,
explosions, breakage or damage to machines or pipelines and any other inability of either party,
whether similar to those enumerated or otherwise and not within the control of the parties
claiming such inability,which by the exercise of due diligence and care such party could not have
avoided.
It is understood and agreed that the settlement of strikes or lockouts shall be entirely
within the discretion of the party having the difficulties, and the above-referenced requirement
that any force majeure be remedied with all reasonable dispatch shall not require the settlement
of strikes or lockouts by acceding to demands of the opposing party when such course is
inadvisable in the discretion of the party having the difficulty.
7.02 Approval. Whenever this Agreement requires or permits approval or consent to
be hereinafter given by any party, such approval or consent shall not be unreasonably withheld,
and, if finally given, shall be effective without regard to whether such approval or consent is
given before or after the time required herein.Such approval or consent on behalf of a party shall
be evidenced by an ordinance or resolution adopted by the governing body of the party,or by an
appropriate certificate executed by a person, firm or entity previously authorized to determine
and give such approval or consent on behalf of the party pursuant to an ordinance or resolution
adopted by the governing body, unless stated otherwise herein.
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7.03 Address and Notice. Unless otherwise provided in this Agreement, any notice,
communication,request,reply or advice(herein severally and collectively for convenience,called
"Notice") herein provided or permitted to be given, made or accepted by any party to the other
must be in writing and may be given or served by depositing the same in the United States mail,
postpaid and registered or certified and addressed to the party to be notified,with return receipt
requested, or by delivering the same to an officer of such party, or by prepaid telegram, when
appropriate, addressed to the party to be notified. Notice deposited in the mail in the manner
hereinabove described shall be conclusively deemed to be effective, unless otherwise stated in
this Agreement, from and after the expiration of three (3) days after it is so deposited.
Notice given in any other manner shall be effective only if and when received by the party
to be notified. However, in the event of service interruption or hazardous conditions, neither
party will delay remedial action pending the receipt of formal notice. For the purpose of notice,
the address of the parties shall, until changed as hereinafter provided, be as follows:
If to the City, to
City of Baytown Attn: City Manager
P.O. Box 424
Baytown,TX 77522
Fax: (281) 420-6586
If to the District, to
Harris County Municipal Utility District No. 555
Attn:-Heather Kelly
Allen Boone Humphries Robinson LLP
3200 Southwest Freeway,Suite 2600
Houston,TX 77027
Fax: (713) 860-6401
The parties shall have the right from time to time and at any time to change their
respective addresses, and each shall have the right to specify as its address any other address,
provided at least fifteen(15) days' written notice is given of such new address to the other parties.
7.04 Assignability. This Agreement shall bind and benefit the respective parties and
their legal successors and shall not be assignable in whole or in part by any party without first
obtaining written consent of the other party.
7.05 Regulatory Agencies. This Agreement shall be subject to all present and future
valid laws, orders, rules and regulations of the United States of America, the State of Texas, and
of any regulatory body having jurisdiction.
7.06 No Additional Waiver Implied. The failure of any party hereto to insist, in any
one or more instances, upon performance of any of the terms, covenants or conditions of this
Agreement, shall not be construed as a waiver or relinquishment of the future performance of
any such terms, covenants or conditions by any other party hereto, but the obligation of such
other party with respect to such future performance shall continue in full force and effect.
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7.07 Modification. Except as otherwise provided herein, this Agreement shall be
subject to change or modification only with the mutual written consent of the parties hereto.
7.08 Parties in Interest. This Agreement shall be for the sole and exclusive benefit of
the parties hereto and shall not be construed to confer any rights upon any third party. The City
shall never be subject to any liability in damages to any customer of the District for any failure to
perform its obligations under this Agreement.
7.09 Captions. The captions appearing at the first of each numbered section in this
Agreement are inserted and included solely for convenience and shall never be considered or
given any effect in construing this Agreement or any provision hereof, or in connection with the
duties, obligations or liabilities of the respective parties hereto or in ascertaining intent, if any
question of intent should arise.
7.10 Severability. The provisions of this Agreement are severable, and if any provision
or part of this Agreement or its application thereto to any person or circumstance shall ever be
held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, the
remainder of this Agreement and the application of such provisions or part of this Agreement to
other persons or circumstances shall not be affected thereby.
7.11 Merger. This Agreement embodies the entire understanding and agreement
between the parties as to the water supply and waste disposal services, and there are no prior
effective representations,warranties or agreements between the parties.
7.12 Construction of Agreement. The parties agree that this Agreement shall not be
construed in favor of or against any party on the basis that the party did or did not author this
Agreement.
7.13 Term.This Agreement shall be in force and effect from the date of execution hereof
for a term of thirty (30) years; provided that (i) City's contract with the Baytown Area Water
Authority for the purchase of treated water in sufficient quantities to supply the District under
the terms and conditions in effect at the time of the execution of this Agreement remain
unchanged; and (ii) the Baytown Area Water Authority's contract with the City of Houston for
the purchase of raw water in sufficient quantities to supply the Baytown Area Water Authority
under the terms and conditions in effect at the time of the execution of this Agreement remain
unchanged. Should the City's contract with the Baytown Area Water Authority or the Baytown
Area Water Authority's contract with the City of Houston be terminated for any reason or should
the City become legally unable to supply the District, then this Agreement shall terminate
automatically at the time of such termination or inability. This Agreement shall be automatically
extended for additional five (5) year terms unless either party gives written notice of termination
three (3) months prior to the date of any such automatic extension. However, both parties
expressly understand and agree that should any portion of the property involved in this
Agreement become annexed by the City of Baytown for full purposes, this Agreement may
terminate with respect to such area at the sole option of the City.
7.14 Agreement Read. The parties acknowledge that they have read, understand and
intend to be bound by the terms and conditions of this Agreement.
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7.15 Multiple Originals. It is understood and agreed that this Agreement may be
executed in a number of identical counterparts, each of which shall be deemed an original for all
purposes.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this __day of
, 2024.
CITY OF BAYTOWN,TEXAS
By:
Jason Reynolds, City Manager
ATTEST
By:
Angela Jackson,City Clerk
(SEAL)
THE STATE OF TEXAS §
COUNTY OF HARRIS §
This instrument was acknowledged before me on this _ day of 2024, by
the City Manager of the City of Baytown,Texas, on behalf of said City.
(SEAL)
Notary Public in and for the
State of Texas
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HARRIS COUNTY MUNICIPAL UTILITY
DISTRICT NO. 555
By:
President, Board of Directors
THE STATE OF TEXAS §
§
COUNTY OF HARRIS §
This instrument was acknowledged before me on this _ day of 2024, by
President of the Board of Directors of Harris County Municipal Utility District No.
555, on behalf of said District.
(SEAL)
Notary Public in and for
the State of Texas
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Exhibit A
Description of Service Area (District Property)
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Exhibit B
District Rate Order
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Exhibit C
Qy's Present Water Service Ordinance
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Exhibit D
City's Present Sewer Service Ordinance
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Exhibit E
Amendatory Contract between the City of Houston and the San Jacinto River Authority
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