Ordinance No. 5,542w10 n i
ORDINANCE ISO. 5542
AN ORDINANCE AUTHORIZING AND DIRECTING THE MAYOR TO
EXECUTE AND THE CITY CLERK TO ATTEST TO AN AGREEMENT
WITH PINEHURST UTILITIES, INC. FOR THE OPERATION AND
MANAGEMENT OF THE PINEHURST SUBDIVISION WATER AND SEWER
1 PROVIDING FOR
EILEEN P. HALL, City Clerk
THE STATE OF TEXAS §
COUNTY OF CHAMBERS §
OPERATION AND MANAGEMENT AGREEMENT
On the day of , 1990, the CITY OF
BAYTOWN, Texas, a municipal corporation located in Harris County
and Chambers County, hereinafter called "City," and PINEHURST
UTILITIES, INC., hereinafter called "Pinehurst," for and in
consideration of the mutual promises and agreements herein
contained, do agree as follows:
I
The parties hereby agree that beginning June 1, 1990, the
City shall operate and manage the water and sewer system owned by
Pinehurst, which is located in the Pinehurst Subdivision of
Chambers County, Texas, and which is more particularly described
in Exhibit "A" which is attached hereto. The City has indicated
an interest in purchasing the above- described system, and desires
to operate and manage said system for two months in order to
determine the feasibility of such purchase. This agreement
excludes the well and tank on Cherokee Street used by Pinehurst
for its bottled water business.
II
In consideration for such operation and management rights,
the City of Baytown hereby agrees to pay all operating and
maintenance expenses and costs, other than billing and
collections, for such system for the period covered by this
agreement. Such expenses and operational costs shall include
personnel costs and other expenses incurred by the City, debt
• service (which is $3,962.27 to be paid to La Porte State Bank on
July 1, 1990, and $3,956.63 to be paid to La Porte State Bank on
August 1, 1990), and such other expenses, other than property
taxes, routinely incurred in the operation, maintenance and
management of a water distribution system and a waste water
collection system. During the period of this agreement,
Pinehurst will continue to bill all customers of Pinehurst and
collect payments made by customers. City shall pay to Pinehurst
$1.25 for each account per month as compensation for Pinehurst's
billing and collection services. All amounts collected shall be
given to the City.
III
The City will be entitled to the total re,
the systems for the period from June 1, 1990,
in order to determine the feasibility of
systems. Any revenue collected after June
attributed to service provided prior to June
paid by the City to Pinehurst.
IV
ienue generated by
to July 31, 1990,
purchasing these
1, 1990, which is
1, 1990, shall be
The City shall employ and supervise all labor required for
the operation and maintenance of the systems, and shall operate
the water and sewer systems in the same manner it operates its
own systems.
u
The City agrees to save harmless and indemnify Pinehurst
from all claims for damage which are caused by or result from the
day to day operation of the systems to the extent allowed by law.
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Pinehurst agrees to save harmless and indemnify the City from any
claim which is based upon operations prior to June 1, 1990.
VI
During the term of this agreement, should Pinehurst sell or
attempt to sell this system, such sale or attempted sale shall be
subject to the City's right to purchase said systems for the
amount agreed upon between Pinehurst and the third party
purchaser, or $485,000.00, whichever is less, plus interest at
the rate of ten percent (10 %) per annum after August 1, 1990.
VII
Upon expiration of this agreement, the City shall return the
above - described water and sewer systems to Pinehurst in a
condition the same or substantially the same as which it received
the system on June 1, 1990. All revenue collected after the
termination of this agreement which is based upon service
provided during the term of this agreement shall be forwarded to
the City by Pinehurst upon receipt.
VIII
This agreement shall terminate on July 31, 1990, provided,
however, the parties may agree to extend the term of this
agreement by an additional thirty day period by written consent
signed by both parties prior to the expiration of this agreement.
City shall continue debt service payments during such extension.
IX
At the end of the term of this agreement, or any extension
thereof, the City shall have an option to purchase the Pinehurst
Utilities, Inc. water and sewer systems for the cash sum of
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$485,000.00. Said option shall be at the sole discretion of the
City and subject to the City's ability to sell certificates of
obligation necessary to finance such purchase.
SIGNED IN DUPLICATE ORIGINALS this
1 1990.
ATTEST:
EILEEN P. HALL, City Clerk
ATTEST:
Secretary
5 :5:7:1
CITY OF BAYTOWN
EMMETT 0. HUTTO, Mayor
day of
PINEHURST UTILITIES, INC.
CHACO THOMAS, President
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