Ordinance No. 8,112971023 -3
ORDINANCE NO. 8112
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS,
AUTHORIZING AND DIRECTING THE MAYOR TO EXECUTE AND THE CITY
CLERK TO ATTEST TO A WATER SUPPLY CONTRACT — TREATED WATER
WITH THE BAYTOWN AREA WATER AUTHORITY; AND PROVIDING FOR
THE EFFECTIVE DATE THEREOF.
WHEREAS, the City of Baytown, Texas (the "City ") and the Baytown Area Water Authority
( "BAWA ") have previously entered into that certain Water Supply Contract — Treated Water (the
"Contract "), dated as of January 31, 1977; and
WHEREAS, the City and BAWA wish to amend and restate the Contract to extend the term
thereof and to incorporate all amendments and supplements to date, including, but not limited to, that
certain Water Supply Contract for Treated Water dated November 26, 1996; NOW THEREFORE
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:
Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes and directs
the Mayor and City Clerk of the City of Baytown to execute and attest to a Water Supply Contract —
Treated Water with the Baytown Area Water Authority. A copy of said agreement is attached hereto,
marked Exhibit "A," and made a part hereof for all intents and purposes.
Section 2: That the City Council of the City of Baytown, Texas, hereby ratifies, approves and
confirms its obligations to pay "Pledged Revenues" to BAWA as defined in the Contract with respect
to all outstanding bonds issued by BAWA pursuant to the Contract.
Section 3: 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 affirmative vote of the City Council of the City
of Baytown this the 23rd day of October, 1997.
PETE C. ALFARO, Mayor
ATTEST:
EILEEN P. HALL, City Clerk
APPROVED AS TO FORM:
® ACIO RAMI Z, SR' -Ay Attorney
c:k I h0kounci hordinances\W aterSu pplyCo ntraefl-reated Water. Ord inance
Amended and Restated
Water Supply Contract --
Treated Water
STATE OF TEXAS §
COUNTY OF HARRIS §
This Amended and Restated Water Supply Contract -- Treated Water, hereinafter referred
to as "Contract," is made and entered into on the date herein after last specified by and between the
Baytown Area Water Authority, a governmental agency and a body politic and corporate of the State
of Texas, created pursuant to Chapter 600, Acts of the 63rd Legislature, Regular Session, 197' ),
hereinafter referred to as "BAWA," and the City of Baytown, a municipal corporation and home -rule
city which is located within Harris and Chambers Counties, Texas, hereinafter referred to as "CITY."
WHEREAS, BAWA and CITY, by executing this Contract, adopt this Amended and
Restated Water Supply Contract -- Treated Water, which accurately incorporates the Water Supply
Contract -- Treated Water dated the 3 V day of January 1 977 and all amendments and supplements
thereto in effect to date, including, but not limited to, that certain Water Supply Contract -- Treated
Water dated the 26'h day of November, 1996; and
WHEREAS, BAWA has the right under a contract with the City of Houston to buy untreated
water from the City of Houston; and
WHEREAS, BAWA has constructed and will continue to repair, construct and modify
certain facilities to treat and deliver the aforementioned untreated water to CITY as treated water;
and
WHEREAS, CITY has constructed or contracted with BAWA to construct certain facilities
to enable CITY to receive the aforementioned treated water; and
WHEREAS, BAWA desires to sell large quantities of treated water from such source or
sources to CITY; and
WHEREAS, CITY, subject to the terms and conditions contained herein, desires to purchase
from BAWA its treated water; and
WHEREAS, BAWA has issued four series of contract revenue bonds payable from payments
made by the City pursuant to the provisions of this Contract and expects to issue one or more
additional series of said bonds; and
® Amended and Restated Water Supply Contract for Treated Water, Page I
EXHIBIT A
® WHEREAS, BAWA and CITY have found, and do hereby find, that BAWA and CITY are
authorized by the laws of the State of Texas to enter into a contract for the sale of water upon such
terms and for the period of time hereinafter set forth; and
WHEREAS, CITY is authorized to enter into a contract for the purchase of treated water
from BAWA pursuant to Chapter 402 of the Texas Local Government Code;
NOW THEREFORE, for and in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto do hereby mutually agree as follows:
ARTICLE I
DEFINITIONS
Unless a different meaning or intent clearly appears from the context, the following words
and terms shall have the meanings specified in this Article, respectively:
1.01 "Act" means Chapter 600, Acts of the 63" Legislature, Regular Session, 1973.
1.02 "BAWA Contract" means the Water Supply Contract between the City of Houston
and Baytown Area Water Authority, dated October 24, 1994, between BAWA, as buyer, and
the City of Houston, Texas, as seller, a copy of which is attached hereto and incorporated
herein for all intents and purposes.
1.03 "BAWA's Cost" means the costs to be incurred by BAWA in the performance of its
obligations under this Contract, including the following:
(a) the Pledged Revenues as described herein with respect to all outstanding
Bonds,
(b) maintenance, operational and administrative costs, and
(c) the cost of untreated water pursuant to BAWA Contract, including any
penalty or interest incurred by BAWA by reason of CITY's acts.
1.04 "Bonds" shall mean bonds or other evidences of indebtedness, including notes, issued
by BAWA pursuant to the Act and the terms of this Contract,
(a) which, together with the interest thereon, are to be paid from the payments
of Pledged Revenues (hereinafter defined) to be made by CITY pursuant to
this Contract and
isAmended and Restated Water Suppk, Contract for Treated Water, Page 2
(b) which have been issued and sold to acquire funds to:
(1) make, purchase, construct, lease, or otherwise acquire the Project
(hereinafter defined)
(2) complete such making purchasing, constructing, leasing, or acquiring,
(3) enlarge, expand or modify the Project
(4) reconstruct the Project or
(5) refund any Bonds.
1.05 "Bond Resolution" shall mean any resolution or resolutions adopted by the governing
body of BAWA which authorize the issuance of Bonds pursuant to this Contract and
providing for other security and payment as such resolution or resolutions may be amended
from time to time as therein permitted.
1.06 "City's Facilities" shall mean facilities constructed by CITY to enable CITY to
receive treated water.
1.07 "Contract Quantity" shall mean the maximum quantity of treated water that BAWA
agrees to reserve and sell to CITY pursuant to Section 2.01 herein.
1.08 "Contract Term" is defined in Article X
1.09 "Cost of Project" shall mean the costs incurred to or to be incurred by BAWA or
CITY with respect to the acquisition of the Project, whether incurred prior to or after the date
of this Contract and including, but not limited to, the following items:
(a) obligations for labor, materials, services, and equipment;
(b) costs of any bonds and insurance, the cost of which is not otherwise provided
for;
(c) costs of engineering services, including costs of preliminary design and
development work, test borings, surveys, estimates, plans and specifications,
supervising construction, and performing all other duties required by or
consequent upon proper construction;
(d) expenses incurred in connection with the issuance and sale of the Bonds,
including without limitation:
(1) fees and expenses of accountants, auditors, attorneys, underwriters,
engineers, and financial advisors,
(2) materials, supplies, printing and engraving,
(3) recording and filing fees,
0 Amended and Restated Water Supply Contract for Treated Water, Page 3
® (4) rating agency fees, and
(5) initial fees and expenses of a trustee, if any;
(e) costs required to be paid under the terms of any contract or contracts in
connection with the Project;
(f) sums required to reimburse BAWA or CITY for advances made by either of
them for any of the above items, including fees of any kind for any other cost
incurred, including expenses for organization or BAWA, overhead expenses
and expenses for any work done by either BAWA or CITY which are
properly chargeable to the Project; and
(g) costs of all other items related to the acquisition of the Project.
1.10 "Director" shall mean the Director of Utilities of the City of Baytown or any
successor department and all persons designated by the Director to administer the sale and
delivery of water to customers within the City of Baytown.
1.11 "General Manager" shall mean the General Manager of the Baytown Area Water
Authority or any successor agency and all persons designated by the General Manager to
administer the sale and delivery of water to CITY.
1.12 "MGD" is an abbreviation for million gallons of water per day. As used in this
contract, "MGD" refers to a quantity of water during a period of time expressed for
convenience in terms of an average daily quantity during a calendar month (unless a different
period of time is specified). The volume of two MGD for a calendar month, for example,
is calculated as follows: Two million gallons multiplied by the number of days in such
calendar month.
1.13 "Pledged Revenues" means the payments to be made by CITY to BAWA for treated
water and pledged in a Bond Resolution for payment of the principal of, premium, if any,
and interest on the bonds issued pursuant to the terms of this Contract.
1.14 "Point of Delivery" shall mean those delivery points as indicated on Exhibit "A,"
which is attached hereto and incorporated herein for all intents and purposes, to which
BAWA agrees to deliver treated water to CITY.
1.15 "Point of Measurement" shall mean the location of the meter at which CITY's
consumption of water is measured, more particularly described in Exhibit "A."
0 Amended and Restated Water Supply Contract for Treated Water, Page 4
1.16 "Proiect" means the property, works, facilities and improvements, whether previously
existing or to be made, constructed or acquired, within or without the boundaries of BAWA,
necessary
(a) to acquire surface water supplies from sources both within and without the
boundaries of BAWA, including particularly the sources provided by
BAWA's Contract (hereinafter defined),
(b) to conserve, store, transport, treat and purify untreated water purchased by
BAWA pursuant to BAWA's Contract, and
(c) to distribute, sell and deliver treated water to CITY pursuant to the terms of
the Contract.
1.17 "Service Area" shall mean the area within the boundaries more particularly described
in Exhibit "B," which is attached hereto and incorporated herein for all intents and purposes.
1.18 " TNRCC" shall mean the Texas Natural Resource Conservation Commission or its
successor.
1.19 "Water" shall mean potable water meeting the minimum drinking water standards
prescribed by Texas Department of Health Resources and Texas Natural Resource
Conservation Commission, and their successor agencies.
ARTICLE It
SALE AND DELIVERY OF WATER
2.01 Subject to the terms and conditions of this contract, during the Contract Term,
BAWA agrees to sell and deliver (or cause to be delivered) to CITY, all of CITY's water
requirements of treated water for municipal purposes at the Points of Delivery at daily rates of
delivery; and CITY agrees to purchase from BAWA, all of CITY's treated water requirements for
municipal purposes (as such term is defined by the TNRCC in its rules) at such Points of Delivery
during the term of this Contract. It is expressly agreed to and understood that BAWA shall not be
obligated to deliver to CITY treated water in excess of the Contract Quantity which shall be the
monthly average per day of 10.71 MGD.
2.02 The Points of Delivery for treated water sold under this contract shall be designated
in writing by CITY; provided, however, BAWA reserves the right to reject any point of delivery
designated by CITY which would affect, interfere with or increase the cost of any other facilities or
operations which BAWA might wish to construct or implement, or plan to construct or implement,
or which would adversely affect BAWA's ability to provide treated water to any of its customers.
0 Amended and Restated Water Supplv Contract for Treated Water, Page 5
Both BAWA and CITY agree that the points of delivery shall be those indicated on Exhibit "A,"
which is attached hereto and incorporated herein for all intents and purposes. Additionally, CITY
may give BAWA notice in writing of any additional or change in point(s) of delivery designated by
CITY, and BAWA agrees to accept or reject such point(s) of delivery by a response in writing within
thirty (30) days after BAWA's receipt of the notice.
2.03 Treated water may be delivered to CITY from any source or combination of sources
available to BAWA.
2.04 The treated water to be delivered shall meet minimum standards prescribed by the
State of Texas for municipal purposes (as such term is defined by the TNRCC in its rules) and shall
be only used by CITY within the Service Area.
2.05 If CITY wishes to reserve for itself additional monthly quantities of treated water,
CITY must notify BAWA in writing of CITY's desire to do so. The General Manager may, at his
discretion after considering the treated water requirements of CITY and its obligations and
commitments, increase the quantity of treated water supplied to CITY; provided, however, that
BAWA shall be under no obligation to deliver treated water in excess of Contract Quantity. CITY
may, at its discretion, discontinue delivery of such additional monthly requirements of treated water
by giving BAWA thirty (30) days' written notice.
2.06 CITY shall own and be responsible for all lines connected to BAWA's transmission
line, beginning at the point where the metering device is installed to meter sales to CITY.
ARTICLE III
CONSTRUCTION OF THE PROJECT
3.01 BAWA agrees to proceed promptly with the acquisition and construction of the
Project with the proceeds of the Bonds or, at the option of BAWA, other money lawfully available
for such purpose. BAWA does not anticipate any delays in commencing or completing the Project,
but BAWA shall not be liable to CITY for any damages occasioned by the acquisition, construction
or completion of the Project or any delays in completion of the Project.
3.02 If BAWA desires to materially revise the scope of or the plans and specifications for
the Project, such proposed revisions shall be submitted to CITY for approval. If CITY approves
such revisions, the Project shall be modified. No such modification shall, however, revise the
Project in such a manner as to change the purpose of the Project from receiving, treating and
supplying surface water for the benefit of CITY.
isAmended and Restated Water Supply Contract f'or Treated Water, Page 6
ARTICLE IV
RATES AND PRICES
4.01 The City agrees to pay BAWA's costs through the establishment of rates for the
purchase of treated water and by payments to BAWA based on such established rates. BAWA and
the City shall periodically establish rates for the purchase of treated water. Billing at the rate for
water as specified hereinbelow shall commence as of November 26, 1996.
4.02 Whenever CITY's consumption shall exceed Contract Quantity by ten percent (10 %),
a five percent (5 %) surcharge shall be charged against that portion of the consumption that exceeds
the Contract Quantity. Provided, however, this surcharge shall not apply to any increase in the
quantity of treated water granted by the General Manager pursuant to Section 2.05 hereof.
4.03 All water sold and delivered by BAWA to CITY for which CITY is obligated to pay
hereunder shall be sold to CITY at the rate of $1.18 per one thousand gallons.
4.04 The amount of water delivered to CITY shall be measured by the metering equipment
located at the treatment plant which measures the total quantity of treated water delivered into the
transmission lines, with the amount delivered to CITY being the total delivered into the transmission
line at the plant, less such amounts sold/metered to other customers of the Authority.
4.05 Additionally, CITY understands and agrees that BAWA may at any time, by order
duly enacted, increase or change the price or prices for treated water as set forth in this article;
provided, however that except where an independent rate analysis conducted by a qualified concern
indicates that certain rate increase is required, the price or prices for treated water shall not be
increased percentagewise to CITY during any twelve (12) month period of this contract in excess
of the percentage rate increase in BAWA's water rates to other purchasers of treated water during
the same period.
ARTICLE V
ISSUANCE AND SALE OF BONDS; CITY'S PAYMENT OF PLEDGED REVENUE
AND OTHER AMOUNTS
5.01 Pursuant to the authority granted by the Act, BAWA agrees, upon the request of
CITY, to issue and sell, from time to time, Bonds in the amounts sufficient to provide the Project
and pay the Costs of the Project. The Bonds shall have the form and the characteristics; bear the
designation; bear the date or dates; mature at such time or times, serially, term, or otherwise, in not
more than forty (40) years from their dates; bear interest at the rate or rates, payable annually,
semiannually, quarterly, or otherwise; be in the denominations; be in the form, either coupon or
0 Amended and Restated Water Suppiv Contract for Treated Water, Page 7
registered; carry the registration privileges as to principal only or as to both principal and interest
and as to successive exchange of coupon for registered bonds or notes or vice versa, and successive
exchanges of bonds or notes of one denomination for bonds or notes of other denominations; be
executed in the manner; be payable at the place or places within or without the state; and be sold for
the price or prices, all as provided in the Bond Resolution.
5.02 In consideration of BAWA's agreement to issue the Bonds and as a part of BAWA's
costs, CITY agrees to pay (1) fledged Revenues to BAWA pursuant to and in accordance with the
terms of any Bond resolution and (ii) the periodic fees, charges, and expenses of any trustee and
paying agent in connection with the Bond. The amount of the Pledged Revenues to be paid by CITY
may be increased from time to time by the issuance and sale of additional Bonds.
5.03 CITY shall pay the Pledged Revenues in the amounts and at the times designated in
the Bond Resolutions. City shall pay the Pledged Revenues in addition to the amounts payable
pursuant to Section 4.03 hereof.
5.04 In the event CITY should fail to make any payment required by this article, such
payment shall continue as an obligation of CITY until such overdue amount shall have been fully
paid.
5.05 The parties to this Contract recognize that Bonds may be secured by a trust indenture
with respect thereto and the payments of the Pledged Revenues may be pledged therein. CITY
expressly consents to such procedures and will comply with any such trust indenture securing the
Bonds. The parties to this Contract recognize the necessity of complying with all requirements of
any such trust indenture, including the right of the trustee under any such indenture to require
increases or to permit decreases in the amount of the Pledged Revenues and other payments and to
enforce any remedies described herein.
5.06 The parties to this Contract further recognize that from the proceeds of the sale of the
Bonds, BAWA may establish a reserve fund or funds in the amount or amounts and for the purpose
or purposes set out in any Bond resolution. Such reserve fund or funds shall be used for the payment
of any maturing principal of and interest on the Bonds when the amount in the applicable interest
and sinking fund is insufficient, or for the payment of the last maturing principal of the interest on
the Bonds. BAWA shall invest and reinvest or cause to be invested or reinvested, the reserve fund
or fund in accordance with law, and the income therefrom may be periodically transferred to the
interest and sinking fund applicable to the Bonds; or, in the event that the parties hereto so
determine, a reserve fund or funds in an amount or amounts different from the aforementioned
amount may be established and the income from investment of such additional amount may be
deposited in such reserve funds.
5.07 The source of funds for CITY to make the payments of the Pledged Revenues shall
include any and all available sources that CITY may pledge toward such payments, including gross
0 Amended and Restated Water Supply Contract for Treated Water, Page 9
revenues of appropriate utility systems and those sources provided by Chapters 49 and 54, Texas
Water Code and Section 402.014 of the Texas Local Government Code, as amended.
5.08 A copy of any Bond Resolution, showing the principal amount of and interest rate
on the Bonds, the maturities of the Bonds, the name of the purchaser thereof, and other pertinent
features, must be delivered to and approved by City prior to issuance and delivery of the Bonds.
5.09 The parties to this Contract agree and understand that the holders of the Bonds shall
rely upon such approval of CITY and upon CITY's promise to pay the Pledged Revenues specified
herein. Therefore, CITY covenants and agrees that such payments of the pledged Revenues shall
be made regardless of the status of the acquisition of the Project and without setoff or counterclaim
and, notwithstanding any other provisions of this Contract, the holders of the Bonds shall be entitled
to rely upon the foregoing covenants and agreements regardless of any other agreements between
CITY and BAWA.
ARTICLE VI
REPORTS
6.01 Within fifteen (15) days after the end of each quarterly period during the term of this
Contract, CITY shall furnish BAWA with a statement under oath showing the quantities and sources
of all water for use or resale by CITY.
ARTICLE VII
MEASURING EQUIPMENT
7.01 All measuring equipment shall be owned by BAWA, even when purchased by CITY,
and all measuring equipment shall be located at the Point of Measurement as shown on Exhibit "A."
7.02 During all reasonable hours as determined by the General Manager in his sole
discretion, CITY, BAWA, the City of Houston, and the Coastal Water Authority of Texas shall have
access to the measuring equipment. CITY may have access to all records pertinent to determining
the measurement and quantity of treated water actually delivered hereunder, but the reading of the
measuring equipment for purposes of billing shall be done by BAWA.
7.03 BAWA shall maintain the measuring equipment within the accuracy tolerance
specified in Section 7.04 by periodic tests. BAWA shall conduct such tests at least once every
twelve (12) months and shall notify CITY at least forty -eight (48) hours in advance of the time and
location at which tests are to be made. BAWA agrees to properly test said measuring equipment at
BAWA's cost when requested to do so by CITY once every twelve (12) months. If CITY requests
an additional test within twelve (12) months, BAWA shall charge CITY an amount equal to
0 Amended and Restated Water Supplv Contract for Treated Water, Page 9
BAWA's costs to perform such test unless the test reveals that the equipment registers one hundred
two percent (102 %) or more for a given flow rate. In addition, CITY shall have the right to
independently check, at its own cost, said measuring equipment at any time upon forty -eight (48)
hours' notification to the General Manager and opportunity for the General Manager to witness such
tests.
7.04 Should any test of the measuring equipment in question show that the equipment
registers either more than one hundred two percent (102 %) or less than ninety -five percent (95 %)
of the water delivered for a given flow rate, the total quantity of water delivered to CITY will be
deemed to be the average daily consumption as measured by the measuring equipment when in
working order, and the meter shall be calibrated to the manufacturer's specifications (in the case of
Venturi meters) or the AWWA specifications (for all other types of meters) for the given rate of
flow, or replaced by BAWA with accurate measuring equipment that is tested before it is placed in
service. The adjustment shall be for a period extending back to the time when the inaccuracy began,
if such time is ascertainable; and if such time is not ascertainable, for a period extending back to the
last test of the measuring equipment or one hundred twenty (120) days, whichever is shorter. 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.
As used in this section, the expression "given rate of flow" means one of the following
selected by the General Manager:
(a) the total quantity of water delivered during the preceding period (usually a calendar
month) as reflected by the totalizer, converted to gallons per minute;
(b) high, low and intermediate rates of flow in the flow rate, as reflected by the flow
recording devices;
(c) the applicable Contract Quantity for the current period, usually a calendar month,
converted to gallons per minute; or
(d) AWWA- specified test flow rates for that size and type of meter.
7.05 In the event of a dispute between BAWA and CITY as to the accuracy of the testing
equipment used by BAWA to conduct the accuracy test, an independent check may be mutually
agreed upon between CITY and BAWA and shall be conducted by an independent measuring
equipment company suitable to both CITY and BAWA. The cost of such test shall be at CITY's sole
expense.
0 Amended and Restated Water Supply Contract for Trcated Water, Page 10
• 7.06 CITY may install, at its own cost and expense, such check meters in CITY's pipeline
or canal as may be deemed appropriate, but BAWA shall have the right of ingress and egress to such
check meters during all reasonable hours; provided, however, that billing computations shall be on
the basis of the results of the measuring equipment set forth above.
ARTICLE VIII
BILLING AND PAYMENT
8.01 As used in this Article VIII, the term "day" shall mean a period of twenty -four (24)
consecutive hours beginning at a mutually agreed -upon time on one calendar day and ending at the
same time on the next succeeding calendar day, and the term "month" shall mean a period beginning
at a mutually agreed -upon time on the first day of a calendar month and ending at the same time on
the first day on the next succeeding calendar month.
8.02 The measuring equipment shall be read on the day at the end of each month (or at
such period of frequency arranged between the parties) and at a mutually agreed upon time, or as
near thereto as practicable.
8.03 The quantities of treated water for which payment is due by CITY hereunder in any
month shall be the total quantity of treated water delivered to CITY in such month determined by
the measuring equipment described in Article V hereof.
8.04 BAWA shall bill CITY at CITY's address within ten (10) days after the read date by
a statement showing the quantity of water used during the preceding month. Payment shall be due
and payable to BAWA at its offices in Baytown, Harris County, Texas, on or before the twentieth
day after receipt of such statement. City shall pay Pledged Revenues as provided in Section 5.03.
8.05 Should CITY fail to tender payment of any amount when due, interest thereon shall
accrue at the rate of ten percent per annum from the date when due until paid and CITY shall be
deemed to be in default.
ARTICLE IX
TITLE TO AND RESPONSIBILITY FOR WATER
9.01 As between BAWA and CITY, BAWA shall be in exclusive control and possession
of, and solely responsible for, all treated water deliverable hereunder and solely responsible for any
damage or injury caused thereby until the same shall pass through the Point of Delivery and
thereafter, CITY shall be in exclusive control and possession thereof and solely responsible for any
injury or damage caused thereby. -
0 Amended and Restated Water SUPPlY Contract for Treated Water, Page I I
® 9.02 BAWA MAKES NO WARRANTY, EXPRESS OR IMPLIED, REGARDING THE
QUALITY OR DELIVERY PRESSURE OF TREATED WATER, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
9.03 With respect to all water handling facilities located between the Point of Delivery and
the Point of Measurement, BAWA and CITY specifically agree:
(a) that all such facilities, other than the measurement equipment itself, shall be and
remain the property of CITY subject to the terms of this Contract;
(b) that CITY shall take all reasonable steps to maintain such facilities and to prevent
leaks or discharges from such facilities;
(c) that CITY shall repair any such leak: or discharge at once upon receiving notice
thereof and pay BAWA the price of any water lost by reason of such a leak or
discharge;
(d) that CITY shall correct or repair any damage caused by any such leaf: or discharge
and shall hold BAWA harmless from and against any such damage and claims
therefore;
(e) that CITY shall alter or relocate, at its sole cost, any such facilities whenever BAWA
shall reasonably request in writing that the same be done; and
(1) that CITY shall promptly remove such facilities and restore their locations to their
pre - existing conditions whenever this Contract is no longer in effect and BAWA so
requests in writing.
ARTICLE X
TERM
This Contract as amended and restated shall remain in force and effect until December 3l,
2020, at 8:00 a.m.; provided that this Contract shall continue in effect until all of the Bonds are paid.
ARTICLE XI
PERFORMANCE BY BAWA AND CITY
11.01 BAWA 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 BAWA's ability to perform fully and
punctually its obligations to CITY under this Contract. In case of temporary shortage of water,
® Amended and Restated Water SLIPPly Contract for Treated Water, Page 12
notwithstanding BAWA's compliance with the portions of this Article XI, BAWA shall distribute
the available supply as provided by the laws of the State of Texas, particularly Section 11.039(a) of
the Texas Water Code, as amended.
11.02 Pursuant to the Amendatory Contract entered into by the City of Houston and the San
Jacinto River Authority, which is incorporated herein by this reference, CITY covenants and agrees
that it shall take treated water for the purpose of distribution through its municipal water system, and
such water shall be used for municipal purposes (as such term is defined by TNRCC Rules, currently
in effect or as hereinafter amended) and for no other purposes. CITY covenants and agrees that such
treated water shall be sold, distributed or used and ultimately consumed only for residential
household or other strictly municipal purposes exclusively within the Service Area. No extension
of these boundaries may be made by CITY without written consent of BAWA as well as the written
consent of the San Jacinto River Authority and City of Houston, when required pursuant to the
Water Supply Contract between the City of Houston and BAWA, dated October 24, 1994. CITY
agrees to include covenants similar to those contained in this Section 11.02 in any sales or contracts
for sale of water by CITY to any other entity. CITY agrees to submit the wording of such covenants
to BAWA for the written approval of BAWA and all other required entities prior to entering into
such contracts.
CITY understands and agrees that BAWA, the City of Houston and/or the San Jacinto River
Authority may enforce the covenants contained in Section 11.02 herein by an action brought directly
against CITY. In the event that BAWA and/or the City of Houston maintains any legal proceeding
to enforce such covenants, CITY agrees to indemnify BAWA and /or the City of Houston in the
amount of all expenses relating to the legal proceeding, including, but not limited to, costs of court
and reasonable attorneys' fees.
11.03 CITY acknowledges that according to the terms of the contract between BAWA and
the City of Houston, BAWA may be liable to the City of Houston and /or the San Jacinto River
Authority for monetary damages in the event that CITY (or any purchaser of water from or through
CITY) fails to comply with the restrictions and limitations on the sale of water set out in Section
11.02 herein. CITY acknowledges that such monetary damages would amount to seventy -five
percent (75 %) of the consideration or revenue received by BAWA for the estimated amount of water
distributed, sold or used in violation of such restrictions or limitations, plus all litigation expenses,
reasonable attorneys' fees, and all other remedies available to the City of Houston and /or the San
Jacinto River Authority. CITY hereby agrees to totally indemnify, defend, and save BAWA
harmless from and against any such expenses and liability which BAWA might incur or any loss
BAWA might suffer, as a result of any failure by CITY, or any purchaser of water from or through
CITY, to comply with such restriction and limitation. CITY agrees that in the event that CITY
furnishes or sells water or water services to a third party that in turn wi II furnish water to the ultimate
consumer, CITY shall include covenants in any such sales or contracts for sale of water to such third
party(ies) to ensure that said other entity(ies) will likewise indemnify, hold harmless, and defend
0 Amended and Restated Water Su pply Contract for Treated Water, Page 13
® BAWA. CITY agrees to submit the wording of such covenants for the approval of BAWA prior to
entering into such contracts.
CITY acknowledges that according to the terms of the contract between the City of Houston
and the San Jacinto River Authority, the City of Houston may be liable to the San Jacinto River
Authority for monetary damages in the event that CITY (or any purchaser of water from or through
CITY) fails to comply with the restrictions and limitations on the sale of water set out in Section
11.02 herein. CITY 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 attorneys' fees, and all other remedies available to the San Jacinto
River Authority. CITY hereby agrees to fully indemnify, defend, and save the City of Houston
harmless 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 CITY, or any purchaser of
water from or through CITY, to comply with such restrictions and limitations. CITY agrees that in
the event that CITY furnishes or sells water or water services to a third party that in turn will furnish
water to the ultimate consumer, CITY shall include covenants in any such sales or contracts for sale
of water to such third party(ies) to ensure that said other entity(ies) will likewise indemnify, hold
harmless, and defend the City of Houston. CITY agrees to submit the wording of such covenants
for the approval of BAWA and the City of Houston prior to entering into such contracts.
11.04 CITY agrees to maintain, at its sole expense, its water wells, if any, in good repair
and working order to facilitate the use of such water wells as an emergency source of supply, if
required, should BAWA be unable to deliver the Contract Quantity of water for any reason. CITY
shall bear all costs of maintaining and supplying such emergency sources of supply.
ARTICLE XII
ENVIRONMENTAL CONSIDERATIONS
12.01 On or before the first anniversary of the effective date of this contract, CITY shall
approve, implement and throughout the term hereof remain in full compliance with a water
conservation program in accordance with the requirements of the TNRCC. 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 TNRCC adopts new requirements, CITY shall adopt an
amended plan and submit the same to the appropriate authority for review and approval.
12.02 CITY agrees that in the event that CITY furnishes or sells water or water services to
a third party that in turn will furnish water to the ultimate consumer, the requirements of this
Contract relative to water conservation shall be met through contractual agreements between CITY
and the third party, providing for the implementation and continued compliance with a water
conservation program consistent with the requirements of the TNRCC.
0 Amended and Restated Water Supply Contract for Treated Water, Page 14
ARTICLE XIII
REMEDIES UPON DEFAULT
13.01 In the event of any default by CITY in the performance of any of CITY's obligations
hereunder which shall continue for a period of thirty (30) days or more, BAWA shall give written
notice to CITY specifying the matter with respect to which CITY is in default and requesting that
the same be remedied with promptness and dispatch. In the event CITY, within forty -five (45) days
after the mailing of such notice by BAWA, has failed to remedy the matter in default, BAWA may
suspend further delivery of treated water to CITY hereunder; and in the event such default on the
part of CITY continues for an additional thirty (30) days, BAWA may, by an additional written
notice to CITY, cancel and terminate this contract, whereupon all rights of CITY and all obligations
of BAWA hereunder shall terminate and be at an end. The exercise of such rights shall be in
addition to any other remedies available to BAWA under the laws of the State of Texas.
13.02 During any monthly period in which BAWA is unable to deliver to CITY, CITY's
daily requirements of water, whether as a result of temporary curtailments resulting from temporary
shortages as provided in Section 1 1.01 hereof or of force majeure as provided in article XI I hereof,
CITY shall be obligated to pay BAWA only for the quantities of treated water actually delivered to
CITY under this contract during such month. During any such period, CITY shall be free to obtain
treated water from other sources. The provisions of this section shall not relieve the City of its
obligation to pay Pledged Revenues.
13.03 The failure of either party to insist in anyone or more instance upon performance of
any of the terms, covenants or conditions of this Contract, shall not be construed as a waiver or
relinquishment of the future performance of any such term, covenant, or condition by the other party
hereto, but the obligation of such other party with respect to future performance shall continue in full
force and effect.
ARTICLE XIV
FORCE MAJEURE
I4.01 In the event either party is rendered unable, wholly or in part, by force majeure to
carry out any of its obligations under this Contract other than the payment of money, or in the event
CITY is rendered unable, wholly or in part, by force majeure to operate CITY's facilities, it is agreed
that on such party's giving notice and full particulars of such force majeure in writing or by telefax
or telegraph to the other party as soon as possible after the occurrence of the cause relied upon, then
the obligations of the party given 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
0 Amended and Restated Water SugglY Contract for Treated Water, Page 15
® be suspended during the continuance of any inability so caused as to the extent provided but for no
longer period. Such cause shall as far as possible be remedied with all reasonable dispatch.
14.02 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, lighting, earthquakes, fires, storms, floods, washouts,
droughts, tornadoes, hurricanes, arrests and restraints of government and people, explosions,
breakage or damage to machinery, equipment, pipelines or canals, and any other inabilities of either
party whether similar to those enumerated or otherwise and not within the control of the party
claiming such inability which by the exercise of due diligence and care such party could not have
avoided.
14.03 It is understood and agreed that the settlement of strikes or lockouts shall be entirely
within the discretion of the party having the difficulty and the above 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.
14.04 CITY shall not be guaranteed any specific quantity or pressure of water whenever
BAWA's treated water supply is limited or when BAWA's equipment may become inoperative due
to unforeseen breakdown or scheduled maintenance and repairs, and BAWA is in no case to be held
to any liability for failure to furnish any specific amount or pressure of water. BAWA agrees that
it will attempt to make any necessary repairs or adjustments to its equipment within reasonable times
mutually agreeable to both parties. It is further agreed that BAWA may, without liability of default,
interrupt its services hereunder to make necessary alterations to or repairs in its facilities, but only
if such interruption cannot otherwise reasonably be avoided. BAWA shall schedule interruptions
in advance after consultation with CITY.
ARTICLE XV
ADDRESS AND NOTICES
15.01 Until CITY is otherwise notified in writing by BAWA, the address of BAWA is and
shall remain as follows:
Baytown Area Water Authority
Attn: General Manager
2401 Market Street
Baytown, Texas 77520
Until BAWA is otherwise notified in writing by CITY, the address of CITY is and shall
remain as follows:
® Amended and Restated Water Supplv Contract for Treated Water, Page 16
® City of Baytown
Attn: City Manager
2401 Market Street
Baytown, Texas 77520
15.02 All written notices, statements, and payments required or permitted to be given under
this Contract from one party to the other shall be deemed given by telefax or the deposit in a United
States Postal Service mailbox or receptacle of certified or registered mail, with proper postage
affixed thereto, addressed to the respective other party at the address set forth above or at such other
address as the parties respectively shall designate by written notice.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
16.01 This contract shall bind and benefit the respective parties and their legal successors,
but shall not otherwise be assignable, in whole or in part, by either party without first obtaining the
written consent of the other; provided, however, that CITY shall have the right, without any consent
of BAWA to pledge or otherwise assign CITY's rights hereunder to the extent required by any
mortgage, deed of trust or other similar agreement to which CITY may be, or hereafter become a
party ; and provided, further, however, that no successor or assignee of CITY shall be entitled to
receive water or sell water to a third party under this Contract unless and until the City of Houston
and the San Jacinto River Authority give their written consent to such assignment.
16.02 This Contract shall be for the sole and exclusive benefit of BAWA and CITY and
shall not be construed to confer any rights upon any third party, except as expressly provided in
Article V. BAWA shall never be subject to any liability in damages to any customer of CITY for
any failure to perform under this Contract.
16.03 This Contract shall be subject to all present and future valid laws, orders, rules and
regulations of the United States of America and the State of Texas and of any regulatory body having
jurisdiction.
16.04 This instrument contains all the agreements made between the parties concerning the
sale and delivery of water by BAWA to CITY at the Point of Delivery set out in this Contract.
16.05 The construction, interpretation and performance of this Contract shall be governed
by the laws of the State of Texas.
0 Amended and Restated Water SunPiv Contract for Treated Water, Page 17
® 16.06 All parties agree that should any provision of this Contract be determined to be
invalid or unenforceable, such determination shall not affect any other term of this Contract, which
shall continue in full force and effect.
16.07 Each party has the full power and authority to enter into and perform this Contract,
and the person signing this Contract on behalf of Each party has been properly authorized and
empowered to enter into this Contract. The persons executing this Contract hereby represent that
they have authorization to sign on behalf of their respective entities.
16.08 The parties acknowledge that they have read, understand and intend to be bound by
the terms and conditions of this Contract.
IN WITNESS WHEREOF, the parties hereto have executed this contract as of the 2-) day
of October, 1997, in multiple copies each of which shall be deemed to be an original, but all of
which shall constitute but one and the same contract.
CITY OF BAYTOWN
PETE C. ALFARO, Mayor
ATTEST:
EILEEN P. HALL, City Clerk
BAYTOWN AREA WATER AUTHORITY
ROBERT L. GILLETTE, President
ATTEST:
PETER R. BUEN7, Secretary
c:kfh631f1A WAMCityofflaytoanDA WA. AmcndcdRcstatedContract
isAmended and Restated Water Supply Contract for Treated Water, Page 18