Ordinance No. 10,572ORDINANCE NO. 10,572
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS,
APPROVING A WATER SUPPLY CONTRACT -TREATED WATER BETWEEN THE
BAYTOWN AREA WATER AUTHORITY AND LAKE MUNICIPAL UTILITY DISTRICT;
AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
WHEREAS, the Baytown Area Water Authority's enabling legislation requires that the City Council
approve the contract before Baytown Area Water Authority ("BAWA") enters into the same; and
WHEREAS, on August 16,2006, the Board of Directors of BAWA met and decided to approve a Water
Supply Contract -Treated Water between BAWA and Lake Municipal Utility District subject to the approval of
both the City of Baytown and the City of Houston; and
WHEREAS, the proposed agreement is similar to that executed between BAWA and the City of
Baytown and is consistent with the requirements contained in BAWA's agreement with the City of Houston; and
WHEREAS, this contract will supersede the Wholesale Water Supply Contract between the parties dated
December 4, 1980, and all amendments thereto and will expire December 31, 2020; and
WHEREAS, the contract quantity has increased from 0.100 MGD to 1.0 MGD; and
WHEREAS, the City of Baytown desires to approve the Water Supply Contract-Treated Water between
BAWA and Lake Municipal Utility District; NOW THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:
Section 1: That the recitals set forth hereinabove are hereby found to be true and correct.
Section 2: That the City Council of the City of Baytown, Texas, hereby approves a Water Supply
Contract -Treated Water between the Baytown Area Water Authority and Lake Municipal Utility District. A
copy of said contract is attached hereto as Exhibit "A" and incorporated herein for all intents and purposes.
Section 3: This ordinance shall take effect immediately frotuand after its passage by the City
Council of the City of Baytown.
INTRODUCED, READ and PASSED by the affirmative vote op(h\ City Council of the City of Baytown
this the 22nd day of March, 2007. />*TS« /
STEPI DONCARLOS, Mayor
, City Clerk
APPROVED AS TO FORM:
JACIO RAMIREZ, SR., C^Attorney
R:\Karen\Files\CityCouncil\Ordinances\2007\March22\ApprovingBAWAConlractWithLakeت
Water Supply Contract — Treated Water
Lake Municipal Utility District
STATE OF TEXAS §
§
COUNTY OF HARRIS §
This Water Supply Contract ~ Treated Water, hereinafter referred to as the "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, 1973, hereinafter
referred to as "BAWA," and the Lake Municipal Utility District, having a mailing address of 600
Jefferson, Suite 780, Houston, TX 77002-7395, hereinafter referred to as the "District."
WHEREAS, BAWA has the right under a contract with the City of Houston to buy untreated
waters from the City of Houston; and
WHEREAS, BAWA has constructed certain facilities to treat and deliver the aforementioned
untreated water to the DISTRICT as treated water at several points of delivery; and the DISTRICT
has constructed or caused to be constructed certain facilities to enable the DISTRICT to receive the
aforementioned treated water; and
WHEREAS, BAWA is desirous of selling large quantities of treated water from such source
or sources to the DISTRICT, and the DISTRICT, subject to the terms hereof, is desirous of
purchasing from BAWA its treated water requirements; and
WHEREAS, BAWA and DISTRICT have found, and do hereby find, that BAWA and
DISTRICT 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, the DISTRICT is authorized to enter into a contract for the purchase of treated
water from BAWA pursuant to the Texas Water 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 63rd Legislature, Regular Session, 1973.
1.02 "BAWA Contract" means the Water Supply Contract and the Contract Amendment
A
between the City of Houston and Baytown Area Water Authority, dated October 24,1994,
and January 3, 2005, respectively. Copies of such contract and amendment are attached
hereto and incorporated herein for all intents and purposes as Exhibits "A" and "B"
respectively.
1.03 "Beginning Date" shall mean the date that DISTRICT begins receiving treated water
from BAWA under this Contract or the effective date hereof, whichever is later. Such date
may occur after the effective date of this Contract as defined in Article IX. Provided,
however, that if DISTRICT does not begin receiving treated water within one year of the
effective date hereof, BAWA shall be under no further obligation to supply DISTRICT with
treated water.
1.04 "DISTRICT'S Facilities" shall mean facilities constructed by DISTRICT to enable
DISTRICT to receive treated water.
1.05 "Contract Quantity" shall mean the maximum quantity of treated water that BAWA
agrees to reserve and sell to DISTRICT pursuant to Section 2.01 herein.
1.06 "Contract Term" is defined in Article IX.
1.07 "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 DISTRICT.
1.08 "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.
1.09 "Point of Delivery" shall mean those delivery points as indicated on Exhibit "C,"
which is attached hereto and incorporated herein for all intents and purposes, to which
BAWA agrees to deliver treated water to DISTRICT.
1.10 "Point of Measurement" shall mean the location of the meter at which DISTRICT'S
consumption of water is measured, more particularly described in Exhibit "C."
1.11 "Project" 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 (herein 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 DISTRICT pursuant to the
terms of the Contract.
1.12 "Service Area" shall mean the area within the boundaries more particularly described
in Exhibit "D," which is attached hereto and incorporated herein for all intents and purposes.
1.13 "TCEQ" shall mean the Texas Commission on Environmental Quality or its
successor.
1.14 "Water" shall mean potable water meeting the minimum drinking water standards
prescribed by Texas Department of Health Resources and Texas Commission on
Environmental Quality, and their successor agencies.
ARTICLE II
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 DISTRICT, all of DISTRICT'S water
requirements of treated water at the Points of Delivery at daily rates of delivery; and DISTRICT
agrees to purchase from BAWA, all of DISTRICT'S treated water requirements for resale at the
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 DISTRICT treated water in excess of the Contract
Quantity which shall be the monthly average per day of 1.000 MGD.
2.02 The Points of Delivery for treated water sold under this contract shall be designated
in writing by DISTRICT; provided, however, BAWA reserves the right to reject any Point of
Delivery designated by DISTRICT 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. Both BAWA and DISTRICT agree that the Points of Delivery shall be those
indicated on Exhibit "C," which is attached hereto and incorporated herein for all intents and
purposes. Additionally, DISTRICT may give BAWA notice in writing of any additional or change
in Point(s) of Delivery designated by DISTRICT, 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 DISTRICT 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 TCEQ in its rules) and shall be
only used by DISTRICT within the Service Area.
2.05 If DISTRICT wishes to reserve for itself additional monthly quantities of treated
water, DISTRICT must notify BAWA in writing of DISTRICT'S desire to do so. The General
Manager may, at his discretion after considering the treated water requirements of DISTRICT and
BAWA's obligations and commitments, increase the quantity of treated water supplied to
DISTRICT; provided, however, that BAWA shall be under no obligation to deliver treated water in
excess of Contract Quantity. BAWA may, at its discretion, discontinue delivery of such additional
monthly requirements of treated water by giving DISTRICT thirty (30) days' written notice.
2.06 DISTRICT 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
DISTRICT.
ARTICLE III
CONSTRUCTION OF THE PROJECT
3.01 DISTRICT agrees to proceed promptly with the acquisition and construction of the
Project with monies lawfully available for such purpose after obtaining written approval of the plans
and specifications from BAWA. However, such approval shall not be deemed to be for the benefit
of DISTRICT, but rather just for the protection of BAWA's system.
3.02 If DISTRICT desires to materially revise the scope of or the plans and specifications
for the Project, such proposed revisions shall be submitted to BAWA for approval. If BAWA
approves such revisions, the Project shall be modified.
ARTICLE IV
RATES AND PRICES
4.01 DISTRICT 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 shall
periodically establish rates for the purchase of treated water. Billing at the rate for water as specified
hereinbelow shall not commence until the effective date of this Contract.
4.02 Whenever DISTRICT'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 DISTRICT for which DISTRICT is
obligated to pay hereunder shall be sold to DISTRICT at the rate of $ 1.29 per one thousand gallons.
4.04 The amount of water delivered to DISTRICT shall be measured by the metering
equipment located at the point of delivery.
4.05 Additionally, DISTRICT 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 DISTRICT 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
REPORTS
5.01 Within fifteen (15) days after the end of each quarterly period during the term of this
Contract, DISTRICT shall furnish BAWA with a statement under oath showing the quantities and
sources of all water for use or resale by DISTRICT.
ARTICLE VI
MEASURING EQUIPMENT
6.01 At its own cost and expense, DISTRICT shall furnish and install at the Point of
Delivery hereunder, measuring equipment properly equipped with meters, totalizers and devices of
standards type for measuring and recording accurately the quantity of water delivered under this
Contract. The meters shall have a capacity for measuring the quantity of water delivered within an
accuracy tolerance of two percent (2%) plus or minus for a given rate of flow. Such measuring
equipment shall be approved by BAWA and after BAWA's approval of the installation, same shall
become property of BAWA. All measuring equipment shall be owned by BAWA, even when
purchased by DISTRICT, and all measuring equipment shall be located at the Point of Delivery as
shown on Exhibit "C." At its own cost and expense, DISTRICT shall also install, operate and
maintain as required by BAWA, pressure regulating devices and equipment. These pressure
regulating devices and equipment shall remain the property of the DISTRICT, but shall be approved
by BAWA.
6.02 During all reasonable hours as determined by the General Manager in his sole
discretion, BAWA, the City of Houston, and the Coastal Water Authority of Texas shall have access
to the measuring equipment. DISTRICT 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.
6.03 After approved installation thereof, BAWA shall maintain the measuring equipment
within the accuracy tolerance specified in Section 6.04 by periodic tests. BAWA shall conduct such
tests at least once every twelve (12) months and shall notify DISTRICT 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 DISTRICT once every
twelve (12) months. If DISTRICT requests an additional test within twelve (12) months, BAWA
shall charge DISTRICT an amount equal to 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, DISTRICT 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.
6.04 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 DISTRICT 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.
6.05 In the event of a dispute between BAWA and DISTRICT 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 DISTRICT and BAWA and shall be conducted by an independent
measuring equipment company suitable to both DISTRICT and BAWA. The cost of such test shall
be at DISTRICT'S sole expense.
6.06 DISTRICT may install, at its own cost and expense, such check meters in
DISTRICT'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 VII
BILLING AND PAYMENT
7.01 As used in this Article VII, 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.
7.02 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.
7.03 The quantities of treated water for which payment is due by DISTRICT hereunder in
any month shall be the total quantity of treated water delivered to DISTRICT in such month
determined by the measuring equipment described in Article VI hereof.
7.04 BAWA shall bill DISTRICT at DISTRICT'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.
7.05 Should DISTRICT fail to tender payment of any amount when due, interest thereon
shall accrue at the rate often percent per annum from the date when due until paid and DISTRICT
shall be deemed to be in default.
ARTICLE VIII
TITLE TO AND RESPONSIBILITY FOR WATER
8.01 As between BAWA and DISTRICT, 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, DISTRICT shall be in exclusive control and possession thereof and solely
responsible for any injury or damage caused thereby.
8.02 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.
8.03 With respect to all water handling facilities located between the Point of Delivery
and the Point of Measurement, BAWA and DISTRICT specifically agree:
(a) that all such facilities, other than the measurement equipment itself, shall be and
remain the property of DISTRICT subject to the terms of this Contract;
(b) that DISTRICT shall take all reasonable steps to maintain such facilities and to
prevent leaks or discharges from such facilities;
(c) that DISTRICT 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 DISTRICT shall correct or repair any damage caused by any such leak or
discharge and shall hold BAWA harmless from and against any such damage and
claims therefore;
(e) that DISTRICT shall alter or relocate, at its sole cost, any such facilities whenever
BAWA shall reasonably request in writing that the same be done; and
(f) that DISTRICT 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 IX
TERM
This Contract shall be in force and effect beginning on the date of execution by BAWA until
December 31,2020, at 8:00 a.m.
ARTICLE X
PERFORMANCE BY BAWA AND DISTRICT
10.01 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 DISTRICT under this Contract. In case of temporary shortage of water,
notwithstanding BAWA's compliance with the portions of this Article X, 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.
10.02 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, DISTRICT covenants and
agrees that it shall take treated water for the purpose of distribution through its system, and such
water shall be used for municipal purposes (as such term is defined by TCEQ Rules, currently in
effect or as hereinafter amended) and for no other purposes. DISTRICT 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 DISTRICT 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.
DISTRICT agrees to include covenants similar to those contained in this Section 10.02 in any sales
or contracts for sale of water by DISTRICT to any other entity. DISTRICT 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.
DISTRICT understands and agrees that BAWA, the City of Houston and/or the San Jacinto
River Authority may enforce the covenants contained in Section 10.02 herein by an action brought
directly against DISTRICT. In the event that BAWA and/or the City of Houston maintains any legal
proceeding to enforce such covenants, DISTRICT 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.
10.03 DISTRICT 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 DISTRICT (or any purchaser of water from or
through DISTRICT) fails to comply with the restrictions and limitations on the sale of water set out
in Section 10.02 herein. DISTRICT 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 attorney's fees, and all other remedies available to the City of
Houston and/or the San Jacinto River Authority. DISTRICT 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 DISTRICT, or any
purchaser of water from or through DISTRICT, to comply with such restriction and limitation.
DISTRICT agrees that in the event that DISTRICT furnishes or sells water or water services to a
third party that in turn will furnish water to the ultimate consumer, DISTRICT 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 BAWA. DISTRICT agrees to
submit the wording of such covenants for the approval of BAWA prior to entering into such
contracts.
DISTRICT 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 DISTRICT (or any purchaser of water from
or through DISTRICT) fails to comply with the restrictions and limitations on the sale of water set
out in Section 10.02 herein. 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's fees, and all other remedies available
to the San Jacinto River Authority. DISTRICT 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
DISTRICT, or any purchaser of water from or through DISTRICT, to comply with such restrictions
and limitations. DISTRICT agrees that in the event that DISTRICT furnishes or sells water or water
services to a third party that in turn will furnish water to the ultimate consumer, DISTRICT 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.
DISTRICT agrees to submit the wording of such covenants for the approval of BAWA and the City
of Houston prior to entering into such contracts.
10.04 DISTRICT 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.
DISTRICT shall bear all costs of maintaining and supplying such emergency sources of supply.
ARTICLE XI
ENVIRONMENTAL CONSIDERATIONS
11.01 On or before the first anniversary of the effective date of this contract, DISTRICT
shall approve, implement and throughout the term hereof remain in full compliance with a water
conservation program, including, but not limited to, a drought contingency plan, 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, DISTRICT shall adopt an amended plan and submit the same to the
appropriate authority for review and approval.
11.02 DISTRICT agrees that in the event that DISTRICT 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
DISTRICT and the third party, providing for the implementation and continued compliance with a
water conservation program consistent with the requirements of the TCEQ.
ARTICLE XII
REMEDIES UPON DEFAULT
12.01 In the event of any default by DISTRICT in the performance of any of DISTRICT'S
obligations hereunder which shall continue for a period of thirty (30) days or more, BAWA shall
give written notice to DISTRICT specifying the matter with respect to which DISTRICT is in
default and requesting that the same be remedied with promptness and dispatch. In the event
DISTRICT, 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 DISTRICT
hereunder; and in the event such default on the part of DISTRICT continues for an additional thirty
(30) days, BAWA may, by an additional written notice to DISTRICT, cancel and terminate this
contract, whereupon all rights of DISTRICT 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.
12.02 During any monthly period in which BAWA is unable to deliver to DISTRICT,
DISTRICT'S daily requirements of water, whether as a result of temporary curtailments resulting
from temporary shortages as provided in Section 10.01 hereof or of force majeure as provided in
10
Article XIII hereof, DISTRICT shall be obligated to pay BAWA only for the quantities of treated
water actually delivered to DISTRICT under this contract during such month. During any such
period, DISTRICT shall be free to obtain treated water from other sources.
12.03 The failure of either party to insist in any one 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 XIII
FORCE MAJEURE
13.01 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
DISTRICT is rendered unable, wholly or in part, by force majeure to operate DISTRICT'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 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.
13.02 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.
13.03 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.
13.04 DISTRICT 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,
11
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 DISTRICT.
ARTICLE XIV
ADDRESS AND NOTICES
14.01 Until DISTRICT is otherwise notified in writing by BAWA, the address of BAWA is
and shall remain as follows:
Baytown Area Water Authority
Attn: General Manager
P.O. Box 424
Baytown, Texas 77522
Until BAWA is otherwise notified in writing by DISTRICT, the address of DISTRICT is and
shall remain as follows:
Lake Municipal Utility District
Attn: President
c/o Bacon & Wallace, L.L.P
John R. Wallace
600 Jefferson, Suite 780
Houston, TX 77002-7395
14.02 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 XV
MISCELLANEOUS PROVISIONS
15.01 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 DISTRICT shall have the right, without any
consent of BAWA to pledge or otherwise assign DISTRICT'S rights hereunder to the extent required
by any mortgage, deed of trust or other similar agreement to which DISTRICT may be, or hereafter
become a party; provided that, DISTRICT'S successor or assignee, as the case may be, is a
responsible person or entity and shall (by operation of law or otherwise) expressly assume
DISTRICT'S obligations hereunder; and provided, further, however, that no successor or assignee of
DISTRICT shall be entitled to receive water or sell water to a third party under this Contract unless
12
and until the City of Houston and the San Jacinto River Authority give their written consent to such
assignment.
15.02 This Contract shall be for the sole and exclusive benefit of BAWA and DISTRICT
and shall not be construed to confer any rights upon any third party, except as expressly provided in
Article X. BAWA shall never be subject to any liability in damages to any customer of DISTRICT
for any failure to perform under this Contract.
15.03 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.
15.04 This instrument contains all the agreements made between the parties concerning the
sale and delivery of water by BAWA to DISTRICT at the Point of Delivery set out in this Contract.
This Contract supersedes any prior negotiations, agreements, or understandings relating to the
subject matters hereof, including the Wholesale Water Supply Contract dated December 4,1980, and
all amendments thereto.
15.05 The construction, interpretation and performance of this Contract shall be governed
by the laws of the State of Texas, and venue shall lie in Harris County, Texas.
15.06 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. 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.
15.07 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.
15.08 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 day of
, 2006, 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.
BAYTOWN AREA WATER AUTHORITY
)BERT L. GILLETTE, President
13
ATTEST:
PETER R. BUENZ, Seen
APPROVED AS TO FORM:
IGNACIO RAMIREZ, SR., General Counsel
LAKE MUNICIPAL UTILITY DISTRICT
Signature
C
Printed Name
Title
STATE OF TEXAS
COUNTY OF HARRIS
§
§
§
3~trL*
Ml (d
Before me,
personally appeared
Municipal Utility District
t/1 known to me
proved to me on the oath of
, the undersigned notary public, on this day
in his/her capacity as of Lake
or
proved to me through his/her current
{description of identification card or other document issued by the federal
government or any state government that contains the photograph and signature of
the acknowledging person}
(check one)
to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that
he/she executed that instrument for the purposes and consideration therein expressed.
Given under my hand and seal of office this /§toay of CFu
John R.Wallace
Notary Publ.c
state of Texas
My Commission 6*Plr°* , October 23,2008^
,2006.
Notan^Public in and for the State of Texas
My commission expires:
14
APPROVED TO CONFORMING TO
REQUIREMENTS OF CONTRACT
NO. 34739, SECTIONS 9.2 AND 9.3:
ARTURO G. MICHEL, City Attorney
CITY OF HOUSTON
R:\Karcn\Filcs\BAWA\Amcnded Contracts 2006\WaierSupplyContract-LokeMUD.doe
15
• ,'
August 8, 1994
• •• • ■.« f \
WATER SUPPLY CONTRACT BETWEEN
THE CITY OF HOUSTON AND
BAYTOWN AREA WATER AUTHORITY
THE STATE OF TEXAS §
COUNTY OF HARRIS §
1
t
THIS CONTRACT (this "Contract") made and entered into by and between the City of
Houston, Texas a municipal corporation and home-rule city, which is principally situated and has
its City Hal! in Harris County, Texas (hereinafter called "Seller"), and the Baytown Area Water
Authority, a governmental entity and a body politic and corporate which is situated and has its
principal office at Baytown, Harris County, Texas (hereinafter called "Buyer"),
wiTNESSETH:
WHEREAS, Seller has the right under certain water permits to divert waters from the TrinKy
River Basin, the Lake Livingston Reservoir, and the Wallisville Reservoir, and may acquire water
rights in other basins and reservoirs; and
WHEREAS, Seller has constructed and is constructing certain facilities to enable delivery
of the aforementioned water to Buyer at a single point of delivery and Buyer has constructed
certain facilities to enable Buyer to receive the aforementioned water, treat it so as to make it
potable, and distribute it; and
WHEREAS, Seller desires to sell large quantities of Untreated Water from such source or
sources to Buyer and Buyer intends to purchase its Untreated Water requirements from Seller for
treatment and resale; and
WHEREAS, Seller and Buyer have found, and do hereby find, that Seller and Buyer are
authorized by the Laws of the State of Texas to enter into contracts for the sale of water upon
such terms and lor the period of lime as are hereinafter set forth, and Seller and Buyer specifically
EXHIBIT A
contemplate the provisions of Tex. Rev. Civ. Stat. Ann. art. 4413(320 and Tex. Loc. GoVt Code
Ann 402.021, as they have been enacted to the date of this Contract, in making these findings;
and .
WHEREAS, Seller has entered an amendatory contract with the San Jacinto River Authority,
which grants Seller conditional permission to sell water to Buyer upon payment to the San Jacinto
River Authority the sum of Fifty ($50.00) Dollars per day during the term of this Contract.
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 ; t
As used in this Contract, the following terms are intended and used herein and shall be
construed to have meanings as follows:
n) The term "Beginning Date" shall mean the date that Buyer begins receiving
Untreated Water from Seller under this Contract or the effective date hereof, whichever is
later. Such date may occur after the effective date of this Contract as defined in Article
VMi. Provided, however, that if Buyer does not begin receiving Untreated Water within one
year of the effective date hereof, Seller shall be under no further obligation to supply Buyer
with Untreated Water.
|2) The term "Buyer's Facilities" shall mean facilities constructed by Buyer to enable
Buyer to receive Untreated Water.
(3j The term "Contract Quantity" shall mean the maximum quantity of Untreated Water
that the Seller agrees to reserve and sell to Buyer pursuant to Section 2.1 herein.
,4) The term "Contract Term" is defined in Article VIII.
,5) The term "Director" shall mean the Director of the Department of Public Works and
Engineering of the City of Houston or any successor department and all persons designated
by the Director to administer the sale and delivery of Untreated Water to Buyer.
-2-
I •
1 The term "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.
(7) The term "Point of Delivery" shall mean the location, in Texas coordinates, to which
Seller agrees to deliver Untreated Water to Buyer more particularly described in Exhibit "A"
attached hereto and incorporated herein for all purposes.
,8) The term "Point of Measurement" shall mean the location, in Texas coordinates, of
the meter at which Buyer's consumption of water is measured more particularly described
in Exhibit "A" attached hereto and incorporated herein for all purposes.
{9) The term "Surface Water Source" shall mean those water rights in reservoirs.
basins, and other facilities now owned or hereinafter acquired by Seller and shall be
modified by any water rights hereinafter acquired or deleted at the sole discretion of the
Seller.
(10) The term "Surface Water System" shall mean all facilities and Surface Water
Sources now owned or hereinafter acquired or constructed by Seller for the purpose of
supplying Untreated Water.
(11) The term "Surface Water System Costs" shall mean all costs budgeted for
expenditure by Seller in Seller's annual budget as approved by Seller's governing body or
actually incurred by Seller in acquiring, constructing, financing, administrating, operating,
and maintaining the Surface Water System and a reasonable allowance for depreciation and
replacement of the Surface Water System.
(12) The term "TNRCC" shall mean the Texas Natural Resource Conservation
Commission and its successor.
-3-
t ■ -
(13) The term "Untreated Water" shall mean water supplied to Buyer from basins and
reservoirs, whatever the source, which has not been treated in any manner. ,
ARTICLE II.
Sale and Pftliverv of Water : :
2 1 Subject to the terms and conditions of this Contract, during the Contract Term Seller
hereby agrees to sell and deliver to Buyer and Buyer agrees to purchase from Seller Untreated
Water at the Point of Delivery shown in attached Exhibit "A" at daily rates of delivery Is may be
needed by Buyer; provided, however, that under no circumstances shall the Seller be obligated to
deliver to Buyer Untreated Water in excess of the Contract Quantity of 11.9 MGD.
2 2 Buyer agrees to purchase at least 90% of its water requirements' frofti Seller as
required under the Code of Ordinances. Any change to the location or existing connection facilities
must be approved both by Buyer and the Director.
2 3 Regardless of the Surface Water Source as defined by the Seller at any time.
Untreated Water may be delivered to Buyer from any source or combination of sources available
to the Seller.
2 4 Untreated Water delivered by Seller to Buyer shall be used only for municipal
purposes (as such term is defined by the TNRCC in its rules), and such Untreated Water shall be
used only within Buyer's service area shown on Exhibit "B."
2 5 If Buyer wishes to reserve for itself additional monthly quantities of Untreated
Water. Buyer must notify Seller in writing of Buyer's desire to do so. The Director may, at its
discretion after considering the Untreated Water requirements of the Seller and its obligations and
commitments, increase the quantity of Untreated Water supplied to Buyer; provided, however, that
Seller shall be under no obligation to deliver Untreated Water in excess of the Contract Quantity.
Seller may, at its discretion, discontinue delivery of such additional monthly requirements of
Untreated Water by giving Buyer 30 days written notice.
-4-
1 ' ARTICLE III.
s and Prices
" ■ 3' 1 (a) The charge for all Untreated Water sold and delivered by Seller to Buyer shall
be calculated in accordance with the rates for untreated water customers as set forth in Article
II Division 2, entitled "Untreated Water," of Chapter 47 of the Code of Ordinances of the City of
Houston as amended, and as such provisions may be amended in the future, incorporated by
reference as fully and completely as if copied herein in full.
(b) Billing at the rate for Untreated Water shall not commence until the Beginning Date
of service ofi or after the effective date of this Contract.
(C) Whenever Buyer's consumption shall exceed the Contract Quantity by 10%, a 5%
rcharge 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
Untreated Water granted by the Director under Section 2.5.
3 2 Additionally, Buyer understands and agrees that Seller may at any time by ordinance
duly enacted, increase or change the price or prices for Untreated Water as set forth in the Code
of Ordinances.
3 3 Buyer recognizes Seller owns and operates an extensive surface water system and
will continue to add capacity to such system by acquisition and construction of new facilities and
water rights and agrees that the cost of providing Untreated Water shall be recalculated
periodically by Seller, taking into account all Surface Water System Costs, regardless of the point
of delivery.
-5-
ARTICLE IV.
Reports •'■'■., 1 I
Within thirty days after the end of each quarterly period during the term of this Contract,
Buyer shall furnish Seller with a statement under oath showing the quantities and sources of all
ter (1) used or sold by Buyer to its customers and (2) all Untreated Water received from Seller
during such quarterly period.
ARTICLE V. ' *
Measuring Equipment
5 -i All measuring equipment shall be owned by Seller, even when purchased by Buyer,
and shall be located at The Point of Measurement as shown on Exhibit "A". , \
5.2 During all reasonable hours, Seller, Buyer and the Coastal Water Authority of Texas
shall have access to the measuring equipment. Buyer may have access to all records pertinent to
determining the measurement and quantity of Untreated Water actually delivered hereuhder, but
the reading of the measuring equipment for purposes of billing shall be done by Seller.
5 3 Seller shall maintain the measuring equipment within the accuracy tolerance
ecified in Section 5.4 by periodic tests. Seller shall conduct such tests at least once every
twelve (12) months and shall notify Buyer at least forty-eight (48) hours in advance of the time and
location at which tests are to be made. Seller agrees to properly test said measuring equipment
at Seller's cost when requested to do so by Buyer once every twelve (12) months. If Buyer
requests an additional test within twelve (12) months, Seller shall charge Buyer an amount equal
to Seller's cost to perform such test unless the test reveals that the equipment registers one
hundred and two (102%) percent or more for a given flow rate. In addition. Buyer shall have the
ri ht to independently check, at its own cost, said measuring equipment at any time upon 48 hours
notification to the Director and opportunity for the Director to witness such tests.
-6-
I
I
5 4 ' Should the 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 Untreated Water delivered to
Bu er 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
s educations (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 Seller with accurate measuring equipment that
is tested before it is placed in service. This 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.
As used in this paragraph, the expression "given rate of flow" means one of the following
selected by the Director for each calibration or test:
1) the total quantity of Untreated Water delivered during the preceding
period (usually a calendar month) as reflected by the totalizer, converted to gallons
per minute;
2) high, low, and intermediate rates of flow in the flow range, as
reflected by the flow recording devices;
3) the applicable Contract Quantity for the current period, usually a
calendar month, converted to gallons per minute; or
4) AWWA-specified test flow rates for that size and type of meter.
55 m the event of dispute between Seller and Buyer as to the accuracy of the testing
equipment used by the Seller to conduct the accuracy test, an independent check may be mutually
-,eed upon between Buyer and Seller to be conducted by an independent measuring equipment
company suitable to both Buyer and the Director. The cost of such test will be at Buyer's sole
expense.
•7-
1 • * * •
' ' 5.6 ' Buyer mayinstall. at its own cost and expense, such check meters in Buyer's pipe
Bna or.cana. as may be deemed appropriate, but Seller sha.l have the right of ingress and egress
Tsuch 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 VI.
_pnii»n f nrf Payment
6.! As used in this Article VI. the term "day" shall mean a period of twenty-four
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
^ginning 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.
6.2 The measuring equipment shall be read on the day at the end of each month (or at
such other period of frequency arranged between the parties) and at a mutually agreed upon time.
or as near thereto as practicable.
6.3 The quantity of Untreated Water for which payment is due by Buyer hereunder in
any month shaH be the total quantity of Untreated Water delivered to Buyer in such month as
dlmined by the measuring equipment described in Article V hereof.
6.4 seller shall bill Buyer at Buyer's address within ten days after the read date by a
statement showing the quantity of Untreated Water used during the preceding month. Payment
shall be due and payable to Seller at its offices in Houston. Harris County. Texas, on or before the
twentieth day after receipt of such statement.
6.5 Should Buyer 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 Buyer sha.. be
deemed to be in default.
-8-
ARTICLE VII.
Titlp to and Rpspnnsibilitv for Water
7 •, As between Buyer and Seller, Seller shall be in exclusive control and possession of.
and solely responsible for, all Untreated 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, Buyer shall be in exclusive control and possession thereof and solely responsible for any
injury or damage caused thereby.
7 2 SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED, REGARDING THE
QUALITY OR DELIVERY PRESSURE OF UNTREATED WATER, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPpSE.
7.3 With respect to all water handling facilities located between the Point of Delivery
and Point of Measurement, Buyer and Seller specifically agree:
D that all such facilities, other than the measurement equipment itself, shall be and
remain the property of Buyer, subject to the terms of this Contract;
2) that Buyer shall take all reasonable steps to maintain such facilities and to prevent
leaks or discharges from such facilities;
3) that Buyer shall repair any such leak or discharge at once upon receiving notice
thereof and pay Seller the price of any water lost by reason of such a leak or
discharge;
4) that Buyer shall correct or repair any damage caused by any such leak or discharge
and shall hold Seller harmless from and against any such damage and claims
therefore;
5) that Buyer shall alter or relocate, at its sole cost, any such facilities whenever Seller
shall reasonably request in writing that the same be done; and
•9-
6) ' that Buyer 'shall promptly remove such facilities and restore their locations to their
pre-existing conditions whenever this Contract is no longer in effect and the Seller
so requests.
ARTICLE VIII.
Term
This Contract shall be in force and effect beginning on the date of countersigns^ shown
below until December 31. 2020 at 8:00 a.m.
ARTICLE IX.
Performance by gpllpr and Buver
9.! Seller covenants and agrees that it will not contract for the sale of Untreated Water
to other users to such an extent or for such quantities as to impair Seller's ability to perform fully
id0 punctually its obligations to Buyer under this Contract. In case of temporary shortage of
water, notwithstanding Seller's compliance with the provisions of this Article IX, Seller 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.
9.2 Pursuant to the Amendatory Contract entered by Seller and the San Jacinto River
Authority, a copy of which is attached hereto as Exhibit "C" and incorporated herein for all
plposes! and notwithstanding any other provision of this Contract to the contrary, Buyer
and agrees that it takes the Untreated Water under this Contract from Seller for the
purpose of treating and selling the same as potable treated water to the City of Baytown
and other local government^ entities; such water to be used for municipal purposes (as such term
idefined by TNRCC Rules) and for no other purposes, and such treated Water shall be sold,
'distributed or used only for .esidential household and other strictly municipal purposes within the
area shown in Exhibit "B." No extension of these boundaries may be made by Buyer without the
written consent of the San Jacinto River Authority and Seller. Buyer agrees to include covenants
liar to those contained in this Section 9.2 in any sales or contracts for sale of water by Buyer
-10-
other entity. Buyer agrees to submit the wording of such covenants for the written
approval of Seller prior to entering into such contracts. _
g.3 Buyer understands and agrees that either Seller or the San Jacinto River Authority,
or both, may enforce the covenants contained in Section 9.2 herein by an action brought directly
against Buyer. In the event that Seller maintains any legal proceeding to enforce such covenants,
Buyer agrees to indemnify Seller in the amount of all expenses relating to the legal proceeding,
including, but not limited to, costs of court and reasonable attorney's fees. ' *
9.4 Buyer acknowledges that Seller may be liable to the San Jacinto River Authority for
monetary damages in the event that Buyer (or any purchaser of water from or through Buyer) fails
to comply with the restrictions and limitations on the sale of water set out in Section §.2 herein.
Buyer acknowledges that such monetary damages would amount to seventy^ive percent (75%)
of the consideration or revenue received by Seller for the estimated amount of water distributed,
sold or used in violation of such restrictions or limitations, plus all litigation expenses, reasonable
. <ees and all other remedies available to the San Jacinto River Authority. Buyer hereby
attorney iceo, on** ,
agrees to fully indemnify and save Seller harmless from and against any such expenses and liability
which Seller might incur, or any loss Seller might suffer, as a result of any failure by Buyer, or any
purchaser of water from or through Buyer, to comply with such restrictions and limitations. Buyer
further agrees to include covenants in any sales or contracts for sale of water by Buyer to any
other entity to insure that said other entity will likewise indemnify and save Seller harmless. Buyer
agrees to submit the wording of such covenants for the approval of Seller prior to entering into
such contracts.
g.5 Buyer agrees to maintain, at its sole expense, its water wells, if any. in good repair
and working order to lacilitate the use of such water wells as an emergency source of supply, if
required, should Seller be unable to deliver the Contract Quantity of Untreated Water for any
reason. Buyer shall bear all costs of maintaining and supplying such emergency sources of supply.
-11-
I ' ARTICLE X.
Fnvironmep+al Considerations
10.1 On or before the first anniversary of the effective date of this Contract, Buyer shall
approve and implement and throughout the term hereof remain in full compliance with a water
conservation program in accordance with 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. Buyer shall adopt
an amended plan and submit same to the appropriate authority for review and approval.
10.2 Buyer agrees that in the event that Buyer 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 the
Buyer and the third party, providing for the implementation and continued compliance with a water
conservation program consistent with the requirements of the TNRCC.
ARTICLE XI.
Hpnn Default
! -, i In the event of any default by Buyer in the performance of any of Buyer's obligations
nereunder which shall continue for a period of thirty days or more, the Seller shall give written
notice to Buyer specifying the matter with respect to which Buyer is in default and requesting that
the default be remedied with promptness and dispatch. In the event Buyer, within forty-five days
after the mailing of such notice by Seller, has failed to remedy the matter in default. Seller may
suspend further delivery of Untreated Water to Buyer hereunder; and in the event such default on
the part of Buyer continues lor an additional thirty days. Seller may. by an additional written notice
to Buyer, cancel and terminate this Contract, whereupon all rights of Buyer and all obligations of
Seller hereunder shall terminate and be at an end. The exercise of such rights shall be in addition
to any other remedies available to Sel.er under the laws of the State of Texas.
-12-
1! .2 ' The f ailure'of either party to insist in any one or more instances upon performance
of any of the terms, covenants or conditions of this Contract sh.ll not be construed as a waiver
or relinquishment of the future performance of any such term, covenant or condition by the other
pHy hereto, but the obligation of such party with respect to future performance shall continue in
full force and effect.
ARTICLE XII.
• *
Fnrrft Maieure
121 |n tne event either party is rendered unable, wholly or in part, by force majeure, to
carry out a*y of its obligations under this Contract, or in the event Buyer is rendered unable,
lolly c, in part, by force majeure to operate Buyer's Facilities, it is agreed that on sudv party's
iving notice and full particulars of such force majeure in writing or by telefax or telegraph to the
rt as soon as possible after occurrence of the cause relied upon, then the obligations of
other party as own. »■«< r
the party giving such notice, to the extent it is affected by force maieure and to the extent that
^diligence is being used to resume performance at the ear.iest practicable time, shall be
suspended during the continuance of any inability so caused as to the extent provided, but for no
lon er period. Such cause shall as far as possible be remedied with all reasonable dispatch.
l0n96r ^2.2 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,
' • c riots epidemics, landslides, lightning, earthquakes, fires, storms, floods, washouts,
insurrections, nui*« ck
tornadoes, hurricanes, arrests and restraints of government and people, explosions,
blakageor damage to machinery, equipment pipelines or canals and any other inabilities of either
plVlhether simi.ar to those enumerated or otherwise and not within the control of the party
liming such inabi.ity, which by the exercise of due diligence and care such party could not have
avoided.
,2.3 „ is understood and agreed that the settlement 01 strikes or lockouts shall be
entire* w«Hn the discretion o, the party having the dHflcuRy and the above requirement tha, any
-13-
force majeure be remedied with all reasonable dispatch shall not require the settlement of strikes
or lockouts by acceding to the demands of the opposing party when such course is inadvisable in
the discretion of the party having the difficulty.
-, 2.4 It is understood and agreed that Seller receives its supply of water from others, and
such water must be transported over long distances before it is received by Seller. Accordingly,
it is agreed that stoppage or diminution of the water received by the Seller from one or more of
its Surface Water Sources (other than by reason of the Seller's failure to make payments due to
its suppliers) shall be deemed a force majeure, and that the Seller cannot and does not guarantee
constant availability of water hereunder but does agree to use its best efforts to maintain such
availability It is further agreed that the Seller may, without liability or default, interrupt hs service
hereunder to make necessary alterations to or repairs in its facilities, but only if such interruption
cannot otherwise reasonably be avoided. The Seller shall give reasonable prior notice of any such
interruption to Buyer and, to the extent possible, the Seller shall schedule interruptions in advance
after consultation with Buyer.
ARTICLE XIII.
Addresses and Notices
13.1 Until Buyer is otherwise notified in writing by Seller, the address of Seller is and
shall remain as follows:
City of Houston Utility Customer Service Division
Contract Water Accounting Section
p. 0. Box 1560
Houston, Texas 77251
Until Seller is otherwise notified in writing by Buyer, the address of Buyer is and shall remain ai
follows:
Baytown Aiea Water Authority
P.O. Box 424
Baytown, Texas 77522-0424
-14-
13.2 All written notices required or permitted to be given under this Contract from
party to the other shall be deemed given by telefax or the deposit of certified or registered mail •
a United States Postal Service mail box or receptacle, with proper postage affixed thereto an
addressed to the respective other party at the address set lorth above or at such other address •
the parties respectively shall designate by written notice.
ARTICLE XIV.
one
in
and
as
• 0 Miscellanp""s Provisions
14.1 This Contract shall bind and benefit the respective parties and their legal successors,
but shall noi otherwise be assignable, in whole or in part, by either party without first obtaining
the written consent of the other; provided, however, that Buyer shall have the righ>, without any
consent of Seller, to pledge or otherwise assign Buyer's rights hereunder to the extent required by
an mortgage, deed of trust or other similar agreement to which Buyer may now be. or hereafter
become, a party or to otherwise assign Buyer's rights and obligations hereunder in connection with
any merger or consolidation or any sale of all or substantially all of Buyer's facilities, provided that
Buyer's successor or assignee, as the case may be. is a responsible person and shall (by operation
of law or otherwise) expressly assume Buyer's obligations hereunder; and provided, further.
however, that no successor or assignee of Buyer shall be entitled to receive Untreated Water or
sell such Untreated Water to a third party under this Contract unless and until the San Jacinto
River Authority gives its written consent to such assignment.
14 2 This Contract shall be for the sole and exclusive benefit of Buyer and Seller and shall
not be construed to confer any rights upon any third party. Seller shall never be subject to any
liability in damages to any customer of Buyer for any failure to perform under this Contract.
14 3 This Contract shall be subject to all present and luture valid laws, orders, rules and
regulations of the United States of America, the State of Texas and of any regulatory body having
jurisdiction.
-15-
14.4 ' This instrument contains all the agreements made between the parties concerning
the sale and delivery of Untreated Water by the Seller to the Buyer at the Point of Delivery set out
in this Contract.
! 4.6' With respect to any prior agreements between the parties or their predecessors for
of Untreated Water to Buyer at any Point of Delivery hereunder. the future obligations of
parties to perform under any such prior agreement are terminated effective as of the ff ective
date hereof, except as follows:
Any obligations which arise prior to such effective date, including
specifically the obligations of Buyer to pay money to Seller for time
periods or deliveries prior to such effective date, are not terminated.-*
sale
.16-
IN WITNESS WHEREOF, the parties hereto to have signed this Contract 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, as of the date of countersignature.
ATTEST:
City Secretary
ATTEST:
Title: Secretary
APPROVED AS TO
Sr. Assistant City Attorney
cm OF HOUSTON. TEXAS
BAYTOWN AREA WATER AUTHORITY
BAYTOWN. HARRIS COUNTY, TEXAS
(Buyer)
Title: President
APPROVED:
D/ector, Department of \
Public Works & Engineering
-17-
. • 1
SAN JACINTO RIVER AUTHORITY
Date:
1C.
RHVFR'S ACKNOWLEDGMENT
t
THE STATE OF TEXAS §
COUNTY OF HARRIS §
This instrument was acknowledged before me on
Gillette,
of Baytown Area Water Authority.
P.
Notary Public in and for the
State of Texas
Commission Expires: October 31, 1994
-19-
WATER'SUPPLY CONTRACT
CITY OF HOUSTON
BAYTOWN AREA WATER AUTHORITY
tari fof CONTENTS
2 ARTICLE I. Definitions
ARTICLE II. Sale and Delivery of Water •..*.... 4
" 5
ARTICLE 111. Rates and Prices
5
ARTICLE IV. Reports . ..
ARTICLE V." Measuring Equipment ". ' \
ARTICLE VI. Billing and Payment
ARTICLE VII. Title to and Responsibility for Water • 8
9
ARTICLE VIII. Term •
ARTICLE IX. Performance by Seller and Buyer • ■ • • 9
ARTICLE X. Environmental Considerations 1 n
12 ARTICLE XI. Remedies Upon Default
12
ARTICLE XII. Force Majeure
ARTICLE XIII. Addresses and Notices
14 ARTICLE XIV. Miscellaneous Provisions
It All EXHIBIT "A
Point of delivery to the Baytown Area Water Authority:
Approximate Texas coordinates: . (
North East x=3,258,560 y=738,120
SouthEast x=3,258,560 y=735,840
x=3,255,730 y=735,890
RAYTOWN AREA WATER'AUTHORITY
PLANT
OLD SERVICE AREA
ADDED SERVICE AREA
EXHIBIT B
/-\w/ni Mir a \a/ aTTD
I
I
I ■
THORITY SERVICE AREA
AMENDATORY CONTRACT BETWEEN
SAN JACINTO RIVER AUTHORITY
AND
THE CITY OF HOUSTON, TEXAS
THE STATE OF TEXAS I
COUNTY OF HARRIS I
THIS CONTRACT executed as of the J^ZWday of ^ THIS C ,
1976 by and between the SAN JACINTO RIVER AUTHORITY. ("SJRA") a
conservation and reclamation district and political subdivision
of the State of Texas, and the CITY OF HOUSTON, TEXAS, ("the City")
a municipal coloration:
1.
The provisions of Section VII of the contract between the'
parties dated March 27, 1944. shall have no application to sales
of Trinity River raw water by the City to the Baytown Area Mater
Authority ("BAWA"). * municipal corporation created by Ch. 600,
p 641. Sixty-Third legislature, Regular Session, 1973. for the
limited purpose of treating and selling the same as potable treated
water to the City of Baytown and other local governmental entities-
for distribution through the municipal water systems of such.local
governmental entities, such water to be used for municipal purposes,
as defined by Rule 129.01.15001-.041. promulgated by the Texas
Water Rights Colston -W December 1, 1975, and for no other pur
poses and only within the boundaries of BAWA as such boundaries
exist on the date of this contract; PROVIDED, that no such water
shall be sold, distributed or used other than for residential
household and other strictly domestic purposes within the area
bounded by Interstate Highway No. 10 on the north. SJol.nd.r Road
on the vest, Archer Road on th. south; and Ceoar Bayou on the east.
without written consent of SJRA.
2.
The City shall insure that all instruments relating
co the sale of water to BAWA include appropriate covenants on
EXHIBIT C
the o,rt of BAWA to observe the Imitations and restrictions
■' imposed on the City by the contract dated March 27, 19,,, as
modified by this contract, and to include covenants in all
sales and contracts for the sale of water by BAWA insuring
compliance with such restrictions and limitations. The word-
ing of the covenants giving effect to such restrictions and _
li.it.tion. shall be submitted to the General Manager of the
SJRA for approval as to conformity to this paragraph prior to
any sale by the City subject to this contract. The City shall
De responsible for the enforcement of such covenants, but they
shall also be enforceable by SJRA directly.
3.
in the event any water delivered by the City to BAWA
under this contract is used in violation of such restrictions
or limitations, SJRA shall be entitled to recover from the
City as liquidated damages an amount equal to seventy-five
percent (757.) of the consideration or revenue received by the
City for the estimated amount distributed, sold or used in
violation of such restrictions or limitations, plus all liti
gation expenses and reasonable attorney's fees. The recovery
of such liquidated damages shall be in addition to all other
remedies available to SJRA.
It.
In consideration of the foregoing limited vaiver by
SJRA of the restrictions and limitations imposed by the
contract dated March 27. 19««. the City shall pay to the SJRA
an amount equal to §50 per day during such period that the
City receives payment from BAWA for water sold under this
........ but .u;h p.y»cnt. to SJRA shall not extend beyond a
oeriod of 20 years. Payment shall be made on a quarterly basi.
on'or before the 10th day of the month following each calendar
quarter.
-2-
5.
The contract shall not be assignable by either party
without the written consent of the other; however the obligations
imposed hereunder shall be binding on their successors or assigns
The waiver provided herein shall be applicable only to sales by
the City to BAWA and shall not be applicable to any sale by
the City to any other entity, including any successors or assigne,
entity to BAWA, without the written consent of SJRA.
6. _
Except as amended by this contract and the contracts
between the parties dated July 19. 1955, .ay 9. 1968 and the
contract dated September 1. 1971. the provisions of the March ^
27, 1944. contract shall retain in full force and effect. .
IN WITNESS WHEREOF, the parties hereto, acting under the
authority of their respective governing bodies have caused this
contract to be executed on this ^£_ day of ^U~^ • 197f
in duplicate originals, each of which shall constitute an original
SAN JAC1NTO RIVER AUTHORITY
COUNTERSIGNED:
ity Attorney
City<3=£—H
CONTRACT AMENDMENT
This CONTRACT AMENDMENT ("the Amendment") is made and entered
into by and between the City of Houston, Texas a municipal corporation and home-rule
City, which is Principally situated and has its City Hall in Harris County, Texas ("City"),
and the Baytown Area Water Authority, a governmental entity and body politic and
corporate, which is situated and has its principal office at Baytown, Harris County, Texas
("Authority").
WITNESSETH
" WHEREAS, the City and the Authority entered into the Water Supply Contract
on or about October 24,1994; and
WHEREAS, the Authority desires to extend the term of the Contract and increase
the Contract Quantity; and
WHEREAS, the City is agreeable to these changes;
N0W, THEREFORE, for and in consideration of the premises and mutual
covenants and agreements herein contained, the parties hereby agree as follows:
1.
Section 2.1 of the Water Supply Contract is amended by increasing the Contract
Quantity (as defined therein) to 15.8 million gallons per day.
11.
Anicle VIM of the Water Supply Contract is amended by extending the
termination date to December 31, 2040.
EXHIBIT B
III.
The Director of Public Works and Engineering ("Director") is authorized to
reduce the Contract Quantity upon .30 days'notice to the Authority as follows:
If the Authority has failed to take at least 25% of the Contract Quantity^ /„* .f iTconsecutive months, the Director may decre^erithedi^nntI^
prevented the Authority /
IZ iaking a. leas. 25% of the Contract Quantity.
rv.
The Water Supply Contract and this Amendment are the entire agreementof the
parties. In the even, of any conflict between a provision of the Water Suppiy Contract
and this Amendment, the provision of this Amendment shall control.
IN WITNESS WHEREOF, the parties hereto have signed this Amendment 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, as of the date of countersignature.
AREA WATER AUTHORITY CITY OF HOUSTON, TEXAS
, HARRIS COUNTY, TEXAS ("City")
("Buyer")
ROBERT L. GILLETTE
President
ATTEST:
g
Assistant Secretary
APPROVED AS TO FORM:
JaCIO RAMIREZ, SJ
General Counsel
/f-
ayor
City Secretary
APPROVED:
APPROVED AS TO FORM:
Director, Department of Public
Works and Engineering
Sr. Assistant City Attorney
UNTERSIGNATURE:
COUNTERSIGNATURE DATE:
\h\os
niT8C.s-.BAWA Coninci whhCiiy ofHouaon\BAYTOWNClean.DOC
THE STATE OF TEXAS
COUNTY OF HARRIS
§
§
§
This instrument was acknowledged before me on
Water Authority.
Robert L. Gillette , President of Baytown Area
Notary Public in alid forflie
State of Texas
Commission Expires: October 25, 2005
«.h riiv of Hou$.on\B A YTOWNCItan.DOC
Point of delivery to the Baytown Area Water Authority:
Approximate Texas coordinates: . ,
North East x=3,258,560 y=738,120
SouthEast x=3,258)560 y=735,840 _
South West x=3,255,730 y=735,890
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