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HomeMy WebLinkAbout1976 VIP +'11LZ '1'~I,"l y I Irzr f)f~u r. BOOTH. LLOYD AND SIMMONS 302 SAN JACINTO "UILOINO AUSTIN, TEXAS 78701 FRANK R. BOOTH TELEPHONE 1517) CTl 0506 ROBERT H. LLOYD LUTCHER B. SIMMONS March 10, 1976 JAMES A. BANNEROT Mr. Jim White City Manager Municipal Building Denton, Texas 76201 Re: Aubrey Project Dear Jim: Sections 11.307 and 11.308, Texas Watery Code, authorize the Texas Water Development Board to contrnc+. with the U. S. Corps of Engineers to acquire storage space in the Aubrey € Project. The purchase price by a political subdivision of { the State to acquire storage space from the Water Develop- ment Board is contained in the Texas Water Code as follows: "Sll.357. Price of Sale: Facilities Acquired under Contracts I "(a) The price of the sale or transfer of a facility acquired under a contract shall be the sum of the direct coat of acquisition, plus an interest charge computed at a rate of one-half of one percent per year from the date of acquisition of the facility to the date of sale or transfer, plus interest at the cumu- lative average effective rate on all water development bonds sold up to the date of the sale or transfer for r each year or portion of a year for which the board paid interest to tha other party to the contract, plus the board's cost of operating and maintaining the facility from the date of acquisition to the date of the sale or transfer, less any payments received by the board from the lease of the facility or the sale of water from it. "(b) If, in transferring any contract, the board remains in any way directly, conditionally, or con- 1 tingently liable for the performance of any part of the contract, then the transferee, in addition to the payments prescribed by .rubssction (a) of this section, ? shall pay to the board annually one-half of one percent ' of the remaining amount owed to the other party to the contract, and shall continue these payments until the board is fully released from the contract. i i Mr. Jim White March 10, 1976 Page 2 "511.358. Costs Defined "With reference to the sale of a state facility, 'direct cost of acquisition' means the principal amount the board has paid or agreed to pay for on the facility up to the date of the sale." j The contractual arrangement that I envision to be acceptable to the Water Development Board would contain i 1. The political subdivision applicant would obtain an option to purchase a fixed amount of the Water I Development Board storag3 on or before a date certain in the future with perhaps 15 years being an acceptable date. If the option is not called, then the Water Development Board would be able to sell the storage space to some other political f j subdivision. i 2. The Water Development Board would obtain a cc:.crac- j tual right to use the applicant's storage space for overdrafting and for terminal and transfer storage 4 subject to a permit from the Water Rights Commis- ! f sion and a finding that the Water Development Board had a backup water supply to equal the overdraft right to provide water during average and below average runoff and rainfall years. Following this approach, I recommend that you send a letter to me addressed to General Rose, the Executive Direc- tor of the Water Development Board, along the lines of the attached draft. I will file the letter with the Water Development Board. Also, if I am successful in getting the matter on the Water Development Board Agenda on March 16, 1976, I would like you to appear before the Board with me to explain our position and to answer questions. Kindest personal regards. Very truly yours, Frank R. Booth FRB:bjs Enclosure cc: Mr. Paul Isham i Mr. Bob Gooch es w~ 1 i1 I i 7 DRAFT E r` E General James Rose Executive Director Texas Water Development Board P.O. Box 13087 Austin, Texas 78711 Re: Aubrey Project Dear General Rose: t The City of Denton has negotiated a contract with the + ! U. S. Corps of Engineers to acquire Aubrey Reservoir Project and has a 26 percent interest in permit applications pending before the Water Rights Commission to impound water in the Aubrey storage space and to divert and use the safe yield of the 26 percent share or an average of 21.2 M.G.D. i i In the event the City of Dallas is unable to acquire a permit to utilize the remaining 74 percent share of the Aubrey Project, for which Dallas has negotiated a contract with the U. S. Corps of Engineers, construction of the Project does not appear possible unless the Water Develop- went Board contracts with the U. S. Corps of Engineers to acquire the conservation storage space remaining after local political subdivisions have contracted for storage to their maximum present financial capability. I The City of Denton hereby makes preliminary application to the Water Development Board for financial participatio.: in the Aubrey Reservoir Project. The 21.2 M.G.D. safe yield I share of the Project which Denton is prepared to contract for will supply Denton's projected water requirements to the year 2994 when used in conjunction with the 4.5 M.G.D. yield Denton presently owns in the Lewisville Project. ~ i w Should the Water Development Board acquire storage f thec Water the Aubrey Development r Board # fonan n opwill tion contract to t acquire upito an additional 30 M.G.D. yield from the Project. The addi- tional 30 M.G.D. yield will supply Denton's projected water requirements to the year 2020. Very truly yours, Jim White City Manager r s +x'a 'rte ~ • MY Of Denton .11111licipal Building, Dento?47lms 76201 'j Office Of O y Manager i i f 1 March 12, 1976 i 1' 1 General James Rose Executive Director Texas Water Development Board P. 0. Box 13087 Austin, Texas 78721 f Re: Aubrey Reservoir { Dear General Rose: The City of Denton has negotiated a contract with the U. S. Corps of Engineers to acquire a 26 percent In- terest in the Aubrey Reservoir Project and has permit I applications pending before the Water R#?hts Commission to impound water in the Aubrey storage space and to divert and use the safe yield of the 26 percent share or an average of 21.2 MGD. f In the event the City of Dallas is unable to acquire thpermit to 74 percent share of Aubrey Projecte fothe r which remaining Dallas has negotiated a contract with the U. S. Corps of Engineers, construction j of the Project does not appear E Development Board contracts with othebU. S.1 Corpshofwater Engineers to acquire the conservation storage space re- maining after local political subdivisions have contracted for storage to their maximum present financial capability. The City of Denton hereby makes preliminary lication to the Water Development Board for financilaparticipation in the Aubrey Reservoir Project. The 21.2 MGD safe yield share of the Project which Denton is prepared to contract for will supply Denton's projected water requirements to the year 1997 when used in conjunction with the 4.5 MGD yield Denton presently owns in the Lewisville Project. S General James Rose March 12, 1976 Page Two Should the Water Development acquire storage space in the Aubrey Project, Denton will contract now with the f~ Water Development Board for an option to acquire up to E an additional 30 MGD yield from the Project. The addi- tional 30 MGD yield will supply Denton's projected water requirements to the year 2020. Very truly yours, I ' James W. White i City Manager j JWWsjs cos Frank Booth # I Booth, Lloyd 6 Simmons Attorneys at Law 302-San Jacinto Building Austin, Texas 78701 Bob Gooch U Freese t Nichols ~ 811 Lamar Street Fort Worth, Texas 76102 E Pahl C. Isham, City Attorney s I ' i t 1 r.N,• or~Nr. BOOTH, LLOYD AND SIMMONS • 302 SAN JACINTO WVILMNO AUSTIN. TEXAS 79701 FRANK R. BOOTH TKVNON& 1312117/.1 s0/ ROBERT H. LLOYD LUTCHER B. SIMMONS March 9, 1976 JAMES A. BANNEROT s General James Rose Executive Director Texas Water Development Board P.O. Box 13087 Austin, Texas 78711 Dear General Rose: I f This letter is a request from the Cities of Denton, Frisco, Lewisville, Farmers Branch and Grand Prairie for an opportunity to present their application to the Texas Water Development Board at its March 16, 1976, meeting for assis- tance in construction of the Aubrey Reservoir Project author- ' ized by Congress for construction by the U. S. Corps of Engineers in the Rivers and Harbor Act of 1965, P.L. 89-298. As proposed by the U. S. Corps of Engineers, the Aubrey j Reservoir Project would be a multiple purpose Project con- taining recreation, fish and wildlife, flood control and municipal water supply storage benefits. Conservation storage would include an additional 177,600 acre feet by enlargement of the existing Lewisville Reservoir Project and 799,600 acre feet in the new Aubrey Reservoir. The combined safe yield of the two reservoirs is estimated by the U. S. Corps of Engineers to be 91,200 acre feet per annum or an average of 81.4 million gallons per day. In 1969, the Texas Water Rights Commission designated the Cities of Dallas and Denton local sponsors of the Pro- ject and these two cities have negotiated contracts with the U. S. Corps of Engineers whireby Denton would acquire a 26 percent interest in the Project at an estimated cost of $28.9 million and Dallas would acquire a 74 percent interest in the Project at an estimated cost of $80.6 million. The Texas Water Rights Commission received applications for permits to appropriate, impound, divert and use water from t,e Project from the Cities of Dallas and Denton and the following additional public subdivisions of the State: Political Subdivision Impound Divert and Use City of Frisco 680000 9,000 City of Gainesville 42,000 60000 'Colony Municipal Utility District go. 1 30,000 4,285 Collin-Denton County Water i Sanitation District 480000 6,500 ~i1 aV e4:s.~ r •y.a t r General James Rose March 9, 1976 Page 2 The Texas Water Rights Commission held a joint public hearing beginning on January 13, 1476, on all six appli- cations for permits. A dispute between Dallas and the other applicants developed during the hearing with Dallas con- tending that recognition of prior water right claims of Dallas reduced the safe yield of the Project to 21.9 M.G.D. and the other applicants contending that the safe yield of the Project is '.L.4 M.G.D. as found by the U. S. Corps of Engineers which is the additional safe yield water supply produced by the Project without impairment of prior water right claims by Dallas. An additional controversy developed during the hearing when Dallas announced that it was discontinuing its long- standing policy of making the water supply benefits of the Project available through water supply contracts with water- h shed cities and Dallas County City customers of Dallas. Dallas announced its position that its application sought a permit from the Aubrey Project exclusively for the benefit of the City of Dallas and that it would not accept a permit under any other circumstances, The Texas Water Rights Commission, at the close of evidence on January 19, 1976, continued the hearing until February 18, 1976. During the interval, the Director of f Permits Division of the Texas Water Rights Commission, Mr. A. E.,Richardson, submitted a memorandum to the Commission dated February 11, 1976, concerning the evidence received by the Commission concerning the safe yield of the Project. A copy of Mr. Richardson's memorandum is enclosed for your information. Mr. Richardson's memorandum contains the following con- clusions and recommendations concerning the safe yield of the Project: 01. Yield of Aubrey Oct ProtThe firm yield of the Aubrey Project (Aubrey Reservoir plus Lewisville Reservoir enlargement) is totally de- pendent on the extent of existing downstream water rights and the priority of those water rights. There is not significant disagreement among parties involved that the Aubrey Project increases the firm yield of the existing Elm Fork system by about 81.4 mgd (91,200 acre-feet per year). "The computer simulations are merely a series of mathe- matical computations and the results are dependent only on the conditions and constraints established. The only significant difference between all the yield . 10 f{{(r y,~ General James Rose (larch 9, 1976 Page 3 studies of the Aubrey Project is that the Dallas studies recognized full priority over the proposed Aubrey Project to the overdrafting of the existing Lake Lewis- ville. The other studies did not." 14. Recommendations A. Recognize the yield of the Aubrey Project as that determined by the Corps of Engineers to be distribu- ted on the basis of ownership of increased storage t space in each reservoir. 8: Limit total annual diversions from all sources by each permittee to the firm annual yield of all of permittee's water supply facilities." i On the question of safe yield, Robert S. Gooch, a con- sulting engineer with the firm of Frcese and Nichols and a witness for Denton, testified that the yield of 81.4 M.G.D. does not affect Dallas' prior water right claims because during the critical drought period all inflows are passed through the Aubrey storage for the benefit of downstream rights and that the 81.4 M.G.D. yield from Aubrey is devel- oped solely from water in storage at the beginning of the critical drought period (Tr. 779-780). on cross examina- tion, William A. Sims, a consulting engineer with the firm i I of Forrest and Cotton, inc., and a witness for Dallas, admitted that the computer operation yield study introduced into evidence and proposed by Dallas to reduce the safe yield to 21.9 M.G.D. contemplated reducing the storage content of existing Lewisville Reservoir and the Aubrey Project to zero on numerous occasions, including a 16 con- secutive month period from October 1955 to January 1957 (Tr. 726-729). i On February 18, 1976, the applicants stated their positions on the evidence and Dallas presented a position paper which stated that Dallas would not accept a p it from the Texas Water Rights Commission unless it gave all of the benefits of Dallas' 74 percent of the Project exclu- sively to the City of Dallas. At this point, the Chairman of the Texas Water Rights Commission announced that Con- gressman R4y+ Roberts, the Congressional sponsor,had advised him that there would be no Federally funded Aubrey Project unless the benefits of the Project were available to the watershed cities and Dallas County customer cities as well as to Dallas itself. Chairman Carter and Commissioner Dorsey H. Hardeman then both stated that they would not issue Dallas a permit unless it contained conditionu which and Dallas continue County customer cities t and hwhicher- ed required cities Dallas to sh tp r Wvixc. MI J r rti 'General James Rase March 9, 1976 Page 4 allowed these cities to participate in the benefits of the Aubrey Project. Following these announcements and discussion, the Commission continued the hearing until March 18, 1976, at 10 O'clock A.M. Therefore, on February 23, 1976, the City Council of Dallas adopted a resolution relating to the position of the City of Dallas. I am informed that an attorney for Dallas has furnished you with a copy of this resolution. As I read E and understand the resolution, Dallas takes the position k that it will not accept a permit which contains the con- ditions Chairman Carter and Commissioner Hardeman announced must be in any permit issued to Dallas. From the above discussion, progress toward final con- struction of the Aubrey Dam and Reservoir Project has been jeopardized by reason of the expressed unwillingness of the City of Dallas to consider accepting a permit from the Texas Water Rights Commission in the form and of the content the Commission feels required b law, I Dallas will conclude that its best interestslaretservad byf not participating in this Project. Faced with this prob- ability, the cities mentioned in the first paragraph of this letter desire to express their interest in participating in the Aubrey Project in conjunction with the Water Development Board. These cities hope that the Water Development Board will indicate a willingness to participate in the Project sh,,,uld Dallas elect not to accept the type of permit the Water Rights Commission will issue. An appropriate response by the Water Development Board at this time would be adoption of a Resolution which states something along the lines of the following: "NOW, THEREFORE, BE IT RESOLVED that the Texas Water Development Board supports the earliest possible con- struction of the Aubrey Dam and Reservoir I-roject and will, if requested, entertain applications for finan- cial assistance in the manner presecribed by law, in furtherance of such Project to the extent that local sponsoring entities are unvble to obtain permits for the full yield of the Project and contractually meet and gice the assurances required by law for construc- tion of the Project." Very truly yours, FRB:bjs Frank R. Booth Enclosure cc: Mr. John Goldsum nF L'r;cnn ~NCG-•sl . 00/tON MINN[AAOLI/• GNICn00 /T,RAUL CLCVC"NO DALLAS N[W TORN O RLA N OO D[TROIT THE /y RHILADC VHIA ' .OAT WORTH f.G COMPANY AN r"ANCIRCO HONOLULU HOUSTON WI ■MINOTON ACI W Rq(-[ NRLDK( /(N(.IT tORSULTART[-b SR 10S ANO[L[/ ■ANAD[N(NT CONSULTANT( INT(.RATIORAL S(N(.IT/-[NN,Or([ GONNUWrATIORS VONTR[AL NIANI I900 R[RUSLK NAM "L MNR TOWER OTTAWA TORONTO DALLAS ' TEXAS T SSOI (SI.) T./•S//T March 1, 1976 f 1 Mr. Paul C. Ishav City Attorney City of Denton Municipal Building Dentoo, Texas 76201 i Dear Mr. Ishas: This constitutes our proposal to undertake a review of the 1 template insurance and risk management program (excluding group insurance) of the City of Denton. The objective of this review will be to provide an independent and unbiased report to city management of the adequacy, comprehensiveness I and appropriateness of the insurance program now in force,,and to make j ! recommendations 2s to those modifications of that program that would a appear to be in the interest of the City at this time or in the immediate future. This study will include the following fnctorst 1. Identification of the exposures of the City to insurable typos of loss. 2. Determination of the most appropriate and least costly method of handling each exposure i.e., commercial insurance, self-insurance[ bold haraiess agresamts, etc. 3. Review of the insurance and risk managnmaat philosophy of the City, and devolopswt of recommendations relative to that philosophy. 1. Analysis of the existing contracts of insurance and evaluatton of the adequacy and comprehensiveness of protection afforded by them. i. Determination of the advisability of any modification of the present insurance program of the City including such matters u : as Changes to or from self-insurance b. Purchase of additional insurance R -Z- c. Changes in deductible levels d. Chanps in rating plans e. Eltalwtion of umucessary coverages f. Consolidation of coverages g. Au"'OA r I. of policy terms and conditions he Reef m Ueration of eysteau of valuation 1. Chan,*@ in practices regarding insurance requirements frog 14806"t suppliars, or contractors J. Rscosoeodatiooa regarding the most efficient course to follow in the purchase of insurance In undertaking this "signment, our activities will include visits to your offices and to key facilities as approved by you to obtain data on the City's opsratio" , ezposur" and insurance policies C and appropriate conferences with key persouwl as the process of conducting this study takes place. To vadertaka this assignment, we will need originals or copies of all asiattag insurance policies relating to coverages within the scope of the study. We also will repairs copies of rate calculations, premium audits, loss atatisties dad la,pection reports, whicb my be in your files or readily available from ycnr insurance agents or compaaiaa. Copies of lea" agreazwnts, appraisals, .wntraet"I agrsamants and other background data will also be most belpfu:.. The Hyatt company is known for the quality of its work, a reputation developed by assignment to each client's needs of capable and ezperienced psrsoaa to the respective disciplines rsquirad. The project team involved in this assignment will be handed bye Frederick 3. Gillette Froj"t Manager Diehard X. kkapgood Associate Project !iawger Additional staff cabers will be "signed " required, followings Other governmental cli48ts of The Wyatt Company include the L Dallas-Fort Worth International Airpo•7c 2. Caddo Parish School board. Shreveport, Louisiana 3. City of Chicago, 1113001s 4. County of Maricopa, Arizona i Wa would ba happy to provide you with the nzmes of coat@cts of thQ" anritias should you wish to check the quality of our work. In be conduct of any assignment we will act solely in a con- salting and advisory capacity. We do not act " insurance brokers and will not receive any commissions in connection with your insurance or a qE rb .:r4'ruC -T remuneration from any source other than the fee charged to you for our professional services. That fee will be based upon the time and out-of- pocket expenses involved in conducting this study, and is estimated to reage from $3.000 to $3.000. plus travel uses. A draft of the report should be available for discussion within 60 days after commencement of this assignment. The final report will be in your hands within 30 days thereafter. n The Wyatt Company also provides consulting service on individual asaigewats covering various projects, such as the preparation of bid specifications and evaluation sad recommendation of bids recalved, feasibility studies for self-.insurance and preparation of insurance manuals. i For thou antities wishing to have consulting service on a continuous basis, The Wyatt Company can be retaia" to finetion as your risk or insurance manager following the same concept u retention of 4 legal counsel or a CPA. Retainer services include such things ass A. Discussion of specific insurance policies prior to removal to determine the adequacy of limits, desirability of compatitive bidding, reasonable parameters of renewal { preaive and changes to rating plans which might be considered. D. Easmination and objective report on competing insurance proposals. C. Review of policies as received and determination of whetber they have been properly issued. D. Analysis of proposals for a change in insurance coverage originating with year insurance agents. f. Periodic review of self-insurance levels. 7. Rxaalaatioa of the feasibility of comrolidatiog insurance policies. 0. Determimatioa of the desirability of self-insurance or near-insurance. H. Discussion of other specific problems on which an outside *piston is dealrad. Retainer agreements are usually for a fiat monthly amount sad are either cancellable or subject to renegotiation by either party upon 30 days' notice. We are pleased to submit this proposal, and look forward to the opportunity to be of service. Sincerely, ( yred rick S. Gillette, CPM Couns"tant Risk Management Services tb Cot We Jim V. White City Kima`er i 1 ' I i r 1 ' ~ r N~ 1 ~ THE WYATTC(161PANY FREWMCK B. GILLE77EO C.P.C.U. CONSULTANT RISK MANAG04 NT SERVICES Responsibilities Project Manager on assignments for the review of Pr Management and Insurance Programs orn' and Casualty Risk risk ~ and consultation with clients on various management problems including self-insurance feasibility and implementa- tion, analysis of insurance proposals, preparation of specifications, review of international insurance programs, and other assignments. f Experience Kaiser Aluminum $ Chemical Corporation - Twelve years of experience in the into, ce and risk management department of this corporation, eventually manag- ing the department with a staff of nine persons. Heavy involvement in self- 1 insurance, international subsidiaries, and large property and business interruption losses. Interstate Brands Corporation - Four years as risk manager. Responsible for total rearrangement of insurance programs, entry into self-insurance in appro- priate areas. Responsible for Employee Benefits as well as Corporate Insurance. I ! R. B. Jones Co ~ rporation -One year as an account executive, with euuphasis on redesign and improvement of insurance and risk management programs. the Wyatt Company - Consultant since 1975.. Academic Background Ihiversity cf California - Bachelor of Science Business Administration (Insurance) I American Institute for Property 8 Liability Insurance - C.P.C.U. Diploma Professional Activities I J Society of Qnartc;red Property $ Casualty Underwriters i Vice President - Northern California Chapter American Society of Insurance Management, Inc. Vice President - Northern California Chapter r Vice President - Greater Kansas City Chapter i Frequent speaker at meetings of professional organizations, including ASIM (RIDS) 1 I I y' Nn.T fiUW.d.Al 7 l1 E THE WYATr CCIwANy RICHARD K. Kvwm WSILTANr RISK MAHAMg7,rr SERVICES t Responsibilities Consultant on assignments for the review of Property and 'gement and Insurance Programs. Advises Casualty Risk aspects, including analysis of domestic and various risk Management on analysis of self-insurancep preparation of reign insurance ~e evaluation of Proposals and other assignmen~ifications for rienco I ~r APIA Ten years of service in foreign [ and Venezuela of this U.S. underwritininsurance operations in Colombia Colombia, Manager for Venezuela. g~• Assistant Manager for Ebasco Services, Inc. Three years as a T molting organization. echnica! Analyst for this insurance I Continents! Insurance Reinsurance Company Fourteen years as Superintendent of Foreign and Departments and Resident Manager of Caribbean, Mexico, and Central America. operations in the j L'Union Nationale NO years as Mane the Continents! Insurance gig Director of this subsidiary of Chairman of LfUnion Nationale Beirut, Lebanon. Also elected Vice The Wyatt Company Consultant since mid-1974. Academic Background Brown University - Bachelor of Arts with Final Honors i Fletcher School of Low 4 Diplomacy (affiliated with Harvard U. and Tufts U.) Master of Arts in Law 4 Diplomacy Insurance College of N.Y. Mares Insurance Courser Chartered Insurance Institute (London) Fire Insurance g Reinsurance Courses i I ' F `i r Sal .s.... w'VX.1 I y - YI T.YMS .2. Professional Activities Former Member Executive Ccjdttee, Association of Insurance C4mpanjes of Colombia-A%CMM; sat on Fire and Marine Technical Commi.,tees. E Former Member Board of Governors, Venezuela Fire Companies Association, FOPw York er Board of Di rectors, United States Fire Conference, a New body concerned fire insurance activities in Caribbean area. Past.President and Director of International Trade Association of Puerto UnFoundinderwriters Member and Association; sat on Executive Canittee of Committee of Puerto Ricoh Inspection and Rating Bureau (Fire). j Insurance Member, American Chamber of Ccamerce of Mexico. Former Member Executive j of Lebanon. Committee, Association of Insurance Companies i Author of "The Foreign Fire Policy" article in The International Insurance l Monitor, New York. Author of "private Insurance in Mwdco" by the American Chamber of Commerce, Mexico City. S/1►10(ICl7, published Attended biennial Hemispheric Insurance Conferences in various Latin American capitals and conventions of the organization of insurance Companies of Central America, contributing verbal and written studies and research findings to these organizations. i t e 1 t t 0 J~ I I 1 i i i s ! S 1 i f r I I fi I 1 I ~ ' i I Y ~ A 1' t R „ ' I }~.lv i {