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Ordinance No. 14,638ORDINANCE NO. 14,638 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE AND THE CITY CLERK TO ATTEST TO A STRATEGIC PARTNERSHIP AGREEMENT WITH CHAMBERS COUNTY MUNICIPAL UTILITY DISTRICT NO. 3; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ************************************************************************************* WHEREAS, Section 43.0751 of the Texas Local Government Code (the "Act") authorizes the City of Baytown and certain utility districts, including Chambers County Municipal Utility District No. 3 (the "District"), to negotiate and enter into a strategic partnership agreement by mutual consent; and WHEREAS, this Agreement provides for the annexation of a tract of land in the District, as more specifically described in Exhibit "A," by the City for the limited purposes of applying certain of the City's ordinances to such tract; and WHEREAS, as required by the Act, the City held public hearings on October 22, 2020, and November 17, 2020, in City Council Chamber, City Hall, 2401 Market Street, Baytown, Texas 77520, and the District, prior to such dates, held public hearings at which members of the public were given the opportunity to present testimony or evidence regarding the proposed Agreement, and the City and the District made copies of the proposed Agreement available, and gave notice of the hearings prior to the public hearings in accordance with the Act; and WHEREAS, the Strategic Partnership Agreement has been adopted by the District's governing body prior to the date of this ordinance; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section l: That the City Council of the City of Baytown, Texas, hereby authorizes and directs the City Manager to execute and the City Clerk to attest to the Strategic Partnership Agreement with Chambers County Municipal Utility District No. 3. A copy of said agreement is attached hereto, marked Exhibit "A," and made a part hereof for all intents and purposes. Section 2: This ordinance shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ, and PASSED by the affirmative vote of the City Council of the City of Baytown, this the 2 1 " day of December, 2020. �t :1:::"( BRANDON CAPETILLO, Ikayor APPROVED AS TO FORM: C' v e RAKaren HomerlDocuments\Files City Council Ordinances\2020 December 21 .CMUD#3 - SPA.doc Exhibit "A" STRATEGIC PARTNERSHIP AGREEMENT STATE OF TEXAS § COUNTY OF CHAMBERS § This STRATEGIC PARTNERSHIP AGREEMENT (this "Agreement") is made and entered into, effective as of , by and between the CITY OF BAYTO", TEXAS, a municipal corporation and home -rule city of the State of Texas (the "City"), and CHAMBERS COUNTY MUNICIPAL UTILITY DISTRICT NO. 3, a body politic and corporate and a governmental agency of the State of Texas, created by the 861" Texas Legislature and operating under and governed by the provisions of Chapter 8042, Texas Special District Local Laws Code and Chapters 49 and 54, Texas Water Code (the "District"). RECITALS 1. The District was created with the consent of the City for the purpose of providing water, sewer, drainage, detention, and road facilities to the land within its boundaries. The District is located within the extraterritorial jurisdiction ("ETJ") of the City, but is not within its corporate limits. The District contains approximately 187.1135 acres, as more particularly described in Exhibit "A", which is attached hereto and incorporated herein for all intents and purposes (the "District Property"). The District anticipates the annexation of approximately 36.17 acres, as more particularly described in Exhibit "A-1", which is attached hereto and incorporated herein for all intents and purposes (the "Annexation Property," and together with the District Property, the "Property"). The parties acknowledge that the Property will include the Annexation Property if and when such tract of land is annexed into the boundaries of the District. 2. The City has historically annexed land into its corporate limits before development of such land has proceeded. However, the City determined that the District can best proceed pursuant to a development agreement with Americus Holdings, Ltd., a Texas limited partnership (the "Developer") and a strategic partnership agreement with the District. 3. To provide certainty and order with regard to the conduct of the development within the District (the "Development") and the roles of the City, the District and the Developer, the City and the Developer entered into that certain Development Agreement, dated May 1, 2020 (the "Development Agreement") to provide for certain terms in connection with the Development. In addition, the provisions of Texas Local Government Code, §43.0751 (Vernon Supp. 2000) (the "Act") state that the City and the District may enter into a strategic partnership agreement that provides for the terms and conditions under which services will be provided and funded by the City and the District. 4. The District would like to contract with the City to obtain, among other things, water supply services from the City, and the District will, once confirmed, enter into a utility agreement in substantially the form and content as that which is attached hereto and incorporated herein for all intents and purposes as Exhibit "B" with the City (the "Utility Agreement"). 5. The City and the District, after the provision of required notices, held public hearings in compliance with the Act. Based upon public input received at such hearings, the City and the District wish to enter into a strategic partnership agreement to provide the terms and conditions under which services will be provided by the City and the District and under which the District will continue to exist after the land in the District is annexed for limited purposes. NOW, THEREFORE, for and in consideration of the mutual agreements, covenants, and conditions contained herein, and other good and valuable consideration. the City and the District agree as follows: Article 1 DEFINITIONS 1.01 Definitions. The terms "Act," "City," "Developer," "Development," "Development Agreement," "District," "ETJ," and "Property" shall have the meanings provided for them in the Recitals, above. Except as may be otherwise defined, or the context clearly requires otherwise, capitalized terms and phrases used in this Agreement shall have the meanings as follows: Applicable Ordinances shall include those ordinances, as amended, which are currently applicable to all or part of the area within the boundaries of the District, as well as the following chapters, articles and/or sections of the Code of Ordinances, Baytown, Texas, along with all amendments thereto: • Chapter 4 "Adult Commercial Establishments"; • Chapter 18 "Buildings and Building Regulations," Article XII "Fencing" and Article XIV "Landscaping"; • Chapter 42 "Health and Sanitation"; • Chapter 82 "Secondhand Goods," Article III "Junk and Automotive Wrecking and Salvage; • Chapter 112 "Off -Street Parking"; • Chapter 114 "Sewer and Water Line Extensions," Article IV "Impact Fees;" • Chapter 118 "Signs," Article Ill Regulations," Division 4 "Location" of the Code of Ordinances, Baytown, Texas, along with all other provisions regulating off -premise signs and digital billboards; and • Unified Land Development Code (as modified for the Property pursuant to the terms of the Development Agreement). City Council means the City Council of the City or any successor governing body. City Manager means the City Manager of the City or his or her designee. Consent Resolution means the resolution(s), including all attachments and exhibits passed by the City Council consenting to the creation of and inclusion of land into the District. Effective Date and similar references means the date first written above, which _2 shall be the date City Manager executes this Agreement, after having been authorized to do so by the City Council. Party or Parties means a party or the parties to this Agreement, being the City and the District. Sales and Use Tax means the sales and use tax authorized to be imposed within the corporate limits of the City lying within Chambers County, Texas, including, but not limited to, the sales and use tax authorized to be imposed by Chapters 321, 323 and 327 of the Texas Tax Code, Chapters 344, 363, and 377 of the Texas Local Government Code, and those imposed by any other district or entity which may be subsequently created by the City which imposes a sales and use tax within the corporate limits of the City lying within Chambers County, Texas. 1.02 Findings and Conclusions. The City and the District hereby find and declare: The Act authorizes the City and the District to enter into this Agreement to define the terms and conditions under which services to the District will be provided and under which the District will continue to exist after the Property is annexed for limited purposes pursuant to this Agreement; b. This Agreement does not require the District to provide revenue to the City solely for the purpose of an agreement with the City to forgo annexation of the District; c. This Agreement provides benefits to the City and the District, including revenue, services, and/or regulations which are reasonable and equitable with regard to the benefits provided to the other Party; d. All the terms and conditions contained in this Agreement are lawful and appropriate to provide for the provision of municipal services and annexation; and e. The City and the District negotiated this Agreement by mutual consent; the terms and conditions of the Agreement are not a result of the City's Annexation Plan or any arbitration between the City and the District. Article 2 LIMITED -PURPOSE ANNEXATION 2.01 Generally. As soon as practicable following the approval of this Agreement by City Council, as authorized by the Act, the City shall annex the Property for the limited purposes of applying the Applicable Ordinances within the Property. The District hereby consents to such annexation for limited purposes regardless of whether the Property is contiguous or non- contiguous to the corporate boundaries of the City. The Applicable Ordinances will be applicable to and enforceable in the Property upon the date of limited -purpose annexation. 2.02 Property Taxes and District Liability for Debts of the City. During the term of -3 this Agreement, except if annexed for full purposes pursuant to this Agreement, ad valorem taxes levied by the City will not be levied on taxable property within the District. 2.03 Municipal Court's Jurisdiction. Upon the limited purpose annexation of the Property, the City's municipal court shall have jurisdiction to adjudicate cases filed under the Applicable Ordinances arising from actions occurring within the Property. 2.04 Powers and Functions Retained by the District. Except as limited by the Consent Resolution, the District is authorized to exercise all powers and functions of a municipal utility district provided by existing law or any amendments or additions thereto. The District's assets, liabilities, indebtedness, and obligations will remain the responsibility of the District during the period preceding any full -purpose annexation. Disposition or acquisition of additional assets, liabilities, indebtedness and obligations will be governed by the Consent Resolution. Article 3 MUNICIPAL SERVICES WITHIN THE DISTRICT 3.01 Enforcement of Applicable Ordinances. The City shall apply and enforce the City's Applicable Ordinances within the Property. 3.02 No Further Services. The Parties expressly understand and agree that during the term of this Agreement, the City will only provide those services necessary to apply and enforce the City's Applicable Ordinances within the District in accordance with Section 3.01. The City shall have no obligation to provide or extend any City municipal services not expressly agreed to herein or otherwise agreed in writing in another agreement. Article 4 SALES AND USE TAX AGREEMENT 4.01 Imposition of the Sales and Use Tax. The City and all special districts or entities created or hereinafter created by the City having within its boundaries the corporate limits of the City lying within Chambers County shall impose a Sales and Use Tax within the Property upon the limited -purpose annexation of the Property and upon the imposition of any Sales and Use Tax hereinafter adopted. The Sales and Use Tax shall be imposed on the receipts from the sale and use at retail of taxable items at the same rate as such tax is imposed on the receipts from the sale and use at retail of taxable items within the corporate limits of the City lying within Chambers County. The Sales and Use Tax shall take effect on the date described in Texas Tax Code §321.102 or such other applicable law. 4.02 Notification of Comptroller. The City shall send notice of this Agreement and the limited -purpose annexation of the District to the Texas Comptroller of Public Accounts within fifteen (15) days of the Effective Date in the manner provided by Texas Tax Code §321.102. The City shall send to the District a copy of any notice from the Texas Comptroller of Public Accounts delaying the effectiveness of the Sales and Use Tax in the Property. 4.03 City Audit Rights. The District is required by Subchapter G, Chapter 49, Texas -4 Water Code, to prepare an annual audit within one hundred twenty (120) days after the close of the District's fiscal year. The District shall provide a copy of its annual audit to the City within thirty (30) days after such audit is completed. Article 5 FULL -PURPOSE ANNEXATION 5.01 No Full Purpose Annexation During Term of Agreement. The City agrees that it will not annex all or part of the District or commence any action to annex all or part of the District for full purposes during the term of this Agreement, except by mutual agreement of the Parties or in accordance with Section 5.02. 5.02 Full Purpose Annexation at Termination of Agreement. Upon termination of this Agreement for cause or on or before the third month prior to the expiration of the term or any extended term hereof, the City Manager shall evaluate and make a recommendation to the City Council regarding whether the City should: a. negotiate a new strategic partnership agreement with the District; b. annex the land within the District for full purposes upon the ternination of this Agreement and dissolve the District; C. annex any commercial property within the District for full purposes upon the termination of this Agreement and allow the District to remain in place as an in - city municipal utility district in accordance with Section 43.0751, Texas Local Government Code; d. annex the land within the District for full purposes upon the termination of this Agreement and allow the District to remain in place as an in -city municipal utility district for the sole purpose of owning and maintaining the District's Detention Facilities (as hereinafter defined), in accordance with Section 43.0751, Texas Local Government Code; or e. allow this Agreement to expire. If the City Council desires to annex all of the land in the District or only the commercial property within the District for full purposes, the District agrees that such annexation will be considered a voluntary annexation, wherein the District and all of the landowners therein at the time of the annexation shall be deemed to have requested the City to annex their properties. Additionally, any land previously annexed for limited purposes shall automatically be converted and deemed to be annexed for full purposes on the date that the City Council decides to include such property in its incorporated limits. For property not previously annexed by the City for limited purposes, the City shall begin proceedings for such property as applicable. If the City Council does not desire to negotiate a new strategic partnership agreement with the District or annex for full purposes any portion of the District that was previously annexed for limited purposes, the City may begin proceedings to disannex the Property for limited purposes if necessary under the applicable provision of the Texas Local Government Code. If the City decides to annex or disannex the Property, the City may institute any required proceedings to accomplish such annexation or disannexation to be effective upon the termination of this Agreement. -5 Article 6 SERVICES PROVIDED BY THE DISTRICT 6.01 Water and Wastewater Facilities. The District will develop, own, operate and maintain water and wastewater systems in the District and the Property. The City shall provide water capacities for the Development pursuant to the terms of the Utility Agreement. The City may periodically inspect the District's water, wastewater and drainage facilities. 6.02 Stormwater Facilities. The District will develop, own, operate and maintain a drainage system in the District and the Property. The drainage facilities that will be constructed to serve the District will include wet and/or dry detention basins, open channels, pump stations, outfall structures, and other control structures or appurtenances related thereto (the "District's Detention Facilities"). The District will own and maintain the District's Detention Facilities until the dissolution of the District. If the City annexes the District, the City, in its sole discretion, may allow the District to remain as an in -city municipal utility district for the sole purpose of owning and maintaining the District's Detention Facilities or may require that the District's Detention Facilities be conveyed to a homeowners' association or other association that exists in perpetuity prior to annexation by the City for ownership and maintenance of the District's Detention Facilities. The City will have no responsibilities with respect thereto. Article 7 DEFAULT, NOTICE AND REMEDIES 7.01 Notice of District's Default. a. The City shall notify the District in writing of an alleged failure by the District to comply with a provision of this Agreement, describing the alleged failure with reasonable particularity. The District shall, within thirty (30) days after receipt of the notice or a longer period of time as the City may specify in the notice, either cure the alleged failure or, in a written response to the City, either present facts and arguments in refutation or excuse of the alleged failure or state that the alleged failure will be cured and set forth the method and time schedule for accomplishing the cure. b. The City shall determine (i) whether a failure to comply with a provision has occurred; (ii) whether the failure is excusable; and (iii) whether the failure has been cured or will be cured by the District. The District shall make available to the City, if requested, any records, documents or other information necessary to make the determination. C. If the City determines that the failure has not occurred, or that the failure either has been or will be cured in a manner and in accordance with a schedule reasonably satisfactory to the City, or that the failure is excusable, the determination shall conclude the investigation. d. If the City determines that a failure to comply with a provision has occurred and -6 that the failure is not excusable and has not been or will not be cured by the District in a manner and in accordance with a schedule reasonably satisfactory to the City, then the City may exercise the applicable remedy under Section 7.03. 7.02 Notice of City's Default. a. The District shall notify the City Manager in writing specifying any alleged failure by the City to comply with a provision of this Agreement, describing the alleged failure with reasonable particularity. The City shall, within thirty (30) days after receipt of the notice or the longer period of time as the District may specify in the notice, either cure the alleged failure or, in a written response to the District, either present facts and arguments in refutation or excuse of the alleged failure or state that the alleged failure will be cured and set forth the method and time schedule for accomplishing the cure. b. The District shall determine (i) whether a failure to comply with a provision has occurred; (ii) whether the failure is excusable; and (iii) whether the failure has been cured or will be cured by the City. The City shall make available to the District, if requested, any records, documents or other information necessary to make the determination. C. If the District determines that the failure has not occurred, or that the failure either has been or will be cured in a manner and in accordance with a schedule reasonably satisfactory to the District, or that the failure is excusable, the determination shall conclude the investigation. d. If the District determines that a failure to comply with a provision has occurred and that the failure is not excusable and has not been or will not be cured by the City in a manner and in accordance with a schedule reasonably satisfactory to the District, then the District may exercise the applicable remedy under Section 7.03. 7.03 Remedies. In the event it is determined that a default has occurred under Section 7.01(d) or Section 7.02(d), the remedies of the non -defaulting Party shall be limited to either or both of the following: a. If the City determines that the District has committed a breach of this Agreement, the City may, and the District explicitly recognizes the City's right to, terminate service under this Agreement and to seek all remedies at law or in equity necessary to enforce the provision(s) violated. Termination of service pursuant to this article shall not limit the City's remedies at law or in equity, including termination of this Agreement or the Development Agreement and annexation of the Property for full purposes. b. Injunctive relief specifying the actions to be taken by the defaulting Party to cure the default or otherwise comply with its obligations hereunder. Injunctive relief shall be directed solely to the default and shall not address or include any activity -7 or actions not directly related to the default If the District determines that the City has committed a breach of this Agreement, the District may file suit in a court of competent jurisdiction in Chambers County, Texas, and seek any relief available at law or in equity, including, but not limited to, an action under the Uniform Declaratory Judgment Act in addition to the monetary awards as may be appropriate. Article 8. MISCELLANEOUS 8.01 Beneficiaries. This Agreement shall bind and inure to the benefit of the Parties, their successors and assigns, as well as the special districts created by the City and imposing a Sales and Use Tax within that portion of the City lying within flarris County. The District shall record this Agreement with the County Clerk in the Official Records of Chambers County, and shall bind and benefit each owner and each future owner of land included within the District's boundaries in accordance with Texas Local Gov't Code, §43.0751(c). 8.02 Term. This Agreement shall commence and bind the Parties on the Effective Date and shall remain in effect for an initial term of thirty (30) years unless earlier terminated. This Agreement shall be automatically extended for additional five (5) year terms unless either party gives written notice of termination three (3) months prior to the date of any such automatic extension. However, both parties expressly understand and agree that should any portion of the property involved in this Agreement become annexed by the City for full purposes, this Agreement may terminate with respect to such area at the sole option of the City. 8.03 Restrictions on Tax Rate. The District shall maintain a minimum tax rate (debt service tax plus operation and maintenance tax) such that the District's tax is greater than the City's tax rate (currently $0.80203 per $100 of valuation). Should the value within the District increase such that the combined tax rate could be lowered, the District will accelerate the bond redemption rate. The City and the District agree that the tax burden on the property owners within the District will decrease upon the City's dissolution of the District. The Parties agree that should the City Council elect for the District to continue after full -purpose annexation, the District's operation and maintenance tax may continue to be assessed for the operation and maintenance of the District's Detention Facilities; provided that the tax burden on the residents within the District will decrease upon annexation. 8.04 Force Maieure. In the event any party is rendered unable, wholly or in part, by force majeure to carry out any of its obligations under this Agreement, it is agreed that on such party's giving notice and full particulars of such force majeure in writing or by telegraph to the other party as soon as possible after the occurrence of the cause relied upon, then the obligations of the party giving such notice, to the extent it is affected by force majeure and to the extent that due diligence is being used to resume performance at the earliest practicable time, shall be suspended during the continuance of any inability but for no longer period. Such cause shall as far as possible be remedied with all reasonable dispatch. The term "force majeure" as used herein, shall include, but not be limited to acts of God, K strikes, lockouts or other industrial disturbances, acts of the public enemy, war, blockades, insurrections, riots, epidemics, landslides, lightening, earthquakes, fires, storms, floods, washouts, droughts, tornadoes, hurricanes , arrests and restraints of governments and people, explosions, breakage or damage to machines or pipelines and any other inabilities of either party, whether similar to those enumerated or otherwise and not within the control of the parties claiming such inability, which by the exercise of due diligence and care such party could not have avoided. It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the party having the difficulties, and the above -referenced requirement that any force majeure be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to demands of the opposing party when such course is inadvisable in the discretion of the party having the difficulty. 8.05 Notice. Any notices or other communications (a "Notice") required to be given by one Party to another by this Agreement shall be given in writing addressed to the Party to be notified at the address set forth below for such Party, (i) by delivering the same in person, (ii) by depositing the same in the United States Mail, certified or registered, return receipt requested, postage prepaid, addressed to the Party to be notified, (iii) by depositing the same with Federal Express or another nationally recognized courier service guaranteeing "next day delivery," addressed to the Party to be notified, or (iv) by sending the same by telefax with confirming copy sent by mail. Notice shall be deemed effective when received by the Party to be notified. For the purposes of notice, the addresses of the Parties, until changed as provided below, shall be as follows: City: City of Baytown 2401 Market Street Baytown, Texas 77520 Attn: City Manager District: Chambers County Municipal Utility District No. 3 c/o Schwartz, Page & Harding, L.L.P. 1300 Post Oak Blvd., Suite 1400 Houston, Texas 77056 Attn: Bryan T. Yeates The Parties shall have the right from time to time to change their respective addresses, and each shall have the right to specify as its address any other address within the United States of America by giving at least five days written notice to the other Parties. If any date or any period provided in this Agreement ends on a Saturday, Sunday, or legal holiday, the applicable period for calculating the notice shall be extended to the first business day following such Saturday, Sunday or legal holiday. 8.06 Time. Time is of the essence in all things pertaining to the performance of this Agreement. 9 8.07 Severability. All parties agree that should any provision of this Agreement be determined to be invalid or unenforceable then, such determination shall not affect any other term of this Agreement, which shall continue in full force and effect. 8.08 Waiver. Any failure by a Party hereto to insist upon strict performance by the other Party of any material provision of this Agreement shall not be deemed a waiver thereof or of any other provision hereof, and such Party shall have the right at any time thereafter to insist upon strict performance of any and all of the provisions of this Agreement. 8.09 Applicable Law and Venue. The construction and validity of this Agreement shall be governed by the laws of the State of Texas without regard to conflicts of law principles. Venue shall be in Harris County, Texas. 8.10 Reservation of Rights. To the extent not inconsistent with this Agreement, each Party reserves all rights, privileges, and immunities under applicable laws. 8.11 Further Documents. The Parties agree that at any time after execution of this Agreement, they will, upon request of another Party, execute and deliver such further documents and do such further acts and things as the other Party may reasonably request in order to carry out the terms of this Agreement. 8.12 Incorporation of Exhibits and Other Documents by Reference. All Exhibits and other documents attached to or referred to in this Agreement are incorporated herein by reference for the purposes set forth in this Agreement. 8.13 Effect of State and Federal Laws. Notwithstanding any other provision of this Agreement, the District shall comply with all applicable laws, rules, and regulations of the United States and the State of Texas, Chambers County and the City as such laws, rules and regulations now exist or as may be hereinafter amended. 8.14 Entire Agreement. This Agreement, including the exhibits hereto, contains all the agreements between the parties hereto with respect to the strategic partnership and may not be modified orally or in any other manner other than by an agreement in writing, signed by all the parties hereto or their respective successors in interest. 8.15 Headings. The headings as to contents or particular articles or sections herein are inserted only for convenience, and they are in no way to be construed as a part of this Agreement or as a limitation on the scope of the particular sections to which they refer. 8.16 Ambiguities. In the event of any ambiguity in any of the terms of this Agreement, it shall not be construed for or against any party hereto on the basis that such party did or did not author the same. 8.17 Agreement Read. The parties acknowledge that they have read, understand and intend to be bound by the terms and conditions of this Agreement. -10 8.18 Multiple Originals. It is understood and agreed that this Agreement may be executed in a number of identical counterparts each of which shall be deemed an original for all purposes. 8.19 Authority for Execution. The City hereby certifies, represents, and warrants that the execution of this Agreement is duly authorized and adopted in conformity with the City Charter and City ordinances. The District hereby certifies, represents, and warrants that the execution of this Agreement is duly authorized and adopted by the Board of Directors of the District. [Remainder of page intentionally left blank.] IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement effective as of the date first written above. CITY OF BAYTOWN, TEXAS By: --- ATTEST By. - -- - - - -- -- - (SEAL) THE STATE OF TEXAS § COUNTY OF § This instrument was acknowledged before me on this day of 5 , by , the of City of Baytown, Texas, on behalf of said city. (SEAL) Notary Public in and for the State ofTEXAS -12 CHAMBERS COUNTY MUNICIPAL DISTRICT NO.3 By:�� President, B?dyd of Directors THE STATE OF TEXAS § COUNTY OF HARRIS § This instrument was acknowledged before me on this . day of , 2020, by Adam Kupstas, President of the Board of Directors of Chambers C i�ity nicipal Utility District No. 3, on behalf of said District. Notary blic in and for the St t�fTEXAS -13 EXHIBIT "A" Description of the District Property Chambers County f0unicipal Utility District No 3 187.1.135 Acres STATE OF TEXAS COUNTY OF CHAMBERS § Chambers County School Land Leagut� Abstract No 321 A METES AND BOUNDS of certain 187.1335 acre tract of land situated in the C*hamber5 County School Land League, Abstract No. 321 in Chambers ODunty, Texas, being all of a called 5.7270 acres conveyed by Deed P.7lontgomery Jett Angel Trust recorded in Vocurnent No, 2018-137473 of the Official Public Record of Chaml:rers Comity (OPRCC), the remainder of a called 154.072 acres (Tract 3) conveyed by Correction UVarranty Deed Park Block, Ltd. and recorded in Volume I15 J. at Page 209 OPRCC:, all of a called 41.7490 acres conveyed by Correction Deer! to The Noor Foundation and recorded in Doc-ume-nt No. 2018-131695 CIPRCC, and all of a called 77.497 acres conveyed by Deed to Harry W. F-reerrrai'r, Trustee recorded in Vclut-ne 3.73, Page 303 of the (teed I?er-ortis of Chambers f'ounty (DRCC) (now car -Tied io the name of Family Interests, Ltd on tax roll); said 187.1335 acre tract heing more particularly Litsuribed r15 follovis with all bearings being based on the Texas Coordinate System of 1983, South Central Zone; BEGINNING at a point -for -corner being in the south right-of-way line of Interstate! Highway No. 10 (300 feet vricle right-of-way) for the nc•rthw;est co,ner of that cFrtairr 4(1.321 acres described in Lis Pendcns dated JUMP 6, 2005. styled Sta_e of Texas vs. Family Interests, Ltd., recorded in Volun-n= 781, Page 367 0PRCC and the r orthPasr rurrier of ;aid 9.7270 acres, hem; at the interse(tion of the south right. -of way line of said Interstate Flighuray No. 10 With the west right of -via- V line of State Highway 99 (a/k/d East Grand Para(wray South) and being the norlhernn-ml northeast corner of flit. herein described tract. (Said 81'.611, KING PUINI has a State PIanE' Cou(dinatFl Vatu= ul Y-13,s�%0,26i.ySan!l X--3,278,546.95.) I HLNCl•, S!!utlr 02 33'30" East, along the liire of the herein described tract, the east line of said 5.7270 a:.-res. the nurthermnost west lire of said 110.323 acrc-:s and the west right -if-, -.,ay line of Said State Highway 99, 50.17 I gel to a point-fe,•r-corner at the begir:ning of a non -tangent curve to the right being an interior corner of the herein described tract, an exterior cxrrner of said 40.323 acres, an exterior corner of said Stati Highway 99 and the nor- iernmost corrn,r of said 154.072 acres. THENCE, airing said ;urve to tkr: right, aifrrrk the saulher nnrust east line of the heiem desr.rit,pd tract, the east line of Said 154.072 acre:, a west I ne of said 40.a23 acres and the west r'igllt-of-v:ay line of said State HiRhway 99, said curve having a radius of 1110 92 feet, a central ar=gle of 28'44'52" and a chord bearing South E51'4S''04' Lj:A, 551.57 fe: t, and an dre length of 557.40 feet to a po nt-for-corner; THENCE, South 27'18'58" East, along the southernmost east line of the herein described tract, the east line of said 154.072 acres, the southernrnosl west line of said 40.323 acres and the west right-of-way li ie of said State Highway 99, 2133.74 feet to a point-for-c_onzer at the beginning of a curve to the right; 'I HENCE, Mang said curve to the right, along the scuthElmnust mast line of the hkrein described tract, the east lire of said '154 072 acre;, the east line of said 11 7490 acres, tfr_ Southernmost West line of said 4�3.32 3 acres and the vest right-of-way line of said Stale Highway 99, said curve having a radius of 26E4.77 feet, a central angle of 57"C", a chord bearing South 01°14'09" ~Nest, 2S47.28 feet, and an arc length of 2655.2-0 feet to a point•for-corner in the. South line of send Chambers County School Land Survey and the riorth line of the Jaccb Townsend Survey, Abstract No. 25. Chambers County, Texas, being In the North lint, of a called 92.31.02 acres conveyed by Dead to Kilgore Business, LLC recorded in Volume 166:3, Page 649 OPRCC and being the southeast corrrtr of the herein described tract, the southeast corner Of, Said Page 1 of 3 K'-0GT ,0\002&r W,011-00 Orjundary curvy.V IFE Arse Baytrtirr, Tract,1 S!.' eyinN Pha1e;CQw1IJ0 No. 3\0ocuments`•,CCr,NUD No. 3 - Tract Onf- PXKS da::v Chambers County Chambers Ceurtty SC11001 Land League Municipal Utility District No, 3 Abstract No. 321 187.1135 Acres 41.7-'90 acres and the southwest corner of said 403L3 acres; 'fHf' a, South 87`32' 17" West, alorte, the easternmost south line of the herein described tract, the south linr:• of said Charrrbers County School I -and Survey, the south line of said 11.7490 acres, the south lint• of said 154-072 acres, lie nor th line of said 92.31 fl? acres and the north line of said Townsend Survey, 9e.5 19 feet to s point•for•corner being t-te southernmost southwest corner of the herein described tract, thr} southwest corner of said 41.,7490 acres, the southernmost southwe.v corner of said 154.072 acres and the southeast corner of a called 32.10 acres, conveyed by deed Speer Properties, Inc. recorded :n Volume 549, Page 7GG OPRCC; THENCE, North 02°2.7'43" lest, along the southernmost west line of the herein described tract. the sou tile rnmost ,vest line of said 15,1.072 acres, the west line of said 41.7490 awes and the east Iirtie of said 12 10 acres, 1478-65 feet to a point -for corner, tieing an interitr cx-ner of the herein describ^d tract, the northwest coiner of said 41.7490 acre; and the northeast corner of said 32.10 acres; (HENCE.. South 87'32'17" West, along the Viesterrmxist South liar' of the herein cfc_scrib d tract, the %ve5ternrnost south line of said 154.0717 acres, the north line of siid 32.10 acres and the north line of a to ec 1.9821 acre tract conveyed by Deed to Spear Properties, Inc. recorded in Volume S49, frage 769 OPRCC, 1478 70 feet to a point:-for•coroer being the %mesteinmo_t suuthv✓cyst corn-, of they herehi described tract, th=• westeromvst southwest corner of ;aid 154 072 acres and the northwest (orner of said 1.9821 acres; 'IMENC:L, North 02'2/'L13" %Ve•;t. ;1lo ig the t:esterrirnrst vic.;t line cA till, I,fe--ibe,e v.r:steirrrncsl +:est I ne of said 154.072 ��rre:,, and the East line of a called 4.391 a:.res c.onveyecl by [teed to Spc�-er 11top ?rlies, Inc recorded in Volume 89, Page 17G OPRCC, 1040 40 feet to a point fcsr curne,r being the sotthwest corner of said called 27.497 acres; TFIENCC:, Continue Nrrrth 02`2?'113'' West. aionr; th - ,;eestei nrnust v✓est line of the herein described t,,@r.t, the westernmost west line of said 15,1.072 :,ores the mi st line rrf said 27.497 acrras, tires earl li!ie of said vast)] acres and the east line of a c:illr d 149 acres com-eyed by Diced to United Gas Pipe Line Company rocorde,d in Voluine 163, Page 459 DRCC, 1086,56 feet to a point -for -corner bring the yvesternrnost northwest corner of the herein clescrit;ed tract, the northwest corner of said 27.497 acres and tie sUtrthv✓est rrarnel (if a called 20.98 acres ccn'deyed by Betty Stunt?s M CtrnP is Frank B. Mct_rrne in Cause No. 31?7 of the Probate Records of Chambers County, Teyas; THENCE, North 87'32- l 7" East; along the westerns-nost north line of the herein describers tract, the north Irne or said 27.497 acres and the sotto° line of said 20.98 acres, 1094.44 feet to a point for cot •ier bei•;g the northeast corner of said 27.497 acres and an r xlenor corner of said 154.072 acres; THENCE, Continue North 873217" Fast, along the westernmost north Irne of the herein described tract, the w?Ste I'll rnost north line of said 154.072 acre.-, and the south line of said 20.98 acres, 123.63 feet to a point -for -corner being an interior corner of the herein describe f tract, an interior corner of said 154.072 acres and the southeast coiner of said 20.98 acxes; THENCE, North 02"31'30" bsiest, along an interior west tine of the herein described tract, the. northernrrrost west line of said 154.072 acres and the east line of said 20.98 acres, 764.88 feet to a point -far -corner Pap 2 of 3 K ,{tU1rCi{1{i280 Crr•7! 0o:!�r,n!1-err Sxv ; • t2G Acre Baytown Tr„rt•\t Surve-ving Pha.e\CCr44U-] Nip.- J1t?3Cum.antslCis�1UU t e. S T-ad One M A (sort Chambers County C118MII-.rS County Sdrool Lauid League Municipal Utility District No. 3 Abstract No, 321 187,1135 Acres tieing an interior rorne- of the herein described tract, the -tortheast r.c_trner of said 20.98 acres and title: southeast corner of said 5-7270 acres; THENCE, South 87'31'3S" %Neat, a ong an interior line of the herein described tract, the south line of Said 5.7270 acres and the north line of said 2O.198 acres, 607.18 feet to a paint -for -corner being ar exterior corn,.-!r of the h_,ein described tract, the southwest corder of said 5 7270 acres arrd the southeast corner of a called 4 964 acres core eyr d by Deed to Wowco Properties, t LC recor,Jed in :'olorrie 1677, Page 404 OPRCC; THENCE, North 02'17'47' West, aI(n(., the northernmost west lime of the herein desctibed tract. the west line of swirl 5.7270 acres at-d thF east line of Said 4.964 acres, 383,93 feet to a point -for -corner being the '.pr-Ith 68111 Of -WAY HMO )f salt) Interstete Highway No. 10 for the northernmost northwest cor.ter of the he rei ) described Ir•art, the northv,'Cs1 r.Urller of said 5.7270 acres and the northeast earner ofsaid 4.9f4 acres; rHLNCE, North 82'20' 19" East, along the northl-:rnmost north line nf0e herein described tract, the rorth line of said 5.7270 acres and the ,o.ith right -of -Way line of said Interstate Highvjay 11-1- 10, 608.0;) feet to the POINT Of BEGINNING, CONTAINING 391 11.35 acres or 9,150,665 srloare feet ut land in Chambers Couwy, Texas as shown on r)rasainP No. 14095 filed in the offices u`JonesjCarlel in Bellaire.. Texas This documeril-was {tree arc-d unde02. fA(: 663.21. clots riot reflect the resultsof an oil theground survey, M)d i; rrut to hC user_) Lei coitv-_y or estab Wi intervsls ir: real properly except thns6 rights and intFrv-.ts implied or ;t+rl,lisls �r.1 try (Ile creation or re-__onfigural or) of the poli1)cal s0clivision for .•;I)ir h it wn,, prepared. ; Jones I Carter 6330 West Loop South, ;cite ISO _{rkC_aho E'y% )rough Steven Jares Bellaire, Texas 77401 Is =re Professional Lana Surveyor (713) 777.5337 t c}` lc;«� %3u.r!tfnj"rl�ral .r.�h'n�'i I.prrii S;rrr.r.rir;r ��••O"tp iescarter.corn �P'tis1+ �,E�jiit:Ttfuu \ro l0046100 Y� 5•��G R .STEVEN JARES ..,..........................,..... 5317 NX vo's ,a;;G� Page 3of3 K:\00280\00280-0001 00 E?ouiiriarf S.r-vey 186 Arta Baytown rract`,1 SurJe'ving P118;?\(,'C 4U-) p,o 3,Vocun-.enr5\CCh• L'D P,.-. 3 Traci. One M&8.do,_x EXHIBIT "A" FPO' so ir 73 f!' TRACT ONE 187.1133 ACRES 8.150.663 SQ FT vs Ju -2'— if TRACT TWO 36.1733 ACRES p 1,SIS.708 SQ FT 4 0tv V BOUNDARY MAP OR CHAMBERS COUNTY MUNICIPAL UTILITY DISTRICT No. 3 CONTAINING 1 14 2232868 ACRES OUT 07 THE CHAMBERS COUNTY SCHOOL LAND LEAGUE, A-121 t' CHAMBER$ COUNTY, TEXAS FEBRUARY 2020 .. - 1. . ..' - I Oc W. of= EXHIBIT "A-1" Description of the Annexation Property Chambers County Municipal Utility District No. 3 36.1733 Acres STATE OF TEXAS COUNTY OF C:HANIGERS § Chambers County School Land league Abstra_t No 321. A METES & BOUNDS description of F.certain :36.1733 acre trac= of land situated in the Chambers County `drool Land League, Abstrar_t No. 321 in Chambers County, Texas, being all of a stilled .1,9821 tic« tract of land conveyed by Gerierai Warranty Deed to Speer Properties recorded in Volume 549, Page 769 of the Official Public Records of Chambers County (OPRCC), all of a called 0.9903 acre tract of land conveyed by General Warranty Deed to Speer Properties recorded in Volume 639, Page /139 OPRCC, al-' of a called 0.5951 acro tract of land conveyed by General Warranty Dced to Speer Properties recorded it-. Volume 776, Pate 388 OPRCC, and all of called .32.10 acre tract of land cortveyecl by General Warranty Deed to Speer Properties recorded ill Volunic! .549, Page 766 OPRCC; said 36.1733 acre tract being more particularly described as follows with all hearings hdsed an the Texas Coordinate System of 1983, South Central Zone; BEGINNING at a point -for -corner being the srnitllwi3st corm=r raid 32.10 acre tract, being ct-,r11111ctn With the Southeast comprof a called 3.577 acre tract of I,trul coriveyr:d by Vendor's Lien Deed to David F. Laves recorded ill Volume 29.1. Page 518 OPR(:(., and being in thp north line of a calle,cl 92.3102 acre tracl of lane; c►mveyed by Special V..' :rranty Deed vvith Venduf'S Lie_i) to Kilgore BwJ irics%, LLC; recorded it Volume 1663, Page 649 OPRCC; 1 HENCE, North U2''26'43" West, alcmg lhc: vie -it lir:c• cf said .32.10 acre ;r'ac-, bang c.omwon :.'ll 1 tilp pas! line of ;aicl 3.57i acres, the east lirn= of a called 1.615 a:re lra;t. conveyed by Warranty Deed will- Vendt7i'� Lrc:n to Harold L Ouncan and 0 ant= E Dum_-an recorded in Volmne :309, Page? 813 OpRCC, the f, st I=nr• rif a called 1.667 acre tract conveyed by Genr!ral Warranty Deed to Larry Joe Renton and Li,a Joiles Benton recorded in Volume 33.1, Page 487 OPRCC., tale coast Gne of a called 3.57 ar_rF tract cnnvt�yed by Deed to P.C. C:ezeau>: an(: G.A. tom (in rerord d ir Volun-•e 16, Page! 44 DRCC. and the east Iine of a called 3.567 acre tract cnnverrr<d by Co-rection D,?td to Ricky Funlenol rerco:d.2d in Volval-_' 1.383, Pate 22 OPRCC, 11841.15 feet to a Point-fin--rornri being an interim sout'l'.A!c'st e_Urn%_'r" Ct the herein described tract, being co-llrnon the southeast cornet of said 0.9903 ave 0,11, the tlartheasl corner of said 3,567 acres tr•ar.i, and being in the west line of said 31..10 acre tract; THENCE, South 87-32'.17 Vilest, along the south tine (if said 0.9903 a.re tract, being r.omroor :with the north line of said 3 567 acre tract, 558.42 feet to a E.roiri1-for corner being thr; soritfrvrEst corner of s.3id 0.9903 acre tract, and being in the occupied east right of .va'; line of Needl Point Road; 1 FIFN(:(-,, along the vest line of the herein ;1ec.rrib—lci tract btying cor'rlmon with the occupied east right of way title of Needie Point Road the fullr:cvinf; iwu 12) courses and distances: 1.. N3rth03°14'15-' West, 36.86 feet to a poirltjor-frorr!er; 2. North 11'48'00" blest, 261.80 feet to a point -for -corner, being the north::res[ corner of said 1 9821 acre tract, and being in the south line of said remainder of 21.43 acre tract: THENCE, North 87'32'17" Last, will) the north fire of the herein dP>cribed tract being cor,nrrrun vjLjl tale south line of the remainder of a called 15-1.072 acre tract conveyed by Special Warranty Creed to Americtis Page 1 of 2 \002W%00P,-(� UUt'1 00 Bcajridavi Sot •i y 1F6 i+_re Bstytcewn 'rJc!\) S:_rve.pri; �fi<S�'1r-CAiIUCt PJU. 3',Do;wrtn;}tr-e:Mr,1L No. 3 • Traci Yalu M&8.rloctt Chambers County Chambers County School Land league Municipal Utility District Nka, 3 Abstract No. 321 36.1.733 Acres I lo►dings, LTC) recorded in Document No. 2019-1.4110E, OPP,CC, 1554.66 feet to a point -for -earner, being the northeast corner of said 32.10 acre tract, being con-n-non with the northwest corner of a called 41.7490 acre tract conveyed by Special Warranty l)ee l to rririericus Holdings, Li-D recorded in Document No. 2019- 1 ?9029 OPRCC; fhIENCE, South 02"28'49' Last, along the eas' line of said 32.10 acre. tract, f?eing comr'non 4viIh the wtr.t fine of said 417490 acre tract, 1476.92 feca to a point -fog -corner (Northing;. 13,865,474.60, Eastir,r• 3,279,015.03) being the southeast corner of said 32.10 acre tract, being common with, the s0uthW2St corner of said 41,7490 acre tract. ane being; in the north line of said 92.3102 acre tract; THfNC.f, South 87'2.3'2 " West, along the north line of said 92.3102 acre tract, 950,40 feet to the POINT OF BEGINNING, CONTAINING 36.1733 acres, or 1,575,708 square feet of land in Chambers County, Texas, as shorn on Drawling; No 14085 in the office of Jcnesl Carter in Bultaire. Texas. This dc,c.unieflt �i,as Dr(al)are(] Wider 22 TALC 663.21, does r of reflect the resells of an on the ground su-vc-1, ilfid is riot tc he used to Convey or estahlkh Interests In real property except those rights and Inteti;sts implied or established by the creation or rpcorifiguratirm of the polio al subdivision for whi_Ir i! was pry=pi rwd :=t It_ines I tall ter 6,30 West Loup South, Suik� _50 BvIlaire, texas 77401 (713) 777 5337 '.ri?_Ad=1it�C! i rJ •1'lhf<<f1:?;,;1r i , 7h? 1'tr:'r.•r firri F;L;1iSfl:i(ltrli S\ft, 11/(?•ffilitf% . /Throug;h Steven lares red Professional 1 and Surve-jo, r �..,`G�S � _ I ,�tescarter.cuni ST>LVEN JARES� t ._. �,.......... .... 5317 1 � r �^t•�• oJQEsstQ`•: �..4 SUA0, Page 2 of 2 K.1iFJ28i1';002BJ UQi,: 00 Bn::a=1�: y S irrey ]8fa Acre R ryl;�+vn ira[t\1 S. rrL�iFrg t'hase\CCfjlLj0 tJo. l'.EIocurnell s\(:Cr,Aj,)-" 'i - I Fact "•amo M&B.Flccr. EXHIBIT "A-1" 02-20"' soaop* "s slilims, w go? Is' - � — N di J2 •~�f �/ /+..N...`• N OIJ2,17• f 1216P TRACT ONE 187.1135 ACRES 9,150,665 SQ FT TRACT TWO 36.1733 ACRES 1,575,70a SQ Pi' IN BOUNDARY MAP OF CHAMBERS COUNTY MUNICIPAL UTILITY DISTRICT No. 3 CONTAINING 223.2868 ACRES OUT OF THE CHAMBERS COUNTY SCHOOL LAND LEAGUE. A-321 CHAMBERS COUNTY. TEXAS FEBRUARY 1020 JONESICARTER EXHIBIT "B" Utility Agreement Exhibit " B" WATER SUPPLY AGREEMENT BETWEEN THE CITY OF BAYTOWN, TEXAS AND CHAMBERS COUNTY MUNICIPAL UTILITY DISTRICT NO. 3 This Water Supply Agreement (this "Agreement") is made and entered into as of the date herein last specified by and between the City of Baytown, Texas, a municipal corporation and home -rule city located in Harris County, Texas, and Chambers County, Texas (the "City"), and Chambers County Municipal Utility District No. 3, a body politic and corporate and a governmental agency of the State of Texas, created by the 861h Texas Legislature and operating under and governed by the provisions of Chapter 8042, Texas Special District Local Laws Code and Chapters 49 and 54, Texas Water Code (the "District"). 1. The City is a municipal corporation and home -rule city located in Harris County, Texas, and Chambers County, Texas. The City owns, operates and maintains a water supply and distribution system supplying water to residents of the City. 2. The District is a municipal utility district, created by the 86`h Texas Legislature and operating under and governed by Article XVI, Section 59, Chapter 8042, Texas Special District Local Laws Code, and Chapters 49 and 54, Texas Water Code. 3. The District will own or lease a water distribution system serving the Service Area (hereinafter defined) and desires to purchase treated water for the Service Area. 4. The District is empowered to supply water for municipal uses, domestic uses, power and commercial purposes and all other beneficial uses or controls. 5. The District is authorized to purchase, construct, acquire, own, maintain, repair or improve or extend inside and outside its boundaries any and all works, improvements, facilities and plants, necessary and incidental to the supply of water. 6. All or part of the Service Area lies within the extraterritorial jurisdiction of the City as established by Chapter 42 of the Texas Local Government Code, as amended. The parties acknowledge the possibility that the City may annex the Service Area during the term of this Agreement. In addition, the parties desire to avoid overlapping responsibilities for utility service. 7. The parties have determined that they are authorized to enter into this Agreement by the Constitution and the laws of the State of Texas, including, without limitation, Texas Local Government Code Section 552.001 and Texas Water Code Section 49.213, as same may be from time to time amended. NOW THEREFORE, for and in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto do mutually agree as follows: AGREEMENT ARTICLE I DEFINITIONS AND EXHIBITS 1.01 Definitions. The terms and expressions used in this Agreement, unless the context clearly shows otherwise, and in addition to other defined terms herein, have the following meanings: "City's System" shall mean the systems for the supply and distribution of water and any extensions thereof and additions thereto, currently serving or that may be constructed to serve the City. "Director" shall mean the Director of Public Works/Engineering of the City of Baytown, or his designee. "District's System" shall mean the systems for the distribution of water and any extensions thereof and additions thereto, to be constructed to serve the District, including those lines and facilities necessary for the transportation and distribution of water from the point of interconnection with the City's System throughout the District's System. "Effective Date" shall mean the effective date of the Strategic Partnership Agreement between the City and the District. "Impact Fee" means a charge or assessment imposed by the City against new development in order to generate revenue for funding or recouping the costs of capital improvements or facility expansions necessitated by and attributable to the new development in accordance with Chapter 395 of the Texas Local Government Code. "Interconnections" shall mean those improvements necessary for the connection of the City's System and the District's System as set forth herein. "Point of Delivery" shall mean the point of connection from the City's System to the District's System, which will be at a mutually agreed upon location. "Service Area" shall mean the area within the boundaries of the District consisting of (i) approximately 187.1135 acres, more particularly described on Exhibit "A," which is attached hereto and incorporated herein for all intents and purposes, and (ii) approximately 36.17 acres more particularly described on Exhibit "A-1," which is attached hereto and incorporated herein for all intents and purposes, if and when such tract of land is annexed into the boundaries of the District. "TCEQ" shall mean the Texas Commission on Environmental Quality or its successor agency. 2 "Water" shall mean potable water meeting the minimum drinking water standards prescribed by Texas Department of Health Resources and TCEQ, and their successor agencies. 1.02 Exhibits. The following Exhibits attached or to be attached to this Agreement are a part of this Agreement as though fully incorporated herein. Exhibit A Service Area (District Property) Exhibit A -I Service Area (Annexation Property) Exhibit B District Rate Order Exhibit C City's Present Water Service Ordinance Exhibit D Amendatory Contract between the City of Houston and the San Jacinto River Authority ARTICLE II CONSTRUCTION OF IMPROVEMENTS BY DISTRICT 2.01 District's System. The District shall acquire or construct, or cause to be acquired or constructed, the District's System. No cost of the District's acquisition or construction of the District's System, including engineering fees, the acquisition of any lands or easements in connection therewith, and obtaining the approval of any regulatory agency, shall be borne by the City. 2.02 City pproval of Plans and Specifications. Prior to the initiation of any construction of the District's System, the engineers of the District shall submit to the Director for written approval the plans and specifications for the District's System. No construction of the District's System shall begin until such plans and specifications are approved in writing by the Director. The District's Engineer will provide the City, upon completion of the construction, with one set of "as built" drawings sealed by a licensed engineer in the State of Texas, which meet the approval of the Director and certification that the District's System was built in accordance with the City's standard plans and specifications and as indicated in the "as built" drawings. The District will likewise obtain approval for and supply the City with "as built" drawings, sealed by a licensed engineer in the State of Texas, and similar certification for any subsequent alterations or modifications made to the District's System during the term of this Agreement. 2.03 Inspection. The District specifically grants the City the right to inspect at any time any and all construction of the District's System in order to determine whether such construction is in conformance with the City's standards and the approved plans and specifications. Should all or any portion of the District's System be found by the Director not to conform with the City's standards or the approved plans and specifications, then the District shall immediately upon receiving written notice from the City of such non-conformance take those remedial steps necessary to meet the required standards, regardless of when such non -conformity is detected. The District's System must be brought into conformity with the City's standards and the approved plans and specifications within thirty (30) days of the District's receipt of notice of non-conformance, unless an extension is approved in writing by the Director. Failure to adequately and timely remedy the District's System shall be construed as an Event of Default for which no additional opportunity to cure shall be given. 2.04 Points of Delivery. The Points of Delivery between the City's System and the District's System shall be approved by the Director and shall not be changed without prior written approval of the Director. 2.05 Completion of Construction. Upon completion of the construction provided for in Section 2.01 and subject to the terms of this Agreement, both the City and the District agree as follows: (i) the City shall deliver to the District and the District shall accept from the City water in quantities as specified in Article IV herein, for the price at the Point of Delivery herein provided, consistent with other limitations as stated herein. 2.06 Commencement of Use of Interconnections. The Interconnections shall be placed into operation only upon the inspection and approval of the Interconnections and the District's System by the City and the District. Furthermore, the City reserves the right to reject any Interconnection designated by the District which would, in effect, interfere with or increase the cost of any other facilities or operations which the City might wish to construct or implement, or plan to construct or implement, or which would adversely affect the City's ability to provide water services to any of its customers. 2.07 Water Measuring Equipment. The District will, at its sole cost and expense, furnish and install or contract with the City to furnish and install, at any and all Interconnections, all measuring equipment as may be required by the City, including, but not limited to, meters, totalizers, and devices of standard type for measuring and recording accurately the quantity of water delivered within an accuracy tolerance of two percent (2%) plus or minus for a given rate of flow. It is expressly understood and agreed by the parties hereto that a master meter(s), with a double-backflow preventer at all points of interconnection and measuring total flow through the Interconnection having an accuracy tolerance of two percent (2%) plus or minus for a given rate of flow, is required and must be approved and inspected by the City prior to the City being obligated under this Agreement to deliver any water to the District. The District shall also install, operate and maintain, or contract with the City to install, operate and maintain, as required by the City, pressure regulating devices and equipment. Such measuring equipment shall be approved by the City; and after the City's approval of the installation, the same shall become the property of the City. (1) Inspection. During all reasonable hours, the City and the District shall have access to such measuring equipment so installed. The City shall have access to all records pertinent to determining the measurement and quantity of treated water actually delivered hereunder, but the reading of the meters for purposes of billing shall be done by the District. (2) Calibration. After approved installation thereof, the City shall perform, at its own cost and expense, periodic calibration tests on the primary measuring equipment so installed in order to maintain the accuracy tolerance within the guarantees of the 4 manufacturer thereof, not to exceed tolerance of two percent (2%), at least once every twelve (12) months. At reasonable intervals, the City agrees to properly check and calibrate the flow, recording the totalizing measuring equipment for the purpose of ascertaining its condition of accuracy. The City agrees to notify the District at least forty-eight (48) hours in advance of the time any test is to be made, to permit the District to observe such test and to furnish the District with a copy of the results of all checks and calibration tests performed on said measuring equipment. If any tests or calibration checks show a condition of inaccuracy, adjustments shall be made immediately by the City so said measuring equipment will register correctly within the aforesaid accuracy tolerance. In addition, the District shall have the right to independently check said measuring equipment at any time upon at least forty-eight (48) hours' notification to the Director. (3) Check Meters. The City may install, at its own cost and expense, such check meters in the District's pipeline as may be deemed appropriate, and the District shall have the right of ingress and egress to such check meters during all reasonable hours; provided, however, that the billing computation shall be on the basis of the results of the measuring equipment set forth in Section 2.07 hereinabove. (4) Inaccuracy Adjustments. If, upon any test, the percentage of inaccuracy of any measuring equipment is found to be in excess of five percent (5%) for the aforesaid given rate of flow, then the District's account shall be adjusted for a period extending back to the time when such inaccuracy began, if such time is ascertainable. If such time is not ascertainable, for a period extending back one- half ('/2) of the time elapsed since the date of the last test, or, the date of the last adjustment to correct the registration, whichever is later, but not to exceed one hundred twenty (120) days. If, for any reason, the measuring equipment is out of service or out of repair and the amount of treated water delivered cannot be ascertained or computed from the reading thereof, water delivered during the period shall be estimated and agreed upon by the parties hereto on the basis of the best data available. (5) Independent Check of Metering Equipment. In the event of a dispute between the District and the City as to the accuracy of the testing equipment used by the City to conduct the test of accuracy upon the meters being used, an independent check may be mutually agreed upon between the District and the City to be conducted by an independent measuring equipment company suitable to both the District and the City, the cost of such test to be at the District's sole expense. (6) Given Rate of Flow. As used in this Article, the expression "given rate of flow" means the total quantities of treated water delivered during the preceding period (usually a calendar month) as reflected by the recording devices, divided by the number of days in the period. ARTICLE III OWNERSHIP, OPERATION AND MAINTENANCE OF SYSTEMS 3.01 District's System. The District shall own, operate and maintain at its sole cost and expense the District's System and will promptly repair any of its facilities so as to prevent leakage. However, should the District fail to operate and maintain the District's System in a manner consistent with sound engineering principles; and should such failure become a danger to the continued proper operation of any portion of the City's System as determined at the sole discretion of the City, then such failure shall be considered an Event of Default. It is expressly understood and agreed that the City, at any time upon notice to the District, may take whatever steps it believes are necessary to preserve the integrity of the City's System, including, but not limited to, discontinuing services. 3.02 City's Utility Requirements. The District covenants and agrees to comply with the City's Plumbing Code, Chapter 109 and Chapter 126, Article V, Division 4 of the City's Code of Ordinances and all amendments thereto (the "Utility Requirements"), for water distribution facilities and agrees not to permit plumbing work relating to water service or allow connection to the District's System except in compliance with the Utility Requirements and Chapter 18, Article IV of the Code of Ordinances and all amendments thereto (the "Plumbing Code"), and after inspection and approval by the District's operator or other authorized representative. The District shall, after such inspection and approval and prior to service to the facility, submit to the City an affidavit of inspection certifying that all the Utility Requirements have been satisfied. The District further agrees that all water service connections shall be maintained in compliance with the Utility Requirements and the Plumbing Code of the City. In order to enforce this provision, the City inspectors shall be permitted to act for and on behalf of the District or in lieu of the District's operator, and the District will enforce any notice issued by such inspectors. The District will be charged an inspection fee in the amount specified in Section 2-595 of the Code of Ordinances, as amended, for each inspection made by the City pursuant to this provision. If any such notices are not complied with, the District shall discontinue service when this may be legally done pursuant to the District's Rate Order upon the request of the City to do so. A copy of such rate order is attached hereto as Exhibit "B" and incorporated herein for all intents and purposes. Failure of the City to act on behalf or in lieu of the District shall not be construed as a waiver of the right to so act in the future or to exercise any right or remedy occurring as a result of the District's default. Should the District for any reason fail to enforce the standards established by the Utility Requirements or Plumbing Code for water or should the District fail to comply with the foregoing provisions of this section, such failure shall be an Event of Default. 3.03 Outside Service Contracts. The District agrees that should the District desire to delegate responsibility for maintenance or for supervision of the District's System to any individual or entity other than its own employees holding any permit or certificate required by law, then any P such proposed service arrangement, by written contract or otherwise, must be approved in writing by the Director, whose consent shall not be unreasonably withheld, prior to execution by the parties. Failure of the District to submit any such proposed service agreement to the District prior to its execution shall be considered an Event of Default. Any outside service agreement, whether submitted to the City or not, shall contain a clause terminating the service agreement as to the District on the date of dissolution of the District by the City. 3.04 Title to and Responsibility for Water. Title to, possession, and control of water shall remain in the City, or its assigns, to the Point of Delivery where title to possession, and control of water delivered under this Agreement shall pass from the City to the District; and the District will take such title, possession and control at the Point of Delivery. As between the parties hereto, the City shall be in exclusive control and possession of the water deliverable hereunder and solely responsible for any damage or injury caused thereby until the same shall have been delivered to the District at the Point of Delivery, after which delivery the District shall be in exclusive control and possession thereof and solely responsible for any injury or damage caused thereby, and such party respectively shall save and hold the other party harmless from all claims, demands, and causes of action which may arise while said water is under its respective ownership and control. The City shall not be responsible in damages for any failure to supply water or for interruption of the water furnished hereunder. The District agrees to save harmless the City from all damage to real and personal property occasioned or caused by the making of the water connection or connections herein referred to or caused by the furnishing of water hereunder, and shall also save and keep harmless the City from all damage of any kind, nature and description which may arise as the result of the making of this Agreement. ARTICLE IV QUANTITY AND CAPACITY 4.01 Quantity. All services to be provided by the City herein shall be expressly subject to the payment of the appropriate impact fees, without credit and/or reimbursement, and other costs specified in this Agreement and the City's Code of Ordinances. Subject to the terms and conditions of this Agreement, the City agrees to sell and deliver (or cause to be delivered) to the District, the District's water requirements of treated water, and the District agrees to purchase from City the District's treated water requirements for resale during the term of this Agreement for water services to be supplied in the Service Area, subject to the limitations expressed hereinabove. The District's total treated water requirements shall mean the total quantity of treated water the District needs to conduct operations, use or resell within the Service Area. The maximum amount of total treated water that the City shall be obligated to provide shall be 400 gpd /ESFC. It is stipulated that the District's total treated water requirements shall not exceed 400 gpd multiplied by: the number of ESFCs necessary to serve any undeveloped property included within the Service Area for which a preliminary plat has been approved by the City, plus 7 2. the number of ESFCs necessary to serve property previously developed or currently under development within the Service Area; provided, however, that in no event shall the District's total treated water requirements exceed 1,625 ESFCs. In the event an approved preliminary plat expires, the District's total treated water requirements shall be reduced by the number of ESFCs associated with the expired preliminary plat. 4.02 Adjusted Quantity. It is expressly understood and agreed that, commencing five (5) years after approval of each final plat of the Property, the quantities calculated in accordance with Section 4.01 and the capacities reserved in Section 4.03 shall be adjusted annually to a quantity that equals one hundred ten percent (110%) of the actual number of ESFCs in the Service Area; provided that the actual quantity does not exceed the quantity as calculated in accordance with Section 4.01. Additionally, it is expressly understood and agreed that: (i) commencing five (5) years after final plat approval of the last phase of the development of the Property or (ii) if there is no preliminary plat filed within five (5) years after the most recent final plat approval, the quantities specified in Section 4.01 shall be adjusted annually if the actual usage during the previous 12-month period is less than one hundred percent (1001/0) of the quantity calculated pursuant to Section 4.01. In such event, the quantity shall be reduced to one hundred ten percent (110%) of the actual usage in the Service Area. 4.03 Capacity Reserved. The City covenants and agrees that upon receipt of impact fees as provided for in Section 5.01 of this Agreement, the City shall endeavor to reserve for the exclusive benefit of the District the capacity in its water supply facilities sufficient to supply and treat the quantities established in Section 4.01 of this Agreement and as adjusted in Section 4.02. However, the District shall not be guaranteed any specific quantity or pressure of water for the services to be provided herein by the City if the City's water supply is limited or when the District's equipment may become inoperative due to unforeseen breakdown or scheduled maintenance and repairs; and the City is in no case to be held to any liability for failure to furnish any specific amount or pressure of water. 4.04 Service Contracts with Other Entities. The District shall not permit any entity located outside the Service Area to connect to the District's System during the term of this Agreement without the express prior written consent of the City. Failure to comply with this provision shall constitute an Event of Default. ARTICLE V PAYMENT AND TERMS 5.01 Impact Fees. The District shall pay to the City impact fees pursuant to Article IV, Chapter 114 of the Code of Ordinances, Baytown, Texas, to purchase water capacity from the City to serve the Service Area. The impact fees may be adjusted from time to time by the City Council, and the District shall be required to pay the rate in effect at the time payment is due. The water impact fee shall be one hundred twenty-five percent (125%) of the water impact fee pursuant to Section 114-99(b) of the City of Baytown Code of Ordinances for each equivalent single-family connection ("ESFC") charged to development within the City at the time of collection. The water impact fee shall be collected at the time the Developer submits each final plat. 5.02 Monthly Service Charge. The District shall pay to the City in monthly installments a service charge (to cover the City's operation and maintenance) equal to the City's minimum charge and additional charges, if any, applied to the actual quantity of treated water delivered to the District during the month in question per connection. The charge shall be calculated on the basis of the metered water use and otherwise for each user connected to the District's system, consistent with the provisions for such calculation found in the City's Water Service Rate Ordinance, which may be amended from time to time. A copy of the City's present rate ordinance for water service, as set forth in Chapter 98, Article III of the Code of Ordinances of the City of Baytown, in effect as of the date of this Agreement, is attached as Exhibit "C," and incorporated herein. The District agrees that the payment due herein shall be calculated by using the water delivered as measured by the master meter(s) or individual residential !commercial meters, whichever is greater. Should a disparity between the master meter(s) and meters of the individual residences or commercial developments exist and the master meter(s) records a greater water usage, the District shall be responsible for the payment of the amount of water usage indicated by the master meter(s) at the rate hereinabove expressed. As used in this section, the term "day" shall mean a period of twenty-four (24) consecutive hours beginning at eight o'clock (8:00) a.m. on one calendar day and ending at eight o'clock (8:00) a.m. on the next succeeding calendar day. The term "month" shall mean a period beginning at eight o'clock (8:00) a.m. on the first day of a calendar month and ending at eight o'clock (8:00) a.m. on the first day of the next succeeding calendar month, except that the first month or partial month shall begin on the day of the initial delivery of water hereunder, and the minimum monthly payment, if any, shall be prorated for such partial month. The measuring equipment used for the measurement of treated water shall be read by the District on the last day of each month (or at such period of frequency arranged between the parties) at eight o'clock (8:00) a.m., or as near thereto as reasonably practicable; and on such day, the District shall account and certify to the City the amount of treated water delivered to the District. Additionally on that day, the District shall render to the City an accounting of the service charges as provided in Section 5.04. On receipt of the above -described accounting, the Director will bill the District for the service charges accrued during the preceding month. Payment by the District to the City shall be made within thirty (30) days following the receipt of the bill. 5.03 Right of Inspection. City shall have the right at any time by actual count or by an inspection of the District's books, records and accounts to determine the number of water connections served by the District, and the District shall have the right at any time to inspect the City's books, records and accounts to verify the charges levied by the City. It shall be the duty of the parties to cooperate fully with each other in any such count, inspection or audit. All books, records and accounts shall be open for inspection at all reasonable hours for any authorized representative of the parties. 5.04 Reporting Requirements. Each month, the District shall provide to the City a preliminary operating report in a form approved by the City's Director of Finance. Such preliminary operating reports shall be tendered to the City on or before the 10`h day of each month concerning the prior month's operations. After receipt of each preliminary operating report, the City will generate an invoice specifying the amount due and owing for the report period. The District shall present both the preliminary operating report and the corresponding invoice to its Board of Directors each month on or before the third Thursday of the month for the Board's review and approval. On or before the Friday after the third Thursday of each month, the District shall tender to the City a final operating report for the previous month in a form approved by the City's Director of Finance containing a certification by the presiding officer of the Board that the information contained in the report is true and correct. Should there be any difference between the preliminary and final operating reports, which affects the amount due and owing to the City, the City shall adjust the next month's bill to address such difference. 5.05 Payments. Payment by the District to the City shall be made within thirty (30) days following the receipt of the invoice specified in Section 5.04 hereinabove. Any sums payable by the District to the City under this Agreement which are not paid within thirty (30) days following the receipt of the invoice shall bear interest in accordance with Section 2251.025, Texas Government Code. If the District defaults on the payment of any invoice, and the amount so past due and unpaid, including interest thereon, is collected by the City by suit, there shall be reasonable attorneys' fees added thereto for collection thereof by suit. Failure to pay charges when due shall constitute an Event of Default. Notwithstanding any of the above, in the event the District fails to tender payment of any amount when due and such failure continues for thirty (30) days after notice in writing to the District of such default, the City may suspend delivery of services offered hereunder, but the exercise of such right shall be in addition to any other remedy available to the City. 5.06 Service Charge Modifications. Although the City believes that the present charges for such services as set forth herein are fair and reasonable, nonetheless, the parties realize that due to unforeseen contingencies, the City may increase the charges for such services, whether by amendment of the rate schedule for like services outside the City limits upon which the service charges levied hereunder are based, or by other means. 10 5.07 Operating Expense and Covenants as to Rates. The sums to be paid the City by the District under the terms of this Agreement are declared by the District to be an essential cost of operating and maintaining the District's System as a part of the District's System, and such costs shall be first charged upon the gross revenues received from the District's System as a part of the District's System, and such costs shall be a first charge upon the gross revenues received from the District's operation of said system. The District agrees to establish and maintain rates sufficient to pay all costs and expenses of operation and maintenance of the District's System. 5.08 Events of Default. An Event of Default, as stated from time to time herein, shall constitute a material breach of this Agreement. For any material breach of this Agreement, the City may, and the District explicitly recognizes the City's right to, terminate service under this Agreement and to seek all remedies at law or in equity necessary to enforce the provision(s) violated; provided, however, that this Agreement shall not be terminated prior to the City's giving thirty (30) days' written notice to the District of the Event of Default complained of and a reasonable opportunity for the District to cure said default, or, if not curable in that time as determined at the sole discretion of the City, to commence substantial curative efforts within thirty (30) days and faithfully prosecute the same. Termination of service pursuant to this section shall not limit either party to any other remedy at law or in equity. ARTICLE VI PERFORMANCE REGARDING TREATED WATER SERVICES The City covenants and agrees that it will not contract for the sale of water to other users to such an extent or for such quantities as to impair the City's ability to perform fully and punctually its obligations to the District under this Agreement. In case of temporary shortage of water notwithstanding the City's compliance with the provisions of this Article, the City shall distribute the available supply as provided by the laws of the State of Texas. It is specifically agreed and understood that this Agreement contemplates that the District will resell the water purchased pursuant to the terms hereof. Pursuant to the Amendatory Contract entered into by the City of Houston and the San Jacinto River Authority, a copy of which is attached hereto as Exhibit "D" and incorporated herein for all intents and purposes, and not withstanding any other provision of this Agreement to the contrary, the District covenants and agrees that it takes the treated water under this Agreement from the City for solely municipal purposes, as such term is defined by the TCEQ rules, currently in effect or hereinafter amended, and no other purposes. Such treated water shall be sold, distributed or used and ultimately consumed only for residential household and municipal purposes exclusively within the District's Service Area. The District understands and agrees that the City, the Baytown Area Water Authority, the City of Houston or the San Jacinto River Authority, or any combination thereof, may enforce the covenants contained in this Article by an action brought directly against the District. In the event that the City maintains any legal proceeding to enforce such covenants, the District agrees to 11 indemnify the City in the amount of all expenses relating to the legal proceeding, including, but not limited to, costs of court and reasonable attorney's fees. The District acknowledges that the City may be liable to the Baytown Area Water Authority, the City of Houston and.'or the San Jacinto River Authority for monetary damages in the event that the District or any purchaser of water from or through the District fails to comply with the restrictions and limitations on the sale of water set out in this Article. The District acknowledges that such monetary damages would amount to seventy-five percent (75%) of the consideration or revenue received by the City for the estimated amount of water distributed, sold or used in violation of such restrictions or limitations plus all litigation expenses, reasonable attorney fees, and all other remedies available to the Baytown Area Water Authority, the City of Houston and.'or the San Jacinto River Authority. The District hereby agrees to fully indemnify, hold harmless and defend the City from and against any such expenses and liability which the City might incur or any loss the City might suffer as a result of any failure by the District or any purchaser of water from or through the District, to comply with such restrictions and limitations. The District further agrees to include covenants in any sales or contracts for sale of water by the District to any other entity to ensure that said other entity will likewise indemnify, hold harmless and defend the City. The District agrees to submit the wording of such covenants for the written approval of the City prior to entering into such contracts. The District acknowledges that the City of Houston may be liable to the San Jacinto River authority for monetary damages in the event that the District or any purchaser of water from or through the District fails to comply with the restrictions and limitations on the sale of water set out in this Article. The District acknowledges that such monetary damages would amount to seventy- five percent (75%) of the consideration or revenue received by the City of Houston for the estimated amount of water distributed, sold or used in violation of such restrictions or limitations plus all litigation expenses, reasonable attorney fees, and all other remedies available to the San Jacinto River Authority. The District hereby agrees to fully indemnify, hold harmless and defend the City of Houston from and against any such expenses and liability which the City of Houston might incur or any loss the City of Houston might suffer as a result of any failure by the District or any purchaser of water from or through the District, to comply with such restrictions and limitations. The District further agrees to include covenants in any sales or contracts for sale of water by the District to any other entity to ensure that said other entity will likewise indemnify, hold harmless and defend the City of Houston. The District agrees to submit the wording of such covenants for the written approval of the City prior to entering into such contracts. On or before the first anniversary of the date this Agreement is signed, the District shall approve and implement and throughout the term hereof remain in full compliance with a water conservation program in accordance with the requirements of the TCEQ. Such plan and any amendments thereto shall be submitted to the appropriate authority as required by state law for review and approval. In the event that the TCEQ adopts new requirements, the District shall adopt an amended plan and submit same to the appropriate authority for review and approval. Within thirty (30) days after the term of this Agreement, the District shall furnish the City 12 with a statement, under oath, showing the quantities and sources of all water for use or resale by the District. ARTICLE VII MISCELLANEOUS PROVISIONS 7.01 Force Maieure. In the event any party is rendered unable, wholly or in part, by force majeure to carry out any of its obligations under this Agreement, it is agreed that on such party's giving notice and full particulars of such force majeure in writing or by telegraph to the other party as soon as possible after the occurrence of the cause relied upon, then the obligations of the party giving such notice, to the extent it is affected by force majeure and to the extent that due diligence is being used to resume performance at the earliest practicable time, shall be suspended during the continuance of any inability but for no longer period. Such cause shall as far as possible be remedied with all reasonable dispatch. The term "force majeure," as used herein, shall include, but not be limited to, acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, war, blockades, insurrections, riots, epidemics, landslides, lightening, earthquakes, fires, storms, floods, washouts, droughts, tornadoes, hurricanes, arrests and restraints of governments and people, explosions, breakage or damage to machines or pipelines and any other inability of either party, whether similar to those enumerated or otherwise and not within the control of the parties claiming such inability, which by the exercise of due diligence and care such party could not have avoided. It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the party having the difficulties, and the above -referenced requirement that any force majeure be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to demands of the opposing party when such course is inadvisable in the discretion of the party having the difficulty. 7.02 Approval. Whenever this Agreement requires or permits approval or consent to be hereinafter given by any party, such approval or consent shall not be unreasonably withheld, and, if finally given, shall be effective without regard to whether such approval or consent is given before or after the time required herein. Such approval or consent on behalf of a party shall be evidenced by an ordinance or resolution adopted by the governing body of the party, or by an appropriate certificate executed by a person, firm or entity previously authorized to determine and give such approval or consent on behalf of the party pursuant to an ordinance or resolution adopted by the governing body, unless stated otherwise herein. 7.03 Address and Notice. Unless otherwise provided in this Agreement, any notice, communication, request, reply or advice (herein severally and collectively for convenience, called "Notice") herein provided or permitted to be given, made or accepted by any party to the other must be in writing and may be given or served by depositing the same in the United States mail, postpaid and registered or certified and addressed to the party to be notified, with return receipt requested, or by delivering the same to an officer of such party, or by prepaid telegram, when 13 appropriate, addressed to the party to be notified. Notice deposited in the mail in the manner hereinabove described shall be conclusively deemed to be effective, unless otherwise stated in this Agreement, from and after the expiration of three (3) days after it is so deposited. Notice given in any other manner shall be effective only if and when received by the party to be notified. However, in the event of service interruption or hazardous conditions, neither party will delay remedial action pending the receipt of formal notice. For the purpose of notice, the address of the parties shall, until changed as hereinafter provided, be as follows: If to the City, to City of Baytown Attn: City Manager P.O. Box 424 Baytown, TX 77522 Fax: (281) 420-6586 If to the District, to Chambers County Municipal Utility District No Attn: Bryan T. Yeates 1300 Post Oak Boulevard, Suite 1400 Houston, TX 77056 Fax: (713) 623-6143 The parties shall have the right from time to time and at any time to change their respective addresses, and each shall have the right to specify as its address any other address, provided at least fifteen (15) days' written notice is given of such new address to the other parties. 7.04 Assignability. This Agreement shall bind and benefit the respective parties and their legal successors and shall not be assignable in whole or in part by any party without first obtaining written consent of the other party. 7.05 Re ulatory Agencies. This Agreement shall be subject to all present and future valid laws, orders, rules and regulations of the United States of America, the State of Texas, and of any regulatory body having jurisdiction. 7.06 No Additional Waiver Implied. The failure of any party hereto to insist, in any one or more instances, upon performance of any of the terms, covenants or conditions of this Agreement, shall not be construed as a waiver or relinquishment of the future performance of any such terms, covenants or conditions by any other party hereto, but the obligation of such other party with respect to such future performance shall continue in full force and effect. 7.07 Modification. Except as otherwise provided herein, this Agreement shall be subject to change or modification only with the mutual written consent of the parties hereto. 14 7.08 Parties in Interest. This Agreement shall be for the sole and exclusive benefit of the parties hereto and shall not be construed to confer any rights upon any third party. The City shall never be subject to any liability in damages to any customer of the District for any failure to perform its obligations under this Agreement. 7.09 Captions. The captions appearing at the first of each numbered section in this Agreement are inserted and included solely for convenience and shall never be considered or given any effect in construing this Agreement or any provision hereof, or in connection with the duties, obligations or liabilities of the respective parties hereto or in ascertaining intent, if any question of intent should arise. 7.10 Severability. The provisions of this Agreement are severable, and if any provision or part of this Agreement or its application thereto to any person or circumstance shall ever be held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Agreement and the application of such provisions or part of this Agreement to other persons or circumstances shall not be affected thereby. 7.11 Merger. This Agreement embodies the entire understanding and agreement between the parties as to the water supply services, and there are no prior effective representations, warranties or agreements between the parties. 7.12 Construction of Agreement. The parties agree that this Agreement shall not be construed in favor of or against any party on the basis that the party did or did not author this Agreement. 7.13 Term. This Agreement shall be in force and effect from the date of execution hereof for a term of thirty (30) years; provided that (i) City's contract with the Baytown Area Water Authority for the purchase of treated water in sufficient quantities to supply the District under the terms and conditions in effect at the time of the execution of this Agreement remain unchanged; and (ii) the Baytown Area Water Authority's contract with the City of Houston for the purchase of raw water in sufficient quantities to supply the Baytown Area Water Authority under the terms and conditions in effect at the time of the execution of this Agreement remain unchanged. Should the City's contract with the Baytown Area Water Authority or the Baytown Area Water Authority's contract with the City of Houston be terminated for any reason or should the City become legally unable to supply the District, then this Agreement shall terminate automatically at the time of such termination or inability. This Agreement shall be automatically extended for additional five (5) year terms unless either party gives written notice of termination three (3) months prior to the date of any such automatic extension. However, both parties expressly understand and agree that should any portion of the property involved in this Agreement become annexed by the City of Baytown for full purposes, this Agreement may terminate with respect to such area at the sole option of the City. 7.14 Agreement Read. The parties acknowledge that they have read, understand and intend to be bound by the terms and conditions of this Agreement. 15 7. 15 Multiple Originals. It is understood and agreed that this Agreement may be executed in a number of identical counterparts, each of which shall be deemed an original for all purposes. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.] 16 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this day of _ , 2020. ATTEST: Felica J. Poe Secretary, Board of Directors APPROVED AS TO FORM: Bryan T. Yeates Attorney for the District CHAMBERS COUNTY MUNICIPAL UTILITY DISTRICT NO. 3 By: _ - Adam Kupstas President, Board of Directors 17 ATTEST: Leticia Brysch City Clerk APPROVED AS TO FORM: Karen L. Horner City Attorney CITY OF BAYTOWN By' — - Richard L. Davis City Manager 18 EXHIBIT "A" Description of Service Area (District Property) 19 Chambcrs County Chambers County School Land League (Municipal Utility District No. 3 Abstract No. 32 1 :1.87,11 5 Acres STATE OF TEXAS COUNTY OF CHAMBERS § A METES AND BOUNDS of certain 187.1135 acre tract of land situated in the Chambers County SCho-ol Land League, Abstract No. 321 in Chambers C-ounty, Texas, being all of a called 5.7270 acres r..onveyed by Deed Montgomery Jett Angel Trust recorded in Document No. 2016-1.37473 of the Official Public Records of Chambers County (OPRCC), the remainder of a called 15,1.072 acre (Tract 3) con -,,eyed by Correction W;irranty Dead Park Block, Ltd. and recorded in Volume 1161 at Page 209 OPRCC:, all of a calle;l 41.7490 acres conveyed by Correction Deed to The Noor Foundation and recorded in Douim2rtt No. 2018.131695 opRCC, and all of a called 27.497 acres conveyed I-y Deed to Harry W. Freeman, Tiustee recorded in Volume 173, Page 303 ref the Geed Recordso IF Chambers :'gamy (DRCC) (nano carried in the narne c,f ramify Interests, Ltd. on tax roll); said 187.1135 acre tract heiing more partic!rlarly described a5 f0IIpVy5 With all bcarin:;s being based on the Texas Coordinate System of 1983, South Central Zone; BEGINNING at a point-for-c.orne► being in the south right-of-way line of Interstate Highway No. 10 (300 feet wide right-of-way) for the northwest corner of that certain 40.323 acres descrihed in Lis Pendens dated pure 6, 2005. styled State of Texas vs. Farnily Interests, Ltd., recorded in Volume 731, Page 367 OPP,CC and the northeast corner of :aid 5,72.70 acres, being at the intersection of the south righL,of-xvay line of said Interstate Highv-iay No. W with the west right of-.vay line of State Highway 99 (afk/a East Grand Parkway South) and being the northernrYrost northeast corner of the herein described tract. (Sa.d BEGINNING .POINT has a State Plane Coon!linate Valu= of Y-13,E70,267.95 and X=3,278,546.95.) THENCE, South 02°131'30" Easl; along thw Irne of thi; lierein described tract, the east line of said 5.7?70 acres. the ru;rtherninost west line of said 10.323 acres and the west right -of -:key line of said State Highway 99, 50.17 feet to a point•fc;r-corner at the beginning of a non -tangent curve to the righ` being at) interior cornier of the herein described tract, an exterior corner of said 40.323 acres, an e; teri„r r.orner of said Stnte Highvmy 99 and the nor_hernmost corner of said 154.072 acres, THENCE, along said ;urvc to the right, :!long the scnrlher ut ost east line of the herein desr.rited (fa(-t, tire: east lin_ crf ,aid 154.072 acre_, a west I ne of s;)icl 40.323 acres and the west right-of-,vay line of said State Highway 99, said curve having a radius of 111J.92 feet, a central ar-gle of 28'44'52" and a chord herring ;o.rth 61'49'04" Ea:.t, 551.57 feet, and an arc length of 557,40 feet to a point -for -corner, THENCE. South 27"18'5E" Cast, along the southernmost east line of the herein described tract, the east line of said 15,1.072 acres, the s-:jutherrtmosL vlest line of said 40.323 acres and the: `•rest right -of -awry li-ie of said State High,,vay 99, 2133.7.1 feet to a point -for -corner at the beginning of a cure to the right; I -HENCE, alcing said cui v2 tO the right, along the southernmost east line of the herein described tract, the east line of said 154 072 acres, the east lirtr? of said 41 7490 acres, the SOULfnernmost west line of said 40 323 acres and -the +rest right-crf-vvay line of said State Highway 99, said curve having a radius of 2664.77 feet, a central angle of 57'06'14", a chord bearing South 01"14'09" ?Nest, 2547.28 feet, and an arc length of 2655.84 feet to a point -far -corner in the south line of said Chambers County School Land Survey and the north line of the Jacob Townsend Survey, Abstract No. 2S, Chambers County, Texas, being in the North line of a calle-cl 92.3107 acres conveyed by Deed to K';Igcre Business, LLC recorded in Volume 1663, page 649 OPRCC and being the southeast corner of the herein described tract, the southeast corner oc sc-ici Page 1 of 3 Y,:\CO'2YD'•,0028i+-0.%G1 00 30undary Sur ieV -- 186 Acre riaywwi; Tr}ct\t St.rveyhrg Pha;O,CCU 11JI) ran. 3\0ocuments`•1CC1-,A'J J No. 3 Tract One rIUA) Chambers County Charbers County School Land Leamue I'Aunicipal Utility District No. 3 Abstract. No. 321 187,1135 Acres 41.7490 acres and the southwest corner of sairl 40.323 acres; THFiN f, Soul h 87`32' 17"'Ales t. along the easternmost. south Iine of Lila herein described tract, the south line of Said Chambers County School Land Survey, the south fine of said 11.7490 acres, the south line of said 154.072 acres, the nor th Iine of said 92.3:102 acres and the north Iine of said Townsend Su-V?y, 945 19 feet to a point -for -corner being the southernmost southwest corner of the herein described tract, the southviest Corn=r of said 4-1.7490 acres, t;1e sotithernn?ost southwest corner of said 354.072 acres and the southeast corner of a called 32.10 acmes conveyers by heed Sheer Properties, Inc recorded n Volume: 549, Page 766 OPRCC; THENCE, North 02627'4.1" Vle.st, aInrl,2 trlrl southern11105t west line of the herein described tract, the southernmost west line of said 154.072 acres, life west line of said 41.7490 acres and the east line of saki 32.10 acres, 1478.6S feet to a point-for-wrner, being all interior corner of the herein described tract, the nrirthwest corner of said 41.7190 acres and the northeast corner of said 32.10 acres; 11-1ENCE, South 87"32'17" West, a'on� the westerrinicist south line of the herein described tract, the westernmci.st south line of said 154.071 acres, the north line of said 32 10 acres and the, north Iine of a ;a!lec: 1.9321 acre tract conveyed by Deed to Speer Properties, Inc. rerorded in VOIunvC• 5+-1?, Page 769 OPRCC, 1478.70 feet to paint -for -corner being the vvesteinmust suuth\vest corner of the herein clescrilied tract, the vir-•sti'rill nost sou"ll.,vest Corr -lei of said 1.5 .072 acres and the northwest corner of said 1.9821 acres; LIIENC1, Nlotth 02'21'43" b'•lest, cflcirig the westerrirnast west line of the herein described tract, tit(? wesll rrr,rlost vest 1 nr' of paid 154.072 acre-.), and the East line of a called 4.391 a Gres conveyed by UCI-cl to Speer I'i.operties, Inc: recorded in Volurne 89, Page 1260PRCC, 1040 40 fret to a point for •curilel being the so!ith..iest corner of said [:died 27.497 acres; THENCE; Continue North 02` 27'el 'Alest, aloe; the westernriwsl vest hne of the herein descrioed tract. the westernniost %A.est Iine of .-.aid 151 072 acres, the west line of swirl 27.497 acres, the east Iine of said 4.3.O1 acres and the east line of a calkd 3.49 acres coriveyeci by Deed to United Gas Pipe Line Corripan•y recorded in Vo!uirie 16 , Page- 459 DRCC, 1086156 feet to a point -for -corner being the veesternniost nort'hojes-t corner of thi, hprevi) desciibed tract, Live northwest corner of said 27.497 acres. and toe southvdesl LoTnei of a called 20.98 acres conveyed bey Betty Stubbs McCtinp tc Franle B. IACC•,uie. in Cause NU 3127 of the Probate Re_ords of Chambers County, Texas; THENCE, North 87*32' 17" East, along the wi--swiiniost north line, of the ligroin cescribed tract, the north line of said 27.497 acres and the south lire of said 20.98 acres, '1094-44 feel 'o a point -for -darner beif?g the northeast corner of said 27. c)7 acres and an ei:terioi cornet of said 154.072 acres; THENCE, Continue North Ks 32'17" East. along the :Aresternrnost north Iine of the herein described tract, the viestlerninost north line of said 154.072 acres and OIC South line of said 20.98 acres, 1-23.63 feet to a point -for -carrier being an interior corner of the herein described tract, an interior corner of said 154 072 acres and the southeast corker of said 20.98 a:.res; (HENCE, North 02" 31'30' West, along an interior NA est fine of the herein described tract, the no;'thernrnost west line of said 154.072 acres and the east line of said 20.98 acres, 764.88 feet to a poi171•for-cornei Page 2 of 3 t:;i±r17.fiC\??t"t80•t)GrJ!-ilat±.�undsry S1•�e�; t:•L- f\�.1-� [tsytrwn Trace\1 Ser•,e�inr; Phase;c:h4!1.] tap 31Gocurr•ants\eCt:1Ull t<� T-acl One FA38 dor_z Chambers County Chambers County School Latid League Nlunicipal Utility District Nfo. 3 Abstract Na. 321. 187,:1135 Acres being an interia; r:orner of the herein described tract, the northeast corner of said 20.98 acres and the southeast comer of said 5.7270 acres; THENCE, South 97°31'35"' Wk 1, a ono an interior line of the herein described tract, the south line of said 5.72i0 acres and the north line of said 20.98 a:.res, 607.18 feet to a point -for -corner being ar exterior corner of thr,! herein described tract, the southwest corner of said 5.7270 acres and the southeast corner" of a called 1 964 acres conveyed by Deed to Wowco Properties, LL.: recorded in ;'olrrmr 1677, Pap 404 CPRCC.; THENCE, North 02017'47" West, along the northernmost west line of the herein described tract, the vvest line of said 5.7270 acres and the rust line of said 4.964 acres, 383.93 feet zo a point -for -corner being the south right-of-way line of said Interstate Highway No. 10 for the nort'ernmost northtivest comer of the herei,i clescrihed tract, the nuithwest i.orner of said 5.7270 acres and the northeast corner (if said 4.96.1 acres; I liNCE, North 82°20' 19" East, along the northernmost rr lrth line of the herein described tract, the north line of said 5.7270 acres aiid the so.rlh right-of-way line of said Interstate Highway flo -10, 608.09 feet to the POINT Of BEGINNING, CONTAINING 197.1135 acres or 9,150,665 square feet of land in Chambers Cr. unty, 1'exas as shown on Drawing (lei. 14085 filed in thF' offir_:!s o; Jone, I C-irtef in Bellaire. Texas This docurnent was prepared under 22 TA( 663.21, clues not reflect, the resultsof an on the ground curve`/, and is I"rut to he used to conw2y or eslab ish Interests in real property except (hose rif;ht5 and imprecas implied or i-_-5tablished by the creation or reconfigurat oil of the'polijiltcal subdivision for ;A.I-lich it ti`.•rj•, prepared. Jones(Carter 6330 West LOOP South, Suite 150 Bellai(e, Texas 7 7110 1 (7 i 1) 777-5337 7r.,, as ilct!!� Ojrl iQ/r'.i SI P!lil ram% :117r9` Stlr Vf'r�rrrl _ f/-Ae fhg 9%// )rough Steven Jares eis >reff Profess!onal Land Surveyor iescarter.com . . •• h -STEVEN ,TARES ..� : ......5317....Y �,... p •� . r !,�•��55� sk ,f �vI O• ....... e. 2�lcv��_ , Page 3of3 Y,:�(rG28^`,OCr28U r70� 1 f l Eut:nclary $_r veer MG Arre Raytown rrace'11 Surveying Fltyi�'�i;Crbill f to 3%Ovcumen s\CCf:4t1U A • Traci: One M&.S.di., x EXHIBIT "A" �v s 02jw, r :.7 TRACT ONE 1 7. 1135 .1% C k ES t TRACT TWO —7471�-.`- 36.1733 ACRES 1.575.708 SQ FT TRACT C TWO 36 733LTACRES .5 0. SQ T 7 .7 F 1% i, BOUNDARY MAP OF CHAMBERS COUNTY MUNICIPAL UTILITY DISTRICT No. 3 CONTAINING 223.2869 ACRES OUT OF THE CHA.MBERS COUNTY SCHOOL LAND LEAGUE. A 321 CHAMBERS COUNTY. TEXAS FEBRUARY 1. t j*J0.E SICARTER EXHIBIT "A-1" Description of Service Area (Annexation Property) 20 Chambers County Municipal Utility District No. 3 36.1733 Acres STATE OF TEXAS COUNTY OF CH.0.NIBERS § Chambers County School Land LeatuF Abstract No- 321 A METES & BOUNDS description of a certain 36,1733 acre tract of land situated in the Chambers COMM School Land League, Abstract h!o. 321 in Chambers County, Texas, being all of a called 1.9821 acre;- tract of land conveyed by General Warranty Deed to Speer Properties recorded in !Volume 549, Page 769 of the Official Public Records of Chambers Cc"minty (OPRCC), all of a called 0.9903 acre tract of land conveyed by General Warranty Deed to Speer Properties recorded in V011rrne 639, Page 488 OPRCC, al' of a called 0.59S1 acrip tract of land conveyedi by General Warranty Deed to Speer Properties recoicled in Volun':e 776, Page 388 0PRCC, and all of Called 32.10 acre tract of land conveyed by General Warranty Deed to Speer Properties recorded in Volume 549, Page 766 OPRCC; said 36.1733 acre tract being more particularly described as follows ► ith dll b--arinfs based .ant the Texas Coordinate System of 1983, South Central Zone; BEGINNING at a point -for -corner being the southwest corn,?r said 32.10 acre tract, feint comnicia with the southeast cornerof a called 3.577 acre tract of land conveyed by Venclor's Lien Deed to David F. Vilves recorded in Volurne 294, Page 518 OPRCC, and heing in the north line of a calltM 92.3102 acre lr-act of lanai conveyed by Special Warranty Deed t0th Vender's Lien to Kilgore Business, LLC recorded it VOltvne 1663, Page 649 OPRCC; 1 HENCE, North 02`26'43" ►Vest, along th;- :vest line of said .32.10 acre rrac', being common -.:Jtr) the east Inge Of %aid 3.577 acres, the east line of a called 3.618 acre tract Conveyed by Warranty Deed witf Vendof',. Licii to Harold L. Duncan and Diana E. Duncan recorded in Volume 309, Page 833 MCC, the east line of a called 1.G67 acre tact conveyed by General Warranty Deed to Larry Joe Benton and Lisa kites Eenton recorded in VOILIMe 31.1, Page 487 OPRCC, the east line of a called 3.57 ar-re Irrct conveyed by Deed to P.C. Cezeaux am G.A. Martin rprordr-d iP Volume 16, Page 44 MCC, and the east line of a called 3.567 arse tract conveyed by Co-rection Deed to Ricky Fontenot rccord'ed rn V011rfIl 13933, Pate 22 OPRCC, I'124.15 feet to a point -for -corner being an interior scrulrMest wrner cf the herein described tract, being i0.11111on the southeast corn_r of s-3id 0.9903 acre tract, the northeast corner of said 3.567 acre tract, and bring in the west line of sail! 32.10 cure tract; THEN:a'.. South 8T32'17" \Vest, along the south iine. of said 0.9903 acre tract, being cornmor, with the north line of said 3.567 acre tract, 558.42 feet to a point -for -corner being the southwest corner of said 0.9903 acre tract, and being in the occupied east right of tivay line of Needle Point Road; TFIFNCE_.. a(cmg the west line of the herein- described tract being commorr with the occupied ease, right of way line of bleeclre Point Road the following t,;y(j 1,2) courses and distances: Nc)rth 08°14'15" West, 36.86 feet to a point -for -corner, North 11" 48'00" West, 261.80 feet to a point -for -corner, being the northwest corner of said 1,9821 acre tract, and being in the south line of said remainder of 21.43 acre tract; THENCE, North 87°32'17-' Easi, with the. north line of the herein described tract being common with the south line of :he remainder of a called 154.072 acre tract conveyed by Special Warranty Deed to Arne ricaas Pace I of 2. \Oil28p\rb71E0 OW,1 nn P.t3unddry Siitvey Sty kre Baytr,wn Trar-r1J Survepm., =CfvVY-) No. 4\1),�currrrt1hr) r10. 3 Trdct T•uo M&B.docr. Chambers County Chambers County S-�11001 .arid league - Municipal Utility District No. 3 Abstract N:). 321 36.1733 Acres IloldinQs, LTD recorded in Document No. 2019.1412.015 0f'RCC, :1.554.66 feet to a poinl-far-;,•urrrer, being the northeast corner ofsaid 32:10 acre tract, being common with the northwest ccmer of a caiit:d 41.7490 acre trar:t conveyed by Spe; ial \Warranty heed to ArneriC Lis Holdings, LTD recorded in Document No, 2019. '139U29 OPRCC; THENCE, South 02•'2W49" East, along the eas: line of said 32.10 acre: tract, being common with the we-,t line of said 41.7490 acre tract, 1.476.92 feet to a paint -for -corner (Northing: 1,865,471.60, Fasting 3,279,015,03) being the southeast corner of said 32.10 acre lrar_1, bein> common v:itlr the soulf++pest corner of said 41.7490 acre tract, and being in the north lime of said 92.3102 acre tract; THENCE, South 87'23'25" West, along the north line of said 92.3102 acre tract, 950.40 feet to ttte POINT OF BEGINNING, CONTAINING 36,1733 acres, or 1,575,703 square feet of land in Chambers County, 'texas, as shown on Drawing No. 14085 in the office of Jcnesi Carter in Br,liair%, Texas. This dOCUr'I1r'nt was orepared under 22 TAr.. 663.21, does not reflect the results of an on the ground survey, and is not to be used to convey or e-vablkh interests in real propert', except those rlgllts and Interests implied or established by the creation rjr reconfiguration of the .polit�al subdivision for which it was prepared. JonesiCartet rL l 6330LUest Loop SOL101, Suite i50 -� At i /Througis Sttwen.lares l B Ilaire, Texas 77401 ' "slererl Professional Lind Smveyoi (713) 777.5337 OF ZZ, -••.. . ,. !e.1;r.r:i;+c;inn,t,Jhr•%ss;r�nci�r'rr:dir,rr.rru,rf, C,< G1s�� �ii�sCarier.rom 10(1-16100 .......... - YO' •JARES fit• r ".3 az:. et, � `ty4 SUn`1��.'' Par-e 2 of 2 �.�ru�?gCl•,UOZo^;I-Uiir:-Gr� rirn:rfLry Sc:r.w 186 At.r¢ la:yt•;rwn Tract\t S, rv2ying Rh<r;a\_Chilirr7 Nn, 3%(Iocurner.rs\CCt>>r_r• i ;, i. ? - rr+ra 'vr0 Mi+AB.clacr. EXHIBIT "A-1" s arl W* C t z A - ------------------- I -'r TW 0 36.1733 At R FS TRACT ONE 187.113S ACRES 9.150.665 SQ FT BOUNDARY MAP OF CHAMBERS COUNTY MUNICIPAL UTILITY DISTRICT No. 3 CONTAININO 2231968 ACRES OUT OF Tole ... ... CHAMBERS COUNTY SCHOOL LAND LEAGUE. A 321 CHAMBERS COUNTY, TEXAS , BRUARY 2020 .1:1.. ESIC..TE R EXHIBIT "B" District Rate Order 21 EXHIBIT "C" City's Present Water Service Ordinance 22