HomeMy WebLinkAbout1997-035J \WPDOCS\ORD\UTRWD ORD
ORDINANCE NO % / -D-3J
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE CITY
MANAGER TO EXECUTE AN INTERLOCAL ADDENDUM TO CONTRACT BETWEEN THE
CITY OF DENTON AND UPPER TRINITY REGIONAL WATER DISTRICT FOR WATER
TREATMENT AND TRANSMISSION SERVICES, AUTHORIZING THE EXPENDITURE OF
FUNDS THEREFOR, AND PROVIDING FOR AN EFFECTIVE DATE
WHEREAS, the City of Denton ("the City") and the Upper Trinity
Regional Water District ("the UTRWD") entered into a July 21, 1992
Contract for Water Treatment and Transmission Services ("the
Contract") to provide for sale of treated water by City to UTRWD
and for transmission and delivery by City of limited amount of
UTRWD treated water from specified points to certain customers of
UTRWD, including the City of Sanger ("Sanger"), and
WHEREAS, said Contract provides in Section 6 4 thereof that
"To provide such service to Sanger, UTRWD shall have the
option to purchase treated water from City at its posted
price for wholesale treated water, if such rate exists, or
at City's rate for large industrial customers, or to
request City to transport UTRWD's water according to the
provisions of this Agreement", and
WHEREAS, in lieu of City transporting UTRWD water for delivery
to Sanger, UTRWD desires to purchase water on a wholesale basis
from City for resale and delivery to Sanger, and City agrees to
develop a wholesale rate for treated water, and
WHEREAS, said Contract provides for transmission of UTRWD water
by City not only to Sanger, but also to the City of Corinth
("Corinth") and to the Lake Cities Municipal Utility Authority
("LCMUA") for UTRWD, and
WHEREAS, in general, City and UTRWD agree that direct delivery
by UTRWD of its own water is to be preferred over any such
transmission of UTRWD water by City, and
WHEREAS, City and UTRWD agree to cooperate on an alternative
strategy that will enable UTRWD to deliver its treated water
directly to Corinth and LCMUA without transmission by City through
its water system, and
WHEREAS, City and UTRWD wish to supplement the July 21, 1992
Contract For Water Treatment And Transmission Services, NOW
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the City Manager is hereby authorized to
execute an "Addendum to Contract between the City of Denton and the
Upper Trinity Regional Water District For Water Treatment and
Transmission Services", a copy of which addendum to contract is
attached hereto and incorporated by reference herein
SECTION II That the expenditure of funds as required in the
attached addendum is hereby authorized
SECTION III That this ordinance shall become effective
immediately upon its passage and approval
PASSED AND APPROVED this the 41- day of 1997
J C MILLER, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
BY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
r��l
BY
ADDENDUM
TO CONTRACT
BETWEEN
CITY OF DENTON
AND
UPPER TRINITY REGIONAL WATER DISTRICT
THE STATE OF TEXAS §
COUNTY OF DENTON §
This Addendum (the "Addendum') to an existing contract styled as CONTRACT FOR WATER
TREATMENT AND TRANSMISSION SERVICES, dated July 21, 1992, (the "Contrail") by and
between UPPER TRINITY REGIONAL WATER DISTRICT, (the *District"), a conservation and
reclamation district Created pursuant to Article XVI, Section 59 of the Constitution of the State of
Texas, and the CITY OF DENTON ('Denton'), a municipal corporation, is made and approved as of
the 4-1'x day of 19#(the "Date of Addendum')
WHEREAS, Denton and District entered Into the July 21, 1992 Contract for Water Treatment
and Transmission Services to provide for sale of treated water by Denton to Drstnct and for
transmission and delivery by Denton of limited amount of District treated water from specified points
to certain customers of Drstnct, including City of Sanger ('Sanger), and
WHEREAS, said Contract provides in Section 6 4 thereof that
"To provide such service to Sanger, District shall have the option to purchase treated
water from Denton at its posted price for wholesale treated water, If SL. h rate exists,
or at Denton's rate for large industrial customers, or to request Denton to transport
District's water according to the provisions of this Agreement ', and
ADDENDUM TO CONTRACT BETWEEN CITY OF DENTON AND UTRWD
FOR WATER TREATMENT AND TRANSMISSION SERVICES
PAGE 2
WHEREAS, in lieu of Denton transporting District Water for delivery to Sanger, District
desires to purchase water on a wholesale basis from Denton for resale and delivery to Sanger, and
Denton agrees to develop a wholesale rate for treated water, and
WHEREAS, said Contract provides for transmission of Oistnct water by Denton not only to
Sanger but also to City of Corinth ('Connth') and to Lake Cities Municipal Utility Authority ('LCMUA')
for District, and
WHEREAS, in general, Denton and District agree that direct delivery by District of its own
water Is to be preferred over any such transmission of District water by Denton, and
WHEREAS, Denton and District agree to cooperate on an alternative strategy that will enable
District to deliver its treated water directly to Corinth and LCMUA without transmission by Denton
through its water system
NOW. THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties agree to supplement the Contract with this Addendum as hereinafter set forth,
to-wrt
Section 10. Preamble Incorporated
That the matters stated in the preamble hereof are true and correct and are incorporated into
the body of this Addendum as if copied in their entirety
Section 1 1 Scope of Addendum
That the provisions of the Contract shall remain in full force and effect as supplemented by
this Addendum Further, Denton and District agree to add the provisions herein to provide for
continued purchase of treated water by District from Denton on a wholesale basis and to facilitate
the provision of direct treated water service by District to Corinth and LCMUA
ADDENDUM TO CONTRACT BETWEEN CITY OF DENTON AND UTRWO
FOR WATER TREATMENT AND TRANSMISSION SERVICES
PAGE 3
Section 1.2 Exercise of Oggon to Purchase Treated Water
As provided in Section 6 4 of the Contract, District does hereby elect to exercise Its
option to purchase treated water from Denton at its posted price for wholesale treated water "
for resale to Sanger Further, Denton agrees to make available such treated water for delivery and
sale to District at the agreed delivery point (specified in separate contract) for the Sangpr
Transmission Line Denton will make reasonable capacity available and will deliver water to said
delivery pant at Denton's operating pressure normally maintained for that sector of its transmission
and distribution system
Section 1.3 QuanM to be Delivered
For the first Water Year of operation during which water is delivered under the contract to
the designated delivery pant for the Sanger Transmission Line, the initial amount of treated water
to be delivered by Denton shall not exceed one-half million gallons per day (0 50 mgd) After the
first Water Year of operations, District may request increased quantity up to a maximum of one and
one -quarter (1 25) mgd to be delivered by Denton District shall give written notice to Denton at
least one hundred twenty (120) days prior to the beginning of a Water Year concerning the Peak
Daily Volume of treated water being requested Denton may, at its sole discretion, waive the written
notice requirement upon written request of District
If the requested Peak Daily Volume exceeds one-half million gallons per day (0 50 mgd),
Denton shall determine if such additional water and such capacity to deliver the water are available
If, for the upcoming Water Year, Denton determines there is sufficient adddxxual capacity and
sufficient additional water to provide the District with the requested Peak Daily volume, Denton may,
under terms of this Addendum and the Contract, provide such additional volume (or any portion
thereof) for that Water Year
Section 14 Rates for Wholesale Treated Water Service
The posted rates for wholesale treated water service provided under this Addendum may be
expressed as a volumA charge per thousand gallons plus a facility charge and an annual demand
charge per unit of peak day usage, or may be expressed as a total unit price per thousand gallons
of water delivered and metered for each Fiscal Year The posted rates for wholesale treated water
service shall include the cost of raw water, the cost of treatment, operation and maintenance
ADDENDUM TO CONTRACT BETWEEN CITY OF DENTON AND UTRWD
FOR WATER TREATMENT AND TRANSMSSION SERVICES
FADE 4
expenses of the Transmission System, pumping and energy costs, depreciation expense, and a
return on Denton's applicable rate base The rate base shall be Denton's actual net investment in
that portion of its water system reasonably allocated to wholesale service, which net Investment
shall be equal to original cost less depreciation reserve The authorized return shall be equal to the
weighted average Interest rate on all outstandin debt for Denton's Water Utility System plus one
and one-half percent (1 5%) A street rental fee equal to four percent (4%) of total operation and
maintenance cost may be Included in operation and maintenance expenses Depreciation expense
will be based upon the original cost of all capital facilities, both invested and contributed capital,
which facilities are expected to be replaced by Denton at a future date in order to maintain service
Pipelines and other facilities paid for by the District, Corinth, LCMUA or others shall not be included
in Denton's investment cost for dating a return but may be included when calculating operating
and maintenance expense Costs to transport water shall be calculated on a system -wide basis,
excluding distribution facilities, and shall be limited to the Transmission System which shall not
include the cost of transporting wader through lines smaller than twelve (12) inches in diameter
The test year for establishing the rate for wholesale treated water service shall be the
projected year for which the rate is proposed to be applicable Test year data shall be obtained from
actual data of the second year pnor to the test year with adjustments made for known or venfiable
changes
Section 1.& Nofice/OpRodunNy to Comment
Denton shall give timely notice to District with opportunity to comment on Denton's cost
analysis in each year that it proposes to revise rates for service provided herein Such notice and
such opportunity to comment on the cost analysis provided shall conform to the provisions of
Section 7 4 and 7 5 of the Contract
Section 16 Transmission Line to LCMUA/Connth
District desires to construct a transmission pipeline to allow District to deliver treated water
directly to LCMUA and Corinth without relying on D inton to transport District water through Denton's
Transmission System A certain transmission line being used by Denton to deliver treated water to
LCMUA and Corinth was paid for by the users, was dedicated to Denton, and is now the property
of Denton Denton agrees to convey to District said pipeline facilities and related appurtenances
ADDENDUM TO CONTRACT BETWEEN CITY OF DENTON AND UTRWD
FOR WATER TREATMENT AND TRANSMSSION SERVICES
PAGE S
The property to be oonveyed shall be that portion of the transmission line and related facilities shown
on Exhibit C, which Exhibit is attached hereto and incorporated herein for all purposes As
consideration, District agrees to grant to Denton an Increased Interest in the Joint Transmission Line
pursuant to the May 6, 1993 Joint Ownership and Operations Contract (as supplemented) As
additional consideration for the facilities being conveyed, District agrees to relieve Denton of its
obligation to provide long4enn Transmission Service for Distnd water to LCMUA and Connth
Denton and Distnd agree to coordinate and cooperate on necessary pipeline improvements by
District to enable the District to use said pipeline being conveyed for direct delivery of Distnct treated
water to LCMUA and Connth The effective date for transfer of ownership of said pipeline from
Denton to Distinct shall be the day that Distinct first uses the pipeline to deliver its water to LCMUA
or Connth Said date shall be confirmed by Distnd to Denton by wntten notice
Section 1.7. Emergency Connection
In conjunction with the conveyance of the LCMLWConnth pipeline as provided in Section 16
hereof, Distnd shall pay for and arrange for improvements approved by Denton to enable an
Emergency Connection at the approximate location shown on Exhibit C The Emergency
Connection shall be established by and maintained for the mutual benefit of Denton and Distinct for
the Pnmary Term of the Contract The Emergency Connection normally shall be dosed In the
event of a water system condition which generally would be regarded as an emergency in the water
utility industry, and upon the request of either party, the parties may mutually agree to open the
emergency connection
Examples of a system condition to be considered an emergency shall include (without
limiting the scope of such conditions)
A disruption in whole, or in part, of either party's water supply,
An electncal outage, which adversely affects water service,
Contamination of either party's water supply, or
Failure of a major system component such as a pipeline or pump
Failure to plan `or an adequate water supply does not constitute an emergency Dunng the time of
such emergency, the requesting party will expedite efforts to overcome the emergency, and, the
other party will supply water to the extent reasonably available and prudent under the circumstance
ADDENOUMTO CONTRACT BETWEEN CITY OF DENTON AND UTRWD
FOR WATER TREATMENT AND TRANSIASSR)N SERVICES
PAGE S
With approval of the supplying party, the benefitting party well be responsible for any necessary
improvements, arrangements or facilities to deliver and receive the water
The party supplying the water under emergency conditions provided for in this Section shall
be compensated for the water delivered If the volume of water delivered during the emergency
conditions is not determined by miter, the parties shall use the best information readily evadable to
develop an estimate of such volume The benefitting party shall compensate the supplying party
as mutually agreeable
Section 1.8 Sale of Treated Water
The Contract provides for Denton to sell treated water to District for resale to certain parties
during the Initial Period of the Contract (through Water Year 1998) Other provisions of the Contract
notwithstanding, Denton agrees that District may reduce or discontinue purchase of treated water
from Denton during the Initial Period If such reduction or discontinuance is related to the District's
own water treatment plant and delivery facilities becoming operational, there shall be no imposition
of the Minimum Water Volume provisions of Section 3 3, provided that the total revenue received
by Denton from District for purchase of both treated water and untreated raw water shall be equal
to or greater than the revenue (not including Variable Costs) that Denton would otherwise have
received if District had continued purchasing only treated water through the 1997 Water Year
pursuant to the Contract
Seotion 1.9 Tenn of Addendum
This Addendum shall be effective on and from the Date of Addendum The Addendum shall
continue for the Primary Tenn of the Contract and for any renewals thereof
ADDENDUM TO CONTRACT BETWEEN CITY OF DENTON AND UTRWD
FOR WATER TREATMENT AND TRANSMISSION SERVICES
PAGE
IN WITNESS WHEREOF, the parties hereto acting under authority of their respective
governing bodies have caused this Addendum to be duly executed In several counterparts, each of
which shall constitute an original, all as of the day and year first above written, which Is the Date of
Addendum
UPPER TRINITY
REGIONAL WATER DISTRICT
Richard Huk
President, Directors
ATTEST
tazm.l s«ap
erl Lind ung
, Boar it or
APPROVED AS TO FORM AND LEGALITY
John F Boyle, Jr , Counse for the District
CITY OF DENTON, TEXAS
Ted Benavides City Manager
ATTEST
nnifer W tars, City Secretary
APPROVED AS TO LEGAL FORM
AHerbPro4yttorney
C \ DENTON\CONTRACTWDD WTBT 103
EXHIBITS A and B
E.,dijbits A and B as contained in the original Contract remain► valid and m effect. Said
Efiibds are modified or supp
lamented ony to the e)der►t provided in
this Addendum
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MEMORANDUM
REGIONAL WATER DISTRICT
TO- Howard Martin
Dir r of Environment perations, City of Denton
FROM: Thom r, Executive Director
DATE: November 12, 1996
RE: Contract Addendums
On November 7, the Board of Directors approved both Contract Addendums Enclosed are 3
executed originals of each Addendum Your scheduling the Addendums for consideration by
the City Council will be appreciated Upon approval, please execute the documents and return
2 originals of each document to me
Based on my discussion with both you and Tim Fisher, I understand that one issue is still being
discussed - the matter of how Denton's share of the Sanger Transmission Line will be
reimbursed The provisions of the Addendum provide for flexibility, however, If you desire a
different method of repayment to be specified, please let me know as soon as possible I can
provide a substitute page for insertion in the Addendum
Howard, I appreciate your help and cooperation in preparing these documents This is another
example of how cooperation and creativity produce good benefits for both Denton and the
District Call me If you have any questions
c Mr Robert E Nelson, Executive Director of Utilities, City of Denton
Encl (1) Addendum to Joint Ownership and Operations Contract Between City of Denton
and UTRWD - Regarding Participation in Sanger Transmission Line
(2) Addendum to Contract Between City of Denton and UTRWD - For Water
Treatment and Transmission Services
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