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1991-070fwsdo ORDINANCE NO 11-090 AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON, AND THE CITY OF HIGHLAND VILLAGE, THE CITY OF LEWISVILLE AND THE DENTON COUNTY FRESH WATER SUPPLY DISTRICT NO 1 RELATING TO THE ACQUISITION OF SURFACE WATER FROM THE COOPER RESERVOIR, AUTHORIZING THE EXPENDITURE OF FUNDS AS PROVIDED IN SAID AGREEMENT, AND PROVIDING AN EFFECTIVE DATE SECTION I That the Mayor is authorized to execute an Agree- ment between the City of Denton, the City of Highland Village, the City of Lewisville, and the Denton County Fresh Water Supply Dis- trict No 1 relating to the acquisition of surface water from the Cooper Reservoir SECTION II That the expenditure of funds as set forth in the Agreement is hereby authorized SECTION III That this ordinance shall become effective im- mediately upon its passage and approva PASSED AND APPROVED this the day of 1991 BOB CASTLEBERRY, ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPR ED AS TO LEGAL FORM DEBRA A DRAYOVITCH, CITY ATTORNEY BY d~ REGIONAL RAW WATER SUPPLY - COOPER RESERVOIR PROJECT THE STATE OF TEXAS § COUNTY OF DENTON § DUPLICATE THIS REGIONAL RAW WATER SUPPLY CONTRACT (the "Contract") made and entered into as of the -/rz day of ICJ N , 19 (the "Contract Date"), 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 following City of Denton City of Highland Village City of Lewisville Denton County Fresh Water Supply District No 1 which parties are collectively or individually referred to herein as "Participating Member(s)" or "Member(s)") W I T N E S S E T H WHEREAS, each of the Participating Members is a duly incorporated city, town or other political subdivision of the State of Texas operating under the Constitution-and laws of the State of Texas, and WHEREAS, each of the Participating Members is a governmental entity located in Denton County, Texas, that currently provides retail utility service or is taking definitive steps satisfacCtory to the District to provide retail utility service to its customers, and WHEREAS, one of the purposes for which the District was created was to acquire new surface water supplies for cities and water distribution utilities of the Denton County area, and -1- WHEREAS, in the pursuit of such purposes, the District has by contract with the City of Commerce, Texas, entered into on July 5, 1990 (the "Commerce Contract"), said Contract attached hereto as Exhibit 8, acquired rights to purchase water in the Cooper Reservoir on the South Sulphur River in Delta County, Texas, built by the United States of America, Corps of Engineers (the "Government"); and WHEREAS, the rights to purchase water covered by the Commerce Contract are dependent on a contract (the "SRMWD Contract") between the City of Commerce, Texas, and the Sulphur River Municipal Water District (SRMWD), entered into on or about March 7, 1991, and the amount of water allocated to Commerce under the SRMWD Contract and contracted to the District under the Commerce Contract is estimated to be 11 72 million gallons per day (MGD) on a firm yield basis, and WHEREAS, to enable the District to provide water from the Cooper Reservoir to the Participating Members and others in the area of Denton County, SRMWD is taking steps to gain appropriate governmental approval to amend the water rights and for an inter- basin transfer of water from the Sulphur River basin to the Trinity River basin and a transmission water main will need to be constructed or other arrangements provided relating to the transfer of water from the Cooper Reservoir to the District, and WHEREAS, under the terms of the Commerce Contract and in consideration of the rights to purchase water from the Cooper Reservoir, the District agreed (1) to reimburse the City of Commerce, Texas, the sum of $50,000 for prior costs incurred in -2- connection with the Cooper Reservoir water, (ii) to pay costs incurred for the permit amendment and for the inter-basin transfer of water, and (iii) to compensate Commerce for payments made to the Government for the construction and operation of the Cooper Reservoir and for other obligations included in the Commerce Contract, and WHEREAS, the District has the opportunity to conduct a feasibility study concerning transportation of the Cooper Water before the commitment to purchase the water becomes final, and WHEREAS, the Board of Directors of the District has authorized such feasibility study, and WHEREAS, the process of obtaining the permit amendment and for allowing inter-basin transfer of water and the conduct of a feasibility study and the construction of a water transmission line for the Cooper Reservoir or acquiring capacity in an existing or future transmission line, either or both, or the making of other arrangements relating to the receipt of raw water and involving Cooper Reservoir water is collectively hereinafter referred to as the "Project", and WHEREAS, for and in consideration of acquiring the right to purchase one hundred percent (1008) of the raw water under the Commerce Contract, the Participating Members are willing and have agreed to contract with the District as hereinafter provided, and WHEREAS, the District and the Participating Members are authorized to enter into this Contract pursuant to the District's enabling statute, Chapter 1053, Acts of the 71st Legislature, Regular Session, 1989 and Vernon's Ann Tex Civ St , Article 4413 -3- (32c) (the "Interlocal Cooperation Act"), and other applicable laws; and WHEREAS, the District agrees that the Participating Members shall continue to own and operate their respective water pumping, storage and distribution facilities, and any respective water treatment facilities, and WHEREAS, the Board of Directors of the District on April 5, 1990, adopted a resolution directing that a portion of the water under the Commerce Contract be made available on a firm basis to parties who contract with the District prior to final determinations being made about the permit amendment, inter-basin transfer and the feasibility of transporting water to the District and until the District is capable of selling Cooper Reservoir water as part of a regional water supply system, and WHEREAS, each of the Participating Members under this Contract proposes to pay its share of costs of the Project until such final determination is made regarding the Project and each Participating Member's share of the costs of the Project will be proportional to the respective amounts of water each has agreed to purchase under this Contract, and WHEREAS, before construction of pipelines to convey water from the Cooper Reservoir to District begins and/or before Bonds are issued to finance costs of the Project, all of the Participating Members must give approval, NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and subject to the terms and -4- conditions hereinafter set forth, the District and each of the Participating Members agrees and contracts as follows ARTICLE I Definitions Beation 1.01. The following terms and expressions as used in this Contract, unless the context clearly shows otherwise, shall have the following meanings: 1 "Acts' means Chapter 1053, Acts of the 71st Legislature, Regular Session, 1989, which was signed by the Governor and became effective June 16, 1989 2 "Adjusted Annual Payment" means the Annual Payment as adjudged by the Board during or after such Annual Payment Period, as provided by this Contract 3 "Administrative and Planning Expenses" means the general overhead cost and expenses of managing the District, but not including expenses related to capital projects financed by the District Such expenses shall include the administration of the District's general office, the activities and meetings of the Board and the planning activities of the District, to the extent such programs and activities shall be for the general welfare of the District Activities and programs for the benefit of specific parties and for specific capital projects shall be the responsibility of the benefiting parties, provided, however, the aggregate annual amount of Administrative and Planning Expenses paid by a Participating Member under this Contract and all other contracts with the District shall not exceed fifty cents 50) per capita (based on the most recent published census data -5- available from the United States Government, Bureau of Census) for the respective Participating Member paying its pro rata share of such Administrative and Planning Expenses unless otherwise agreed to by at least seventy-five percent (75%) of all Participating Members, as defined in the "Act," having collectively at least seventy-five percent (75%) of the population represented by all of the Participating Members 4 $$Annual Payment' means the amount of money to be paid to the District by each Participating Member during each Annual Payment Period as its proportionate share of the Annual Requirement 5 IlAnnual Payment Period" means the District's fiscal year, which currently begins on October 1 of each calendar year and ends on September 30 of the next following calendar year, but which may be any twelve-consecutive-month period fixed by the District, and the first Annual Payment Period under this Contract is estimated to be the period of October 1, 1990, through September 30, 1991. 6 INAnnual Requirementif means, during an Annual Payment Period, the total amount required to pay all Operation and Maintenance Expenses of the Project and all costs and payments due and payable for the amortization of indebtedness issued or incurred to finance the costs of the Project by the District 7 '$Board" means the governing body of the District 8 "Board Member(s)" means a member or members of the Board -6- 9 evzond ltesolutionle means any resolution of the District which authorizes any Bonds 10 IlBoads" means all bonds, notes or other obligations payable from and secured, in whole or in part, from the payments to the District under this Contract, and the interest thereon, hereafter issued by the District to finance the costs to acquire, construct and complete the Project, and/or all bonds, notes or other obligations issued subsequently to finance costs to improve, extend, operate or maintain the Project, and any bonds issued to refund any bonds, notes or other obligations or to refund any such refunding bonds 11 OlDistrictll means the Upper Trinity Regional Water District, a conservation and reclamation district pursuant to Article XVI , Section 59 of the Constitution of the State of Texas created in accordance with the Act 12 "MGD" is an abbreviation for "million gallons of water per day " 13 900peration and Maintenance Expensesof means, during an Annual Payment Period, all direct costs and expenses incurred by the District for the operation and maintenance of the Project, including (for greater certainty but without limiting the generality of the foregoing) amounts payable under the Commerce Contract and/or SRMWD Contract to the U S Army Corps of Engineers or any other federal, state, or local agency for the construction, operation and/or water storage rights or other interests in water in the Cooper Reservoir, the costs of utilities, supervision, engineering, accounting, auditing, legal services, insurance -7- premiums, supplies, services, and administration of the Project, Administrative and Planning Expenses, and costs of operating, repairing, maintaining and replacing equipment for proper operation and maintenance of the Project The term "Operation and Maintenance Expenses" does not include depreciation charges 14. '$Participating Sember(s)II means the City of Denton, Texas, the City of Lewisville, Texas, the City of Highland Village, Texas, and the Denton County Fresh Water Supply District No 1 15 I'Phase i of the Project's means the period beginning with the date of this Contract and ending on the date Phase II of the Project begins (i e , when Bonds are issued by the District to finance the costs of the Project or a construction contract or other similar kind of contract is let or executed by the District relating to the transfer and/or exchange of water from the Cooper Reservoir) or eight (8) years from the date of this Contract has expired without the issuance of Bonds or the letting of such a contract, whichever occurs first 16 IlPoint(s) of Delivery" megLns the point designated in this Contract or by subsequent agreement where water will be delivered from the Project 17 I'Proiectst means the "Project" as defined in the Preamble of this Contract 18 IlProject Advisory Committeelf means the Committee created to oversee implementation of the Project and to advise the District with respect to the Project, which Committee is composed of three (3) representatives and two (2) alternates appointed by the Board -8- 19 #$state'$ means the State of Texas ARTICLE II. Board of Directors section 2.01. Board Representation. In accordance with the provisions of the Act, each of the Participating Members shall be entitled to appoint one member to the Board of Directors of the District and each such director appointed by the Participating Members shall be entitled to vote on all matters before the Board, including all projects to be considered by the Board in all service areas of the District, regardless of whether the Participating Members are participating in the project section 2.02. Terms. Board members shall serve staggered four (4) year terms in accordance with procedures established by the Board and as provided in the Act section 2.03. Representation and Warranties of the District The District hereby represents and warrants that the Commerce Contract has been duly executed by all the parties thereto and the Commerce Contract is in full forced nd effect, the District has full power and authority to assign or otherwise convey to the Participating Members the right to purchase water in the Cooper Reservoir in accordance with the terms of the Commerce Contract and the execution and delivery of this Contract and the provisions hereof do not and will not conflict with or constitute on the part of the District a breach or a default of any provision of the Commerce Contract -9- ARTICLE III. Raw Water Convevanc•/option to purchase Construction and Issuance of Bonds Eeotion 3.01. Raw Water Conveyance/option to purchase. The Participating Members hereby agree to purchase from the District and the District hereby agrees to sell to the Participating Members all of the raw water acquired by the District under and pursuant to the Commerce Contract subject to the terms and provisions hereinafter appearing, provided, however, at any time prior to the expiration of Phase I of the Project, the District shall have the right to purchase, and the Participating Members hereby each agree to sell to the District, a maximum of 48 8% of the raw water quantity each Member respectively holds under this Contract pursuant to the Commerce Contract upon payment to the Participating Members of an amount equal to the percentage share of all costs incurred by each Participating Member under the terms of this Contract equal to the percentage of raw water acquired by the District, e g , if the district acquires from the Participating Members forty percent (40%) of the raw water covered by the Commerce Contract pursuant to the option granted by this Section, the District would owe the Participating Members forty percent (40%) of all costs incurred by the Participating Members to the date such acquisition is effective, plus interest on the unpaid balance of such purchase price at the rate of ten percent (10%) per annum (calculated on a 360-day year of twelve [12] 30- day months) Payment of the purchase price for raw water by the District to the Participating Members shall be in whole or in -10- installments and, if in installments, over a period not to exceed five (8) years from the date the District exercises such option to purchase raw water If at the end of Phase I, the District has not exercised its option to purchase 48 at of the water, any Participating Member may request the District to purchase up to 48 8% of its water and if so requested by any Participating Member, the District shall be obligated to purchase the amount so requested by such Member Bection 3.02. Consulting Engineers; Construction of Project. The District and the Participating Members agree that the District will select the Consulting Engineers for the Project and, subject to approval by a majority of the Participating Members, may change Consulting Engineers at the option of the District Subject to approval of all Participating Members, the District may issue its Bonds, payable from and secured by a pledge of the Annual Payments from this Contract to finance the costs to acquire, construct, extend, enlarge, repair, renovate, equip and otherwise improve the Project The acquisition, congtruction and improvement of the Project by the District will be made in accordance with generally accepted engineering practices Each Bond Resolution of the District shall specify the exact principal amount of the Bonds to be issued thereunder, which shall mature within the maximum period, and shall bear interest not exceeding the maximum allowable rates, permitted by law, and each Bond Resolution shall contain such other terms and provisions pertaining to the security and payment of Bonds and the operation and maintenance of the Project as may be necessary for the marketing and sale of the Bonds -11- section 3.03. Bonds. (a) It is the intention of the parties hereto that, following the completion of Phase II of the Project, the District will be responsible for operating and maintaining the Project in a manner which will provide for the withdrawing, transporting and delivering all water from the Cooper Reservoir to the general vicinity of Denton County Subject to the approval of all Participating Members, the District may from time to time issue its Bonds in such amounts as are within its judgment and discretion, sufficient to achieve full implementation of the Project, including construction of facilities (b) As noted above, each issue of such Bonds will require the approval of all Participating Members If the Board desires to issue Bonds, and if one or more Participating Members fail to approve such issuance, the District or other remaining Participating Members, or both, shall have first rights to acquire the raw water of such Participating Member's interest under this contract and, if the District or the Participating Member refuses to exercise such option to acquire, the District shall have the right to convey such Participating Member's interest in the Project to others In such event, the selling Participating Member will be refunded its proportionate share of the costs incurred under this Contract plus simple interest at the effective interest rate (calculated in the manner prescribed in Article 717k-2, V A T C S ) the District pays on all Bonds then outstanding and issued for the Project, or if no Bonds have been issued by the District, then at -12- the rate of ten percent (10%) per annum (calculated on a 360-day year of twelve (12) 30-day months) (c) Before any Bonds for construction of the Project are issued, the District must first conduct an engineering feasibility study and submit the report thereof to Participating Members for approval ARTICLE IV Qperatinc Requirements Section 4.01. Water Sales Each of the Participating Members, respectively, shall be entitled to receive from the District the quantities of raw water identified in Exhibit A attached hereto and in accordance with this Contract To the extent the District has acquired a percentage share of the raw water to be delivered or acquired hereunder pursuant to Section 3 01, the District may sell or otherwise use such raw water from the Project to supply treated water to others participating in a regional treated water system Section 4.02. Qption to Terminate. The Board, after consideration of the feasibility of transporting water from the Project, and after consulting the Participating Members, may decide that Phase II of the Project is not feasible If so, the Board, after consulting with all Participating Members, may elect to exercise its option to terminate the Commerce Contract If the option to terminate the Commerce Contract is exercised, the District and Participating Members will have no further obligations under this Contract or under the Commerce Contract except for obligations and commitments incurred prior to the termination of -23- such contracts. If the District elects to terminate the Contract with Commerce, and if such election to terminate is not approved by a majority of the Participating Members, the District shall assign the Commerce Contract to such of the Participating Members that agree to assume said Commerce Contract in a timely fashion upon receipt of approval of said assignment by Commerce if Commerce refused to accept assignment of the Contract to Participating Members, District agrees that it will not terminate the Contract without the consent of a majority of the Participating Members section 4.03. Future Water Supply. The Board, after consideration of the feasibility of transporting water from the Project, and after consulting with Participating Members, may decide not to transport the water in the near future, but to maintain its rights to the water in the Cooper Reservoir for future, long-term needs of the Participating Members and the District Until such time as the Participating Members have received full payment in accordance with paragraph 1, Section 3 01, the Board, subject to the approval of a majority of the Participating Members, shall have the right and duty to take such action as deemed to be in the best interest of the District and the Participating Members After the Participating Members have been fully paid, the Board shall have the right and duty, subject to the prior consultation with the Participating Members, to take such action as deemed to be in the best interest of the District and the Participating Members Such action may be to transport the water in the near future, to maintain its rights to the water in the -14- Cooper Reservoir for long-term water supply, or to make such other disposition of the water as may be in the best interest of the District and Participating Members in accordance with the terms of this Contract, each Participating Member will have a continuing obligation to pay its share of the Annual Requirement Section 4.04. ]later Transfers and Exchanges Until such time as the Participating Members have been repaid pursuant to Section 3 01 hereof, the Board, subject to the approval of a majority of the Participating Members, after consideration of the feasibility of transporting water from the Project, and all alternatives, may decide to transfer to or exchange the water with other entities to achieve for the District an indirect benefit of the water After the Participating Members have been repaid, the Board's decision to transfer or exchange water shall be subject to the prior consultation with the Participating Members For example, the District could deliver the water to an entity at a location other than Denton County in return for the District being granted certain rights to water in or rMpr Denton County or for other good and valuable consideration The Board has the right and duty to consider all options for the maximum beneficial use of the water, and, subject to the approval of a majority of the Participating Members until such time as the Participating Members have been repaid pursuant to Section 3 Ol hereof, may make such contracts and other arrangements pertaining to the use or transfer and exchange of raw water covered by this Contract After the Participating Members have been repaid, District shall have the obligation to consult with the Participating Members prior to -15- agreeing to any transfer or exchange as provided for in this Section In accordance with the terms of this Contract, each Participating Member acknowledges a continuing obligation to pay its share of the Annual Requirement, subject to any credits applicable to such transfers or exchanges section 4.08. 4uantity. Each Participating Member agrees to take at Point(s) of Delivery to be later mutually agreed upon or to pay for the minimum amount of water as indicated in Exhibit A hereto, which Exhibit is attached hereto and incorporated herein for all purposes section 4.06. Points of Delivery Water from the Project may be delivered at Cooper Reservoir, at Lake Lewisville, at Lake Ray Roberts, at a Member's water treatment plant, at the Member's Point of Delivery identified in a separate Contract the Member may have with the District for treated water service, or at another mutually agreeable Point of Delivery All Points of Delivery of the water shall be mutually agreed in writing between each Participating Member, respectively,_pnd the District section 4 07. Resale. Members hereby agree not to sell water purchased from District under this Contract to any person or entity outside such Member's corporate boundaries or prescribed service area (as may be adjusted from time to time) unless Member has received prior written approval from the District Approval to make retail sales of water covered by this Contract to individual customers outside such boundaries may be granted by the General Manager or Executive Director of the District Approval to make wholesale sales of water pursuant to this Contract outside -16- the Member's prescribed service area shall require the specific approval of the Board Notwithstanding any provision in this section to the contrary, each Participating Member shall have the right and authority to continue to sell water on a retail basis or wholesale basis to all existing customers situated outside its corporate boundaries or service area and without the approval or consent of the District Additionally, the Participating Members shall have the right and authority to sell raw water or treated water received from other sources on a wholesale basis or otherwise without any limitation imposed by this Contract or approval by the District Section 4.08. Other Contracts (a) If the District exercises its right to raw water under this Contract pursuant to Section 3 01 hereof, the District reserves the right to supply raw water from the Project to others on wholesale basis Each such contract with other entities shall be limited to the District's share of raw water covered by this Contract and shall not contain any provision which would adversely affect each Participating Member's percentage share of raw water covered by this Contract (b) It is further recognized and agreed that the District may use raw water from the Project to supply treated water from its treated water system to other entities which are not Participating Members, provided that all such sales of water to such customers shall not impair the capability of the District to fulfill its -17- duties and obligations under this Contract to the Participating Members. (o) The parties hereto recognize and acknowledge that the District shall have the right and authority to contract or make other arrangements with respect to its percentage share of water from the Project without limitation or approval of any Participating Member Section 4.09. Quality. The water to be delivered by the District and received by each Member shall be raw surface water from the Project Each Member has satisfied itself that such water will be suitable for its needs section 4.10. Metering Equipment (a) Before water is delivered from the Project to Members, each Member will furnish and install at its expense the necessary equipment and devices of standard type required for measuring the quantity of water delivered under this Contract from the Project to each Member's Point or Points of Delivery Such meters and other equipment so installed mall be the property of the District The District shall inspect, calibrate, and adjust its meters at least annually as necessary to maintain accurate measurements of the quantity of water being delivered Each Member shall have access to the metering equipment at all reasonable times for inspection and examination, but the reading, calibration, and adjustment thereof shall be done only by employees or agents of the District If requested, the affected Member may witness such reading, calibration and adjustment of meters All readings of meters will be entered upon proper books of record maintained by -18- the District Any Member may have access to said record books during normal business hours. (b) Under the Commerce Contract, the District is required to install metering devices to measure the amount of water taken from Cooper Reservoir and purchased from Commerce Such metering devices shall be considered to be a part of the Project Section 4.11. Treated Water Service If a Participating Member has a separate contract with the District for treated water service, such Participating Member agrees that raw water up to the quantity specified in Exhibit A for such Participating Member purchased under this Contract shall, upon completion of facilities to deliver water from the Project to Denton County, be used by the District to meet the Participating Member's treated water needs In such instance, a credit will be applied to the statement for treated water charges from the District to such Participating Member, such credit to be the amount of raw water cost otherwise included in the price of treated water from the District ARTICLE V. Fiscal Provisions section 5 01 Annual Requirement (a) Subject to the terms and provisions of this Contract, the District will provide or contract for and pay for the cost of the Project It is acknowledged and agreed that payments by they Participating Members to the District under this Contract will be the sole or primary source available to the District to provide the Annual Requirement In compliance with the District's duty to fix and from time to time to revise the rates and charges -19- for services rendered under this Contract, the Annual Requirement may change from time to time Each such Annual Requirement shall be allocated among the Participating Members and the District according to their respective percentage shares of raw water covered by this Contract, and the Annual Requirement for each Annual Payment Period shall be identified in each annual budget and shall at all times be not less than an amount sufficient to pay or provide for the payment of. (A) All Operation and Maintenance Expenses of the Project, and (B) An amount to fund within a reasonable period not to exceed twenty-four (24) months a special reserve for the Operation and Maintenance Expenses of the Project or for capital improvements to the Project The total amount to be accumulated for such operating and capital improvements reserve shall not exceed twenty-five percent` (25%) of the annual Operation and Maintenance Expenses of the Project (estimated to be approximately three (3) months' expenses), and (C) When the District and Participating Members agree to issue Bonds to finance the costs of the Project, a capital component, including principal, interest, premium, reserve funds or other funds established or required by any Bond Resolution -20- section 3.02. Annual Budget. Each Annual Budget for the acquisition and/or operation and maintenance of the Project shall always provide for amounts sufficient to pay the Annual Requirement. The Annual Budget for the Project for the Annual Payment Period during Fiscal Year 1990-91 has been prepared and adopted by the District based on estimates made by the District, and each Participating Member has been furnished a copy of such Annual Budget and each Participating Member hereby acknowledges its ability to pay its share of the Annual Requirement from available funds budgeted therefor On or before June 15 of each year thereafter, the District shall furnish to each Participating Member a preliminary estimate of the Annual Payment required from each Participating Member for the next following Annual Payment Period Not less than sixty (60) days before the commencement of each Annual Payment Period beginning in Fiscal Year 1991-92, the District shall cause to be prepared a preliminary budget for the Project for the next ensuing Annual Payment Period A copy of such preliminary budget shall be filed with each Participating Member for review before action by the Board Any Participating Member may submit comments about the preliminary budget directly to the Board The Board may adopt the preliminary budget or make such amendments thereof as to it may seem proper, provided, however, no change or amendment to the preliminary budget will be made by the Board after such preliminary budget has been submitted to the Participating members which change or amendment would in effect increase the Annual Requirement without resubmitting such amended -21- preliminary budget to the Participating Members for additional comments The budget thus approved by the Board shall be the Annual Budget for the next ensuing Annual Payment Period The Annual Budget, including the first Annual Budget, may be amended by the District at any time to transfer funds from one account or fund to another account or fund provided such transfer will not increase the total budget and the transfer of funds is attributable to the costs of the Project or to the Project's maintenance and operation Subject to notification and approval by the Participating Members, the amount for any account or fund, or the amount for any purpose, in the Annual Budget may be increased through formal action by the Board even though such action might cause the total amount of the Annual Budget for the Project to be exceeded, provided, however, such action shall be taken only in the event of an emergency or special circumstances which shall be clearly stated in the notice to the Participating Members and in the resolution at the time such action is taken by the Board Section 5 03. Payments by Participating Members. (a) For the raw water services to be provided to the Participating Members under this Contract, each of the Participating Members agrees to pay, at the time and in the manner hereinafter provided, its proportionate share of the Annual Requirement Each of the Participating Members shall pay its part of the Annual Requirement for each Annual Payment Period directly to the District, in monthly installments in accordance with the -22- schedule of payments furnished by the District, as hereinafter provided (b) Each Participating Member shall pay a proportionate share of the Annual Requirement according to the relative amount of water contracted to each Member and tabulated in Exhibit A The District shall charge each Member its share of pumping costs according to the volume of water actually delivered (a) Each Participating Member's allocated share of the Annual Requirement for each Annual Payment Period shall be made in accordance with a written schedule of payments for the appropriate Annual Payment Period which will be supplied to each of the Participating Members by the District (d) Notwithstanding the foregoing, the Annual Requirement, and each Participating Member's share thereof, shall be redetermined, after consultation with each of the Participating Members, at any time during any Annual Payment Period, to the extent deemed necessary or advisable by the District, if (i) The District exerciup its option to acquire raw water pursuant to Section 3 01 hereof, (ii) Unusual, extraordinary, or unexpected operation and Maintenance Expenses are required which are not provided for in the District's Annual Budget or reserves for the Project, (iii) Operation and Maintenance Expenses of the Project are substantially less than estimated, (iv) The District issues Bonds for the Project, or -23- (v) The District receives either significantly more or significantly less revenues or other amounts than those anticipated, provided, however, such Annual Requirement shall not be redetermined in a manner that would increase a Participating Member's Annual Payment without notifying such Participating Member of such circumstance and such Participating Member acknowledging in writing its ability to pay such increased Annual Payment (e) Each Member hereby agrees that it will make payments to the District required by this Contract within twenty (20) days of the date a bill for service is rendered If any Member at any time disputes the amount to be paid by it to the District, such complaining party shall nevertheless promptly make such payment or payments, but if it is subsequently determined by agreement or by appropriate administrative board, agency, or court decision that such disputed payments should have been less, or more, the District shall promptly revise and reallocate the charges in such manner that the Member will recover its overpayiWnt or the District will recover the amount due it All amounts due and owing to the District by each Member or due and owing to any Member by the District shall, if not paid when due, bear interest at the rate of ten percent (10%) per annum from the date when due until paid (f) Delinquent Hills The District shall, to the extent permitted by law, suspend the delivery of services or water from the Project to any member which remains delinquent in any payments due hereunder for a period of sixty (60) days, and shall not resume delivery of services or water while such Member is so delinquent -24- It is further provided and agreed that if any Member should remain delinquent in any payments due hereunder for a period of one hundred twenty (120) days, and if such delinquency continues during any period thereafter, such Member's minimum amount specified in Exhibit A shall be deemed to have been zero gallons during all periods of such delinquency, for the purpose of calculating and redetermining the percentage of each Annual Payment to be paid by the non-delinquent Members, and the District shall redetermine such percentage on that basis in such event so that the non-delinquent Members and the District, collectively, shall be required to pay all of the Annual Requirement However, the District shall pursue all legal remedies against any such delinquent Member to enforce and protect the rights of the District, the other Members, and the holders of the Bonds, if Bonds have been issued The delinquent Member shall not be relieved of the liability to the District for the payment of all amounts which would have been due hereunder had no default occurred or the percentage had not been redetermined as provided in this Section It is understood that the foregoing provisions are for the benefit of the District and holders of the Bonds, if Bonds have been issued, so as to insure that all of the Annual Requirement will be paid by the non-delinquent Members and the District during each Annual Payment Period regardless of the delinquency of a particular Member If any amount due and owing the District by any Member is placed with an attorney for collection, such member shall pay to the District all attorney's fees, in addition to all other payments provided for herein, including interest -25- (q) If, during any Annual Payment Period, any Participating Member's Annual Payment is redetermined in any manner as provided or required in this Section, the District will promptly furnish such Participating Member with an updated schedule of monthly payments reflecting such redetermination Section 5.04. Unconditional Payments. (a) While this Contract remains in effect, each of the Members agrees to pay its pro rata share of the total cost of the Project in the proportion that each Member's amount of water specified in Exhibit A bears to the total amount of water for all Members specified in Exhibit A If the District elects to exercise its option to acquire a percentage share of the raw water covered by this Contract as provided in Section 3 01 hereof, the Annual Payment of each Member shall be reduced to the proportion that each Member's amount of water identified in Exhibit A bears to the total amount of water available from the Project In other words, during Phase I of the Project, the Members agree to pay one hundred percent (100%) of the Annual Requirements but, once the District exercises its option to acquire raw water from the Project pursuant to Section 3 01 hereof, the Participating Members and the District shall share the cost of the Project in proportion to quantities of raw water each is entitled to take from the Project pursuant to this Contract (b) Recognizing the fact that the Participating Members urgently require the facilities and services of the Project, and that such facilities and services are essential and necessary for actual use and for standby purposes, and recognizing the fact that -26- the District will use payments received from the Participating Members to pay and secure the Bonds, it is hereby agreed that each of the Participating Members shall be unconditionally obligated to pay, without offset or counterclaim, its proportionate share of the Annual Requirement, as provided and determined in this Contract, regardless of whether or not the District actually acquires, constructs or completes the Project or is actually delivering water from the Project to any Participating Member hereunder, or whether or not any Participating Member actually receives or uses water from the Project whether due to force majeure or any other reason whatsoever, regardless of any other provisions of this or any other contract or agreement between any of the parties hereto This covenant by the Participating Members shall be for the benefit of and enforceable by the holders of the Bonds as well as the District Section 5 O5. Continuing Right to Raw Water For and in consideration of agreeing to the unconditional payments to be made under this Contract, each Member is entitled to a firm right to raw water from the Project in the amounts indicated in Exhibit A That right shall continue for the term of this Contract and any renewals thereof, subject to the terms of the Commerce Contract The amount of water is subject to pro rata reductions according to options that Commerce enjoys under the commerce contract once capital charges associated with construction of Cooper Reservoir for water in Cooper Reservoir are fully paid in accordance with the terms of the Commerce contract, such charges will be deleted from the Annual Requirement Likewise, if Commerce -27- exercises certain options retained under the commerce contract to take water from the Project, members shall be entitled to pro rata refund of costs received by District from Commerce ARTICLE VI. Miscellaneous Provisions and Special Conditions Section 6 01. Operation and Maintenance of Project. The District will continuously operate and maintain the Project in an efficient manner and in accordance with good business and engineering practices, and at reasonable cost and expense The District recognizes its right and duty to operate the Project in the most prudent and economical manner for the benefit of all Members. section 6 02. Project Schedule It is the intent of the parties that the Project will be placed in operation as soon as practicable, and the District agrees to proceed diligently with the evaluation of feasibility, securing of regulatory permits and design and construction of the Project to meet such schedule, subject to the other terms and conditions-in this Contract section 6.03. Permits, Financing and ARRlicable Lars It is understood that any obligations on the part of the District to acquire, construct, and complete the Project and related facilities and to provide raw water from the Project to the Members shall be (i) conditioned upon the District's ability to obtain all necessary permits, material, labor, and equipment, (ii) subject to the District's final determination of feasibility of transportation of the water from the Project and upon acceptability of the terms of any inter-basin transfer permit granted by the -28- Texas Water Commission, (iii) conditioned upon the ability of the District to finance the cost of the Project through the actual sale of the District's Bonds, and (iv) subject to all present and future valid laws, orders, rules, and regulations of the United States of America, the State of Texas, and any regulatory body having jurisdiction section 6.04. Title to Water: Indemnification Title to all water supplied to each Member shall be in the District up to each Point of Delivery, at which point title shall pass to the receiving Member The District and each of the Participating Members shall save and hold each other party harmless from all claims, demands, and causes of action which may be asserted by anyone on account of the transportation and delivery of said water while title remains in such party The District makes no warranty that it will ever be able to deliver the water to Denton County Section 6 05 (a) Payments Solely from Revenues Except as may be provided in Exhibit B, the District shall_never have the right to demand payment by any Participating Member of any obligations assumed by it or imposed on it under and by virtue of this Contract from funds raised or to be raised by taxes, and the obligations under this Contract shall never be construed to be a debt of such kind as to require any of the Participating Members to levy and collect a tax to discharge such obligation Nonetheless, any Participating Member may make payments from its water and wastewater (sewer) system revenues, or from any other lawful source, including ad valorem taxes -29- section 6.06. Qperatina Expenses. Each of the Participating Members, respectively, represents and covenants that, to the extent payments under this Contract are made with water and wastewater system revenues, such payments shall constitute reasonable and necessary "operating expenses" of its combined waterworks and sewer system, as defined in Vernon's Ann Tex Civ St , Article 1113, and that all such payments will be made from the revenues of its combined waterworks and sewer system or any other lawful source Each Participating Member represents and has determined that the raw water supply to be obtained from the Project is absolutely necessary and essential to the present and future operation of its water system and the Project represents a long-term source of supply of raw water to meet current and projected water needs of the Participating Member's water and wastewater system and facilities, and, accordingly, all payments required by this Contract to be made by each Participating Member shall constitute reasonable and necessary operating expenses of its respective system as described above, with the effect that such payments from revenues of such systems shall be deducted from gross revenues of the system like other system operating and maintenance expenses for purposes of determining net revenues available to pay Bonds or other similar obligations heretofore or hereafter issued by such Participating Member, which obligations are payable from and secured by a pledge of the revenues of the system or facilities after deduction of maintenance and operating expenses Section 6.07. Rates for Water and Wastewater services Each of the Participating Members agrees throughout the term of -30- i this contract to continuously operate and maintain its waterworks system, its wastewater (sewer) system, or both, and to fix and collect such rates and charges for water services, wastewater (sewer) services, or both, to be supplied by its system or systems as aforesaid as will produce revenues in an amount equal to at least (i) all of the expenses of operation and maintenance expenses of such system or systems, including specifically its Annual Payment under this Contract, and (ii) all other amounts as required by law and the provisions of the ordinance or resolutions authorizing its revenue bonds or other obligations now or hereafter outstanding, including the amounts required to pay all principal of and interest on such bonds and other obligations section 6 08. Use of Funds and System The District covenants and agrees that neither the proceeds from the sale of the Bonds, nor the moneys paid it pursuant to this Contract, nor any earnings from the investment of any of the foregoing, will be used for any purposes, except those directly relating to the Project, and the Bonds as provided in this Contract, provided that the District may rebate any excess arbitrage earnings from such investment earnings to the United States of America in order to prevent any Bonds from becoming "arbitrage bonds" within the meaning of the Internal Revenue Code of 1966 (the "Code") or any amendments thereto in effect on the date of issue of such Bonds The District and each Participating Member hereby covenant and agree that it will not use or permit the use of the Project or water from the Project in any manner that would cause the interest on any of the Bonds to be or become subject to federal income -31- taxation under the Code or any amendments thereto in effect on the date of issue of such Bonds 6ection 6.09. Rights-of-Nay. (a) Each Member hereby grants to the District, without additional cost to the District, the use of the streets, easements, and rights-of-way under its control for the construction, operation, and maintenance of the Project, provided, however, such grant of the use of streets, easements and rights-of-way to the District is subject to and conditioned on the District (i) complying with all applicable policies, practices and regulations of the Participating Members governing and regulating such use of the streets, easements and rights-of-way and (ii) paying all costs, if any, of restoring such streets, easements and rights-of-way to substantially the same state of condition that existed prior to the District's use (b) Each Member agrees that with prior written approval, the District may use streets, alleys and public rights-of-way within Member's boundaries for pipeline purposes section 6.10 Xnsuranoe When facilities are constructed, the District agrees to carry and arrange for fire, casualty, public liability, and/or other insurance, including self insurance, on the Project for purposes and in amounts which, as determined by the District, ordinarily would be carried by a privately-owned utility company owning and operating such facilities, except that the District shall not be required to provide liability insurance except to insure itself against risk of loss due to claims for which it can, in the opinion of the -32- District's legal counsel, be liable under the Texas Tort Claims Act or any similar law or judicial decision Such insurance will provide, to the extent feasible and practicable, for the restoration of damaged or destroyed properties and equipment, to minimize the interruption of the services of such facilities Premiums for such insurance that relate directly to the Project or, under generally accepted cost accounting practices, is allocable to the Project, shall constitute an Operation and Maintenance Expense of the Project Section 6.11. special Provisions. The parties hereto acknowledge and agree to the Special Provisions, if any, which are set forth in Exhibit B hereto, which Exhibit is incorporated herein for all purposes The Special Provisions for this Contract reflect circumstances or issues for this specific Member which may be different from those of other Members and therefore constitute a modification of or requirement in addition to the standard provisions otherwise contained in this Contract ARTICLE VII _ Section 7.01. Force Majeure If by reason of force ma)eure a Participating Member shall be rendered unable wholly or in part to carry out its obligations under this Contract, other than the obligation of each Participating Member to make the payments required under Section 5 03 of this Contract, then if such party shall give notice and full particulars of such force majeure in writing to the other Participating Members and the District within a reasonable time after occurrence of the event or cause relied on, the obligation of the Participating Member giving such -33- notice, so far as it is affected by such force majeure, shall be suspended during the continuance of the inability then claimed, but for no longer period, and such Participating Member shall endeavor to remove or overcome such inability with all reasonable dispatch The term "Force Ma7eure" as employed herein shall mean acts of God, strikes, lockouts or other industrial disturbances, acts of public enemy, orders of any kind of the Government of the United States or the State of Texas, or any civil or military authority, insurrection, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrests, restraint of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipelines or canals, partial or entire failure of water supply, or on account of any other causes not reasonable within the control of the party claiming such inability section 7.02. Term of Contract. This Contract shall be effective on and from the Contract Date, and shall continue in force and effect for thirty (30) years or_ for such period of time that Bonds issued by the District for the Project remain outstanding, whichever is greater, provided, however, the term of the Contract and the expiration date may be extended for succeeding twenty (20) year periods at the option of the Participating Member for as long as the Commerce Contract remains in effect It is understood and agreed by the District and each Member that the firm right to raw water according to Section 5 06 hereof shall continue throughout any renewals or extension of this Contract The District's obligation to provide the contracted for services shall -34- commence from the date the Project becomes operational and functional to deliver raw water to any Participating Member as certified by the Consulting Engineers for the Project or on such other date that one or more of the Participating Members receives raw water by virtue of or in exchange for raw water from the Project This Contract constitutes the sole agreement between the parties hereto with respect to the Project section 7.03. $gcuired Approval/Consent. Unless otherwise provided herein, any approval or consent required by the provisions of this Contract by a Participating Member or the District shall be evidenced by a written resolution adopted by the governing body of the party giving such approval or consent Upon receipt of such written resolution duly certified by the appropriate party, the District or the Participating Member can conclusively act on the matter requiring such approval However, failure to adopt a written resolution regarding any approval or consent required within sixty (60) days after notification by the District or Participating Member shall b€ deemed an approval section 7.04 Effective Date This Agreement shall become effective as of the date of approval and execution by all parties on or before June 16, 1991 Section 7.05. Modification No change, amendment or modification of this Contract shall be made or be effective which will affect adversely the prompt payment when due of all moneys required to be paid by any Participating Member under this Contract or any similar contract and no such change, amendment or -35- modification shall be made or be effective which would cause a violation of any provisions of any Bond Resolution Section 7.06. Addresses and Notice. Unless otherwise provided herein, 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 any other party, must be in writing and may be given or be 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 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 herein, 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 For the purposes of Notice, the addresses of the parties shall, until changed as hereinafter provided, be as follows If to the District, to Upper Trinity Regional If to City of Denton, to 215 East McKinney Denton Texas 76201 -36- to If to Denton County Fresh Water Supply District No 1, No. 1 2001 Bryan Tower. Suite #700 Dallas. Texas 75201 The parties hereto 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 by at least fifteen (15) days' written notice to the other parties hereto Section 7 07 State or Federal Laws. Rules. Orders or Regulations This Contract is subject to all applicable federal and state laws and any applicable permits, ordinances, rules, orders and regulations of any local, state or federal governmental authority having or asserting jurisdiction, but nothing contained herein shall be construed as a waiver of any right to question or contest any such law, ordinance, order, rule or regulation in any forum having jurisdiction Section 7 08. Remedies Dpon Default. It is not intended hereby to specify (and this Contract shall not be considered as -37- If to City of Highland Village, to if to City of Lewisville, to specifying) an exclusive remedy for any default, but all such other remedies (other than termination) existing at law or in equity may be availed of by any party hereto and shall be cumulative Recognizing, however, that the District's undertaking to provide and maintain the services of the Project is an obligation, failure in the performance of which cannot be adequately compensated in money damages alone, the District agrees, in the event of any default on its part, that each Participating Member shall have available to it the equitable remedy of mandamus and specific performance in addition to any other legal or equitable remedies (other than termination) which may also be available Recognizing that failure in the performance of any Participating Member's obligations hereunder could not be adequately compensated in money damages alone, each Participating Member agrees in the event of any default on its part that the District shall have available to it the equitable remedy of mandamus and specific performance in addition to any other legal or equitable remedies (other than termination) which may also be available to the District Notwithstanding anything to the contrary contained in this contract, any right or remedy or any default hereunder, except the right of the District to receive the Annual Payment which shall never be determined to be waived, shall be deemed to be conclusively waived unless asserted by a proper proceeding at law or in equity within two (2) years plus one (1) day after the occurrence of such default No waiver or waivers of any breach or default (or any breaches or defaults) by any party hereto or of performance by any other party of any duty or obligation hereunder -38- shall be deemed a waiver thereof in the future, nor shall any such waiver or waivers be deemed or construed to be a waiver of subsequent breaches or defaults of any kind, character or description, under any circumstances Section 7.09. Severability. The parties hereto specifically agree that in case any one or more of the sections, subsections, provisions, clauses or words of this Contract or the application of such sections, subsections, provisions, clauses or words to any situation or circumstance should be, or should be held to be, for any reason, invalid or unconstitutional, under the laws or Constitutions of the State or the United States of America, or in contravention of any such laws or Constitutions, such invalidity, unconstitutionality or contravention shall not affect any other sections, subsections, provisions, clauses or words of this Contract or the application of such sections, subsections, provisions, clauses or words to any other situation or circumstance, and it is intended that this Contract shall be severable and shall be construed and appljed as if any such invalid or unconstitutional section, subsection, provision, clause or word had not been included herein, and the rights and obligations of the parties hereto shall be construed and remain in force accordingly Section 7 10. Venue All amounts due under this Contract, including, but not limited to, payments due under this Contract or damages for the breach of this Contract, shall be paid and be due in Denton County, Texas, which is the County in which the principal administrative offices of the District are located It is specifically agreed among the parties to this Contract that -39- Denton County, Texas, is the place of performance of this Contract, and in the event that any legal proceeding is brought to enforce this Contract or any provision hereof, the same shall be brought in Denton County, Texas IN WITNESS WHEREOF, the parties hereto acting under authority of their respective governing bodies have caused this Contract 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 this Contract UPPER TRINITY REGIONAL WATER DISTRICT BY - President, Board of Directors ATTEST i Secretary, Board of/Directors (AUTHORITY SEAL) DPPROVED AS TO FORM AND LEGALITY Counsel for the D*strict -40- CITY OF DENTON, TEXAS BY ATTEST C oo etary, City of De on, r xas APPROVED AS TO FORM City Attorney City of Denton, Texas -41- CITY OF HIGHLAND VILLAGE, TEXAS Nay%r v, ity Texas of H hland V111 Texas ATTEST- r i cad City(ecrMary, City of City of Highland Village, Texas APPROVED AS TO FORM V City Attorney, City of Highland Village, Texas -42- CITY OF LEWISVILLE, TEXAS uuCi~G'G(/1..IdC-~ BY && (,/r~/J(ear, C ty of Lewisville, Texas ATTEST City Secretar City of Lewisville, Texas APPROVED AS TO FORM City Atto ney, City of Lewisville, Texas -43- DENTON COUNTY FRESH WATER SUPPLY DISTRICT NO 1 BY W Tucker, J , President Board of Supervisors ATTEST C4& ~o F IQQs44.~- Charles E Baum, Secretary Board of Supervisors APPROVED AS TO FORM Ja erry Leon rd Marsh Hurt Terry & Blinn General Counsel Denton County Fresh Water Supply District No 1 -44- EZHISIT A ALLOCATION 08 RATER The provisions of the Exhibit A form a part of the Contract and are applicable to the District and to Participating Members as if set forth in their entirety in the body of the Contract Quanti Not Less Tht Yield in Mi (8) Firm Rights 17 064846% 8 532423% 17 064846% 8,532423% 51 194538% n Percentage of Total Ilion Gallons Per Day (C) (D) (E) District Option Option Alloc Ratio Total n/a 33 333333% n/a 16 666667% n/a 33 333333% DLA 16,666667% 48 805461% 100 000000% 100 00% (A) Entity City of Denton Highland Village City of Lewisville Denton Co Fresh Wtr Supply Dist #1 Under the terms of the Contract, the District may exercise its option to purchase up to 48 805461% of the total yield of the project as defined in the Preamble of this Contract District option shall be allocated to or from all Participating Members in the percentages listed in Column (D) above or in the Alternative, exercise of participant's option in Section 3 01, paragraph 2 -45- WATER SALE CONTRACT by and between the City of Commerce, Texas and the Upper Trinity Regional Water District Dated i 1990 UPPER TRINITY r s Regional Watel Astrlct rn July 10 1990 Mr Truitt Gilbreath City Manager City of Commerce 1119 Alamo Street Commerce TX 75428 Dear Truitt Diligent work on behalf of the City of Commerce and the Upper Trinity Regional Water District over many months has reached a major milestone Enclosed is the executed contract for sale of water out of the Cooper Project by Commerce to UTRWD We appreciate the high standards and cooperation exhibited by you Dave James and Ron throughout the negotiations and we look forward to the continuing relationship between Commerce and UTRWD Because of the project schedule and the contract terms time is of the essence Please take the necessary steps to have a meeting of the SRMWD Board scheduled as soon as possible to consider the actions they need to take regarding the water permit As we discussed a meeting of the advisory committee for the project has been scheduled for 10 00 a m July 18 in Commerce I look forward to seeing you there Ync rely Thomas E Taylor General Manager TT/]w Enclosure Executed Contract c Ronald J Freeman with copy of Contract John F Boyle Jr with copy of Contract R E Nelson Steven L Bacchus Austin D Adams John Baxter P 0 Drawer 305 9 Lrw sville Texas 75067 9 214 219 1228 e #f WATER SALE CONTRACT This Water Sale Contract (the "Contract") by and between the City of Commerce, Texas ("Commerce") , a home rule city, and the Upper Trinity Regional Water District ("UTRWD"), a political subdivision of the State of Texas organized and operating under Article 16, Section 59 of the Texas Constitution, is made as of the day of , 1990. RECITALS WHEREAS, the United States Army Corps of Engineers (the "COE") is in the process of constructing Cooper Reservoir (the "Reservoir") on the Sulphur River, which Reservoir will have storage capacity to impound approximately 404,400 acre-feet of water, including 273,000 acre-feet of water for municipal and industrial water supply purposes (between elevations 415.5 and 440 0 feet msl) and 131,400 acre-feet of water for flood control storage (between elevations 440.0 and 446 2 feet msl)i WHEREAS, the COE has entered into agreements with North Texas Municipal Water District ("North Texas"), the City of Irving ("Irving") and the Sulphur River Municipal Water District ("SRMWD") whereby said entities collectively have agreed to purchase one hundred percent of the water storage space in the Reservoir for municipal and industrial water supply purposes, copies of said agreements being attached hereto as Exhibits "A", "B" and "C", respectively$ WHEREAS, to evidence its purchase of said water storage space SRMWD has entered into an agreement with the COE (Contract No. DACW29-68-A-101 supplemented and amended by Supplemental Agreement No. 1 on July 15, 1976 (jointly, the "COE/SRMWD Contract"), a copy of which is attached hereto as Exhibit "D", or for the purchase of a total of 71,750 acre-feet of water storage space in the Reservoir for municipal and industrial purposes, obligating SRMWD to pay (during years 1-50 after completion of construction of the Reservoir) for 17,750 acre-feet of said water storage space in the Reservoir as~a source of initial municipal and industrial water supply ("SRMWD's Initial Water Storage Rights") and to pay (during years 11-60 after completion of construction of the Reservoir) for an additional 54,000 acre-feet of said water storage space in the Reservoir as a source of future municipal and industrial water supply ("SRI4WD's Future Water Storage Rights"), WHEREAS, the COE/SR14WD Contract provides that SRMWD may, at the sole option of SRMWD, accelerate the time of payment for, and right to use of, SRMWD's Future Water Storage Rights, WHEREAS, the total annual diversion permitted by the Texas Water Commission (the "TWC") from the Reservoir by SRMWD, North Texas and Irving is 146,520 acre-feet per annum (130 8 mgd), being 70% for municipal use and 30% for industrial use; -2- WHEREAS, firm yield studies performed by various engineers have indicated the firm yield of the Reservoir to be 106.64 mgd or 81.52% of the total annual diversion amounts permitted by the TWC to SRMWD, North Texas and Irving, collectively; WHEREAS, SRMWD has obtained approval of and authorization for storage, diversion and use of water available from its water storage space in the Reservoir under Certificate of Adjudication No. 03-4797 ("CA No. 03-4797"), a copy of which is attached hereto as Exhibit "E", and Permit No. 2336, a copy of which is attached hereto as Exhibit "F", from the TWC; WHEREAS, CA No 03-4797 authorizes SRMWD to divert and use 38,520 acre-feet of water per annum from the Reservoir for municipal and industrial purposes (being lot for municipal use and 30% for industrial use); WHEREAS, SRMWD has entered into agreements with Commerce, the City of Sulphur Springs ("Sulphur Springs") and the City of Cooper ("Cooper") (copies of said agreements being attached hereto as Exhibits "G", "H" and "I", respectively) whereby said cities collectively have contracted to purchase one hundred percent of the water stored and made available for diversion and use by SRMWD's Initial and Future Water Storage Rights in the Reservoir, WHEREAS, Commerce, pursuant to the agreement attached as Exhibit "G" (the "Commerce/SRMWD Contract") has agreed to purchase 30,000 acre-feet of SRMWD's Initial and Future Water Storage Rights in the Reservoir, which 30,000 acre-feet consists of 6,000 -3- acre-feet of SRHWD's Initial Water Storage Rights ("Commerce's initial water storage Rights") and 22,000 acre-feet of SRMWD's Future Water Storage Rights ("Commerce's Future Water Storage Rights")f WHEREAS, Commerce is entitled to 41.612% of SRMWD's 710750 acre-f set of Initial and Future Water Storage Rights in the Reservoir and is therefore entitled under CA No. 03-4797 to the diversion and use of a total of 16,106 acre-feet of water per year from the Reservoir (4,294 acre-feet per year under its Initial Water Storage Rights and an additional 11,912 acre-feet under its Future Water Storage Rights), being 70% for municipal use and 30% for industrial use ("Commerce's Available Permitted Water"), WHEREAS, Commerce's portion of the Reservoir's firm yield is a total of 13,122 acre-feet per year (3,496 acre-feet per year under its initial Water Storage Rights and an additional 9,624 acre-feet per year under its Future Water Storage Rights), being 70% for municipal use and 30% for industrial use ("Commerce's Available Firm Yield"), WHEREAS, it is presently estimated by engineers that the firm yield of the Reservoir could possibly be increased by approximately 13% by securing permission from the COE and TWC to utilize the 37,000 acre-feet of sediment storage space in the Reservoir, WHEREAS, Commerce is willing to sell water from the Reservoir on a temporary, interim basis, only with the cleat and unequivocal agreement and understanding between Commerce and UIR17U as provided -4- in this Contract that Commerce may terminate or curtail, either partially or wholly, the sale of such water to UTRWD for the reasons, at the times, to the extent of and under the terms and provisions provided in this Contract and may enforce such termination or curtailment by mandamus or other remedy as provided herein or by applicable law; WHEREAS, UTRWD (and its predecessor, the Upper Trinity Municipal Water Authority, Inc ) have caused various engineering studies to be made to determine the availability and cost of various potential raw water supplies to UTRWD and its member cities; WHEREAS, UTRWD intends to obtain additional water from other sources at later times to meet the further needs of its customers and agrees to timely replace the supply of water provided under this Contract at such times as water service under this Contract may be curtailed or terminated, either wholly or partially, and in that connection, UTRWD agrees to timely undertake and complete the reasonable planning and construction efforts to obtain such additional replacement water supplies, WHEREAS, UTRWD desires to acquire water from Commerce from the Reservoir on a temporary, interim basis under the terms and provisions of this Contract, and WHEREAS, Commerce desires to sell to UTRWD water from the Reservoir on a temporary, interim basis under the terms and provisions of this Contract, -5- NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and undertakings of the parties hereto, the sufficiency of which is hereby acknowledged and agreed upon, the parties hereto agree as follows ARTICLE I 1.01 Definitions. "Additional Term" means a period of time beginning at the and of the Third Term and thereafter continuing for a period of 50 years. "CA No 03-4797" means Certificate of Adjudication No 03-4797 issued to the Sulphur River Municipal hater District by the Texas Water Commission. "COE" means the United States Army Corps of Engineers "COE/SRMWD Contract" means, collectively, that certain agreement (Contract No DACW29-68-A0101) dated March 29, 1968, as supplemented and amended by Supplemental Agreement No 1 dated July 15, 1976 between the United States Army Corps of Engineers and the Sulphur River Municipal Eater District for the purchase of a total of 710750 acre-feet of water storage space in Cooper Reservoir by the Sulphur River Municipal Water District "Commerce" means the City of Commerce, Texas "Commerce's Available Firm Yield'_ means Commerce's share of that amount of water which can be continuously supplied from Cooper Reservoir on an annual basis through the worst drought of record, said amount presently being estimated to be 13,122 acre-feet per year. "Commerce's Available Pernitted hater" means Commerce's share of the amount of water permitted under Certificate of Adjudication No 03-4797 for diversion and use for municipal and industrial purposes, said amount being 16,106 acre-feet per year "Commerce's Future Water Storage Rights" means Commerce's additional share of the available municipal and industrial dater storage capacity in Cooper Reservoir for future use under the COE/SRMWD Contract by payment in years 11-60 after completion of construction of Cooper Reservoir or at such earlier time as -6- Commerce and Sulphur River Municipal Water District may request, said amount being 22,000 acre-feet. "Commerce's Initial Termination Option" means the right of Commerce under Section 3.02 of this Contract to partially terminate service to the Upper Trinity Regional Water District in an amount up to twenty-five percent (25%) of the water otherwise committed hereunder. "Commerce's Initial Water Storage Rights" means Commerce's share of the available municipal and industrial water storage capacity in Cooper Reservoir for initial use under the COE/SRMWD Contract by payment in years 1-50 after completion of construction of Cooper Reservoir, said amount presently estimated to be 8,000 acre-feet. "Commerce's Second Termination option" means the right of Commerce under Section 3 03 of this Contract to partially terminate service to the Upper Trinity Regional Water District in an amount up to fifty percent (50%) of the water otherwise committed hereunder. "Commerce's Third Termination Option" means the right of Commerce under Section 3.04 of this Contract to partially or totally terminate service to the Upper Trinity Regional Water District in an amount up to all of the water otherwise committed hereunder. "Completion Date" means the earlier of the date of completion of construction of Cooper Reservoir as certified by the United States Army Corps of Engineers or the date upon which the Corps of Engineers permits water in Cooper Reservoir to be diverted and used by Sulphur River Municipal Water District or Commerce "Contract" means this contract "Cooper" means the City of Cooper, Texas "Delivery Point" means the point or points on the perimeter of Cooper Reservoir or as otherwise agreed herein at which Commerce agrees to provide water under this Contract to the Upper Trinity Regional Water District. "Denton" means the City of Denton, Texas "Emergency" means a sudden unexpected liappeninj, an unforseen occurrence or condition, a sudden or unexpected occasion for action; exigency, pressing necessity, or a relatively permanent condition of insufficiency of service or facilities resulting in social disturbance or distress -7- l "Fiscal Year" means the period beginning each October 1 and ending the next September 30. "Initial Term" means a period of time beginning on the Completion Date and thereafter continuing for fifty (50) years. "Irving" means the City of Irving, Texas. "Lewisville" means the City of Lewisville, Texas. "Meter" means the meter, facility, or mechanism mutually agreeable to the parties to measure the amount of water provided to UTRWD hereunder. "North Texas" means North Texas Municipal Water District. "Reservoir" means Cooper Reservoir on the Sulphur River "Second Term" means a period of time commencing upon expiration of the Initial Term and thereafter continuing for twenty-five Q5) years. "SRMWD" means the Sulphur River Municipal Water District. "SRMWD's Future Water Storage Rights" means Sulphur River Municipal Water District's additional share of the available municipal and industrial water storage capacity in Cooper Reservoir for future use under the COE/SRMWD Contract by payment in years 11-60 after the completion of construction of Cooper Reservoir or at such earlier time as Sulphur River Municipal Water District may request, said amount being 54,000 acre-feet "SRMWD's Initial Water Storage Rights" means SRMWD's share of the available municipal and industrial-water storage capacity in Cooper Reservoir for initial use under the COE/SR..MWD Contract by payment in years 1-50 after completion of construction of Cooper Reservoir, said amount being 17,750 acre-feet "Sulphur Springs" means the City of Sulphur Springs, Texas "Termination Date" means the date upon which the obligation of Commerce to provide water to Upper Trinity Regional Water District under this Contract will totally terminate by reason of action or inaction of the parties hereto as provided herein "Termination Options" means Commerce's Initial Termination Option, Commerce's Second Termination Option and Commerce's Third Termination option -6- . . "Third Term" means a period of time commencing upon expiration of the Second Term and thereafter continuing for twenty-five (25) ( years. "TWC" means the Texas Water Commission "UTRWD" means the Upper Trinity Regional Water District. 1.02 Exhibits. All exhibits attached hereto are true and correct copies of the originals of same and are hereby incorporated by reference herein for all intents and purposes. ARTICLE II 2.01 General. Commerce agrees to sell to UTRWD and UTRWD hereby agrees, to purchase from Commerce an amount of raw water from the Reservoir equal to the total amount of water to which Commerce is entitled from Commerce's Initial Water Storage Rights and Future Water Storage Rights in the Reservoir under the COE/SRMWD Contract, CA No 03-4797 and the Commerce/SRMWD Contract all in accordance with the terms and provisions, and for such interim, temporary period, set forth in this Contract and all subject to, and limited by, the terms and provisions of the COE/SRMWD Contract, CA No 03-4797 and the Commerce/SRM14D Contract 2.02 ouantity. subject to the provisions of Sections 3 02 - 3 05 of this Contract, commencing on the completion Date, Commerce agrees to sell to UTR14D and UTRWD agrees to purchase from Commerce at the Delivery Point from Commerce's Initial and/or, as appropriate, Future Water Storage Rights in the Reservoir under the Commerce/SRMWD Contract, the COE/SF,11;~D Contract and CA-04-4797, -9- a total maximum amount of 16,106 acre-feet per year of permitted diversion or 13,122 acre-feet per year of estimated firm yield of the Reservoir. 2 03 Timing of Sales of Water from Commerce's Initial and Future Water Storage Rights. The water agreed to be sold to UTRWD by Commerce under this Contract is based on Commerce's Initial and Future Water Storage Rights in the Reservoir. Collectively, the COE/SRMWD Contract and the Commerce/SRMWD Contract provide that commerce will pay for its share of principal, interest and maintenance expenses of the Reservoir for its Initial Water Storage Rights in annual installments during the first fifty (50) years after completion of construction of the Reservoir as certified by the COE and for its Future Water Storage Rights in years eleven (11) through sixty (60) after completion of the Reservoir as certified by the COE (the "Completion Date"). However, Commerce has the right under the Commerce/SRMOD Contract to require SRMWD, pursuant to the COE/SRMWD Contract, to accelerate access to and use of Commerce's Future Water Storage Rights in the Reservoir and, in the event of such acceleration, palnents by Commerce to SRMWD and from SRMWD to the COE are accelerated UTRWD hereby agrees that the amount of water to which it is entitled under this Contract during the first ten years after the Completion Date shall be limited to water made available by Commerce's Initial Water Storage Rights (4,294 acre-feet per year of permitted annual diversion or 3,498 acre-feet per year of -10- , r estimated firm yield) unless UTRWD notifies Commerce that it desires to accelerate access to and use of Commerce's Future Water Storage Rights during the initial ten-year period after the Comple- tion Date, in which event Commerce shall accelerate its right to Future Water Storage Rights in the Reservoir under the Com- merce/SRMWD Contract (and, correspondingly, SRMWD shall accelerate its right to Commerce's Future Water Storage Rights in the Reservoir under the COE/SRMWD Contract) In the event of such acceleration, UTRWD agrees to accelerate its payments to Commerce as hereinafter provided for water made available by Commerce's Future Water Storage Rights. 2.04 Avreement_to Change Purnnse and Place of Use of Water Commerce's right to divert and use water made available by its Initial and Future Water Storage Rights are designated for use only in the Sulphur River Basin and are specified as seventy percent (704) for municipal use and thirty percent (304) for industrial use in the COE/SRMWD Contract and in CA No 03-4797 As further provided in Section 4.04 hereof, Commerce and UTRWD hereby agree to jointly use reasonable efforts to secure approval, if necessary, by the COE, SRMWD, the TWC and any other appropriate governmental or other entitles of a change in the place and purpose of use of such water to add authority to divert the water for use in the Trinity River Basin within the District or its environs for up to one hundred percent (1004) municipal purpose -11- 2.05 Acreement to Recuest Use of Water from Sediment Storage. Commerce and UTRWD agree to jointly use reasonable efforts to explore and discuss with, and to obtain approval of, SRMWD, COE, TWC and other appropriate entities for Commerce to utilize and sell to UTRWD water made available by accessing Commerce's pro rata share of any sediment storage capacity in the Reservoir for municipal purposes for an interim or other period of time. All reasonable expenses of such efforts, the amount of which shall be agreed upon prior to expenditure thereof, shall be paid by UTRWD SRMWD's share of such sediment storage is presently estimated to be 9720 acre-feet; Commerce's pro rata share would thus be 4064 acre-feet (41.812% of 9720 acre-feet). If Commerce is successful in obtaining approval to utilize water made available from Commerce's pro rata share of sediment storage space in the Reservoir, then any such additional water shall be made available by Commerce to UTRWD under the terns and conditions of, and for the interim, temporary period provided in, this Contract The only additional consideration to be paid -by UTRWD for any such additional water shall be to reimburse Commerce for any expenses incurred by Commerce in obtaining and providing such water if any such additional water is obtained, the parties agree to enter into a supplement to, and amendment of, this Contract in order to further evidence the sale of such additional water to UTRWD by Commerce as provided herein -12- 2.06 Delivery point. Water provided by commerce to UTRWD ( under this Contract shall be provided at a point or points (collectively, the "Delivery Point") mutually agreeable to the parties hereto and subject to the approval of the COE. SRMWD and any applicable regulatory authorities. 2.07 Desion and Construction of Diversion and Transportation Facilities. (a) UTRWD, at its sole expense, shall install all facilities necessary to divert, transport, treat and, except for the Reservoir, store water provided by Commerce under this Contract All such facilities (other than the Reservoir) shall be initially constructed, owned, operated, maintained, repaired and replaced by UTRWD. Such facilities shall include a meter or other facility or mechanism acceptable to both parties (the "Meter") for the purpose of measuring the amount of water provided to UTRWD under this Contract to ensure compliance with the terms of this Contract and to allow Commerce and SR1r14D to accurately report the amount of water diverted and used from the Reservoir (b) It is the stated intention and clear preference of UTRWD to enter into an interlocal agreement with North Texas and/or others to finance, construct, operate and maintain point diversion and transportation facilities, which facilities maf or may not traverse Commerce or be located in close proximity to commerce in such event, UTRWD will provide Conrerce with the location, design and construction plans and specifications of such facilities, -13- including the Meter, in advance of finalizing such plans or commencing such construction, for any comments and observations as Commerce may have. In the event the Meter is shared with North Texas or other diverters, the parties shall agree, prior to diversion by UTRWD, to a method of allocating UTRWD's use of water under this Contract as a portion of the total diversion through the Meter. (c) In the event UTRWD is unable to consummate an agreement as described in Section 2.07(b), UTRWD will coordinate with Commerce the location, design and construction of facilities needed to utilize the water sold herein, including the route of any new water transmission main to be constructed Commerce will assist UTRWD with any approvals required for rights-of-way within Commerce's city limits. Design of, plans and specification for and construction of the raw water intake, raw water pumps, meter and raw water transmission main, or any replacements, improvements or betterments thereof, from the Reservoir through Commerce's city limits shall be subject to prior inspection, review and approval by Commerce, which approval shall not be unreasonably withheld or delayed. Prior to commencing construction of any such facilities, UTRWD shall provide at least sixty (60) days written notice to Commerce accompanied by a copy of the plans and specifications for such improvements Commerce shall have the right to review and approve any such plans and specifications (and any subsequent changes to -14- or deviations therefrom), which approval shall not be unreasonably ( withheld. Prior to commencing any such construction, UTRWD shall give Commerce at least thirty (30) days notice of its intent to commence such construction and Commerce shall have the right to periodically inspect and approve such construction to assure its conformity to the approved plans and specifications, which approval shall not be unreasonably withheld or delayed. (d) To facilitate Commerce's having emergency access to a portion of the water in accordance with Section 3.09 of this Contract, UTRWD agrees, as part of its original construction, to install in its pipeline, at a location mutually acceptable to UTRWD and Commerce, an appropriate connection, tap or flange. The exact location, size, nature and configuration of the connection, tap or flange shall be determined by subsequent engineering study, which study will be made available to Commerce for review and approval, which approval shall not be unreasonably withheld or delayed Any facilities desired or needed by Commerce, either initially or at a later date, in addition to the connection, tap or flange to be provided by UTRWD shall be provided, paid for, owned and operated by commerce. 2.08 Meter. The Meter may be calibrated at any reasonable time by either party to this Contract, provided that the party making the calibration shall notify the other party at least two (2) weeks in advance and allow the other party to witness the calibration Further, the Meter shall be tested for accuracy by, -15- • , and at the expense of, UTRWD at least once each calendar year at ( intervals of approximately twelve (12) months and a report of such test shall be furnished to Commerce. However, in the event any question arises at any time as to the accuracy of the Meter, the Mater shall be tested promptly upon demand of Commerce, the expense of such test to be borne by Commerce if the meter is found to be within 54 accuracy and by UTRWD if the Meter is found to not be within 5% of accuracy. If, as a result of any test, the Meter is found to be registering inaccurately (in excess of 5% of accuracy), the readings of the Meter shall be corrected at the rate of its inaccuracy for any period which is definitely known or agreed upon or, if no such period is known or agreed upon, the shorter of: (i) a period extending back either sixty (60) days from the date of demand for the test or, if no demand for the test was made, sixty (60) days from the date of the test, or (ii) a period extending back half of the time elapsed since the last previous test, I and the records of readings shall be adjusted accordingly 2.09 Title to and Responsibility for Water Title to, and possession and control of, the eater provided by Commerce under this Contract shall remain with Commerce (or, as appropriate, SRMWD or the COE) while it is in the Reservoir Title to, and possession and control of, the water shall pass to UTRWD at the Delivery Point -16- 2.10 Duality of Water. The water supplied by Commerce hereunder shall be raw, untreated water in its natural condition in the Reservoir. Water provided by Commerce to UTRWD from the Reservoir under this Contract is provided AS IS, WHERE IS, AND WITHOUT ANY WARRANTIES OF WHATSOEVER NATURE, EXPRESSED OR IMPLIED, IT BEING THE INTENTION OF COMMERCE AND UTRWD TO EXPRESSLY NEGATE AND EXCLUDE ALL WARRANTIES, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE AND RIGHTFUL TRANSFER CONTAINED Ili OR CREATED BY THE TEXAS UNIFORM COMMERCIAL CODE. 2.11 Price In consideration for Commerce's agreement to provide water under this Contract, UTRWD hereby agrees to pay to Commerce the following. (1) The sum of $50,000 to reimburse Commerce for its costs in developing and administering its participation in the Reservoir to the date of this Contract The $50,000 shall be paid by UTRWD to Commerce within six (6) months after Elie execution of this Contract; (2) All sums (including engineering, legal administrative, travel, telephone and other out-of-pocket costs) expended by Commerce in attempting to obtain the regulatory approvals referenced in Section 4 04 of this Contract, whether or not such approvals are obtained, provided however, a proposed budget for such expenditure -17- Mall be first submitted to the Advisory Committee created pursuant to Section 4.03 of this Contract for its review and approval and all subsequent expenditures *hall be submitted to said Advisory Committee for review prior to payment; (3) Such amounts, at such times and in such installments, as necessary to enable Commerce to timely pay to SRMWD all amounts owed by Commerce to SRMWD under the Commerce/SRMWD Contract for Commerce's Initial and Future Water Storage Rights in the Reservoir, including all amounts to pay Commerce's pro rata share of annual principal and interest payments owed by SRMWD to the COE under the COE/SRMHD Contract; (ii) Commerce's pro rata share of all amounts owed by SRMWD to the COE for maintenance expenses of the Reservoir under the COE/SRMWD Contract; and ` (iii) all amounts owed by Commerce to SRMWD as a principal and interest reserve fund and/or maintenance reserve fund under the Commerce/SRMWD Contract for Commerce's pro rata share of SRIIIID's share of the principal and interest and/or maintenance expenses of the Reservoir under the SR11t4D/C0E Contract -16- All payments required to made under this sub- paragraph 3 shall be made in installments so that at least thirty (30) days prior to the time that Commerce must make such payments to SRMWD, it will have sufficient funds available. Commerce shall provide UTRWD with a schedule of such payments by September 30 annually for the fiscal year beginning October i in order to notify UTRWD of the amount and timing of such payments, provided, however, that such schedule may be modified during the year as necessary to coincide with Commerce's obligation to SRMWD; (4) All reasonable and necessary costs incurred by Commerce directly or through SR11WD for administering Commerce's Initial and Future Water Storage Rights. UTRWD shall not be obligated to pay to Commerce or any other person costs for any project or activity of such person except those costs which are directly related to commerce's Initial and Future Water-Storage Rights that are the subject matter of this Contract commerce shall submit a statement to UTRWD at the conclusion of each fiscal year of Commerce detailing the direct costs to be paid by UTRWD under this subsection If UTRWD disputes the amount of costs to be paid by it to Commerce, UTRWD shall nevertheless pay such costs, but if it is subsequently determined by mutual agreement or otherwise -19- i i that the amount of such disputed costs should have been more or less, Commerce shall promptly revise and reallocate such costs in accordance with such determinations and (5) Annually on or before December 31 of each year a sum equal to five percent (5t) of UTRWD's payments under Section 2.11(3) (1) and (ii) and (4) above for the previous Fiscal Year. Notwithstanding anything herein to the contrary, however, UTRWD's obligation to make payments to Commerce under this Contract shall be unconditional and independent of whether or not any water from the Reservoir is actually provided or made available to, or diverted or used by, UTRWD pursuant to this Contract 2.12 Billina and Payment On or before June 1 of each year, Commerce shall establish a preliminary budget of costs to be paid by UTRI"D under this Contract for the next ensuing twelve month period beginning October 1. UTRWD shall have thirty (30) days after receipt of said proposed budget to file its comments thereon with commerce After receipt of said comments, Commerce shall adopt a final budget for said period by September 30 of each year The final budget shall establish periodic amounts, including any amounts required to be paid under Section 2 11, to be paid by UTRWD for the ensuing one year period beginning each October 1 Commerce may amend the budget during a Fiscal fear if necessary to adjust it for any unforeseen matters related to the payments under -20- Section 2.11(3)(1) and (ii) above. Any such adjustment shall be adopted only upon reasonable notice to UTRWD under the circumstances which shall normally be at least thirty (30) days written notice with opportunity for UTRWD to comment on any such change prior to approval thereof. Payment of each periodic amount shall be due in accordance with the approved budget. All late payments shall bear interest at the lesser of fifteen percent (15%) per annum or the maximum allowed by law from the due date until paid. UTRWD shall be solely responsible for billing and collecting from its water customers Failure to collect from its customers will not affect UTRWD's obligation to make all payments due to Commerce. Should UTRWD fail to make any payment as required hereunder, then Commerce shall utilize the reserves maintained by it on behalf of UTRWD to make such payment to the extent funds are available in such reserves. In addition to all other required payments hereunder, to the extent such reserves are so used, UTRWD shall be obligated to immediately pay to Commerce an equal amount to replenish the reserve fund so depleted ARTICLE III Terms: Renewal: optional Termination Curtailment of Water Service Emergency Water Use by Commerce 3.01 Terms (a) Initial Term. This Contract shall become effective upon execution by Commerce and UTRWD, and thereafter, water shall be -21- . provided hereunder tar an initial term of fifty (50) years (the "Initial Term") commencing with the Completion Date. l (b) Second Term. If, and to the extent that, this Contract or water service hereunder not be previously terminated, either partially or wholly, by either party hereto, and subject to Commerce's Initial Termination Option as hereafter provided commencing upon expiration of the Initial Term, UTRWD shall have the right and obligation to continue to purchase the remaining available water from Commerce's Initial and Future Water Storage Rights in the Reservoir for up to an additional twenty-five (25) years (the "Second Term") unless UTRWD gives written notice to Commerce no'later than five (5) years prior to the expiration of the Initial Term of UTRWD's desire to terminate the Contract Failure of UTRWD to provide timely notice of such election to terminate shall be deemed to be notice by UTRWD of its intent to extend this Contract for the Second Term at the end of the Initial Term. The purchase and sale of water under this Contract during the Second Term shall be under the same--terms and conditions as are contained in this Contract for the Initial Term (c) Third Term. If, and to the extent that, this Contract or water service hereunder not be previously terminated, either partially or wholly, by either party hereto, and subject to Commerce's continuing rights under the Second Termination Option as hereinafter provided, commencing upon expiration of the Second Term UTRWD shall have and is hereby granted by Commerce the right -22- 1 and obligation to continue to purchase the remaining available water from Commerce's Initial and Future Water Storage Rights in the Reservoir under the same terms contained in this Contract for an additional period of twenty-five (25) years (the "Third Term") unless UTRWD gives written notice to Commerce no later than five (5) years prior to the expiration of the Second Tarm of UTRWD's desire to terminate the Contract. Failure of UTRWD to provide timely notice of such election to terminate shall be deemed to be notice of continuation of the Contract at the and of the Second Term The purchase and sale of water under this Contract during the Third Term shall be under the same terms and conditions as are contained in this Contract for the Initial Term. (d) Additional Term If, and to the extent that, this Contract or water service hereunder not be previously terminated, either partially or wholly, by either party hereto, and subject to Commerce's Third Termination option as hereafter provided, commencing at the end of the Third Term UTRWD shall have and is granted by Commerce pursuant to Section 3.05 hereof a right of first refusal to use any portion of the remaining water from the Reservoir under terms similar to this Contract for an additional period of 50 years (the "Additional Term") The provisions of any contract considering such extension of the rights of UTRWD during the Additional Term which will be subject to negotiation at the end of the Third Term shall be limited to the price of water -23- (e) Effect of termination by UTRWD. If UTRWD exercises its right to terminate and cancel its obligations under this Section 3.01, it shall have no obligation to pay any further amounts under this Contract; provided, however, that UTRWD will pay to Commerce any sums which had accrued to Commerce hereunder before the effective date of such termination and cancellation 3.02 Initial Termination Option By Commerce Up to a Total of Twenty-five Percent (25%1 of Contract Amount. notwithstanding anything herein to the contrary, Commerce hereby reserves the option and UTRWD hereby grants the option to Commerce, to terminate commerce's obligation to provide water to UTRWD under this Contract in an amount up to a total of twenty-five percent (25%) of the water available under this Contract commencing upon expiration of the Initial Term ("Commerce's Initial Termination Option"). Said option may be exercised once at any time after expiration of the Initial Term Commerce must give written notice to UTRWD at least ten (10) years prior to the exercise of such option At the time Commerce exercises its Initial Termination Option, Commerce hereby agrees to pay to UTRWD, for the proportionate amount of water which it reacquires the right -to use under this option, the pro rata share of all principal payments (as provided in the COE/SPJVD Contract) effectively made by UTRWD as a result of this Contract prior to the effective date of Commerce's exercise of the option The amount to be paid by Commerce under this section shall not -24- include interest or operation and maintenance expenses (as provided in the COE/SRMWD Contract) effectively made by UTRWD From and after the effective date of any exercise of commerce's Initial Termination Option, payments by UTRWD to commerce under this Contract shall be reduced for all payments, including principal, interest and maintenance expenses, attributable to that portion of the water no longer sold by Commerce to UTRWD hereunder. 3.03 Second Termination Option By Commerce U to a Total of Fifty Percent f50%1 of Contract Amount Commerce hereby reserves the further option, and UTRWD hereby grants the further option to Commerce, to terminate Commerce's obligation to provide water to UTRWD under this Contract in an amount up to a total of fifty percent (50%) of the water available under this Contract (inclusive of water, if any, previously re-acquired by Commerce by exercising its Initial Termination Option) once at any time upon or after expiration of the Second Term of this Contract ("Commerce's Second Termination Option"). Commerce must give written notice to UTRWD at least ten (10) years prior to the effective date of the exercise of the option At the time Commerce exercises its Second Termination Option, Commerce hereby agrees to pay to UTRWD for the proportionate amount of water which it reacquires the right to use under this option, (i) one-half of the pro rata share of all principal payments (as provided in the COE/SR1114D Contract) effectively made -25- by UTRWD as a result of this Contract prior to the effective date of Commerce's exercise of the option and (ii) the proportionate amount of the principal costs of any Reservoir improvements made by the COE, SRMWD or other entity, as appropriate, and effectively paid by UTRWD during the last twenty (20) years of the Second Term. The amount to be paid by Commerce under this section shall not include interest or operation and maintenance expenses (as provided in the COE/SRMWD Contract) effectively made by UTRWD. The Reservoir improvements, if any, which are within the scope of this section are those improvements (not including routine operation and maintenance expenditures) which are considered by the COE or any successor thereof as betterments or improvements that extend the life of the Reservoir or increase the available water supply in the Reservoir From and after the effective date of any exercise of Commerce's Second Termination Option, payments by UTRWD to Commerce under this Contract shall be reduced for all payments, including principal, interest and operation and maintenance expenses attributable to that portion of the water no longer sold by Commerce to UTRWD hereunder 3.04 Third Termination Option By Commerce Up to Full Contract Amount. Commerce hereby reserves the further option, and UTRWD hereby grants the further and final option to commerce, to terminate Commerce's obligation to provide water to UTRWD under this Contract in an amount up to one hundred percent (100%) of the -2G- water available under this contract in one or more installments from time to time at any time upon or after expiration of the Third Term of this Contract ("Commerce's Third Termination option"). Commerce must give written notice to UTRWD at least ten (lo) years prior to the effective date of any exercise of the option. At the time Commerce exercises its Third Termination Option, Commerce hereby agrees to pay to UTRWD for the proportionate amount of water which it reacquires the right to use under this option, (i) one-third of the pro rata share of all principal payments (as provided in the COE/SRMWD Contract) effectively made by UTRWD as a result of this Contract prior to the effective date of Commerce's exercise of the option and (ii) the proportionate amount of the principal costs of any Reservoir improvements made by the COE, SRMWD or other entity, as appropriate, and effectively made for by UTRWD during the last twenty (20) years of the Third Term The amount to be paid by Commerce under this section shall not include interest or operation and maintenance expenses (as provided in the COE/SRMWD Contract) effectively paid -by UTRWD The Reservoir improvements, if any, which are within the scope of this section are those improvements (not including routine operation and maintenance expenditures) which are considered by the COE or any successor thereof as betterments or improvements that extend the life of the Reservoir or increase the available water supply in the Reservoir. -27- 3905 Bale of Water After Expiration of Third Term but Prior to Fu11 exercise of Third Termination option. After expiration of the Third Term of this Contract and prior to Commerce's full exercise of its Third Termination Option, UTRWD shall have a continuing right of first refusal to continue to purchase the remaining available water from Commerce's Initial and Future water storage Rights in the Reservoir under the same terms and provisions contained in this Contract for the Additional Term of fifty (50) years commencing upon expiration of the Third Term of this Contract; provided, however, that the price of said water shall be subject to mutual agreement of the parties and the provision of such water service is in all respects subject to Commerce's right to exercise from time to time, in installments or otherwise, its rights under the Third Termination Option. Should UTRWD desire to exercise it's right of first refusal, it shall give notice of the exercise of such right to Commerce at least one (1) year prior to the expiration of the Third Term of this Contract. 3.06 Non-availability. Discontinaa-nce or Curtailment of Water Service. Notwithstanding anything herein to the contrary, it is specifically understood and agreed between the parties that the obligation of Commerce to provide water to UTRWD pursuant to this Contract is subject to the availability of water to Commerce from the Reservoir pursuant to, in conformity with, and subject to all conditions and restrictions contained in, the Commerce/SRWiWD Contract, the COE/SRMWD Contract and CA No 03-4797, and 1s also -28- subject to inability to provide water due to Emergency, force { majeure, the need to curtail water service to cause repairs or improvements to be made to the Reservoir, or the need to protect the public health, safety or welfare. In any of such events, Commerce (or its agents, including, without limitation, SRMWD or the COE) shall have the right, after reasonable notice to UTRWD under the circumstances, to curtail or limit water service to UTRWD under this Contract; provided that any such curtailment or limitation shall be limited in amount and duration to the minimum amount necessary. 3.07 Option for Purchase of interest in Capacity or Water Facilities Upon Exercise of Termination Options. UTRWD agrees that Commerce, upon the exercise of any of its Termination Options shall have the option and right to acquire from UTRWD upon payment by to UTRWD of the depreciated net book value, a proportionate ownership interest or other right of use in, and appropriate title to, any facilities, capacity in facilities or contract rights in facilities owned, leased or otherwise utilized by -UTRWD, including without limitation the raw water intake, raw water pumps, meter and raw water transmission main (and easements, permits, licenses or real property interests associated therewith) from the Delivery Point to the point on the transmission line where Commerce diverts the raw water for its own use, provided, however, UTRWD shall be required to convey any such interest only to the extent of its then existing legal title, rights and abilities The parties shall -29- agree on an acceptable standard of placing such value on said ( facilities which shall be consistent with appropriate depreciation techniques under water utility ratemaking standards of the National Association of Regulatory Utility Commissioners Uniform System of Accounts. UTRWD shall execute any documents necessary or appropriate to reflect the transfer of ownership of any such facilities or interest therein to Commerce. At such time as Commerce becomes the majority owner of said facilities it shall have the further and additional option of becoming the operating manager of such facilities with the costs being apportioned between the parties Capital costs and operation and maintenance expenses shall be allocated as follows (1) capital costs based on percentage of water allocated, and (2) operation and maintenance expense, including cost of pumping, based on water usage At least six (6) months prior to the transfer of title of said facilities or any interest therein, UTRWD shall install a new meter (thereafter, the "Meter") at which point water shall thereafter be metered and provided by Commerce to UTRWD under this Contract The cost of purchasing and installing said Meter shall be prorated between the parties based on percent of water allocated to each Metering, billing and payment related to the facilities used by the non-operating party shall be on a monthly basis in an amount sufficient to pay the non-operating party's prorata share (on the -30- . . bases provided hereinabove) of the operating party's capital costs and expanses incurred in providing service to the non-operating party. 3.08 Actions in Event of Unenforceability of Certain Provisions of Contract. Notwithstanding anything herein to the contrary, if it is over determined by any governmental or regulatory authority that provision of water by Commerce under this contract, or curtailment, limitation or termination of water service by Commerce under this contract, is in violation of applicable law, then Commerce, at the sole option of Commerce, may take such action as will best effectuate the intent of the parties •s, in agreeing to this Contract and comply with applicable law or, if required or permitted by law, may terminate this Contract. 3.09 Emergency Suo2v to Commerce If at any time during the Initial Term, Second Term, Third Term or Additional Term of this Contract, Commerce incurs an Emergency which interrupts its raw water supply from Commerce Water District, groundwater or other sources, Commerce may request that UTRWD'provide water to Commerce on a temporary basis during such Emergency from the water provided to UTRWD hereunder. If so requested, UTRWD agrees to use its best efforts to make available to Commerce and, to the extent so made available, Commerce shall be entitled to purchase from UTRWD water necessary to alleviate said Emergency To the extent water is provided to Commerce under this section, Commerce shall pay UTRIsD the full cost incurred or agreed under this Contract to be incurred -31- by UTRWD applicable to such water for the period of such use plus such other reasonable expenses, it any, as UTRWD may incur in delivering such water to Commerce. During the period of any such Emergency, Commerce agrees to use its best efforts to alleviate said Emergency or to minimize the deficiency of water through conservation, development of alternate water supplies, or other means. Both parties agree to cooperate during said Emergency to ensure that Commerce's reasonable needs for water are not and that UTRWD's supply of raw water is not unreasonably impaired 3.10 Actions by UTRWD Upon Notice of Termination by Commerce Upon receipt of notification by Commerce that it is exercising one of its Termination Options, UTRWD shall immediately commence preparation of necessary studies and plans by its engineers and other consultants to obtain replacement water supplies for the water to be obtained by Commerce in the exercise of any such option Within one year after receiving any such notification, UTRWD shall submit to Commerce evidence of approval by its Board of Directors of a specific course of action for obtaining necessary replacement water supplies, including a copy of any engineering studies or plans related to such replacement water supplies if construction or acquisition of additional facilities is needed in order to make available the replacement water supplies, such acquisition or construction shall be commenced within four (4) years from the date of receipt of notification by UTR14D and such acquisition or construction shall be completed within eight (8) -32- years from the date of receipt of such notification. After receipt of notification, UTRWD shall report in writing to Commerce at least once every six months on the progress of its efforts to obtain replacement water supplies. If UTRWD fails to meet any of the deadlines provided in this section for action to secure replacement water supplies, or should UTRWD be unable or unwilling to allow Commerce to timely and completely exercise any of its Termination options, then UTRWD agrees to promptly pay Commerce an amount of money sufficient to obtain alternate water supplies of equal amount and quality to those which Commerce is otherwise entitled to under any of its exercises of"such options 7.11 Automatic Price Adiustment Related to Wfter from T.ake Tawokani Notwithstanding anything herein to the contrary, if it is ever determined by Commerce that the price per acre-foot of raw water available to commerce from Lake Tawokani is greater than the amount otherwise required to be paid per acre-foot by UTRWD to Commerce under this Contract for water--from and at the Reservoir, then, in such event, UTRWD shall pay a price for water from and at the Reservoir which is equivalent to average price per acre-foot of water from both such sources as calculated by Commerce and reviewed and approved by UTRWD, which approval shall not be unreasonably withheld or delayed -33- ARTICLE IV Miscellaneous 4.01 Payments are Oneratina Exoenses. UTRWD represents, covenants and agrees that all payments to be made by it shall constitute reasonable and necessary "operating expenses" of its water and, if appropriate, wastewater system and that UTRWD will require each of its customers to agree that each such entity's payments to UTRWD shall also constitute reasonable and necessary "operating expenses" of each respective entity's water and, as appropriate, wastewater system, as referenced in Article 1113, Vernon's Texas Civil Statutes, as amended, or other appropriate law. Such payments will be made from the revenues of the water and, if applicable, wastewater systems of UTRWD and each such customer of UTRWD with the effect that the obligation to make such payments shall be treated as an operating expense of each said system and shall have priority over any obligation to make any payments from such revenues (whether principal, interest or otherwise) with respect to all bonds and other obligations heretofore or hereafter issued by UTRWD or any of its customers, as applicable, payable from such revenues 4 02 Rate Covenant UTRWD hereby agrees that throughout the term of this Contract it will continuously fix and collect such rates and charges for water and wastewater services as will produce revenues in an amount sufficient to at least pay all of the -34- payments required under this Contract and its other expenses related to its water and, if appropriate, wastewater system. 4.03 Advisory Committeer Coordination. Commerce and UTRWD agree to establish an advisory committee regarding operations of each party under this Contract. The advisory committee shall be composed of six members, three from each party appointed by and serving at the pleasure of the governing body of each respective party. Each party and the advisory committee will be given timely notice of agendas and meetings of the others where the rights or interests of each under this Contract are to be discussed so that each will have the opportunity to attend and participate. Before any budgets of Commerce or SRMWD affecting what UTRWD shall pay in this Contract are adopted, UTRWD and the advisory committee shall be given opportunity to review and comment. 4.04 Reaulatorv and Other Approvals Assurance of Feagibility of Transportation Faciliries Rights of Termination Commerce shall be responsible for obtaining approval, if any be required, of this Contract by tha 1WC or other regulatory authorities. With UTRWD's cooperation, Commerce will initiate the appropriate filing through SRMWD for an amendment to CA No. 03-4797, in substantially the form attached hereto as Exhibit "i", authorizing the diversion and use of water as provided in this Contract from the Reservoir for municipal purposes within the,District or its environs SRASWD, Commerce and UTRWD will -35- support said application with data and testimony as may be suitable and appropriate to effect a good faith application. If within twelve (12) months of the effective date of this contract the regulatory or other approvals contemplated by this section are not obtained or UTRWD does not determine a feasible method to transport the water from the Delivery Point to the District, UTRWD reserves the right to terminate this Contract upon the giving of written notice to Commerce within three (3) months thereafter or such later time as the parties may agree to in writing. In the event, but only in the event, that at the end of fifteen (15) months from date of execution of this Contract, the required regulatory or other approvals have not been obtained, UTRWD may notify Commerce that UTRWD desires to extend the period for exercising its termination option provided previously in this section for an additional one (1) year period During such extended one (1) year period, UTRWD agrees to make all payments required under this Contract During sSid extended one (1) year period, UTRWD shall have the right to exercise the aforementioned termination option until the earlier of (i) the end of said extended one (1) year period or (ii) within three (3) months after receipt of all required regulatory or other approvals if during said extended one (1) year period, UTRWD exercises any right to terminate this Contract under this section either for the aforementioned reasons or for the reason described below in this -36- section UTRWD shall, after such termination, nonetheless continue to be obligated to make all payments required under this Contract for an additional one (1) year period from the date of termination including all amounts accruing to Commerce as described in Section 2.11(4); provided, however, in such event Commerce agrees to use good faith efforts to find another buyer for the water contemplated to be sold in this Contract and any payments made by such a buyer during said one (1) year period after termination shall offset payments to be otherwise made by UTRWD hereunder Both parties reserve the right to terminate this Contract in the event the regulatory or other approvals received contain provisions that in the opinion of either party hereto substantially impair the water rights or the ability of either party to carry out its obligations and responsibilities under this Contract Notwithstanding anything herein to the contrary, any termination option to be exercised pursuant to this section shall be exercised within three (3) months of receipt of final regulatory or other approval or such later time as the parties may agree to in writing by giving written notice to the other party If (i) UTRWD exercises its right to terminate and cancel its obligations under this section within fifteen (15) months from the date of execution of this Contract or (ii) Commerce exercises its right to terminate under this action at any time, UTRWD shall have no obligation to pay any further amounts under this Contract, provided, however, that in either of such events UTRWD will pay to Commerce any sums -37- j which had accrued to Commerce hereunder before the effective date of such termination and cancellation. 4.05 Indemnification. UTRWD agrees to fully indemnify and hold harmless Commerce and its officers, employees, agents, contractors and related interests from and against any and all claims, losses, damages, demands, judgments, suits, liabilities and causes of action of whatsoever nature, whether known or unknown, fixed or contingent (including, but not limited to, attorneys' fees, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) related to or directly or indirectly resulting from or arising out of, after the date of execution of this Contract: (1) UTRWD's failure to comply with this Contract; (2) the actions of persons or things other than Commerce affecting the water supplied by Commerce to UTRWD after such water reaches the Delivery Point, and (3) the interruption, curtailment or limitation of service by Commerce to UTRWD or cusl►omers served by or to be served by UTRWD as provided in Section 3 04 of this Contract. 4.06 Remedies Upon Default Either party hereto shall be entitled to terminate this Contract upon thirty days written notice to the other party if, at the time of such termination, the other party is in breach of a material term of this Contract, which breach has been continuing and uncured for the shorter of (i) a -38- period of six (6) consecutive months or (ii) in the event of failure to pay a monetary obligation, then at such times as there are no reserves to pay said amount. The term "material provision" shall include, without limitation, the requirement of UTRWD to pay money to Commerce hereunder. It is not intended hereby to specify (and this Contract shall not be considered as specifying) an exclusive remedy for any default, but all such other remedies existing at law or in equity may be availed of by any party hereto and shall be cumulative In addition thereto, the parties specifically agree that in the event of any such default, the non-defaulting parties shall be entitled to obtain a writ of mandamus from a court of competent jurisdiction ordering and compelling the defaulting party, and its officers or representatives, to take such action as may be necessary or appropriate to cure such default and otherwise comply with the provisions of this Contract 4.07 Surolus Water or Capacity of UTRWD If UTRWD shall have surplus water or idle capacity in any of its facilities to transport water under this Contract, UTRWD agrees to negotiate in good faith a transportation and sale agreement for said water to Commerce with compensation therefor at actual cost plus a reasonable return on its investment in facilities so used 4.08 Contracts, Other Water Rights Commerce shall have the right to enter into other water supply contracts from its other water supply sources, provided, however, Commerce agrees not to -39- enter into any contract, other than this contract, to supply water from Cooper Reservoir to any customer located more than fifty (50) 1 miles from Commerce's then existing city limits. Nothing in this contract shall be construed as granting any right, title, interest or claim to UTRWD or its customers in any water systems or rights owned or used by Commerce, other than the right to purchase water from Commerce from the Reservoir pursuant to the terms of this Contract. UTRWD shall have the right to enter into contracts to supply water to its customers; provided, however, UTRWD shall not sell water to any person or entity located within fifty (50) miles of Commerce's then existing city limits 4 09 Force Maieure If either party is rendered unable, wholly or in part, by force majeure to carry out any of its obligations under this Contract other than an obligation to pay or provide money, then such obligations of that party to the extent affected by such force majeure and to the extent that due diligence is being used to resume performance at the earliest practicable time, shall be suspended during the continuance of any inability so caused to the extent provided but for no longer period Such cause, as far as possible, shall be renedied with all reasonable diligence The term "force majeure," as used herein, shall mean acts of God, strikes, lockouts, or other industrial disturbances, acts of the public enemy, orders of any kind of any governmental entity or any civil or military authority, acts, orders or delays thereof of any regulatory authorities with jurisdiction over the -40- parties, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, floods, washouts, droughts, arrests, restraint of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipelines or canals, or any other conditions which are not within the control of such party. It is understood and agreed that the settlement of strikes and lockouts shall be entirely within the discretion of either party hereto, and that the above requirements that any force majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes and lockouts by acceding to the demand of the opposing party or parties when such settlement is 1 unfavorable to it in the judgment of either party hereto 4.10 &everability The provisions of this Contract are severable, and if any provision or part of this Contract or the application thereof to any person or circumstance shall ever by held by any agency or court of competent jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Contract and the application of such provision or part of this Contract to other persons or circumstances shall not be affected thereby 4.11 Modification This Contract shall be subject to change or modification only with the mutual written consent of Commerce and UTRWD -41- 4. 22 Addresses and Notices. Unless otherwise notified in writing by the other, the addresses of Commerce and UTRWD are and shall remain as follows. commerce: City of Commerce Attn: Mayor 1119 Alamo Btreet Commerce, Texas 75428 UTRWD. Upper Trinity Regional Water District At President, Board of Directors 396 W Main, Suite 102 Lewisville, Texas 75067 4 13 Assianability. This Contract shall be assignable by either party with the written consent of the other party, which consent shall not be unreasonably withheld or delayed. 4.14 Time of the Essence. Time is of the essence with respect to all matters covered by this agreement 4 15 Authority of Parties Executina Aareement By their execution hereof, each of the undersigned parties represents and warrants to the parties to this document that he or she has the authority to execute the document in the capacity shown on this document. 4 16 captions The captions appearing at the first of each numbereEd section or paragraph in this Contract are inserted and included solely for convenience and shall never be considered or given any effect in construing this Contract -42- c IN WITNESS WHEREOF, the parties hereto bave executed this Contract in multiple copies, each of which shall be deemed to be an original and of equal force and effect, effective upon the execution hereof by both parties; provided, however, for purposes of Section 4.04 only, the term "effective date" means the latter of (1) execution by the parties hereto or (2) execution of the contract between Commerce and SRMWD to be attached as Exhibit "c" hereto. Executed' ~w)c 5 , 1990 CITY OF COMMERCE, TEXAS '~3 1 By: (~'l "7 IQayor ATTEST' L City Secrete [SEAL] -43- Executed: 0 1990 ATTEST: Secretary, Board of Directors [SEAL] \rs\rfter2 eon UPPER TRINITY REGIONAL WATER DISTRICT res derlt, board of Directors V _ encra unso or ppcr n~ty Regional Water District -44- DUPE I CAT E EXHIBIT LIST WATER SALE CONTRACT By and between the City of Commerce Texas and the Upper Trinity Regional Water District July 5 1990 Eyhibit A - COE/North Texas Contract Exhibit B - COE/Irving Contract Exhibit C - COE/SRMWD Contract Exhibit D - Supplemental COE/SRMWD Contract Exhibit E - CA No 03-4797 Exhibit F - Permit No 2336 Exhibit G - Commerce/SRMWD Contract Exhibit H - Sulphur Springs/SRMWD Contract Exhibit I - Cooper/SRMWD Contract Exhibit J - Application to Amend CA No 03-4797 UPPER TRINITY Regional Wteei Astrict July 10 1990 Mr Truitt Gilbreath City Manager City of Commerce 1119 Alamo Street Commerce TX 75428 Dear Truitt Diligent work on behalf of the City of Commerce and the Upper Trinity Regional Water District over many months has reached a major milestone Enclosed is the executed contract for sale of water out of the Cooper Project by Commerce to UTRWD We appreciate the high standards and cooperation exhibited by you Dave James and Ron throughout the negotiations and we look forward to the continuing relationship between Commerce and UTRWD Because of the project schedule and the contract terms time is of the essence Please take the necessary steps to have a meeting of the SRMWD Board scheduled as soon as possible to consider the actions they need to take regarding the water permit As we discussed a meeting of the advisory committee for the project has been scheduled for 10 00 a in July 18 in Commerce I look forward to seeing you there nc rely, Cam' omas E Taylor General Manager or TT/3w Enclosure Executed Contract c Ronald J Freeman with copy of Contract John F Boyle, Jr with copy of Contract R E Nelson Steven L Bacchus Austin D Adams John Baxter P 0 Drawer 305 • Lewisville Texas 75067 • 214-219-1228 DEPARTMENT OF THE Ar 1Y )RT WORTH DISTRICT CORPS OF EndINtjRS 0 sox 17200 Rarer TO I FORT WORTH T[XAS 74102 0200 DvI PLI ^TE A"ROVION erg March 8, 1991 %,/-1 Office of Counsel Mr. Truitt Gilbreath City Manager City of Commerce 1119 Alamo Street Commerce, Texas 75428 Dear Mr. Gilbreath: Pursuant to your Freedom of Information Act request dated February 27, 1991, regarding water supply contracts, are copies of Contract No DACW29-68-A-0099, Contract Between The United States of America and The City of Irving, Texas for Water Storage Space in Cooper Reservoir, With Supplemental Agreement Nos. 1 and 2, and Contract No. DACW29-68-A-0100, Contract Between The United States of America and North Texas Municipal Water District of Texas for Water Storage Space in Cooper Reservoir, with Supplemental Agreement No. 1. Sincerely, I oAkww Barbara Bear General Attorney Enclosures EX141itrr A- CONTRACT NO. DACW29-o6-A-3100 CONTRACT BEINM THE UNITED STATES OF AMERICA AND NORTH.TEXAS MUNICIPAL WATER DISTRICT OF TEXAS FOR WAFER STORAGE SPACE IN COOPER RESERVOIR THIS CONTRACT, entered into this 29th day of March 1968 by and between the UNITED STATES OF AMERICA (hereinafter called the Government), represented by the Contracting Officer executirs this contract, and the NORTH TEXAS MUNICIPAL WATER DISTRICT OF TEXA3, an agency of the State of Texas with its principal office in the city of Wylie, Texas (hereinafter called the District), WITt7ESSET11 TnAT WHEREAS, construction of the Cooper Reservoir on South Sulphur River, Texas (hereinafter called the Project), has been authorized by the Act approved 3 September 1954 (Public Law 780, 83d Congress, 2d Session), as amended by the Act approved 3 August 1955 (Public Law 218, 84th Congress, 1st Sesstion), and, WHEREAS, the North Texas Municipal Water District of Texas, a governmental agency of the State of Texas, created under the provi- sions of Acts 1951, 52d Legislature, State of Texas, Regular Session (Art 8280-141 Vernons Texas Statutes), with the power to acquire any and all rights in and to municipal, domestic, and industrial water supply storage capacity to be provided in the Project, has been authorized by the Texas Water Rights Commission as an agency with whom the Contracting Officer should negotiate with respect to a portion of the water supply storage in the Project, and, WHEREAS, the Government is authorized by the Water Supply Act of 1958 (Title III of Public Law 85-500 approved 3 July 1958), as amended by Section 10 of the Federal Water Pollution Control Act Amendments of 1961 (Public Law 87-88 approved 20 July 1961) to include storage in any reservoir project to be constructed by the Corps or Engineers to impound water for initial or anticipated future demand or need for municipal or industrial water, and, WHEREAS, Public Law 88-140, approved 16 October 1963, makes permanent rights of states and local interests to utilize municipal and industrial storage in Corps of Engineers' reservoirs for which they contributed, and, WHEREAS, storage space has been included in the Project for municipal and industrial water supply, and, n CONTUCT NO DACW29-68-A-Oloo WHEREAS, the District desires to utilize 100,b25 acre-feet of storage space for future municipal and industrial water supply as set forth in Article 1, and, WHEREAS, the District hereby agrees to fulfill the local interest requirembnts of the Water Supply Act of 1958, as amended NOW, THEREFORE, the parties do mutually agree as follows ARTICLE 1 WATER STORAGE SPACE - a The District shall have the right to utilize, from the 10th anniversary of the date of deliberate impoundment, an undivided thirty-six and eight hundred fifty-nine thousandths percent (36.859%) of the storage space in the Project between elevations 440 0 and 415 5 feet above mean sea level as deemed necessary by the District to impound water in the Project for its future muni- cipal and industrial use, and make such diversions as granted to the District by the Texas Water Rights Commission, or its successors, to the extent such storage will provide b The right described in Article 1 a above is subject to the retention by the Government ana others of the remaining undivided sixty-three and one hunared forty-one thousandths percent (63 141%) of the storage space for such purposes as the Government may deem advisable c The District will not make or permit withdrawals which would lower the water level below elevation 415 5 feet above mean sea level, unless expressly approved in writing by the Contracting Officer d The Government shall not be responsible for diversion by others, nor will it became a party to any controversies between users of the aforesaid storage space,,except as such controversies may affect storage space reserved by the Government e. The design and location of any future District installations or facilities that the District may construct at the Project for the purpose of diversions or withdrawals shall be subject to the approval of the Contracting Officer, and the cost of such installations or facilities, or any modifications thereof, _ shall be borne by the District f. The Government reserves the right to take such mea- sures as may be necessary in the operation of the Project to preserve life and/or property. g The Government reserves the right at all times to maintain a low flow release of 5 cubic feet per second, regardless of the elevation of the water During periods of regulation for 2 CONTRACT 10. DACW29-60-A-0100 water supply (when the reservoir water surface is below elevation 440 0 feet above mean sea level), the District shall be entitled no percent (0 000) of the total yield of the aforesaid storage apse* after allowance of the flow of 5 cubic feet per second, for a period of 10 years after the date of deliberate impoundment Thereafter, the District shal3zbe entitled to thirty-six and eight uundred fifty-nine thousandths percent (36.859%) of the total yield of the aforesaid storage space after allowance of the flow of 5 cubic feet per second. Should the rate of withdrawal of water supply, downstream release, and evaporation fail to maintain a recession in water level of 2/10 of a foot in any 10-day period during the months May through October, inclusive, the Government reserves the right to obtain the above rate of recession by release of water downstream in excess of 5 c.f s. in the interest of mosquito control Should the inflow during the months May through October, inclusive, result in a rise in water level and require an additional expenditure in the interest of mosquito control, proportionate reimbursement for such expenditure shall be made by the District h. To implement the provisions of this article, the Government shall, at the appropriate time and in consultation with the District, formulate a plan of operation for the Project which will achieve these objectives 1. The "date of deliberate impoundment" as used in this contract shall mean the date upon which the Project becomes operative for storage of water for any of the purposes contained in the authorizing act ARTICLE 2 METERING - For the purpose of maintaining an accurate record of water resources at the Project, the District shall install suitable meters or metering devices satisfactory to the Contracting Officer, without cost to the Government, at such time as the District may withdraw xater from the Project The District shall furnish the Government periodically, at least monthly, a record of all such withdrawals from the Project Nothing in this article is to be construed as prohibiting participa- tion by the District in cooperative gaging programs sponsored by the United States Geological Survey or other Government agencies in the water resources field ARTICLE 3 FEDERAL AND STATE LAWS - The District shall utilize such storage space in s manner consistent with Federal and state lava ARTICLE 4 REGULATION OF THE USE OF WATER - The regulation of the use of water stored is the water supply spaces covered by this contract 400,625 acre-feet for future) shall be the 3 CONTRACT NO DAC'A29-68-A-0100 responsibility of the District upon initiation of payment by the District for construction costs allocated to such spaces ARTICLE 5 CONSIDERATION AND PAYMENT - a. In gonsideration of the Government's providing the aforesaid storage space of 100,625 acre-feet for future water supply use by the District, it is agreed wist the District shall pay the following sums to the Government (1) Three million four hundred and six thousand eight hundred and forty-eight dollars (443,406,8681 which is the estimated cost, including interest during construction, of providing the storage space for future water supply use in payments in the amount of one hundred thirty-four thousand four hundred anu sixty-four dollars ($134,464) Except for the first payment, which shall be applied solely to the reduction of the principal, all payments shall include accrued interest at the rate of three and two hundred fifty-three thousandths perceut (3 253$) per annum on the unpaid balance The aforesaid payments are more specifically set forth in exhibit "B" attached hereto and made a part hereof, and the last payment shall be adjusted upward or downward, when due, to assure the repayment of all capital costs by the end of 50 years The first payment shall be due and payable within thirty (30) days following the 10th anniversary of the date the District is notified that deliberate impoundment has been made. Payments thereafter shall be due and payable within thirty (30) days of the yearly anniversary date of the first payment under this contract (2) Twelve and eight hundrea thirty-six thousandths percent (12.8366) of the annual experienced point-use cost of ordinary operation and maintenance of the Project The first payment estimated to be fourteen thousand nine hundred and fifteen dollars ($14,915) will be due and payaole within thirty (30) days following the 10th anniversary of the date the District is notified that deliberate impoundment has been made Annual payments thereafter will be due and payable in advance on the anniversary date of deliberate impoundment and will be equal to twelve and eight hundred thirty-six thousandths percent (12 836%) of the actual experienced point-use cost of ordinary operation and maintenance for the preceding Government fiscal year The second payment shall be increased or decreased in an amount to reflect the difference between the first payment and twelve and eight hundred thirty-six thousandths percent (12 8365) of the actual experienced point-use cost of ordinary operation and maintenance for the pre- ceding fiscal year. Records of cost of operation and maintenance of the Project shall be available for inspection and examination by the District The extent of operation and maintenance of the 4 CONTRACT NO. DAC'A29-68-A-0100 Project shall be determined by the Contracting Officer and all records and accounting shall be maintained by the Contracting Officer. In the event the District should require additional operation and maintenance of the water supply storage over and above that deemed necessary by the Contracting Officer, the District shall bear thesentire cost of such additional expense (3) Ten and eight hundred thirty-seven tnousandths percent (1;n.W%) of the cost of sedimentation resurveys ana joint- use mayor capital replacements when incurred (4) In the event of default in the payment of the costs contained in Article 5 a (1), (2), and (3), the amount of such payments shall be increased by an amount equal to inteieat on such overdue payments at the rate of three and two hundred fifty-three thousandths percent (3 253%) per annum tnereon, compounded annually, and such amount equal to interest shall be charged from the date such payments are due until paid (5) The District may, upon written notice to the Government at any time prior to the tenth anniversary date of deliberate impoundment, advance or defer the date of first use of all or any portion of the storage space provided under this con- tract for future water supply, subject to the requirements that the entire amount of the construction costs, including interest during construction, allocated to water supply shall be repaid within the life of the project, and that repayment of the amount of such costs for any portion of the storage space used shall be made within a period of not to exceed 50 years from the date such portion of the storage space is first used for the storage of water for water supply purposes No principal or interest payment with respect to the storage space provided under this contract for future water supply is required to be made during-the first 10 years following the date of deliberate impoundment unless all or a portion of such storage space is used by the District for the storage of water for water supply purposes, in which event repayment for the portion used shall be started and shall be repaid within not to exceed 50 years from the date of first use In the event the date of first use of all or a portion of the future water supply storage space is _ deferred beyond the 10th anniversary date of deliberate impoundment, interest at the rate specified will be charged for that portion from the 11th year until such time as it is first used for the storage of water for water supply purposes The District may at its option pay the interest as it becomes due or may allow the interest to accumulate until the storage space is used If this letter option is exercised the interest will be compounded annually and will be added to the principal amount 5 CONTRACT NO DACW29-68-A-0100 b. In the event the actual first cost of the Project exceeds the presently estimated first cost, as set forth in exhibit "Al" the aforesaid annual payments shall be increased to reflect the actual first cost, including interest during construction, as determined by the Contracting Officer In the event such first cost of the Projech is less than the presently estimated first cost, the aforesaid annual payments shall be decreased to reflect the actual first cost, including interest during construction, as determined by the Contracting Officer In the event the annual payments are increased or decreased, as provided above, an adjust- meat, as determined by the Contracting Officer, of payments made prior to the determination of the final Project cost shall be made in the first payment due after such costs are determined The interest rates used in this contract are for estimating purposes only The interest rate used for purposes of computing interest during construction and interest on the unpaid balance shall be determined by the Secretary of the Treasury, as of the beginning of the fiscal year in which construction of the project is ini- tiated, on the basis of the computed average interest rate payable by the Treasury upon its outstanding marketable public obligations, which are neither due nor callable for redemption for fifteen years from the date of issue At the time that the final Project costs are determined, the repayment schedule shall be modified to reflect the increased or decreased annual payment and such modification will form a part of this contract ARTICLE 6 NO WARRANTIES AS TO QUALITY OF WATER - The parties hereto recognize that the water in the storage space being made available to the District under the terms of this agreement is raw reservoir water The Government makes no representations with respect to the conditions or the potability of the water, and assumes no responsibility therefor or for treatment of the water, or for undertaking any action which might tend to reduce con- tamination from the reservoir or from other sources in the ratershed ARTICLE 7 PERIOD OF CONTRACT - This contract shall become effective as of the date of approval by the Secretary of the Army, and shall continue in full force and effect, under the conditions set forth herein, not to exceed the life of the Project This con- tract is subject to the provisions of Public Law 88-140, approved 16 October 1963, and the District shall have a permanent right to the use of such storage space after the period of years specified for repayment under Article 5 in the contract, or as amended, subject to the following a The District must have discharged its responsibilities for payment of the costs allocated to water supply 6 CONTRACT NO DACW29-68-A-0100 b The District must continue payment of its share of annual operation and maintenance costs allocated to water supply c. The District must pay in a lump sum, or annually with interest,=the costs allocated to water supply which may, at termination of the repayment period set forth in the contract or thereafter, be required for any necessary reconstruction, re- habilitation, or replacement of Project features which may be required to continue satisfactory operation of the Project. Such costs will be established by the Contracting Officer Repayment arrangements will be in writing and will be made a part of this contract d Upon termination of the repayment periods set forth in the contract, the Contracting Officer shall redetermine the storage space for municipal and industrial water supply, taking into account such equitable reallocation of reservoir storage capacities among the purposes served by the Project as may be necessary due to sedimentation Such findings, and the storage space allocated to municipal and industrial water supply, shall be defined and described in an exhibit which will be made a part of this contract Following the same principle, such reallocation of reservoir storage capacity may be further adjusted from time to time as the result of sedi- mentation resurveys to reflect actual rates of sedimentation and the exhibit revised to show the revised storage space allocated to municipal and industrial water supply e The permanent rights of the District under this contract shall be continued as long as the Government continues to operate the Project In the event the Government no longer operates the Project, such rights may be continued subject to the execution of a separate contract, or supplement agreement providing for (1) Continued operation by the District of such part of the facility as is necessary for utilization of the storage space allocated to it, (2) Terms which will protect the public-interest, and (3) Effective absolvement of the Government by the District from all liability in connection with such con- tinued operation T CONTRACT NO DACW29-68-A-0100 ARTICLE 8. OPERATION AND MAINTENANCE - The Government shall operate and maintain the Project owned by the Government. The District shall have the right to make withdrawals of water for its purposes as needed in accordance with Article 1. The District shall be responsible for operation and maintenance of all features and appurtenancesiwhich may be provided and owned by the District ARTICLE 9 RIGHTS-OF-WAY - The Government, subject to the approval of the Secretary of the Arad, shall, without additional con- sideration, grant to the District, by separate instrument or instru- ments, an easement or easements as may be required for the construction, operation and maintenance of pumping facilities and water supply pipelines in, on, over, and across Government-owned lands acquired for project purposes The instruments granting such easements shall be consistent with Government contract provisions in effect at that time, with such modifications as may be necessary in each instance and as may be approved by the Goverament ARTICLE 10 RELEASE OF CLAIMS - The District shall hold and save the Government, including its officers, agents, and employees harmless for liability of any nature or kind for or on account of any claim for damages which may be filed or asserted as a result of the storage in the Project or withdrawal or release of water from the Project, made or ordered by the District, or as a result of the construction, operation, or maintenance of the features or appurtenances owned and operated by the District. ARTICLE 11. TRANSFER OR ASSIGNMENT - The District shall not transfer or assign this contract, nor any rights acquired thereunder, nor suballot said water or storage space or any part thereof, nor grant any interest, privilege, or license whatsoever in connection with this contract, without approval of the Secretary of the Army, provided, that, unless contrary to the public interest, this restriction shall not be construed to apply to any water which may be obtained from the water supply storage space by the District and furnished to any third party or parties ARTICLE 12 OFFICIALS NOT TO BENEFIT - No member of or delegate to Congrese, or resident commissioner, shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom, but this provision shall not be construed to extend to this contract if made with a corporation for its general benefit. ARTICLE 13 COVENANT AGAINST CONTINGENT FEES - The District warrants that no person or selling agency has been employed or retained to solicit or secure this contract upon an agreement or 8 i~ t er CONTRACT NO DACW29-: )l,., understanding for a commission, percentage, b-oKtrage, or cort'_ngcnt fee, excepting bona fide employees or bo a fide estatlished com- mercial or selling agencies maintained by the Listrict for the purpose of securing business For breach or violatior of this warranty the Government shall have tte rigl~t to annul this contract without liability or in its discretion to edd to the contract price or considerstion, or otherwise recover, the full amount of such commission, percentage, brokerage, or contirgent °ee ARTICLE 14 APPROV,.L )r CONT^A^T - "his contract shall be subject to the written approial of the Secretary of the Arry, and shall not be binding until so approved IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the del and year first above written APPROVED THE UIiITED STATES OF AMERICA Secretarlyl of t Ar:vr JUL 148 DATE By / -0~7 k , Cuntract Otficer NORTH TEXAF 4UNICIPAL WATER DISTRICT OF TEXAS By r i C// President Dra ter 0, 11ylie, Texas 755098 Post Oifice Address ATTEST \ q Secretary, North Texas Municipal Water District/ of Texas evcaivrn e n vcar.J wLtiorney, nOTLn vex" Municipal Water Diatr Ct 01 Texas 9 1 CONIRACT NO DACW29-68-,1-O1f+U it C. Truett ;nith , certify that I am the Secretary of the NORTH TEXAS MUNICIPAL WATER DISTRICT OF IUC.AS herein, a body politic and corporate, that A R Sclrll, I'I who signed this contract on behalf of the District was then PRESIDENT of said NORTH TEXAS MUNICIPAL WATER DISTRICT OF TEXAS, that said contract was duly signed ror and on behalf of the NORTH TEXAS MUNICIPAL MATER DISTRICT OF TEXAS by authority of its governing body and is within the scope of its legal powers IN WITNESS WHEREOF, I have hereunto affixed my head and the seal of said NORTH TEXAS MUNICIPAL WATER DISTRICT OF TEXAS this 29th day of March 196 8 i Secret,¢ry, North Texas Municipal Water District of Texas CORPORATE SEAL 10 EXHIBIT A I - Reservoir Stora es_s Z Percent of M&I water supply space Water supply storage, Municipal & industrial Future use, North Texas Municipal Water District Other M&I water supply users 36 859 63 141 Usable Elevation storage(1) (ft.m.s 1 ) (ac-ft) 100,625 172,375 Total M&I water supply storage 100 000 415 5-440 0 273,000 Flood control storage - 440.0-446.2 131,400 Reservoir storage - 0 (1)Storage remaining after 100 years of sedimentation. II - Allocation of Estimated Construction Cost M&I water supply for future use of North B 3 7 v 98 Texas Municipal Water District others - b ,4 , 78 5.479) y M&I water supply for use 315 M28 Subtotal - M&I water supply Texas Water Development Board participation . 1,715,471 Flood Control (noureimbursable) 10,196,503 Recreation (noureimbursable) 5,938,711 000 06,529' Total ~ _ III - Costs to be Repaid by the North Texas Municip al Water District for Future Water Supply Use 36 859% of cost allocated to M&I water supply 198,738 4 3 ( 36859 x $8,678,315) , Interest during construction 110 208 (3253% x 1/2 of 4-year period) , $ 3,406,848 Total 1 ~ Iv - Allocation or Estimatea operation. Maintenance, ana major neAlaQemem Cost of " NTMWD Other M&I M&I Flood j Water 3 . Water Su TWDB Control Rec Total $/Yr Yr. Uyr /Fyr T5r• -/Yr- Operation & maint. Specific cost 0 0 0 50,600 58,600 109,200 Joint-use cost 14 uq~jj 25J50 8,439 37.270 30 026 ll6 2`00 tl~ 225, 0 Total 1i,915 25,550 39 871870 Mayor replacements Specific cost 0 0 0 0 18,600 18,600 Joint-use cost 115 197 ~6~ 5o44 -b T ~1~• B 1 060 -,6 0 1 Total 115 197 i b5 5 1 ,7T9 9 Y - Annual Charges for Future M&1 water aupplY use - Interest and amortization of cost of M&I water supply features (see computation below) $ 134,464 Joint-use operation and maintenance costs equivalent to 12 836% of the actual point-use operation and maintenance costs, computed as follows 34 824% = percent of point-use 0&M cost allocated to M&I water supply 36 859% = percent M&I water supply space to be used by the North Texas Municipal Water District (34 824% x 36859) - 12 836% of the actual point-use 0&M costs Estimated annual cost (.12836 x $116,200) $ 14,915 Joint-use major capital replacement and sedimentation resurvey costs, when incurred, equivalent to 10 837% of the actual point-use mayor capital replacements and sedimentation resurvey costs, computed as follows 29 400% = percent point-use mayor capital replacement and sedimentation resurvey costs allocated to M&I water supply 36 859% = percent M&I water supply space to be used by the North Texas Municipal Water District (29 400% x 36859) - 10 837% of the actual point-use major capital replacements and sedimentation resurvey costs $ 115 Estimated annual cost - ( 10837 x $1,060) _ Total annual cost for future M&I water supply $ 149,494 2 , . Computation of Annual Payment for Interest and Amortization (Based on 50 payments, 49 of which bear interest on the unpaid balance) WHEREIN 1 1+i n-1 i D a Annual payment D a I R R■ Amount to be repaid a $3,4o6,8L8 (1+i)n-1 i a Interest rate a 0 03253 n a Number of payments a 50 D a .03253(1+0.0525114-9 1+0 03253 -1 x $3,406,848 a $3,406,848 x 0 0394689 D a $134,464 3 EXHIBIT B SCHEDULE FOR COST OF WATER SUPPLY FOR FUTURE USE BY THE NORTH TEXAS MUNICIPAL WATER DISTRICT TOTAL COST S 34 "848.00 NUMRFR OF PAYMEN 4 50 INTFREST RATE# PFRCFNT 0.03253 . . . . . . . . . . . . . . . . . . . . . . . . . . . ANNIIAL AMOUNT PAYMENT OP NUMBER PAYMENT 1 134464.00 2 134464.00 3 134464.00 4 134464.00 5 134464.00 6 134464.00 7 134464.00 8 134464.00 9 134464.00 10 134464.00 11 134464.00 12 134464.00 13 1344A4.00 14 134464.00 15 134464.00 16 134464 00 17 134464.00 18 134464.00 19 134464.00 20 134464.00 21 134464.00 22 134464.00 23 134464.00 24 134464.00 25 1344A4.00 26 134464.00 27 134464.00 28 134464.00 29 134464.00 30 134464.00 31 134464.00 32 134464.00 33 134464.00 34 134464.00 35 134464.00 36 134464.00 37 134464.00 38 134464.00 39 134464.00 40 134464.00 41 134464.00 42 134464.00 43 134464.00 44 134464.00 45 134464.00 46 134464.00 47 134464.00 48 134464.00 49 134464.00 50 134556.09 APPLI CATION . . . . . . . . . . . INTERFST . . . . . . ALLOC COST . . . 0.00 . . . . 134464.00 106450.65 28011.35 105539,37 78924.63 104698.45 ?9865,55 103626.93 30837.07 102623.80 31840.20 101588,04 37875.96 100518,58 33945.42 99414.34 35049.66 96274,17 36180.83 97096,92 37367.08 95881.37 3P582.63 94626.27 39837.73 93330.35 41133.65 91992.27 42471.73 90610.67 43853.33 89184.12 45279.88 87711.16 46752.84 86190.29 48273.71 64619.95 49844.05 82998.52 51465.48 81324.35 53139.65 79595.72 54868.28 77010.85 56653.15 75967.93 58496.07 74065.05 60398995 72100.27 62361.73 70071.58 64392.42 67976.89 66487.11 65814.07- 68649.93 63580.89 70883.11 61275.06 73189.94 58894.22 75569.78 56435.94 78028.06 53697.68 80566.32 51276.86 83187.14 48570.78 85891.22 45776,68 88687.32 42891.68 91572.32 39912.83 94551.17 36837,08 97626.92 33661.28 100802.72 30382.17 104081.83 26996.38 107467.62 23500.46 110963.54 19890.82 114573.18 16163.75 118300.25 12315.45 122148955 8341.95 12612?.05 4?39.70 130316.89 BALANCE ALLOC ~COST 3272384.00 3244370.65 3215446.02 3185580.47 3154743.40 3122903.20 3090027.24 3056081.82 3021032.15 298484?,33 2947475.25 2908892.62 2869054.89 2827921.24 2785440.51 2741596.iB 2696316.31 2649563.47 2601289.76 2551445.70 2499980.22 2446840.57 2391977.29 ?335319.14 2276823.07 2216424 12 2154060.39 2089667.97 2023160.86 1954530.93 1883647.82 1810459.88 1734889.11 1656861.04 1576294.73 1493107.58 1607214.36 !318527.04 1226954.72 1132403.55 1034776.63 933973.91 829892.08 722424.46 611460.92 496887,74 378587.49 256438.94 130316.89 0.00 1 . ~ r tract No. DACW29-68-A-0100 a-pplemental Agreement No. 1 SUPPLEMENTAL AGREEMENT NO. 1 BETWEEN THE UNITED STATES OF AMERICA AND THE NORTH TEXAS MUNICIPAL WATER DISTRICT OF TEXAS FOR WATER STORAGE SPACE IN COOPER RESERVOIR d This Supplementlal Agreement No 1, entered into thiq.Z'Vr!day of -774",sL'jr , 191~,by and between the UNITED STATES OF AMERICA (hereinafter called the Government) represented by the contracting officer executing this agreement, and the NORTH TEXAS MUNICIPAL WATER DISTRICT OF TEXAS, an agency of the State of Texas, with its principal office in the City of Wylie, Texas (hereinafter called the District), WITNESSETH THAT WHEREAS, on 29 March 1968, the Government entered into Contract No DACW29-68-A-0100 with the District for the purchase of water supply storage space in Cooper Reservoir, and WHEREAS, on 29 March 1968, the Government entered into Contract No. DACW29-68-A-0102 with the TEXAS WATER DEVELOPMENT BOARD, an agency of the State of Texas existing under the laws of Texas (hereinafter called the Board); and WHEREAS, at the time the Board entered into Contract No DACW-29-68-A-0102, the Board had intended to construct the Sulphur Bluff and Naples Reservoirs (features of the Texas Water Plan) downstream of Cooper Reservoir, and WHEREAS, construction of these downstream reservoirs would have inundated areas now protected by existing channel and levee improvements already constructed under the Project as well as areas to be protected by future levee and channel improvements authorized to be constructed under the Project, and would have eliminated certain levee and channel improvements authorized for constri-•ton under the Project, and WHEREAS, the construction of these 3ownstream reservoirs would operate to reduce the benefits allocable to the purpose of food control in the Project, and thus increase the costs allocated to the purpose of the municipal and industrial water supply over those allocable to such purpose in the Project as authorized, and W11FREAS, the Bard in a resolution dated 27 April 1966 indicated - its willingness to bear the additional costs allocated to the purpose of municipal and industrial water supply in Cooper Reservoir resulting from the construction and operation of the downstream reservoirs, to the end that costs to purchasers of municipal and industrial water supply storage space in Cooper Reservoir would be the same both with and without construction of those features of the Texas Water Plan, and Contract No DACW29-68-A-0100 Supplemental Agreement No 1 WHEREAS, an earlier plan for development of Cooper Reservoir included storage spacq in the amount of 32,100 acre-feet for the purpose of water quality control; and WHEREAS, a minimum downstream release of 5 e f s from Cooper Reservoir will be sufficient to satisfy the water quality needs for the Sulphur River, thus making unnecessary the provision of storage space in Cooper Reservoir for water quality control, and such minimum release being assured by the State of Texas in accordance with state standards as approved by the Federal Water Pollution Control Administration (whose functions were incorporated into the authority of the Environmental Protection Agency), and WHEREAS, the space previously reserved for water quality control has been reassigned, in equal amounts, to the North Texas Municipal Water District and to the City of Irving by the Texas Water Rights Commission, and WHEREAS, the District and the City of Irving have previously agreed to purchase the above space, and WHEREAS, the elimination of water quality control as a project purpose would operate to increase the costs allocated to the purpose of municipal and industrial water supply, both as to total cost and cost per unit of storage apace, and WHEREAS, the Board had previously expressed its intention that as a result of the Board's financial involvement in the project, the unit cost to be paid by the purchasers of municipal and industrial water supply storage apace in Cooper Reservoir should be based on an alloca- tion of project costs with water quality control storage in the amount of 32,100 acre-feet included as a project-purpose, and WHEREAS, in accordance with the terms and conditions expressed iu Contract No DACW29-68-A-0102, the Board had obligated itself to pay the Government the additional costs allocated to municipal and indus- trial water supply in the Cooper Reservoir, inclusive of the additional joint-use annual cost for construction, the additional joint-use cost for operation and maintenance, and the additional cost for replacements and sedimentation resurveys, when incurred, resulting from modification of the Project in the interest of the Sulphur Bluff Reservoir and Naples Reservoir features of the Texas Water Plan, and resulting from the elimination of water quality control as a project purpose, and 2 A Contract No DACW29-68-A-0100 Supplemental Agreement No 1 WHEREAS, by letter dated 22 March 1973 the Board advised the Government that construction of the Sulphur Bluff and Naples Reservoirs will not be likely in the foreseeable future, and accordingly, that certain downstream levee and channel improvements that previously would have been affected or eliminated by the implementation of the Sulphur Bluff and Naples Reservoirs should therefore be reinstated into the formulation of project plans, that the fiscal responsibility of the purchasers of water supply storage space should be realised to reflect differences in costs due to the elimination of the downstream reservoirs from further considerations in the development of the project; that the financial responsibility should be further realined such that the pur- chasers of municipal and industrial water supply storage space assume the increased costs to water supply which resulted from the elimination of water quality control as a project purpose, and WHEREAS, in essence, the Board desires to withdraw as a cost- sharing cosponsor in the development of the Project with the result that all of its fiscal responsibilities in connection with the development of the Texas Water Plan and its fiscal responsibilities in connection with the elimination of water quality control as a project purpose, in so far as these obligations relate to the water supply purpose of the Project, be redistributed to the purchasers of water supply storage space in Cooper Reservoir, and WHEREAS, the remaining purchasers of water supply storage space have indicated a willingness to assume all of the fiscal responsibil- ities occasioned by the withdrawal of the Board as described above, and WHEREAS, the District has indicated its willingness to assume a proportional share of these fiscal responsibilities in accordarce with the terms and conditions set forth in the basic cwntiact as amended by this supplemental agreement, and WHEREAS, because it is the policy of Congress that the "Federal Government should participate and cooperate with states and local interests in developing such water supplies" as proclaimed in Sec 301(x) of the Water Supply Act of 1958, Public Law 85-500, approved 3 July 1958, it is deemed advisable for the Government to incorporate into the basic contract the above realinement of fiscal responsibilities as they relate to the District NOW THEREFORE, the parties hereto do mutually agree to amend Contract No. DACW29-68-A-0100 in the following manner and the basic contract is so amended to read as follows, to wit 3 Contract No DACW29-68-A-0100 Supplemental Agreement No. 1 1. Subparagraphs a(1), a(2), and a(3) of Article 5 of the basic contract are deleted and the following substituted therefor "(1) Nine million two hundred and seven thousand six hundred and thirty-eight dollars T($9,207,638) which is the estimated cost, including interest during construction, of providing the storage space for future_ in payments in the amount of three hundred sixty-t ree water augal J U thousand four hundred and fifteen dollars ($363,415). Except for the first payment, which shall be applied solely to the reduction of the principal, all payments shall include accrued interest at the rate of three and two hundred fifty-three thousandths percent (3 253%) per annum on the unpaid balance The aforesaid payments are more specifically set forth in Exhibit "B" attached hereto and made a part hereof, and the last payment shall be adjusted upward or downward, when due, to assure the repayment of all capital costs by the end of 50 years The first payment shall be due and payable within thirty (30) days following the 10th anniversary of the date the District is notified that deliberate impoundment has been made Payments thereafter shall be due and payable within thirty (30) days of the yearly anniversary date of the first pay- ment under this contract. "(2) Thirteen and eight hundred and three thousandths percent (13.803X) of the annual experienced joint-use cost of ordinary operation and maintenance of the Project The first payment estimated to be twenty- five thousand nine hundred and seventy-three dollars ($25,973) will be due and payable within thirty (30) days following the 10th anniversary of the date the District is notified that deliberate impoundment has been made Annual payments thereafter will be due and payable in advance on the anniversary date of deliberate impoundment and will be equal to thirteen and eight hundred and three thousandths percent (13 803%) of the actual experienced joint-use cost of ordinary operation and maintenance for the preceding Government fiscal year --The second payment shall be increased or decreased in an amount to reflect t.te difference between the first payment and thirteen and eight hundred and three thousandths percent (13 $03%) of the actual experienced joint-use cost of ordinary operation and maintenance for the preceding fiscal year Records of cost of opera- tion and maintenance of the Project shall be available for inspection and examination by the District The extent of operation and maintenance of the Project shall be determined by the Contracting Officer and all records and accounting shall be maintained by the Contracting Officer In the event the District should require additional operation and maintenance of the water supply storage over and above that deemed necessary by the Contracting Officer, the District shall bear the entire cost of such additional expense "(3) Eleven and six hundred and eighteen thousandths percent (11 618%) of the cost of sedimentation resurvey, and joint-use major capital replacements when incurred " 4 ` . Contract No. DACW29-68-A-0100 P Supplemental Agreement No. 1 be3 Of aring basic replaced by hteto and A and 2B attached Exhibits Supplemental Agreement No. I- 3. This supplemental agreement shall be subject to the written approval of the Secretary of the Army and shall not be binding until so approved. T IN WITNESS WHEREOF9 the parties hereto have executed this Supplemental Agreement No. 1 as of the day and year first above written. APPROVED: AAJ Army_ /AIMAs1s:6n: o Cr" r+ of Cis A-mv Nov, W1 DATE THE UNITED STATES OF AMERICA jv~ 10f (Contrac ng icer) EARLY J RUSH III Colonel, CE NORTH TEXAS MUNICIPAL WATER DISTRICT OF TEXAS L ZL a i L.L- ATTEST i Secretary. North Texas Municipal Water District of Texas APPROVED AS TO FORM (~#dcipal Wate3~Dist Lof Texas / ~CLGa P 0, Drawer Wylie, Texa 75098 (Post office Address) 5 Contract No. DACW29-68-A-0100 Supplemental Agreement No. 1 is C. TRUETT SMITH , certify that I am the Secretary of the NORTH TEXAS MUNICIPAL WATER DISTRICT OF TEXAS herein, a body politic and corporate; that JACK I McJUNKIN who signed this contract on behalf of the District was then PRESIDENT of said NORTH TEXAS MUNICIPAL WATER DISTRICT OF TEXAS, that said contract was duly signed for and on behalf of the NORTH TEXAS MUNICIPAL WATER DISTRICT OF TEXAS by authority of its governing body and is within the scope of its legal powers. IN WITNESS WHEREOF, I have hereunto affixed my hand and the seal of said NORTH TEXAS MUNICIPAL WATER DISTRICT OF TEXAS this 8th day of JUNE , 1976 CORPORATE SEAL District of Texas 6 Contract No DACW29-68-A-0100 Supplemental Agreement No 1 S EXHIBIT A Contract No. DACW29-68-A-0100 Supplemental Agreement No 1 EXHIBIT A I - Reservoir Starnes i Percent of M&I water Usable supply space Elevation storale(l) (ft m.s 1 1 (ac-ft) Water supply storage Municipal 6 industrial Future use, North Texas je4"n cipal Water District 36.859 1000625 Other M&I water supply 63 141 172.375 users Total M&I water supply storage 100 000 415 5-440 0 2739000 Flood control storage - 440.0-446 2 131,400 Reservoir storage - 404,400 (1) Storage remaining after 100 years of sedimentation II - Allocation of Estimated Construction Cost M&I water supply for future use of North Texas $ $,645,182 Municipal Water District 14 809,556 M6I water supply for use by others $23 454,738 Subtotal - M&I water supply 27,602,183 Flood Control (non-reimbursable) 12,653,079 Recreation (non-reimbursable) $63,710,000 Total III - Costs to be Repaid by the North Texas Municipal Water District for Future Water Supply Use 36.859% of-cost allocated to M&I water supply $ $,645,182 (.36859 x $23,454,738) Interest during construction 562,456 (3 253 x 4 of 4-year period) Total $ 9,207,638 Contract No. DACW29-68-A-0100 Sup mental Agreement No 1 IV - NTMWD Other M6I M&I Water Water Flood % Suno1r r Supply r Control sT r Rae T Total $T - y Y y Operation 6 maint. Specific cost 0 0 81,939 94,893 1769832 Joint-use cost 25.973 44,491 73.229 44,475 188.168 Total 25,973 449491 155,168 139,368 365,000 I Major replacements Specific cost 0 0 0 55,819 55,819 Joint-use cost 370 633 1,702 476 3,181 Total 370 633 1,702 56,295 59,000 V - Interest and amortization of cost of MSI water supply features (see computation below) $363,415 Joint-use operation and maintenance costs equivalent to 13 8032 of the actual joint-use operation and maintenance costs, computed as follows. 37 44756% - percent of joint-use 06M cost allocated to M&I water supply 36.859% - percent M6I water supply space to be used by the North Texas Municipal Water District (37 44756 x .36859) - 13 8032 of the actual joint-use 06M costs Estimated annual cost ( 13803 x $188,168) $ 250973 Joint-use major capital replacement and sedimentation resurvey coats, when incurred, equivalent to 11 618% of the actual joint-use major capital replacements and sedimentation resurvey costa, computed as follows 31.51961% - percent joint-use major capital replacement and sedimentation resurvey costs allocated to M&I water supply 36 859% - percent M6I water supply space to be used by the North Texas *Jnicipal Water District (31.519612 x 36859) - 11 618% of the actual joint-use major capital replacements and sedimentation resurvey costs Estimated annual cost - ( 11618 x $3,181) - $ 370 Total annual cost for Future M&I water supply $389,758 Conte -t No DACW29-68-A-0100 Supp• ^ntal Agreement No 1 Computation of Annual Payment for Interest and Amortization (Based on 50 payments, 49 of which bear interest on the unpaid balance) WHEREIN 1 1+1 n-1 = D - Annual payment D w x R R - amount to be repaid ■ $9,207,638 i - Interest rate - 0 03253 n - Number of payments - 50 D - .03253(1+0 03253) 49 x $9,207,638 - $9,207,638 x 0.0394689 (1+0 03253)0-1~ D - $363,415 A-3 Contract No DACW29-68-A-0100 Supplemental Agreement No. 1 S EXHIBIT B AMORTIZATION SCHEDULE COST OF WATER SUPPLY FOR FUTURE USE BY NORTH TEXAS MUNICIPAL WATER DISTRICT OF TEXAS .n. r• 4 Is It T,'h JI, 111 IJTr 1 ,1 t1111 4111 V4 1JJnA1. 11 1 1uV 1 lY 4F 4 1 yr V1s4rr.,% NAvoe41 E 3 4 b 6 K 9 11) 11 17 13 14 IS 16 17 1,5 1J ll /J -14 lb E6 37 ,.l 1'1 JI J. 3J J4 3J J7 a.4 41 411 11 1.0 44 44 45 14, 41 n, aJ WM♦ Y... .Y YI\Ya/ YY 1% YLYY 1. 1J.'bJ S-alementoil Agreement No 1 EXHIBIT 3 AVIII. 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Yb IJ1"6l 011 lEJIiD 11.1911 At 1111,41,45.6j J 1 a" 1, h1Y 111.,..4 blll)to .1 Il,Ibh.6E bJ Jl) / . J / bJ/bl.Y/ J1JII 74 "EbJ . I 1 I Ion 1..,j 111.100. Wal To 31;14415.00 JW41 b.96 /bI1J.41 Idllb.37 UUIIY.4D dJJ4b.Gb 460b6.41 dddbb0d9 91146.34 N41JU.dd Yl4lE.4d IUU994 3E 104E79.66 IU/b/l•dn 111114.4b 11419U096 I IISbeb. I l IEEJd0.73 IEbJbI.71 1J047E•JE IJ4/16•bd 139090.91 14JhEJ0bu 1 41SE'J be he lbJIlY09b IbdI000y4 IbJE4J.96 I6dbb4.E9 I14U3/.Jb 1/Y6YU.9U 14bb44.40 IJlWJ-16 1911SIE0Eb EU4E4/.U9 EIUd91•Eb 41 1 lbl .*4 /•.44Jb•00 EJE I 4K • K1S dJYIUU•69 24149,•Ib EDjb4Y*db ,'bJ ,h,..l,s /E 44 D. Il esl3ud.30 EJtJ4bJ.34 E9JYU/.Y1, JOIb.,J.94 11)7JI.Jb 1JUIJto 4. Jm1y 11.,1' JbIJaJ.II b11111.44,t n1LUb 1,Ja 1 dtl44EEE•00 d76UbUd•6J d690JJE0tb d60961E.Ib dbY6E610 b0 H44UE11•uU dJblJbbeIJ UESY6Ud•lb d164U1l.dd 606/U6D.Jd 796643/1•Ub ld61191.JU 71641190bU 764E94b.U6 Ibldlb4.IJ 74096EY.U0 /Ed/E4d.Eb l l 6Uddb• bU 70JU414.19 61f Y b697.63 67b6JJ4.b9 b61E9740dd h4b46/9•UU 6JI1bbY006 6lbJ4*J.1J by90C14.19 bddlbb9.bu bb4/OEC.DU !l4b/9EJ.b9 bEdEJ/9.01 bUYU/99.19 4dYE9d6.94 4odd/J9-dd 447 I d 4d • (iJ 4E6UUY/.Ub 4UJDE6E.u6 JdUJ11J.19 J,bJ41E•Su JJIDy14.J4 JU6UJbb0UJ id lyhaUE•nl ,:bE4Ub/.U9 EE4E/4d• IA 19bOed9•Jn IbbdJdI.J9 IJ4/.11/•41 Iu,d4)d000b bJ6:d41.bJ 011If 0J0nI U• ASSURANCE OF CONIPLIAACL U E111 THL DLPAPr1E\T 01 DEFENSE DIRECTIVE UNDLR TITLP VI OC THL CIVIL RIGHTS ACT OP 1964 NORTH TLXAS MUNICIPAL WATER DISTrICT N-reinaftes called the "District") HLRLBY AGRELS THAT it will comply with title VI of the Civil Rights Act of 1964 (P.L 88-352) and all requirements imposed by or pursuant to the Directive of the Department of Defense (32 CFR Part 300, issued as Department of Defense Directive 5500 11, December 28, 1964) issued pursuant to that title, to the and that, in accordance with title VI of that Act and the Directive, no person it the United States shall, on the ground of rice, 6ulor, yr national origin be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity in connection with the collection, distribution, and use of water, for municipal and industrial purposes, from storage space in the authorized Cooper Reservoir, wnich reservoir is to be constructed by the U S Army Corps of Engineers and in connectionwith which the District will receive financial assistance under the Water Supply Act of 1958, 43 United States Code 390b, and HEREBY GIVES ASSURANCE THAT it will immediately take any measures necessary to effectuate this agreement If any real property or structure thereon is provided or improved with the aid of Federal financial assistance extended to the District by the Department of the Army, assurance stall obligate the District, or in the case of any transfer of such property, anv transferee, for the period during which the real property or structure is used for another purpose involving the provision of similar services or benefits if any personal property is so provided, this assurance shall obligate the District for the period during which it retains ownerbhip or possession of the property In all other cases,,this assurance shall obligate the District for the period during which the Federal financial assistance is extended to it by the Department of the Army THIS ASSURANCE is given in consideration of and for the purpose of obtaining any and all Federal grants, loans, contracts, property, discounts or other Federal financial assistance extended after the date hereon to the District by the Department, including installment payments after such date on account of arrangements for Federal financial assistance which were approved beforf- such date The District recognizes and agrees that such Federal financial assistance will be extended in reliance on the representations and agreements made in this assurance, and that the United States shall have the r16ht to seek . I i , r~ t A f n t~ 1 i i t judicial enforcement of this assurance Thib assurance is binding on the District, its successors, tritstarecs, 'Inu assignees, and the person or persons whobe siynature•s appear below are authorized to sign this assurance on behalf of the District 2 Dated AORTA MutS `IUWICIPAL WATER DISTRICT (District) ~ i, tom! /~•:C/,' 14.1 le L 7,i z' ~ By (President, Chaitmaa ot. Board, or comparable authorized official) (Dis ict's mailing address) ? DUPLICATE CO',11ACT C9 DACW29-68-A-0099 COflT?ACT bI: Th: 17%IT:3 STC:3 OF XMT:CA %D TZIE CITY OF I?VI.%G, TEXAS, • 7-C: : WATr9 14TOWE SPACE I\ 0009ER RESERVOIR THIS CO11"MCT, entered into this 29th day of March 196 8 by and between the UNITED STATES OF AhD:FiICA (hereinafter called the Government), represented by the Contracting Officer executing this contract, and the City of Irving, Texas, a municipal corporation existing under the laws of Texas, with its principal office in the city of Irving, Dallas County, Texas (hereinafter called the City), WIrL`NESSETH THAT WHEREAS, construction of the Cooper Reservoir on South Sulphur River, Texas (hereinafter called the Project), has beer authorized by the Act approved 3 September 1954 (Public Law 780; 83d Congress, 101 2d Sessio-), as amended by the Act approved 1 August 1955 (Public go ~QSv,,~r Law 218, 84th Congress, lot Session), and, D ~ WHEREAS, the City has been authorized by the Texas Water Rights Co=ission as an agency with whom the Contrasting Officer should ^egotiate with respect to a portion of the water supply storage in the Project, and, WhEREAS, the Government is authorized by the Water Supply Act of 1958 (Title III of Public Law 85-500 approved 3 July 1958), as amended by Section 10 of the Federal Water Pollution Control Act Ameidmerts of 1961 (Public Law 87-88 approved 20 July, 1961) to include storage in any reservoir y:.,,iect to be constructed by the Corps of Engineers to impound water for initial or anticipated future demand or need for municipal or industrial water, and WHEREAS, Public Law 88-140, approved 16 October 1963, makes { rm-neat tho lights of states and local interests to utilize municipal and industrial storage in Corps of Engineers' reservoirs for which they contributed, and, WHEREAS, storage space has been included in the project for municipal and industrial water supply, and, 1 WHEREAS, the City desires to utilize 54;575 acre-feet of storage space as a source of initial municipal and 1-d-atrial ` water supply as set fortr in Arzic a 1, and, WHEREAS, the City desires to utilize an add'tio-a1_4k-,050 acre- feet of storage space for future runicipal ann indust a; later supply as set forth in Articlc i, and, A C~,:RACT NO DACn29-68-A-0099 What'.. the City her(.b, glees to fulfill tae local interest requirements of the Water Supol/ Act of, 1958, as amenaed twd, ^.H:R.'MRL, the parties do rutually agree as follows .1PTICLE 1 FATBRrSTCt,AGE SPAC:: - ` a The City shall have the right to utilize an undivided nineteen and nine hundred ninety-one thousandths percent (19 991%) of the storage space in the Project between elevations 440 0 and 415 5 feet above seaa sea level as deemed necessary by the City to impound water in the Project for its initial municipal and industrial use, and make such diversions as granted to the City by the Texas Water Rights Commission, or its successors, to the extent such storage will provide b The City shall further have the right to utilize, from the 10th anniversary of the date of deliberate impoundment, an undivided sixteen and eight hundred sixty-eight thousandths percent (16 864) of the storage space in the Project betdpea elevations 440 0 and 415 5 feet above mean sea level as deemed necessary by the City to impcard water in the Project for its future municipal and indus- tria- use, and make such diversions as granted to the City by the Texas eater Rights Commission, or its successors, to the extent such storiSe will provide c The rights described in Articles 1 a and b above are subject to the retention by the Government and others of the remaining undivided sixty-three and one hundred forty-one thousandths percent (63 141%) of the storage space for such purposes as the Government may deem advisable d The City will not make or permit withdrawals which would lower the water level below elevatioa 415 5 feet above mean sea level, unless expressly approved in writing by the Contracting Officer e. The Government shall not be responsible for diversion by others, nor will it become a party to any controversies between users of the aforesaid storage space, except as such controversies may affect storage space reserved by the Government f The design and location of any future City installa- tions or facilities that the City may construct at the Project for the purpose of diversions or withdrawals shall be subject to the r approval of the Contracting Officer, and the cost of such installa- tions or facilities, or any modifications thereof, shall be borne by the City. 2 CONTRACT NO DACW29-68-A-0099 9 The Cove--mart reserves the right to take such measures as may be necessary in the operation of the Project to preserve life and/or property h The Governnent reserves the right at all times to maintain a low f11w release of 5 cubic feet per second, regardless of the elevation of the water During periods of regulation for water supply (unen the reservoir water surface is below elevation 440 0 feet above mean sea level), the City shall be entitled to nineteen and nine hundred ninety-ons thousanaths percent (19 991%) of the "field of the aforesaia storage space after allowance of the flow of 5 cubic feet per second, for a period of 10 years after the date of deliberate impoundment. Thereafter the City shall be entitled to thirty-six and eight hundred and fifty-nine thousandths percent (36 859%) of the total yield of the aforesaid storage space after allowance of the flow of 5 cubic feet per second Should the rate of withdrawal for water supply, downstream release, and evaporation fail to maintain a recession in water level of 2/10 of a foot in any 10-day period during the months May through October, inclusive, the Government reserves the right to obtain the above rate of re- cession by release of water downstream in excess of 5 c f a in the interest of mosquito control Should the inflow during the months Ma„ through October, inclusive, result in a rise in water level and .-Li_e an additional expenditure in the interest of mosquito con- .ol, proportionate reimbursement for such expenditure shall be made .,y the City I. To implement the provisions of this article, the Govern- ment shall, at the appropriate time and in consultation with the City, formulate a plan of operation for the project which will achieve these objectives j The "date of deliberatg impoundment" as used in this contract shall mean the date upon which the Project becomes operative for storage of Ovate- for any of the purposes contained in the author- izing Act. ARTICLE 2 METERING - For the purpose of maintaining an accur- ate record of water resources at the Project, the City shall install suitable meters or metering devices satisfactory to the Contracting _ Officer without cost to the Government, at such time as the City may withdraw water from the Project The City shall furnish the Govern- ment periodically, at least monthly, a record of all such withdrawals from the Project Nothing in this article is to be construed as prohibiting participation by the City in cooperative gaging programs sponsored by the United States Geological Survey or other Government agencies in the water resources field 3 W mMACT NO DACW29-68-A-0099 AMICL: 3 r=::=AL AilD ;Tin- L. 'QV - The City stall utili:s stc- storage space it a a.n-a-rorsistent 'with Federal and state 1.43 Mr-, ICLE 4 F-GIZA^: , t .^r Try J3% Or WA TM - The regulation of the use of water storea 1- tae water supply spaces covered by this cortract (51+,575 a3c_e-feet for initia-, 46,050 acre-feet for future) stall be the responsibility of the City upon initiation of payment by the City for construction costs allocated to such spaces. ARTICLE 5 CONSIDERATION AND PAYMMM - a In consideration of the Government's providing the aforesaid storage space of 54,575 acre-feet for initial water supply use by toe City, it is agreed that the City shall pay the follow- ing sums to the Government (1) One million eight hundredrand forty seven thousand seven hurdred and thirty-nine dollars ($1,847,739) which is the estimated cost, including interest during construction, of providing the storage space for initial water supply %.as in payments in the amount of seventy-two thousand nine hundred and tventy-eight dollars ($72,928) Except for the first payment, which shall be applied solely to the reduction of the principal, all payments shall include accrued interest at the rate of three and two hunared fifty-three thousandths percent (3 253%) per annum on the unpaid balance. The aforesaid payments are more specifically set forth in exhibit "8" attacned hereto and made a part hereof, and the last payment shall be aa;usted upward or downward, when due, to assure the repayment of all capital costs by the end of 50 years The first payment sha-i be due and payable within thirty (30) days following the date the City is notified that deliberate impoundment has been made Pay- ments thereafter shall be due and payable within thirty (30) days of the yearly anniversary date of the first payment under this con- tract. (2) Six and nine hundred sixty-two thousands percent (6 962%) of the annual experienced point-use cost of ordinary opera- tion and maintenance of the project The first payment estimated to be eight thousand and eighty-nine dollars ($8,089) will be due and payable within thirty (30) days following the date the City is notified that deliberate impoundment has been made. Annual payments thereafter vil be due and payable in advance on the anniversary date of deliberate .-poundnent and will be equal to six and nine hundred sixty-two thousandths percent (6 962%) of the actual experienced point-use cost of ordinary operation ens maintenance for the pre- ceding Government fiscal year The second payment shall be increased or decreased in sa amount to reflect the differosce between the first payment and six and nine hundred sixty-two thousandths percent (6.962%) of the actual experienced point-use cost of ordinary operation 4 Co„•;.1ACr J. DACd29-68-A-0099 Ard zai;ten.,nce for the precsd.ne fiscal fear Records of cost of oper- ation aid mai-"usnce of the Project snail ue availaule for inspection and exaninaticn bf the Ci j ;7e extent of operution and maintenance of t''e P oject Shall be Bete-mined bf tae Contracting Officer and all recorus ana accougti-g wall to ^.aintainea by tha Contracti"g Officer In the event tie Cit/ should require additional operation and :.ai-terance the water supply storage over and above that Jeered necessary%y the Contracting Officer, the City shall bear the entire cost of such additional expense (3) Five and eight hundred seventy-seven thousandths percent (5 877%) of the cost of sedimentation resurveys and joint-use rajor capital replacements when incurred. (4) In the event of default in the payment of the costs contained in Article 5 a (1), (2), and (3), the amount of such payments shall be increased by an amount equal to interest on suchoverdue payments at the rate of three and two hundred fifty- three thousandths percent (3 253%) per annum thereon, compounded annually, and such amount equal to interest shall be charged from the date such payments are due until paid b In consideration of the Government's providing the aforesaid storage space of 46,050 acre-feet for future water supply use by the City, it is agreed that the City shall pay the following sums to the Government .pea% (1) One million fivelb$ndred and fifty-nine thousand one hundred and nine dollars ($1y159-,3D97, which is the estimated cost, including interest during construction, of providing the storage space for future water supply use in payments in the amount of sixty-one thousand five hundrea and thirty-six dollars ($61,536) Except for the first payment, which shall be applied solely to the reduction of the principal, all payments shall include accrued interest at the rate of three and two hundred fifty-three thousandths percent (3 253%) per annum on the unpaid balance he aforesaid payments are more specifically set forth in exhibit "C" attached hereto and made a part hereof, and the last payment shall be adjusted upward or downvard, wnen due, to assure the repayment of all capital costs oy the erd of 50 years The first payment shall be due and payable within thirty (30) days following the 10th anni- versary of the date the City is notified that deliberate impoundment has been made. Payments thereafter snall be due and payable within 30 days of the yearly anniversary date of the first payment under this contract (2) Five ana eight hundred seventy-four thousandths percent (5 874%) of the annual experienced joint-use cost of ordinary operation and maintenance of the Project The first payment estimated to be six thousard eight hundred twenty-six dollars ($6,826) will be due and payable within thirtf (30) days following the 10th anniversary 5 CONTRACT NO. DAN29-68-A-0099 of the date the City is notified that deliberate impoundment has been made. Annual payments thereafter will ba due and payable in advance on the anniversary date of deliberate impoundment and will be equal five and eight hundred seventy-four thousandths percent (5 874%) of the actual experience point-use cost of ordinary operation and maintentnce of Lhe prece ing Government fiscal year The second payment shall be increased or decreased in an amount to reflect the difference between the first payment and five and eight hundred seventh-four thousandths percent (5 874%) of the actual experienced point-use cost of ordinary operation and maintenance for the preced- ing fiscal year Records of cost of operation and maintenance of the ProjsLt shall be available for inspection and examination by the City The extent of operation and maintenance of the Project shall be determined by the Contracting Officer and all records and accounting shall be maintained by the Contracting Officer In the event the City should require additional operation and maintenance of the water supply storage over and above that deemed necessary by the Contracting Officer, the City shall bear the entire cost of such additional expense (3) Four and nine hundred fifty-nine thousandths percent (4 959%) of the cost of sedimentation resurveys and joint- use mayor capital replacements when incurred (4) In the event of default in the payment of the costs contained in Article 5 b (1), (2), and (3), the amount of such payments shall be increased by an amount equal to interest on such overdue payments at the rate of three and two hundred fifty- three thousandths percent (3 253%) per annum thereon, compounded annually, and such amount equal to interest shall be charged from the date such payments are due until paid (5) The City may, upon written notice to the Govern- ment at any time prior to the 10th anniversary date of deliberate impoundment, advance or defer the date of first use of all or any portion of the storage space provided under this contract for future water supply, subject to the requirements that the entire amount of the construction costs, including interest during construction, allocated to water supply shall be repaid within the life of the project, and that repayment of the amount of such costs for any portion of the storage space used shall be made within a period of not to exceed 50 years from the date such portion of the storage space is first used for the storage of water for water supply pur- poses Do principal or interest payment with respect to the storage space provided under this contract for future water supply is required ,o be made during the first 10 years following the date of deliber- ate impoundment unless all or a portion of such storage space is used by the City for the storage of water for water supply purposes, in vbieh event repayment for the portion used lih"l be started and shall be %ipaid within not to exceed 50 years from the date of first use. 6 CJ TRACT 40 DACQ9-69-A-0099 In the event the date of fi-„t use of all or a portion of the future water supply storage space i., dele red bolona the 10th anniversary date of deliteicte irzoundzg;nt, i-terest at the rate specified will be charged for L6U portion from the lltn year until such time as it is first used for the storage of water for water supply purposes Tne Ciiy mal at is option pay the interest as it becomes due or al~cw the interest to accumulate until the storage space is used If, tMs latter option is exercised the interest will be compounded annually and will be added to the principal amount c In the event the actual first cost of the Project exceeds t:e presently estimated first cost, as set forth in exhibit "A," the aforesaid annual payments shall be increased to reflect the actual first cost, including interest during construction, as determined by the Contracting Officer In the event such first cost of the Project is less than the presently estimated first cost, the aforesaid annual payments shall be decreased to reflect the actual first cost, including interest during construction, as determined by the Contracting Officer In the event the annual payments are increased or decreased, as provided above, an adjustment, as cetermined by the Contracting Officer, of payments made prior to V,e determination of the *inal Project cost shall be made in the first pVment due after such Costs are determined The interest rates ased in this contract are for estimatina purposes only„ The e Merest rate used for purposes of computing interest during con- straction and interest on the unpaid balance shall be determinea by the Secretary of the Treasury, as of the beginning of the fiscal year in which construction of the Project is initiated, on the basis of the computed average interest rate payable by the Treasury upon its outstanding marketable public obligations, which are neither due nor callable for redemption for fifteen years from date of issue At the time that the final Project costs are determined, the repayment schedules snail be moaified to reflect the increased or decreased annual payments and such modification will form a part of this contract hRTICLE 6 NO WARRANTIES AS TO QUALITY OF WATER - The parties hereto recognize that the water in the storage space being made ava-fable to the City under the terms of this agreement is raw reservoir water. The Government makes no representations vita respect to the conditions or the potability of the water, and as- sumes no responsibility therefor c for treatment of the water, or for undertaking any action which might tend to reduce contamination from the reservoir or from other sources in the watershed ARTICLE T PERIOD OF CONTRACT - This contract shall become effective as of the date of anprovai by tae Secretary of the A--=y, and shall continue in full force and effect, under the conditions set forth herein, not to exceed the life of the Project This T CG•.A'PACT .0 aaCi,29-6b-a-0099 contract is subject to the provisions of °ublic Law 88-140, approved 16 OctoLe, 190, sad t'c City snail have a par-anent rignt to the use of s:: -tarcge s,,uces after t e per.oa of years specified "ter repelm*at unucr ..rticle > in t•e c,,nt act, or as amenaea, sub- .jot to tie following S a Tte C:tJ MU3t haea discrarged its responsibilities for payment of tte costs allocated to ,ater supply b The City must cortinue payment of its share of annual operation and maintenance costs allocated to water supply. c The City mast pay in lump sum, or annually with in- terest, the costs allocated to water s..ppiy which may at termination of the repayment pe.iod set forth in the contract, or thereafter, be required for any necessary reconstruction, renabilitation, or replace- ment of protect feat..res which may be required to continue satisfactory operation of the Project. Such costs will be established by the Con- tracting Officer 4epavYent arrangements will be in writing and will be made A part of this contract. d. Upon termination of the repayment periods set forth in the contract, the Contracting Officer shall redetermine the storage space for municipal and industrial water supply, taking i"to accciat ju.n equitable reallocation of reservoir storage capacities among the purposes served by the Project as may be nec- essirf cue to sedime tation Such findings, and the storage space allocated to municipal and industrial water supply, shall be de- fined a*a described in an exhibit which will be made a part of this contract Following the same principle, such reallocation of reservoir storage capacity may be further adjusted from time to time as the result of sedimentation resurveys to reflect actual rates of sedimentation and the exnibit revised to show the revised storage space allocated to municipal and industrial water supply e. The permanent rights of the City under this contract shall be continued as long as the Government continues to operate the °roject In the event the Government no longer operates the Project, such rights may be continues subject to the execution of a separate contract, or supplement agreement providing for (1) Continued operation by the City of such part of the facility as is necessary for utilization of the storage space allocated to it, (2) Terms which will protect the public interest, d (3) Effective absolvement of the Government by the City from all liability in connection with such continued operation 8 COI tACT NO DACQ9-68-A-0099 A°T:CL% B 0o_R,1"IC` f, , ,I ^ ANC.. - The Government shall operate anu mliiytain .ie Pro,; ct oercu oy the Government The City shall have t?c rig^t to rate with.rawals of +atcr for its purposes as needed in accoru,,nco ditn Art_cle 1 The City shales be responsible for operation ana -aintenance of all features and appurtenances w-ign may be pro~riaed and owned by the City ARTICLE 9 RIG'.TS.Or-l,'AY - The Government, subject to the a,inroval of the Secretary of the Army, shall, witnout additional consiaeration, grant to the City, by separate instrument or inatr,.ments, an easement or easements as may be required for the construction, operation and maintenance of pumping facilities and water supply pipelines in, on, over, and across Government-owned lards acquired for project purposes The instruments granting such easements shall be consistent with Government contract provisions in effect at that time, with such modifications as may be necessary =r eeca instance and as may be approved by the Government ARTICLE 10 RELIAS,' OF CLAIMS - The City shall hold and save the Government, including its officers, agents, and employees .arm-ass from liability of any nature or kind for or on account of any claim for damages which may be filed or asserted as a result of t^e storage in the Project or withdrawal or release of water from the Project, made or ordered by the City, or as a result of the =onstruetion, operation, or maintenance of the features or appur- tenances owned and operated by the City ARTICLE 11 TRANSFLR OR ASSIG4MENT - The City shah not transfer or assign this contract, nor any rights acquired there- under, nor suballot said water or storage space or any part thereof, nor grant any interest, privilege, or license whatsoever in connec- tion with this contract, without approval of the Secretary of the Army, provided, that, unless contrary to the public interest, this restriction shall not be construed to-apply to any water which may be obtained from the water supply storage space by the City and furnished to any third party or parties ARTICLE 12 OFeICIALS NOT TO dh'NEFIT - No member of or delegate to Congress, or resiaent commissioner, shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom, but this provision shall not be construed to extend to this contract if made with a corporation for its general benefit ARTICLE 13 COVCNANT AGAINST CONTINGENT FEES - The City warrants that no person or selling agency has been employed or retained to solicit or secure this contract upon an agreement or understanding for a commissior, percentage, b-okerage, or con- tingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintairea by the City for the purpose of securing business For breach or violation of this 9 CONTRACT NO DACW29-68-A-oo99 warranty the Cove-rrert shall have the right to an^ul this contract without liability or in its aiscretion to add to the contract price or 6orside:ation, or othcr.iae recover, the full amount of sscn commission, percentage, brokerage, or contingent fee ARTICLE 14 ADWOVAL 0" CO - This contract shall be subject to the written approval; of the Secretar, of the Army, and sha-i. not be binaing until so approved IN WIT"IESS Yins'"ir EOF, t%e parties nereto have executed this agreement as of the aay ana year first above written APPROVED THE UNITEY STAMS OF AMERICA el! ~g/~. I\ wry By Secretarg of the Arad Con t ng Officer) 47~ DATL 11 JUL 1968 CIT By Irvin e Post Office Address APPROVED AS TO FORM Attorney, City of Irving, Texas 10 CONTRACT NO. DACW29-68-A-0099 I, Marv Gilliland , certify that I am the City Clark of the city of Irving, Texas, named as City herein, that Robert Dowp- who signed this contract on behalf of the City was then MAYOR of the CITY OF IRVING$ TEXAS, that said ` certrae des duly signed for and on behalf of the CITY OF IRVING, TEXAS, by authorityTof its governing body and is within the scope of its legal powers In Witness Whereof, I have hereunto affixed my hand and the seal of the CITY OF IRMO$ TEXAS, this 29th day of March 196 8_. City Clerk, C, :y of Ir ng, Texas 11 COR?0?nl'E SEAL 11 % , hA111BI^. A I - Reservoir Stora` T Percent of r ' M&I water supply space Elevation (ft.m a 1.) Water Supply Storage MI water supply Initial use City of Irving 19.991 Future use City of Irving 16 868 Other M&I water supply users 63 141 Total M&I water supply storage 100 000 415 5-440 0 Flood control storage 440 0-446 2 '.s.:voir storage 54,575 46,o5o 172,375 273,000 131 400 W, 4400 II - Allocation of Estimated Construction Cost M&I water supply for initial use by the City of Irving a 1,734,868 M&I water supply for future use by the City of Irving 1,463,870 M&I water supply use by others 5.479,577 Subtotal - M&I water supply , 77,315 Texas Water Development Board participation 1,T15,471 Flood control (non-reimbursable) 10,196,503 Recreation (non-reimbursable) L938,71 1 Total $26,520,000 III - Costs to be Repaid by the Citx.of Irving for for Initial ana Future M&I Water Si.zply Use Initial M&I water supply use - 19 991% of cost allocated to M&I water supply (0.19991 x %8,678,315) $ 1,734,668 Interest during construction (3 253% x 1/2 of 4-year period) 112,8T1 Total 1% ,W7 o 739 , t r~ - Usable(1) storage ac-ft (1)Storage remaining after 100 years of sedimentation Future 1t&: Water s.nnl/ Lac ) Y. 16 663: of cost al-oc%te L to &I Water sur-)IY (0 loroa ( 48,b73,3~5) $ 1,463,870 Inte-ost acre-6 corstruction (3 253"e x 1/2 of r-je.a perioa) 23 Total r 1,559,109 IV - Allocation of Lstimated Oreration. Maintenance ana MaJor IeDlace-ert Cost City of City of Irving Irving Other Initial Future M&I Flood M&I Water M&I Water Water Con- SuPp1 Supply St"„j1L TWDB trol Rec Tota /S Yr_ $/Yr a/Yr /yr S/Yr 3/yr 5%yr Oyer & Maint Specific cost 0 0 0 0 50,600 58,600 109,2 Joint-use cost 8.089 6.826 25,550 8.439 37.270 30,026 116.2 Total 8,089 6,826 25,550 8,439 87,870 88,626 225,4 Major replacements Specific cost 0 0 0 0 0 18,600 18,0 Joint-use cost 62 53 197 65 504 179 l.C Total 62 53 197 65 504 18,779 19,6 2 V - :.u1' C' --e: r4 - In:Lii.' livid Future 'M 'Date- C.-..w Lift - City of Iwi°rt r' Initial t'&I water supply use f Interest and a ortization of coat of M&I water supply feature3 (see computation below) $ 72,928 Joint-use operation ana maintenance costs equivalent * 6 962: of the actual joint-use operation and maintenance coats, computed " follows 34.824% = percent of joint-use 0&M cost allocated to M&I water supply 19 991% = percent MI water supply space to be used by the City of Irving (initial) (34 8245 x 19991)- 6 962% of the actual joint-use 0&M costs estimated annual cost ( 06962 x $116,200) $ 8,089 Joint-use major capital replacement ana seaimentation resurvey costs, when incurred, equivalent to 5 8772 of the actual joint-use major capital replacements and sedimentation resurvey costs, computed as follows 29.400% = percent joint-use major capital replacement and sedimentation resurvey costs allocated to M&I water supply 19 991% = percent M&I water supply space to be used by the City of Irving (initial) (29 400% x 19991) - 5 877% of the actual joint-use major capital replacements and sedimentation resurvey costs Estimated annual cost ( 0587T x $1,060) $ 62 Total annual cost for initial M&I water supply $ 81,079 Computation of Annual Payment for Interest and Amortization (Based on 50 payments, 49 of which bear interest on the unpaid balance) D■ i t+1 n-1 R ((1+1)n-1) D = 03253 1+ 03253) 49 (1+-03253)5u - 1 D - $72,928 WHEREIN D = Annual payment R = Amount to be repaid = $1,847,739 i = Interest rate = 0 03253 n - Number of payments ■ 50 x $1,847,739 = 0.0394689 x $19847,739 3 s Future V41 Ovate- supply use Interest and amortization of cost of M&I water supply features (see computation below) Joint-use operation and raintenance costs equivalent to 5 874% of t^e act,a_ joint-use operation ana maintenance costs, co-puted as follows 34 824% - percent of point-LSe 0&M cost allocated to M&I water supplf 16 868% - percent of MI water s..pply space to be usea by the City of Irving (Future) (34 824% x 16868) a 5 874% of the actual point-use 0&M costs Estimated annual cost ( 05874 x $116,200) - Joint-use major capital replacement and sedimentation resurvey costs, when incurred, equivalent to 4 959% of the actual joint-use major capital replacements and sedimentation resurvey costs, computed as follows fit i r X1,536 $ 6,826 29 400% - percent joint-use major capital replacement and sedimentation resurvey costs allocated to M&I water supply A 868% - percent of M&I water supply space to be used oy the City of Irving (Future) 129 400% x 16868) - 4 959% of the actual joint-use major capital replacements and sedimentation resurvey costs Estimated annual cost (.04959 x $1,o6o) - $ 53 Total annual cost for future M&I water supply $ 68,415 Computation of Annual Payment for Interest and Amortization (Based on 5o payments, 49 of which bear interest on the unpaid balance) WHEREIN (i(1+1)n-1) D - Annual payment D ■ R R - Amount to be repaid . $1,559,109 ((1+1)n-1) i - Interest rate - 0 03253 n - Number of payments - 50 D - 03253 (1+ 03253) 49 x $1,559.109 % $1,559,109 x .0394689 (1+ 03253)50-1 D - $61,536 4 I EXHIBIT B AYORTIZATION SCiEDULE COST OF WATER SUPPL: FOR INITIAL USE BY THM CITY OF IRVING TOTA1 COc S .647739.0n NUMRFQ OF PAY NTS 50 INTEREST RATF, PFACENT n 03?53 ANNUAL AMOUNT APPLI CATION F' BALANCE PAYMENT OF . . . . . • • • • . . ALLOC NUMBER PAYMENT INTEREST ALLOC POST COST _ 1 72938 nn 0.00 7292P 00 1774811.OC 2 7?924 On 57734.60 15193.40 1759617.60. 3 729'28.00 57740.36 15687.64 1743929.96 4 72978.On 56730,n4 16197.96 1727732.04 5 72928.00 56203.12 16724.88 1711007.12 6 729?8.On 55659.06 1726A.94 1693738.18 7 729?8.00 55n97.30 17830.70 1675907.46 R 72978.00 54517.27 18410.73 1657496.75 9 72998.00 53918.36 19009.64 1638487.11 10 72928.00 53299.98 19628.02 1618859.n9 11 72978.00 52661.48 ?0266.52 1598592.57 12 7?928 On 59002 21 20925.79 1577666.78 13 7?928.00 51321.50 71606,50 1556n60.28 14 72928.00 50618.64 ?1309.36 1533750.92 15 7?928.0n 49892.91 23035.09 1510715.83 16 72928.00 49143.58 23784.42 1486931.41 17 72928.00 48369.87 24558.13 1462373.28 18 72928.00 47571.00 25357.00 1437016.28 19 72928.00 46746.13 ?6181.87 1410834.41 ?0 72928.00 d5894.44 27033.56 1383800.85 21 729?8.00 45015.04 27917.96 1355887.89 ?2 72928.00 44107,03 28820.97 1327066.92 23 72928 00 43169.48 29758.52 1297308.40 ?4 72928.00 42201.44 30726.56 1266581.84 25 7?9?8.nn 41201.90 31726.10 1234855 74 ?6 72428.nO 40169.85 32758.15 1202097.59 ?7 72928.00 39104.23 33823.77 1168273 82 28 72928.00 38003,94 34924.06 1133349.76 ?9 72928.00 36867 86 36060.14 1097289.62 30 72928 00 35694.8.3 37233.17 1060056,45 31 72928.0n 34483.63 38444.37 1021612.08 32 72928.00 33233,04 39694,96 981917.12 33 72928.00 31941.76 40986.24 940930.88 34 72928.00 30608 48 42319.52 898611.36 35 729?8.00 29231.82 43696.18 854915.18 16 7?928.00 27810.39 45117.61 809797.57 37 779?8.00 26342.71 46585.29 763212.28 38 729?8.00 24827,29 48100.71 715111.57 39 72928.00 23262.57 49665.43 665446.14 40 72928.00 21646.96 51261.04 614165.10 41 729?8.00 19978.79 52949.21 561215.89 42 7?978.00 18956.35 54671,65 506544,24 43 72928.00 16477.88 56450.12 450094.12 44 72926.On 14641.56 56206944 301807.68 45 72928.00 12745.50 60182.50 351625.18 46 72926.00 10787.-6 62140.24 269484.94 47 72928 00 8766.3- 64161.60 205323.28 48 72998 00 6679 16 66248.84 139074.44 49 72928.00 4524.09 68403.91 70670.53 50 72969.44 2298 91 70670.53 0.00 s EXHIBIT C AMORTIZATION S:nEDLZE COST OF WATER SUPPLY FOR FUTURE USE BY THE CITY OF IRVING TOTAi rOcT 3 K,jlmAFR P/ 1NTEkFCT PATr, ANN4Al PAYMENT NUMRFit -1- 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 71 22 ?3 24 ?5 26 27 28 29 30 31 32 33 34 35 Z6 37 38 39 40 41 42 43 44 45 46 47 48 49 50 1559109.00 IFNTS 50 PFFrFNT n.03951 AMOUNT Of PAYMENT 6.536.all 61516.3n 6A536.On 61536 00 61516 On 61536.00 61536.00 61536.On 61516,00 61536.00 61536.00 61536.00 61536 00 61536 On 61536.00 61536.00 61536.00 61516.00 61556.00 61536.00 61516.00 61536 00 61536 00 61536.00 61436.00 61536.00 61536 00 61536.00 61536,00 61536.On 61536,0n 61516.00 61536.On 61536.00 61536.00 61536.00 61536.00 61536.00 61536.00 61536.00 61536.00 61516.00 61536.00 61556.00 61536.On 61536 00 61536.00 61516.00 61536.06 61586.21 APPLiCAT10N - INTFRFST ALLOC rOST 0.00 48716,04 48?99.01 47868.41 47423.81 46964.74 46490.73 46001.31 45495.97 44974,18 44435.43 43879.15 43304,77 42711.71 42n99.35 41467.08 40814.24 40140.16 39444.15 38725.50 37983.48 37217.32 3A426,23 35609 41 34766.02 33895.19 32096.03 32067,63 31109,02 30119,?3 29n97;24 2R042. n1 26952.45 25827.45 24A65 AS 23466,46 ?7?28.06 20049,37 19629.09 18?65.96 16858.28 15404.02 13904.27 12354,A1 10754.95 9103.04 7397.40 5A36.?7 3817 85 1940.28 61536.00 12819.06 13?36.99 13667.59 1411?.19 14571,26 15045.27 15534.69 16040,03 16561.82 17100.57 1765A,85 18231.23 ISA24.29 19436.65 70068.92 ?0721.76 ?1395.84 ?2091.85 ?2810.50 ?3557.52 24318.68 25109,77 ?5926.59 26760.98 2764n.81 28539.97 29468.37 30426.98 31416.77 32438.76 33493.99 34583.55 35708.55 36870.15 38069.54 39307.94 40586.63 41906.91 43270.14 44677.72 46131.08 47631.73 40181.19 50781.05 42432.96 54138.60 55890.73 57718.15 59645.93 R,G~RALAhCE ALLOC COST 1497573.09 1484753,04 1471516.05 1457848,46 1443736.?7 1429165.01 1414119.74 139858F.05 1382545,02 1365983.20 1348P8?.A3 1331225.78 1312994,55 129417P.26 1274733,61 1254F64.69 1233942.93 1212547.n9 1190455.24 1167644.74 114409?.22 1119773.54 1094663.77 1068737,1A 1041967.?0 1014326.'19 985786 42 956318.05 925891.07 894474.30 862035.54 828541.55 793958.00 758249.45 7?1370.30 683309.76 644001,82 603415.19 561508,28 518238.14 473560.42 427429.34 379797.61 330616.42 279835.=7 227402.41 173?63.81 117364.08 59645,93 0.00 Contract No DACW29-68-A-0099 Supplemental Agreement No. 1 SUPPLEMENTAL AGREEMENT NO 1 BETWEEN THE _ UNITED STATES OF AMERICA AND THE CITY OF IRVING, TEXAS FOR WATER STORAGE SPACE IN COOPER RESERVOIR This supplemental agreement no 1, entered into this 11th day of I - June 1970 by and between the UNITED STATES OF AMERICA (hereinafter _ called the Government), represented by the Contracting officer executing this contract, and the CITY OF IRVING, TEXAS, a municipal corporation existing under the laws of Texas, with its principal office in the City of Irving, Dallas County, Texas (hereinafter called the City), WITNESSETH THAT: n WHEREAS, on 29 March 1968, the Government entered into contract no ~J DACW29-68-A-0099 with the City of Irving, Texas for water storage space in Cooper Reservoir; and, WHEREAS, it was represented to the City of Irving prior to such signing that modification of the contract for the purpose of reallocating storage spec from initial to future storage would be allowed; and WHEREAS, the City of Irving desires to reallocate storage space from initial to future storage; and WHEREAS, because it is the policy of Congress that the "Federal Governmen should participate and cooperate with states and local interests in developing such mater supplies***" as proclaimed in Sec 301(a) of the Water Supply Act of 1958, Public Law 85-500, approved 3 July 1958, it is deemed advisable by the Government to incorporate said revised storage require:rents of the ` City of Irving, into the basic contract. (V, NOW THEREFORE, the parties hereto do mutually agree to amend the contract no DACW29-68-A-0099 in the following manner and the basic contract is so amended to read as follows, to wit: 1. The sixth and seventh "WHEREAS" clauses of the basic contract are deleted and the following substitued therefor: "WHEREAS, the City desires to utilize 46,200 acre-feet of storage space as a source of initial municipal and industrial water supply as set forth in Article 1; and, "WHEREAS, the City desires to utilize an additional 54,425 acre-feet of storage space for future municipal and industrial water supply as set forth in Article 1; and," n r M Contract No DACW29-68-A-0099 Supplemental Agreement No. 1 SUPPLEMENTAL AGREEMENT NO 1 BETWEEN THE _ UNITED STATES OF AMERICA AND THE CITY OF IRVING, TEXAS FOR WATER STORAGE SPACE IN COOPER RESERVOIR This supplemental agreement no 1, entered into this 11th day of ` June 1970 by and between the UNITED STATES OF AMERICA (hereinafter called the Government), represented by the Contracting Officer executing this contract, and the CITY OF IRVING, TEXAS, a municipal corporation existing under the laws of Texas, with its principal office in the City of Irving, Dallas County, Texas (hereinafter called the City), WITNESSETH THAT: WHEREAS, on 29 March 1968, the Government entered into contract no DACW29-68-A-0099 with the City of Irving, Texas for water storage space in Cooper Reservoirs and, WHEREAS, it was represented to the City of Irving prior to such signing that modification of the contract for the purpose of reallocating storage spac from initial to future storage would be allowed: and WHEREAS, the City of Irving desires to reallocate storage space from initial to future storage; and WHEREAS, because it is the policy of Congress that the "Federal Governmen should participate and cooperate with states and local interests in developing sach oatar supplies***" as proclaimed in Sec 301(a) of the Water Supply Act of 1958, Public Law 85-500, approved 3 July 1958, it is deemed advisable by the Governsrent to incorporate said revised storage requirements of the A City of Irving, into the basic contract U NOW THEREFORE, the parties hereto do mutually agree to amend the contract no DACW29-68-A-0099 in the following manner and the basic contract is so amended to read as follows, to wits 1. The sixth and seventh "WHEREAS" clauses of the basic contract are deleted and the following substitued therefor: "WHEREAS, the City desires to utilize 46,200 acre-feet of storage space as a source of initial municipal and industrial water supply as set forth in Article 1: and, "WHEREAS, the City desires to utilize an additional 54,425 acre-feet of storage space for future municipal and industrial water supply as set forth in Article 1; and," n ~ r Contract No DACA29-68-A-0099 Supplonental Agreement No. 1 2 Subparagraphs a and b of Article 1 of the basic contract are deleted and the following substituted therefor: "a The City shall have the right to utilize an undivided sixtee and nine hundredwtwenty-three thousandths percent (16 923%) of the storage space in the Project between elevations 440 0 and 415 5 feet above mean sea level as deemed necessary by the City to impound water in the Project for its initial municipal and industrial use, and make such diversions as grant - - to the City by the Texas Water Rights Commission, or its successors, to the extent such storage will provide "b The City shall further have the right to utilize, from the 1 anniversary of the date of deliberate impoundment, an undivided nineteen an, nine hundred thirty-six thousandths percent (19 936%) of the storage space O in the Project between elevations 440 0 and 415 5 feet above mean pea level as deemed necessary by the City to impound water in the Project for its future municipal and industrial use, and make such diversions as granted to the City by the Texas Water Rights Commission, or its successors, to the extent such storage will provide " 3 The second sentence of subparagraph h of Article 1 of the basic contract is deleted and the following substituted therefor: "During periods of regulation for water supply (when the reservoir water surface is below elevation 440 0 feet above mean sea level), the City shall be entitled to sixteen and nine hundred twenty-three thousandths percent (16 923%) of the yield of the aforesaid storage space after allowance of the flow of 5 cubic feet per second, for a period of 10 years after the date of deliberate impoundment." O 4 Article 4 of the basic contract is deleted and the following substituted therefor: "ARTICLE 4 REGULATION OF THE USE OF WATER The regulation of the use of water stored in the water supply spaces covered by this contract (46,200 acre-feet for initial, 54,425 acre-feet for future) shall be the responsibility of the City upon initiation of payment by the City for construction costs allocated to such spaces " 5 Subparagraphs a, a(1), a(2), a(3), b, b(1), b(2), and b(3) of Article 5 of the basic contract are deleted and the following substituted therefors "a In consideration of the Government's providing the aforesaid storage space of 46,200 acre-feet for initial water supply use by the City it is agreed that the City shall pay the following sums to the Government 2 Exhibit C DUPLICATE CONTRACT 10. DK'W29-68-A-0101 CONTRACT BETWEEN 710: UNITED SULPHUR RIVER AND MUNICIPAL WATER POR STATES OF AMERICA DISTRICT OF TEXAS WATER STORAGE SPACE IN COOPER RESERVOIR ISIS CONTRACT, entered into this 29th day of ll&rcb 19§L by and between the UNITED STATES OF AMERICA (hereinafter called the Government), represented by the Contracting Officer executing this contract, and the SULPHUR RIVER MUNICIPAL WATER DISTRICT OF TEXAS, I on agency of the State of Texas with its principal office in the city of Commerce, Texas (hereinafter called the District), WITNESSETH THAT: WHEREAS, construction of the Cooper Reservoir on South Sulphur River, Texas (hereinafter called the Project), has been authorized by the Act approved 3 September 1954 (Public Law 780, 83d Congress, 2d Session), as amended by the Act approved 3 August 1955 (Public Lev 218s 84th Congress, lot Session), end, WHEREAS, the Sulphur River Municipal Water District of Texas, a governmental agency of the State of Taxi, created under provisions of Acts 19551 54th Le islature, State of Texas, Regular Session, approved 13 May 1955 ~Ast. 8280-165, Vapon's Texas Statutes) with the power to acquire any and all rights In and to municipal, domestic, and industrial water supply storage capacity to be provided in the Project, has been authorized by the Texas Water Rights Commission as an agency with whom the Contracting Officer should negotiate with respect to a portion of the water supply storage in the Project, and, WHEREAS, the Government is authorized by the Water Supply Act of 1958 (Title III of Public Law 85-500 approved 3 July 1958), as amendedoby Section 10 of the Federal Water Pollution Control Act Amendments of 1961 (Public Lev 87-88 approved 20 July 1961) to include storage In any reservoir project to be constructed by the Corps of Engineers to impound water for present or anticipated future demand or need for municipal or industrial vater, and, WHEREAS, Public Law 88-140, approved 16 October 1963, makes permanent rights of states and local interests to utilize municipal and industrial storage in Corps of Engineers' reservoirs for which they contributed, and, . CONTRACT 10. DACW29-6&A-0101 1M W49 storage space has been included lm the project for municipal and industrial eater supply; sad. VMMX o the District desires to utilise 17.750 acre-feet of storage space as a source of initial municipal and industrial hater supply as set forth in Article ii and. WBUW P the District desires to utilise an additional 540000 acre-foot of storage space for future municipal and industrial ester supply as set forth in Article 1= and. WM MMp the District hereby agrees to fulfill the local interest requirements of the Water Bupply Act of 19581 ar amended. BOW. TIMAQ'ORE9 the parties do mutually agree as follows: ARTICLE 1. WATER STORAGE SPACE. - a. The District shall have the right to utilize an undivided six and five hundred two thousandths percent (6 502%) of the storage specs in the Project between elevations 440.0 and 415.5 feet above mean sea level as deemed necessary by the District to impound voter in the Project for its initial munici- pal and industrial use, and make such diversions as granted to the District by the Taxes Water Rights Commissiong or its successorso to the extent such storage will provide. b. The District shall further have the right to utilize, from the 10th anniversary of the date of deliberate impoundment, an undivided nineteen and seven hundred eighty thousandths percent (19 780%) of the storage space in the Project between elevations 440.0 and 415.5 feet above mean sea level as deemed necessary by the District to impound water in the Project for its future municipal and industrial use, and make such diversions as granted to the District by the Texas Water Rights Commission, or its successors, to the extent such storage will provide. e. The rights described in Articles I.e. and b. above are subject to the retention by the Government and others of the remaining undivided seventy-three and seven hundred eighteen thousandths percent (73.718x) of the storage space for such purposes as the Government may deem advisable. d. The District will not make or permit withdrawals which mould lower the vater level below elevation 415.5 feet above mean sea level, unless expressly approved in writing by the Contracting Officer. 2 . OGMTnAOT 10. DACW29-68-A-0101 e. The Government shall act be responsible for diversion by others, nor will it become a pasty to nay controversies between were of the aforesaid storage space, except ar such controversies 3147 Want $tongs space reserved by the Oowarmcnt. f. The design and location of any future District installations or facilities that the District may Construct at the Project for the purpose of diversions or withdrawals shall be subject to the approval of the Contracting Officer, and the cost of such installations or facilities, or any modifications thereof, shall be borne by the District. g. The Government reserves the right to take such measures as slay be neceseary !a the operation of the Project to preserve life and/or property. h. The Government reserves the right at all times to maintain a low flow release of 5 cubic feet per second, regardless of the elevation of the water. During periods of regulation for water supply (when the reservoir water surface 1s belov elevation 440.0 feet above mean sea level), the District shall be entitled to six and five hundred two thousandths percent (6.502x) of the yield of the aforesaid storage space after all'oue"te of the flow of 5 Cubic feet per second, for a period of 10 years after the date of deliberate impoundment. Thereafter the District shall be entitled to tventy-six and two hundred eighty-two thousandths percent (26.282x) of the total yield of the aforesaid storage space - after allowance of the flow of 5 cubic feet per second. Should the rate of withdrawal for water supply, downstream release, and evaporation tail to maintain a recession in rater level of 2/10 of a toot in any 10-day period during the months May through October, Inclusive, the Government reserves the right to obtain the above rate of recession by release of water downstream in excess of 5 C.t.s. In the interest of mosquito control. Should the inflow during the months May through October, inclusive, result in a rise in water level and require an additional expenditure in the interest of mosquito control, proportionate reimbursement for such expenditure shall be made by the District. 1. To implement the provisions of this article, the Government shall, at the appropriate time and in consultation with the District, formulate a plan of operation for the project which will achieve these objectives. J. The "date of deliberate impoundment" as used in this contract shall mean the date upon which the Project becomes opera- tive for storage of water for any of the purposes contained in the authorising Act. 3 CONTRACT 50. OAcv29.68.AolO1 A MCLE 2. U MRINO. - for the purpose of maintaining an accurate record of water resources at the Project, the District shall install suitable motors or metering devices satisfactory to the Contracting Officer without cost to the Government, at snob tine se the District may withdraw water from the Project. The District shall furnish the Government periodically, at least monthly, a record of all such withdrawals from the Project. Nothing in this article is to to construed as prohibiting participation by the District in coopera- tive gaging programs sponsored by the United States Geological Survey or other Goverepsent agencies in the valor yesources field. ARTICLE 3. MERAL AND STATE LAWS. - The District shall utilise such storage space in a manner consistent with Federal sad state lava. ARTICLE 4. REGULATION OF THE USE OF WATER - The regulation of the use of water stored in thevater supply spaces covered by this contract (17,750 acre-feet for initial, 546000 acre-feet for future) shall be the responsibility of the District upon initiation of payment by the District for construction costs allocated to such spaces. ARTICLE 5. CONSIDERATION AND PAYMENT. - a. In consideration of the Government's providing the aforesaid storage space of 179750 acre-feet for initial water supply use by the District, it is agreed that the District shall pay the following sums to the Government (1) Six hundred thousand nine hundred and fifty-nine dollars ($600,959), which is the estimated cost, including interest during construction, of providing the storage space for initial water supply use in payments in the amount of tventy-three thousand seven hundred and nineteen dollars 1$239719). Except for the first payment, which shall be applied solely to the reduction of the principal, all payments shall include accrued interest at the rate of three and two hundred fifty-three thousandths percent (3.253%) per annum on the unpaid balance. The aforesaid payments are more specifically set forth in exhibit W attached hereto and made a part hereof, and the last payment shall be adjusted upward or downward, when due, to assure the repayment of all capital costs by the end of 50 years The first payment shall be due and payable within thirty (30) days following the date the District is notified that deliberate impoundment has been made. Payments thereafter shall be due and payable within thirty (30) days of the yearly anniversary date of the first payment under this contract. CONTRACT 50. DACW29-WA-0101 (2) Two and two hundred sixty-four thousandths percent (2.2646) of the annual experienced Joint-use cost of ordinary operatiob and maintenance of the Project, The first payment estimated to be two thousand six hundred and thirty-one dollars (421,631) will be due and payable vithis thirty (30) days following the date the District is notified that deliberate impoundment has been made. Annual payments thereafter will be due and payable in advance on the anniversary data of deliberate impoundment and will be equal to two and two hundred sixty-four thousandths percent (2.264¢) of the actual experienced joint-use cost of ordinary operation and maintenance for the preceding Government fiscal year. The second payment shall be increased or decreased in an amount to reflect the difference between the first payment and two and two bupdred sixty- four thousandths percent (2.2646) of the actual experienced joint-use cost of ordinary operation and maintenance for the preceding fiscal year. Records of cost of operation and maintenance of the Project sball be available for inspection and examination by the District. The extent of operation and maintenance of the Project sball be de- termined by the Contracting Officer and all records and accounting shall be maintained by the Contracting Officer. In the event the District should require additional operation and maintenance of the water supply storage over and above that deemed necessary by the Contracting Officer, the District shall bear the entire cost of such additional expense. (3) One and nine hundred twelve thousandths percent (1.9126) of the cost of sedimentation resurveys and point-use mayor capital replacements when incurred. (4) In the event of default in the payment of the costs contained in Article 5•a (1), (2), and (3), the amount of such payments *ball be increased by an amount equal to interest on such overdue payments at the rate of three and two hundred fifty-three thousandths percent (3.2536) per annum thereon, compounded annually, and such amount equal to interest shall be charged from the data such payments are due until paid. b. In consideration of the Government's providing the aforesaid storage space of 54,000 acre-feet for future water supply use by the District, it is agreed that the District shall pay the following sums to the Government- (1) One million eight hundred and twenty-eight thousand two hundred end seventy-one dollars ($1,82892T1), which is the esti- mated cost, including interest during construction, of providing the storage space for future water supply use in payments in the 5 CONTRACT 30• DACW29-68-A-0101 amount of seventy-tvo thousand one hundred and fifty-nine dollars (8729159). Ikeept for the first payment, vhicb shall be applied solely to the reduction of the principal, ail payments shall include accrued interest at the rate of three and two hundred fifty-threat thousandths percent (3.2533) per sun= on the unpaid balance. The aforesaid payments are more specifically set forth In exhibit "C" attached hereto and made a part bersof, and the laat payment shall be adjusted upward or downvard, when due, to assure the repayment of all capital costs by the end of 50 years. The first payment shall be due and parable vithin thirty (30) days following the tenth anniversary of the data the District is noti- fied that deliberate impoundment bas been made. Payments thereafter shall be due and payable vithin thirty (30) days of the yearly anniversary date of the first payment under this contract. (2) Bix and eight hundred eighty-eight thousandths percent (6.8883) of the annual experienced joint-use cost of ordinary operation and maintenance of the Project. The first payment estimated to be eight thousand and four dollars (=8,004) will be due and payable vithin thirty (30) days following the tenth anniversary of the date the District is notified that deliberate impoundment has been made. Annual payments thereafter vill be due and payable in advance on the anniversary date of deliberate impound- ment and will be equal to six and eight hundred eighty-eight thousandths percent (6.8883) of the actual experienced joint-use cost of ordinary operation and maintenance of the preceding Govern- ment fiscal year. The second payment shall be increased or decreased in an amount to reflect the difference between the first payment and six and eight hundred eighty-eight thousandths percent (6.8883) of the actual experienced joint-use cost of ordinary operation and maintenance for the preceding fiscal year. Records of cost of operation and maintenance of the Project shall be available for inspection and examination by the District. The extent of operation and maintenance of the Project shall be determined by the Contracting Officer and all records and accounting shall be maintained by the Contracting Officer In the event the District should require additional operation and maintenance of the rater supply storage over and above that deemed necessary by the Contracting Officer, the District shall bear the entire cost of such additional expense. 6 CONTRACT 10. DAM29-68-A-0101 (3) Five and eight hundred fifteen thousandths percent (5.0153) of the cost of sedimentation resurvey$ and joint- use moor capital replacements when incurred. (N) In tbt event of default in the payment of the Costs eontaiaed in Article S.b.(1). (2)9 and (3)9 the amount of such payments shell be increased by an amount equal to interest on such overdue payments at the rate of three and two hundred fifty-three thousandths percent (3.2535) per annum thereon, com- pounded annually, and such amount equal to interest sball be charged from the date such payments are due until paid. (5) The District may. upon written notice to the Government at any time prior to the tenth anniversary data of delib- erate impoundment, advance or defer the data of first use of all or any portion of the storage space provided under this contract for future water supply, subject to the requirements that the entire amount of the construction costs, including interest during construc- tion, allocated to water supply shall be repaid within the life of the project, and that repayment of the amount of such costs for any portion of the storage space used shall be made within a period of not to exceed 50 years from the date such portion of the storage space is first used for the storage of water for water supply pur- poses. 1o principal or interest payment with respect to the storage space provided under this contract for future water supply is required to be made during the first 10 years following the date of deliber- ate impoundment unless all or a portion of such storage space is used by the District for the storage of water for water supply pur- poses, in which event repayment for the portion used shall be started and shall be repaid within not to exceed 50 years from the date of first use. In the event the date of first use of all or a portion of the future water supply storage space is deferred beyond the 10th anniversary date of deliberate impoundment, interest at the rate specified will be charged for that portion from the 11th year until such time as it is first used for the storage of water for water supply purposes. The District may at its option pay the interest as it becomes due or may allow the interest to accumulate until the storage space is used If this latter option is exercised the interest will be compounded annually and will be added to the principal amount. co In the event the actual first cost of the Project exceeds the presently estimated first cost, as set forth in exhibit "A," the aforesaid annual payments shall be increased to reflect the actual first cost, including interest during con- struction, as determined by the Contracting Officer. In the event such first cost of the Project is less than the presently estimated first cost, the aforesaid annual payments shall be decreased to reflect the actual first cost, including interest during construction, 7 COMTAACT NO, DACW29-6p-A-0101 fs determined by tbq Contracting Officer. In the event the annual payments are increased or decreased. as provided above. on adjustment. as determined by the Contracting Officers of payments e prior to the determination of the final Project cost shall be de in the first payment due after such costs are determined. The interest rates used in this contract are for estimating purposes only. The interest rate used for pqrposas of computing interp{t during construction and interest on the unpaid balance shall be determined by the Secretary of the Treasury. as of the beginning of the fiscal year in which construction of the Project is initiated, on the basis of the computed average interest rate payable by the Treasury upon its outstanding marketable p]tblic obligations, which are neither due nor callable for redemption for fifteen years from date of issue. At the time that the final Project costs are determined, the repayment schedules shall be modified to reflect the increased or decreased annual payments and such modification will form a part of this contract. ARTICLE 6. AO WARRANTIES AS TO QUALITY OF WATER - The parties hereto recognise that the water in the storage space being made available to the District under the terms of this agreement is raw reservoir water. The Government makes no representations with respect to the conditions or the potability of the water, and as- sumes no responsibility therefor or for treatment of the water, or for undertaking any action which might tend to reduce contamination from the reservoir or from other sources in the watershed. ARTICLE T. PERIOD OF CONTRACT. - This contract shall became effective as of the date of approval by the Secretary of the Army, and shall continue in full force and affect, under the conditions set forth herein, not to exceed the lift of the Project. This contract is subject to the provisions of Public Law 88-140, approved 16 October 1963, and the District shall have a permanent right to the use of such storage spaces after the period of years specified for repayment under Article 5 in the contract, or as amended, subject to the following a. The District must have discharged its responsibilities for payment of the costs allocated to water supply. b. The District must continue payment of its share of annual operation and maintenance costs allocated to water supply. e. The District must pay in lump sum, or annually with interest, the costs allocated to water supply which may at termin- ation of the repayment period set forth in the contract, or thereafter, 8 CONTRACT N0. DACW29-69-A-0101 U required for any necessary reconstruction, rehabilitation. or replacement of PFoject features which may be required to con- tinue satisfactory operation of the Project. Such costs will be established by the Contracting Officer. Repayment arrangements will be in writing end will be made a part of this contract. d.. Upon termination of the repayment periods set forth in the contract, the Contracting Officer shall redetermine the storage space for municipal and industrial water supply, taking into account such equitable reallocation of reservoir storage capacities among the purposes served by the Project as may be necessary due to sedimentation. Such findings, and the storage space allocated to municipal and industrial water supply$ shall be defined and described in an exhibit which will be made a part of this contract. Following the same principle, such reallocation of reservoir storage capacity may be further adjusted from time to time as the result of sedimentation resurveys to reflect actual rates of sedimentation and the exhibit revised to show the revised storage. space allocated to municipal and industrial water supply. a. The permanent rights of the District under thin contract shall be continued as long as the Government continues to operate the Project. In the event the Government no longer operates the Project, such rights may be continued subject to the execution of a separate contract, or supplement agreement pro- viding for (1) Continued operation by the District of such part of the facility as is necessary for utilization of the storage space allocated to it. (2) Terms which wilt protect the public interest, and (3) Effective absolvement of the Government by the District from all liability in connection with such continued operation. ARTICLE 8. OPERATION AND MAINTENANCE - The Government shall operate and maintain the Project owned by the Government. The District shell have the right to make withdrawals of water for its purposes as needed in accordance with Article 1 The District shall be responsible for operation and maintenance of all features and appurtenances which may be provided and owed by the District. ARTICLE 9. RIGHTS-OF-WAY. - The Government, subject to the approval of the Secretary of the Army, shall, without additional 9 . CONTRACT N0. DACM29484-0101 consideration, grant to the Districts by separate instrument or anstrumente, an easement or essemeats as may be required for the constructions operation and maintenance of pumping facilities and water supply pipelines la. ono over, and across Government- owned leads acquired for project purposes. The instruments granting such essaments shall be consistent with Government con- tract provisions is effect at that time, with such modifications as may be aeeessary in each instance and at may be approved by the Government. ARTICLE 10. RELEASE OF CLAIMS. - The District shall hold and save the Government, including its officers, agencies, and employees, harmless from liability of any nature or kind for or on account of any claim for damages which mar be filed or asserted v a result of the storage in the Project or withdrawal or release of water from the Project, made or ordered by the District, or as a result of the constructions operation, or maintenance of the features or appurtenances owned and operated by the District. ARTICLE 11. TRANUM OR ASSIGNMEIPP. - The District shall not transfer or assign this contracts nor any rights acquired thereunder$ nor suballot said water or storage space or any part thereofs nor grant any interests privileges or license whatsoever in connection with this contracts without approval of the Secretary of the Army; provided, that, unless contrary to the public interest, this restriction shall not be construed to apply to any water which may be obtained from the water supply storage space by the District and furnished to any third party or parties. ARTICLE 12. OFFICIALS NOT TO BENEFIT - No member of or delegate to Congress, or resident commissioner, shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom; but this provision shall not be construed to extend to this contract if made with a corporation for its general benefit. ARTICLE 13. COVENANT AGAINST CONTINGENT FEES. - The District warrants that no person or selling agency has been employed or retained to solicit or secure this contract upon an agreement or understanding for a commission, percentages brokerage, or con- tingent fee, excepting boas fide employees or bona fide established , commercial or selling agencies maintained by the District for the purpose of securing business. For breach or violation of this warranty the Government shall have the right to annul this contract 10 . P;. SocretAry of the ArW Contrac g Offices DATEe 11 JUL 1968 SULPHUR RIVER MUNICIPAL WATER DISTRICT OF TEXAS NY low/. I President ' CONTRACT 00. IDACW4-6&A-0101 without liability or in its discretion to add to the contract price or eonsideration, or otherwise recover, the full amount of such i~ commission, percentage, brokerage, or contingent lee. 4 J=ICLE 14. APPRCVAL OF CONTRACT. - This contract shall be subject to the written approval of the Secretary of the Atsy, and shall not be binding until so approved. IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the day and year first above written. APPROVED: THE UNITED STATES OF AMERICA ATTEST: C~ Secretary, Sulplklr River Municipal Water Dtatriat of Texas APPROVED FORMS Attorney, Sulphur River Municipal Water District of Taxes 1910 Monroe Street Commerce, Texas 45428 Post office address 11 { . SO. DACW29-WA-0101 I r '✓~G~z r certify that I as the secretary of the SU .rJR RIVER KUNICIPAL WATE'~ `STRIC F PqAS Derain; a body politic and corporate= that .~.~'.-I! R7 vho signed this contract on behalf of the District vas then t PRESIDF.NT of said SJLPNUR RIVER MUNICIPAL WATER DISTRICT OF TEXMq that Feid contract vas duly signed for and on behalf of the SULPHUR RIVER MUNICIPAL WATER DISTRICT OF TEXAS by authority of its governing body and is vithis the scope of its legal povers. In Witneos Whoreotr I bove horeunto affixed q band and the se of said SUXfii RIVE" NUNICT~'AL WATER DISTRICT OF TEXAS this day of "~196=, 0- Z~. eaaryr outpour iver mu Water District of Texas CORPORATE SEAL 12 Fojf)i I - Reservoir Storeaes Water supply storage: Municipal water supply Initial use Sulphur River Municipal Water District Future use Sulphur River Municipal Water District Other MiI water supply users Percent of MLI water suooly mace 6.502 19.780 73 T18 Usable levati tar e~ ft.i.s.l.) ac•ft Total rater supply storage 100.000 415.5-440.0 Flood control storage 440.0-446.2 Reservoir storage (I)Storage remaining after 100 years of sedimentation. II - Allocation of Estimated Construction Cost t, t Uhl water supply for initial use of Sulphur River Municipal Water District MiI water supply for future use of Sulphur River Municipal Water District M&I water supply for use of others Subtotal - M&I water supply Texas Water Development board participation Flood Control (nonreimbursable) Recreation (nouraimbureable) Total 17.750 54,000 201,250 273,000 131.400 40 0400 $ 564,249 1,716,590 6,397,476 = 8,678,31' 1,715,471 10,196,50 5,938.71. =26,529 soo( 1 1111- Initial NU water supply use: 6.502% of Cost allocated to N4I rates supply (0.06502 s $8,6789315) $ 5649249 Interest during construction (3.253% a 1/2 of 4-year period) 36,110 Total i 600,959 Future NiI voter supply meet 19 TOO of cost allocated to MiI eater supply (0.19780 : $8,678,315) $1,7166590 Interest during construction (3.253% tt 1/2 of 4-year period) 111,681 Total $1,628,271 IV . Sam SAMWD Other MiI M W Flood i initial w S. n~T . Fut.W.S. 4T : W.S. Vi r. TWDB Ur_r . Control UY Aec tT Total yr Operation and saint. Specific cost 0 0 0 0 50.600 58,600 109,20 Joint-use cost 2.631 T t l 8 004 "1- 29,830 " " 8,439 7 270 3Q.026 ~ 116 2e -j o a 29631 s00 i , gO 2 , ,b 26 2 2 5,L0 PAjor replacements specific cost 0 0 0 0 0 18 600 18060 Joint-uselcost 20 61 231 6 504 X179 1 o6 Total 20 -~l 31 b5 0 I8; 79 19 a i 2 R TM Initial M&I water supply use: ' Interest and amortisation of cost of NO water supply features (sea computation below) Joint-use operation and maintenance costs equivalent to 2.2640 of the actual joint-use operation and maintenance eostep computed as follow 34.924% • percent of joint-use 0&M cost allocated to M&I water supply 6.502% ` percent M&I water supply space to be used by the Sulphur River Municipal Water District (Initial) (34.824% x .06502 a 2460 of the actual joint-use 0&M costs Mstimated annual coat (.02264 x $116.200) ■ Joint-use mayor capital replacement and sedimentation resurvey costss when incurred, equivalent to 1.912% of the actual joint-use mayor capital replacements and sedimentation resurvey costs$ computed as follow : 29.400%n percent joint-use mayor capital replacement and sedimentation resurvey costs allocateA to M&I water supply 6.502% a percent M&I water supply space to be used by the Sulphur River Municipal Water District (Initial) $ 23.719 $ 2,631 (29.400% x .06502) a 1.912% of the actualL joint-use mayor capital replacements and sedimentation resurvey costs 8`atimsted annual cost (.01912 x $1$060) 20 Total annual cost for initial M&I water supply Computation of Annual Payment for Interest and Amortization $ 26,370 (Based on 50 paymentso 49 of which bear interest on the unpaid balance) WHEREIN D a Annual payment D Ii(1+1)n-1] R a Amount to be repaid a $600,959 ((1~!)n-1) R i - Interest rate - 0.03253 n a lumber of payments a 50 D .23253 1+ . 0 - 4 1.9 (1+.03253);Iu x $6000959 ` 0.0394689 x $600,959 1 D n $23,719 3 future MiI water supply use: Interest and amortisation of cost of MiI water supply features (see Computation below) = T2.1S9 Joint-use operation and Maintenance Coots equivalent to 6.888% of the actual joint-use operation and maintenance Costs, computed as tollovss 34.824% • percent of joint-use O&M east allocated to MiI water supply 19.780 • percent of MiI water supply space to be used by the Sulphur River Municipal Water District (Future) (34.824% x .19780) ■ 6.888% of the actual joint-use O&M costs Estimated annual cost (.06888 x 1116.200)• i 8,oo4 Joint-use mayor capital replacement and sedimentation resurvey costs, when incurred, equivalent to 5.815% of the actual joint-use mayor capital replacements and sedimentation resurvey costs computed as follows 29.400% ■ percent joint-use mayor capital replacement and sedimentation resurvey costs allocated to MiI water supply 19.780% ■ percent of MiI water supply space to be used by the Sulphur River Municipal Water District (Future) (29.400% x .19780) a 5.815% of the actual point-use mayor capital replacements and sedimentation resurvey costs Estimated annual cost (.05815 x 11,o60) ■ = 61 Total annual cost for future MiI water supply $ 80,225 Computation of Annual Payment for Interest and Amortization (Based on 50 psyments,49 of which bear interest on the unpaid balance) D 11(1+00-1 R ((1+i)n-1) D a .03253 (1+ 03253)49 (1+.0_ 3253'i D • $72.159 WRE'REIN D a Annual payment R a Amount to be repaid - $198289271 1 a Interest rate a 0 03253 n a lumber of payments ■ 50 x $1,8289271 ■ 11,828,271 x .0394689 4 MMBIT B AMORTIZATION SCHEDULE COST OF MUTER SUPPLY FOR INITIAL USE BY THE SULPHUR RIVER MUNICIPAL MATER DISTRICT ~T a+Ai ►60ST 5 60095 ►0 NUMSFR Or PAYM ENTS SO INTEREST NAM P1060T 0903253 ANNUAL AMOUNT PAYMENT or NUMOQP PAYMENT . . . . . . . . . . . . . . . l 23710.00 2 23719.00 3 23719.00 4 23719.00 5 23719.00 6 23719.00 7 23719.00 0 23719.00 9 23719.00 10 23719.00 13 23719.00 12 23719.00 13 23719.00 14 23719.00 is 23719.00 16 23719.00 17 23719.00 10 23719.00 19 23719.00 20 23719.00 21 23719.00 22 23719.00 23 23719.00 24 23719.00 25 23719.00 26 23719.00 27 23719.00 28 23719.00 29 23719.00 30 23719.00 31 23719.00 32 23719.00 3',3 23719900 314 23719.00 35 23719.00 36 23719.00 3~7 23719.00 3'8 23719.00 39 23719.00 40 23719.00 411 23719.00 4'12 23719.00 43 23719.00 44 2'_719.00 45 23719.00 46 23719.00 47 23719.00 48 23719.00 49 23719.00 50 23746.30 • . . - . - - APPL ICATION BALANCE ALLOC INTEREST ALLOC COST COST . . . . . . • . . . . . • . • . . . 0000 23710.00 577240.00 8777.61 4941.39 572298661 8616.87 5102.13 667196.48 6450.90 5268.10 561928.38 8279.53 $439947 $56488.91 6102.58 5614042 550872.49 7919.88 $799.12 545073.37 7731.23 5967077 539085.60 7536.45 6182.55 532903.05 7335.33 6383.67 526519938 7127.67 6591933 519928005 6913.25 6805075 $13122.30 6691.86 7027.14 506095.16 6463.27 7255.73 498839.43 6227.24 7491.76 491347.67 15083.53 7735.47 463612.20 15731.90 7967.10 475625.10 15472.08 8246.92 467370.18 15203.81 8515.19 458862.99 14926981 8792019 450070.80 14640.80 9078.20 440992.60 14345.48 9373.52 431619.08 14040.56 9678.44 421940064 13725.72 9993.28 411947.36 13400.64 10318.36 401629.00 13064.99 10654.01 390974.99 12718.41 11000059 379974.40 12360.56 11358.44 368615.96 11991.07 11727.93 356688.03 11609.56 - 12109.44 344778.59 11215.64 12503.36 332275.23 10808041 12910009 319365.14 10388.94 13330.06 306035.08 9955.32 13763.68 292271.40 9507058 14211.42 278059.98 9045.29 14673.71 263386.27 8567095 15151005 248235.22 6075.09 15643.91 232591.31 7566.19 16152901 216438.50 7040.74 16678.26 199760.24 6498.20 17220.80 182539.44 5938.00 17761.00 164758.44 5359.59 18359.41 146399.03 4762636 le956.64 127412.39 4145.70 19573.30 107669.09 3508.98 20210.02 87659.07 2851.44 20867.46 66791.61 2172.73 21546.27 45245.34 1471.83 22247.17 22998.17 748.13 22998.17 . 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0.00 ZKRISIT C AMORTIZATION SCHEDULE COST OF WATER SUPPLY FOR FUTURE USE by TIM SULPHUR RIVER MUNICIPAL WATER DISTRICT ~Y~I osT : 1e2e~7 ,o JMBFI~ OF PAYM ENT' Sp WIRINT RATEo PFRCENT 0903253 a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ANNUAL AMnUNT APPLI CATION BALANCE PAYMENT OF • - • - . . - . . . ALLOC NUMRER PAYMENT INTEREST ALLOC COST COST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 72159.00 0900 72159.00 1756112900 2 72159.00 57126.32 15032.68 1741079.32 3 72159.00 $6637931 15521.69 1725557.63 4 72159.00 56132.38 16026.62 1709531.01 5 72159.00 SS611.04 16547.96 1692983.05 6 72159900 SS072.73 17086.27 1675696.78 7 72159.00 S4916.92 17642.08 1658254.70 8 72159000 53943.02 16219.98 1640030.72 9 72159.00 53350.45 18808655 1621230.17 10 72159.00 52738.61 19420.39 1601809.78 11 72159.00 $2106.67 20052.13 1581757.65 12 72159.00 51454.57 20704.43 1561053.22 13 72159.00 $0781.06 21377.94 1539675.28 14 72159.00 50085.63 22073.37 1517601.91 15 77159.00 49367.59 22791.41 1494610.50 16 72159000 48626.18 23532.82 1471277.68 17 72159.00 47860.66 24298.34 1446979.34 18 72159.00 47070.23 25088.77 1421FM 5 7 19 72159.00 46254.10 25904.90 1395985.67 20 72159.00 45411.41 26747.59 1369238.06 21 72159.00 44541931 27617.69 1341620939 22 7215940 43642.01 28516.09 1313104.30 23 72159.00 42715.28 2944302 1283660,18 P4 72159.00 41757.47 30401.53 1253259.05 25 72159.00 40768951 31390.49 1221868.56 26 72159.00 39747.18 32411.62 1189456.94 27 72159.00 38693.03 33465.97 1155990.97 28 72159.00 37604.38 34554.62 1121436935 29 72159.00 36480.32 35678.68 1085757.67 30 7215940 35319.69 _ 36839.31 1040918.36 31 72159.00 34121.31 38037.69 1010880.67 32 72159.00 32883.94 39275.06 971605.61 33 72159.00 31606.33 40552.67 931052.94 34 72159.00 30787.15 41871.85 889181009 35 72159.00 28925.06 43233.94 845947.15 36 72159900 27518.66 44640.34 801306.81 37 72159.00 26066.51 46092.49 755214.32 38 7215940 24567.12 47591.88 707622.44 39 72159.00 23018.95 49140.05 658482.39 40 72159.00 21420.43 50735.57 607743.82 41 72159.00 19769.90 52389.10 555354.72 42 72159.00 16065.68 54093.32 501261.40 43 72159.00 16306.03 55852.97 445408.43 44 72159.00 14489.13 57663.67 387738.56 45 72159.00 12613.13 59545.87 326192.69 46 72159.00 10676.10 61482.90 266709.79 47 72159.00 8676.06 63482994 2D3226.85 48 72159.00 6610.96 65548.04 137678981 49 72159.00 4478.69 67680.31 69998.50 SO 72275.55 2277.05 69996050 0.00 • S ~ Contract No DACW29-68-A-0095 Supplemental Agreement No. 1 "(1) One million five hundred and sixty-four thousand one hundred and eighty-eight dollars (81,564,188) which is the estimated cost, including Interest during construction, of providing the storage space for initial water supply use in payments in the amount of sixty-one thousand seven hundred and thirty-six dollars ($61,736) Except for the first payment, which shall be applied solely to the reduction of the principal, all payments shall include accrued interest at the rate of three and two hundred fifty-three thousandths percent (3 253%) per annum on the unpaid balance The aforesaid payments are more specifically sat forth in exhibit "8" bearing contract No DACW29-68-A-0099, Supplemental Agreement No l,attached hereto and made a part hereof, and the last payment shall be adjusted upward or downward, when due, to assure the repayment of all capital costs by the and of 50 years The first payment shall be due and O payable within thirty (30) days following the date the City is notified that deliberate impoundment has been made Payments thereafter shall be due and payable within thirty (30) days of the yearly anniversary date of the first payment under this contract "(2) Five and eight hundred ninety-three thousandths percent (5 893%) of the annual experienced joint-use cost of ordinary operation and maintena of the project The first payment estimated to be six thousand eight hundred and forty-eight dollars ($6,848) will be due and payable within thirty (30) days following the date the City is notified that deliberate impoundment has been made Annual payments thereafter will be due and payable in advance on the anniversary date of deliberate impoundment and will be equal to five and eight hundred ninety-three thousandths percent (5 893%) of the actual experienced joint-use cost of ordinary operation and maintenance for the preceding Government fiscal year The second payment shall be increased or decreased in an amount to reflect the difference between the first payment and five and eight hundred ninety- O three thousandths percent (5 893%) of the actual experienced joint-use cost of ordinary operation and maintenance for the preceding fiscal year. Records of cost of operation and maintenance of the Project shall be available for inspection and examination by the City The extent of operation and maintenance of the Project shall be determined by the Contracting Officer and all records and accounting shall be maintained by the Contracting Officer In the event the City should require additional operation and maintenance of the water supply storage over and above that deemed necessary by the Contracting Officer, the City shall bear the entire cost of such additional expense "(3) Four and nine hundred seventy-five thousandths percent (4 975%) of the cost of sedimentation resurveys and joint-use major capital replace- ments when incurred." 3 Contract No DACN29-68-A-0099 Supplemental Agreement No 1 "b in consideration of the Government's providing the aforesaid storage space of 54,425 acre-feet for future water supply use by the City, it is agreed that the City shall pay the following sums to the Government; "(1) One Allion eight hundred and forty-two thousand six hundred and sixty dollars ($1,842,660), which is the estimated cost, including - interest during construction, of providing the storage space for future _ water supply use in payments in the amount of seventy-two thousand seven hundred and twenty-seven dollars ($72,727) Except for the first payment, which shall be applied solely to the reduction of the principal, all payments shall include accrued interest at the rate of three and two hundred fifty-three thousandths percent (3 253%) per annum on the unpaid balance The aforesaid paysents are more specifically set forth in exhibit © "C," bearing contract No DACW29-68-A-0099, Supplemental Agreement No 1, attached hereto and made a part hereof, and the last payment shall be adjusted upward or downward, when due, to assure the repayment of all capital costs by the end of 50 years The first payment shall be due and payable within thirty (30) days following the 1Qth anniversary of the date the City is notified that deliberate impoundment has been made Payments thereafter shall be due and payable within 30 days of the yearly anniversary date of the first payment under this contract "(2) Six and nine hundred forty-three thousandths percent (6 943%) of the annual experienced joint-use cost of ordinary operation and maintenance of the Project The first payment estimated to be eight thousand and sixty-seven dollars ($8,067) will be due and payable within thirty (301 days following the 10th anniversary of the date the City is notified that deliberate impoundment has been made Annual payments thereafter will be due and payable in advance on the anniversary date of deliberate impound- ment and will be equal to six and nine hundred forty-three thousandths O percent (6 943%) of the actual experienced joint-use cost of ordinary operation and maintenance of the preceding Government fiscal year The second payment shall be increased or decreased in an amount to reflect the differences between the first payment and six and nine hundred forty-th: thousandths percent (6 943%) of the actual experienced joint-use cost of ordinary operation and maintenance for the preceding fiscal year Records of cost of operation and maintenance of the Project shall be available for inspection and examination by the City The extent of operation and mainten ance of the Project shall be determined by the Contracting officer and all records and accounting shall be maintained by the Contracting Officer In the event the City should require additional operation and maintenance of the water supply storage over and above that deemed necessary by the Contracting Officer, the City shall bear the entire cost of such additional expense "(3) rive and eight hundred sixty-one thousandths percent (5 861%) of the cost of sedimentation resurveys and joint-use major capital replace- ments when incurred." 4 Contract No DACW29-68-A-0099 Supplemental Agreement No 1 6. Exhibits A, B, and C of the basic contract are replaced by exhibits A, 8, and C, hereto attached, bearing the contract No DACW29-68- A-0099, Supplemental Agreement No. 1 IN WITNESS WHEREOF, the parties hereto have executed this Supplemental i Agreement No 1 as*of the 11th day of March , 1971. APPROVEDt 8^"-l ^ ,W Secr- etaryrof the Army 2 0 NAY 1913 DATES _ BY: LLAulla- Herbert A Haar, Jr. Colonel, CE Contracting Officer CITY OF IRVING, TEXAS BY: Q-Y~7~IL Robezt H Power, Mayor (Post Office dress) / ' O4 a ATTEST: THE UNITED STATES OF AMERICA City C c, C1 Y of Irving exaa APPROVED AS TO FORHi Attorney ity of Irving, Poxes 5 i Contract No DACW29-68-A-0099 Supplemental Agreement No 1 O it Mary Gilliland , certify that I am the City Clerk of the City of Irving, Texas, named as City hereinr that Robert H. Power who signed this supplemental Agreement No 1 to contract No DACW -68-A-0099 on behalf of the City was then MAYOR of the CITY OF IRVING, TEXASt that said Supplemental Agreement No 1 was duly signed for and on behalf of the CITY OF IRVING, TEXAS, by authority of its governing body and is within the scope of its legal powers In Witness Whereof, I have hereunto affixed my hand and the seal of the CITY OF IRVING, TEXAS, this 11th day of March , 1971 CORPORATE SEAL 6 Contract No DACW29-68-A-0099 Supplemental Agreement No 1 O EXHIBIT A O 6untracc no. UA6w4y-99-, supplemental Agreement N F3I4IEIT N~~ ' I - Reservoir Storages Percent of M&I water supply Usable(1) space Elevation stora e (ft m s.l.) ac-ft Water Supply Storage M&I water supply Initial use City of Irving 16 923 46,200 Future use City of Irving 19 936 540425 Other M&I water supply users 63 141 172,375 O Total M&I water supply storage 100 000 415 5-440 0 273,000 Flood control storage 440.o-446.2 131 400 Reservoir storage 014, 0 II - Allocation of Estimated Construction Cost M&I water supply for initial use by the City of Irving M&I water supply for future use by the City of Irving M&I water supply use by others Subtotal - M&I water supply Texas Water Development Board participation Flood control (non-re mbursabls) Recreation (non-reimbursable) Total © III - Initial M&I water supply use 16 923% of cost allocated to M&I water supply (0.16923 x 88,678,315) Interest during construction (3 253% x 1/2 of 4-year period) Total = 1,468,638 1,130,100 5.479.577 i 8,678,315 1,715.471 10,196,503 1 5,938 713 526,529.06 $ 1,468,638 1,564,188 (1)Storage remaining after 100 years of sedimentation. Future M&I water supply use 19 936%% of cost allocated to M&I water Supply (0 19936 x 58,678,315) Interest during construction (3 253% x 1/2 of 4-year period) Total Contract No DACW29-68-A-009 Supplemental Agreement No. . NCi Fz 0,1000 5 1,17132 0 1,642,66o IV - Allocation of Estimated Operation Maintenance - and Ma3or Replacement Cost City of City of Irving Irving Other O Initial Future M&I Flood M&I Water M&I Water Water Con- SuAP1 supply SHRPlY TWDB trol Rec. Total /Ye r /S yr 3/Yr T/ Fr /yr /r yr Oper.& Maiht. Specific cost 0 0 0 0 50,600 58,600 109,200 Joint-use cost 6,848 8.06f 25,551D 8.439 37,270 30,026 116,200 Total 6,848 8,067 25,550 8,439 87,870 88,626 225,4oo Mayor replacements Specific cost 0 0 0 0 0 189600 18,600 Joint-use cost 53 62 197 - 5 504 179 1,060 Total 53 62 197 65 504 18,779 19,660 1 2 Contract No DACW29-68-A-00 Supplemental Agreement No V - Annual rh-i*oe tor Initial and Future M&I Water t SuDDly Use - City Ilyin~ Initial M&I water supply use Interest and amortization of cost of M&I water supply features (see computation below) = 61,736 Joint-use ope~r4tion and maintenance costs equivalent to 5.893% of the actual joint-use operation and maintenance coats, computed as follows 34 824% = percent of joint-use o&M cost allocated to M&I water supply 16.923% = percent M&I water supply space to be used by the City of Irving (initial) 0 (34.824% x .16923)' 5 893% of the actual joint-use 0&M costa Estimated annual scat ( 05893 x %116,200) $ 69848 Joint-use major capital replacement and sedimentation resurvey costs, when incurred, equivalent to 4.975% of the actual joint-use major capital replacements and sedimentation resurvey costa, computed as follows 29 400% = percent joint-use major capital replacement and sedimentation resurvey costs allocated to M&I water supply 16.923% - percent M&I water supply space to be used by the City of Irving (initial) (29 400% x .16923) = 4.975% of the actual joint-use major capital replacements and sedimentation resurvey costs Estimated annual cost (.04975 x $1,060) $ 53_ Total annual coat for initial M&I water supply $ 68s637 Computation of Annual Payment for Interest and Amortization (Based on 50 payments, 49 of which bear interest on the unpaid balance) WHEREIN 1 1+i a-1 D = Annual payment D = R R = Amount to be repaid - $1,564,188 ((1+i)n-l) i - Interest rate = 0.03253 n = Number of payments = 50 D - 03253 (1+ 03253) 49 1+ 03253 - 1 x $1,564,188 = 0 0394689 x $1,564,188 D - $61,736 3 yYUIL=Y.. IW Yf.y bil`YY`Q`y♦ Supplemental Agreement No Future M&I water supply use Interest and amortization of cost of M&I water supply features (see computation below) $ 729727 Joint-use operation and maintenance costs equivalent to 6.943% of ;the actual point-use operation and maintenance coats, computed as follows 34 8245 = percent of point-use 0&M cost allocated to M&I water supply 19.9365 = percent of M&I water supply space to be used by the City of Irving (Future) (34 8245 x 19936) = 6.943$ of the actual point-use 0&M costs Estimated annual cost © ( 06943 x $116,200) 8,067 Joint-use mayor capital replacement and sedimentation resurvey costs, when incurred, equivalent to 5 861$ of the actual point-use mayor capital replacements and sedimentation resurvey costs, computed as follows• 29 4005 - percent joint-use mayor capital replacement and sedimentation resurvey costs allocated to M&I water supply 19.936 ■ percent of M&I water supply space to be used by the City of Irving (Future) (29 4005 x 199361 = 5.8615 of the actual joint-use mayor capital replacements and sedimentation resurvey costs Estimated annual cost (.05861 x $1,060) - $ 62 © Total annual cost for future MZI water supply $ 80,856 Computation of Annual Payment for Interest and Amortization (Based on 50 payments, 49 of-which bear interest on the unpaid balance) WHEREIN D = Annual payment 842 D ■ R R = Amount to be repaid = $1 660 , , ((1+i)n-1] i = Interest rate = 0 03253 a = Number of payments - 50 49 D - 03253 (1+ 03253) x $1,842,660 = $1,842,660 x 0394689 (1+ 03253) 50-1 D = $72,727 4 Contract No DACW29-68-A-0 Supplemental Agreement No EXHIBIT S AMORTIZATION SCHEDULE COST OF WATER SUPPLY FOR INITIAL USE BY THE CITY OF IRVING O ' U _ _ _ _ _ _ _ _ Supplemental Agreement No _1 TOTAL COST 1564188.00 NUMBER OF PAYMENTS 50 _ INTFREST RATEt PERCENT 0 03253 l . _ _ _ _ _ _ _ _ _ _ _ ~ ANNUAL AMOUNT APPLICATION ~ eI BAIANCE PAYMENT OF . - ALLOC NUMBER ~ ~ ~ _ ~ PAYMENT _ ~ ~ ~ INTEREST S ~ _ ALLOC COST ~ ~ ~ COST 1 61736 00 0. 00 61736 00 _ 1502452 _ . 00 2 61736. 00 48874 76 12861 24 1489590 76 3 T 61736 Ole 48456 38 13279 62 1476311 14 4 61736. 00 48024 40 13711 60 1462599 54 5 61736 00 47578 36 14157 64 1448441 90 6 61736 00 47117 81 14618 19 1433823 71 7 61736 00 46642 28 15093 72 1418729 99 e 61736 00 46151 28 15584 72 1403145 27 9 61736 00 45644. 31 16091 69 1387053 58 10 61736 00 45120 85 16615 15 1370438 43 11 61736 00 44580 36 1715S 64 1353282 79 12 61736 00 44022 28 17713 72 1335569 07 O 13 61736 00 43446.06 18289 94 1317279 13 14 61736 00 42851 09 18884 91 1296394 22 15 61736 00 42236 76 19499 24 1278894 98 16 61736 00 41602 45 20133 55 1258761.43 17 61736 00 40947 50 20786 50 1237972.93 18 61736 00 40271 25 21464 75 1216508 18 19 61736 00 39573 01 22162 99 1194345 19 20 61736 00 38852 04 22883 96 1171461 23 21 61736 00 38107 63 23628 37 1147832 86 22 61736 00 37339 00 24397 00 1123435 86 23 61736 00 36545 36 25190 64 1098245 22 24 61736 00 35725 91 26010 09 1072235 13 25 61736 00 34879 80 26856 20 1045376 93 26 61736 00 34006 17 27729 83 1017649 10 27 61736 00 33104 12 28631 88 989017 22 28 61736 00 32172 73 29563 27 959453 95 29 61736 00 31211 03 30524 97 928928 98 © 30 61736 00 30218 05 31517.95 897411.03 31 61736 00 29192 76 32543 22 865867 81 32 61736 00 28134 14 33601 86 831265 95 33 61736 00 27041 08 34694 92 796571 03 34 61736 00 25912 45 35823 55 760747 48 35 61736 00 `'34747 11 36988 89 723758 59 36 61736 .00 23543 86 38192 14 685566 45 37 61736 00 22301 47 39434 53 646131 92 38 61736 00 21018 67 40717 33 60S414 59 39 61736 00 19694 13 42041 87 563372 72 40 61736 .00 18336 51 43409 49 519963 23 41 61736 00 16914 40 44821 60 475141 63 42 61736 .00 15456 35 46279 .65 428861 98 43 61736 00 13950 68 47765 12 381076 86 44 61736 00 12396 43 49339 57 331737 29 45 61736 00 10791 41 50944 59 280792 70 46 61736 00 9134 18 52601 82 228190 88 47 61736 00 7423 04 54312 96 173877 92 48 61736 00 5656 24 $6079 76 117798 16 49 61736 00 3831 97 57904 03 59894 13 50 61842 48 1948 35 59894 13 0 00 O Contract No DACW29-68-A-0 Supplemental Agreement No S EXHIBIT C AMORTIZATION SCHEDULE COST OF WATER SUPPLY FOR FUTURE USE BY THE CITY OF IRVING i EXHIBIT c Lontract NO DAI.NLy-bb-A-UVYJ t SuEplemontal Agreement No 1 TOTAL COST S 1842660 00 NUMBER OF PAYMENTS 50 INTEREST RATE, PERCENT 0 03253 _ - - - _ - _ - - ~ - _ _ _ - - _ - _ _ ANNUAL AMOUNT A PPL ICATION BALANCE PAYMENT or _ _ ALLOC NUMBER PAYMENT INTEREST ALLOC COST - - - - - - - - - - COST - - - - - - - - - - - - - 1 - - - - - - - - - - 72727 00 - - - - - - 0 00 72727 00 1769933 00 2 T 72727 00 57575 92 15151 08 1754781 92 3 72727 00 57083 OS 15643 95 1739137 97 4 72727 00 56574 15 16152 85 1722985 12 5 72727 00 56048 70 16678 30 1706306 82 6 72727 00 55506 16 17220 84 1689085 98 7 72727 00 54945 96 17781 04 1671304 94 8 72727 00 54367 54 18359 46 1652945 48 9 72727 00 53770 31 18956 69 1633988 79 10 72727 00 53153 6S 19573 35 1614415 44 11 72727 00 52516 93 20210 07 1594205 37 12 O 72727 00 51859 SO 20867 50 1573337 87 13 72727 00 51180 68 21546 32 1551791 55 14 72727 00 50479 77 22247 23 1529544 32 15 72727 00 49756 07 22970 93 1506573 39 16 72727 00 49008 83 23718 17 1482855 22 17 72727 00 48237 28 24489 72 1458365.50 18 72727 00 47440 62 25286 38 1433079 12 19 72727 00 46618 06 26108 94 1406970 18 20 72727 00 45768 74 26958 26 1380011 92 21 72727 00 44891 78 27835 22 1352176 70 22 72727 00 43986.30 28740 70 1323436 00 23 72727 00 43051 37 29675 63 1293760 37 24 72727 00 42086 02 30640 98 1263119 39 25 72727 00 41089 27 31637.73 1231481 66 26 72727 00 40060 09 32666 91 1198814 75 27 72727 00 38997 44 33729 56 1165085 19 26 72727 00 37900 22 34826 76 1130258 41 © 29 72727 00 36761 30 35959 70 1094298 71 30 72727 00 35597 53 37129 47 1057169 24 31 72727 00 34389 71 38337 29 1018831 95 32 72727 00 33142 60 39584 40 979247 55 33 72727 00 -31854 92 40672 08 938375 47 34 72727 00 30525 35 42201 6S 896173 82 35 72727 00 29152.53 43574 47 852599 35 36 72727 00 27735 05 44991 95 807607 40 37 72727 00 26271 46 46455 54 761151 86 38 72727 00 24760 26 47966 74 713185 12 39 72727 00 23199 91 49527 09 663658 03 40 72727 00 21588 79 51138 21 612519 82 41 72727 00 19925 26 52801 74 559718 08 42 72727 00 18207 62 54519 36 505198 70 43 72727 00 16434 11 56292 89 448905 81 44 72727 00 14602 90 58124 10 390781 71 45 72727 00 12712 12 60014 88 330766 83 46 72727 00 10759 84 61967 16 268199 67 47 72727 00 8744 05 63982 95 204A16 72 48 72727 00 6662 68 66064 32 138752 40 49 72727 00 4513 61 68213 39 70539 01 50 72833 64 2294 63 70539 01 0 00 . Contract No DACW29-68-A-0099 Supplemental Agreement No. 2 SUPPLEMENTAL AGREEMENT NO 2 BETWEEN THE UNITED STATES OF AMERICA AND THE CITY OF IRVING, TEXAS FOR WATER STORAGE SPACE IN COOPER RESERVOIR This Supplamental Agreement No 2, entered into this 8th day of July , 1978 by and between the UNITED eTATES OF AMERICA (hereinafter called the Government) represented by the contracting officer executing this agreement, and the CITY OF IRVING, TEXAS, a municipal corporation existing under the laws of Texas, with its principal office in the City of Irving, Dallas County, Texas (hereinafter called the City), WITNESSETH THAT WHEREAS, on 29 March 1968, the Government entered into Contract No DACW29-68-A-0099 with the City of Irving. Texas for the purchase of water supply storage space in Cooper Reservoir, and WHEREAS, on 11 June 1970, the Government and the City entered into Supplemental Agreement No 1 to the aforementioned Contract No. DACW29-68-A-0099 for the purpose of reallocating storage space in the reservoir from initial to future storage, and WHEREAS, on 29 March 19680 the Government entered into Contract No. DACW29-68-A-0102 with the TEXAS WATER DEVELOPMENT BOARD, an agency of the State of Texas existing under the laws of Texas (hereinafter called the Board), and WHEREAS, at the time the Board entered into Contract No DACW-29-68-A-0102, the Board had intended to construct the Sulphur Bluff and Naples Reservoirs (features of the Texas Water Plan) downstream of Cooper Reservoir, and WHEREAS, construction of these downstream reservoirs would have inundated areas now protected by existing channel and levee improvements already constructed under the Project as well as areas to be protected by future levee and channel improvements authorized to be constructed under the Project, and would have eliminated certain levee and channel improvements authorized for construction under the Project, and -WHEREAS, the construction of these downstream reservoirs would operate to reduce the benefits allocable to the purpose of flood control in the Project, and thus increase the costs allocated to the purpose of the municipal and industrial water supply over those allocable to that purpose in the Project as authorized, and 1 Contract No DACW29-68-A-0099 Supplemental Agreement No 2 WHEREAS, the Board in a resolution dated 27 April 1966 indicated its willingness to bear the additional costs allocated to the purpose of municipal and industrial water supply in Cooper Reservoir resulting from the constructioiC and operation of the downstream reservoirs, to the end that costs to purchasers of municipal and industrial water supply storage space in Cooper Reservoir would be the same both with and with- out construction of these features of the Texas Water Plan, and WHEREAS, an earlier plan for development of Cooper Reservoir included storage space in the amount of 32,100 acre-feet for the purpose of water quality control, and WHEREAS, a minimum downstream release of 5 c f a from Cooper Reservoir will be sufficient to satisfy the water quality needs for the Sulphur River, thus making unnecessary the provision of storage space in Cooper Reservoir for water quality control, and such minimum release being assured by the State of Texas in accordance with state standards as approved by the Federal Water Pollution Control Administration (whose functions were incorporated into the authority of the Environmental Protection Agency), and WHEREAS, the space previously reserved for water quality control has been reassigned, in equal amounts, to the North Texas Municipal Water District of Texas and to the City by the Texas Water Rights Commission, and WHEREAS, the North Texas Municipal Water District of Texas and the City have previously agreed to purchase the above space, and WHEREAS, the elimination of water quality control as a project purpose would operate to increase the costs allocated to the purpose of municipal and industrial water supply, both as to total cost and cost per unit of storage space, and WHEREAS, the Board had previously expressed its intention that as a result of the Board's financial involvement in the project, the unit cost to be paid by the purchasers of municipal and industrial water supply storage space in Cooper Reservoir should be based on an alloca- tion of project costs with water quality control storage in the amount of 32,100 acre-feet included as a project purpose, and WHEREAS, in accordance with the terms and conditions expressed in Contract No DACW29-68-A-0102, the Board had obligated itself to pay the Government the additional costs allocated to municipal and industrial water supply in the Cooper Reservoir, inclusive of the additional joint- use annual cost for construction, the additional joint-use cost for operation and maintenance, and the additional cost for replacements and 2 h ~ Contract No DACW29-68-A-0099 Supplemental Agreement No 2 sedimentation resurveys, when incurred, resulting from modification of the Project in the Interest of the Sulphur Bluff Reservoir and Naples Reservoir features of the Texas Water Plan, and resulting from the elimination of water quality control as a project purpose, and WHEREAS, by letter dated 22 March 1973 the Board advised the Government that construction of the Sulphur Bluff and Naples Reservoirs will not be likely in the foreseeable future, and accordingly, that certain downstream levee and channel improvements that previously would have been affected or eliminated by the implementation of the Sulphur Bluff and Naples Reservoirs should therefore be reinstated into the formulation of project plans, that the fiscal responsibility of the purchasers of water supply storage space should be realined to reflect differences in cost due to the elimination of the downstream reservoirs from further considerations in the development of the project, that the financial responsibility should be further realined such that the pur- chasers of municipal and industrial water supply storage space assume the increased costs to water supply which resulted from the elimination of water quality control as a project purpose, and WHEREAS, in essence, the Board desires to withdraw as a cost-sharing cosponsor in the development of the Project with the result that all of its fiscal responsibilities in connection with the development of the Texas Water Plan and its fiscal responsibilities in connection with the elimination of water quality control as a project purpose, in so far as these obligations relate to the water supply purpose of the Project, be redistributed to the purchasers of water supply storage space in Cooper Reservoir, and WHEREAS, the remaining purchasers of water supply storage space have indicated a willingness to assume all of the fiscal responsibil- ities occasioned by the withdrawal of the-Board as described above, and WHEREAS, the City has indicated its willingness to assume a proportional share of these fiscal responsibilities in accordance with the terms and conditions set forth in the basic contract as amended by this supplemental agreement, and WHEREAS, boLausa it is the policy of Congress that the "Federal _ Government should participate and cooperate with states and local interests in developing such water supplies" as proclaimed in Sec 301(a) of the Water Supply Act of 1958, Public Law 85-500, approved 3 July 1958, it is deemed advisable for the Government to incorporate into the basic contract the above realinement of fiscal responsibilities as they relate to the City NOW THEREFORE, the parties hereto do mutually agree to further amend Contract No DACW2968-A-0099 in the following manner and the basic contract is so amended to read as follows, to wit 3 Contract No. DACW29-68-A-0099 Supplemental Agreement to. 2 1. Subparagraphs a, a(1), a(2), a(3), b, b(1), b(2) and b(3) of Article 5 of the basic contract, as amended, are deleted and the following substituted therefor "a In consideration of the Government's providing the aforesaid storage apace of 46,200 acre-feet for initial water supply use by the City it is agreed that the City shall pay the following sums to the Government "(1) Four million two hundred twenty-seven thousand four hundred and eighty-four dollars ($4,227,484) which is the estimated cost, including interest during construction, of providing the storage space for initial water supply use in payments in the amount of one hundred sixty-six thousand eight hundred and fifty-four dollars ($166,854) Except for the first payment, which shall be applied solely to the reduction of the principal, all payments shall include accrued interest at the rate of three and two hundred fifty-three thousandths percent (3 253%) per annum on the unpaid balance The aforesaid pay- ments are more specifically set forth in Exhibit "8" bearing Contract No DACW29-68-A-0099, Supplemental Agreement No 2, attached hereto and made a part hereof, and the last payment shall be adjusted upward or downward, when due, to assure the repayment of all capital costa by the and of 50 years The first payment shall be due and payable within thirty (30) days following the date the City is notified that deliberate impoundment has been made Payments thereafter shall be due and payable within thirty (30) days of the yearly anniversary date of the first payment under this contract. "(2) Six and three hundred thirty-seven thousantha percent (6 3372) of the annual experienced joint-use cost of ordinary operation and maintenance of the project The first payment estimated to be eleven thousand nine hundred and twenty-four dollars ($11,924) will be due and payable within thirty (30) days following the date the City is notified that deliberate impoundment has been made Annual payments thereafter will be due and payable in advance on the anniversary date of deliberate impoundment and will be equal to six and three hundred thirty-seven thousandths percent (6 3372) of the actual experienced joint-use cost of ordinary operation and maintenance for the preceding Government fiscal year The second payment shall be increased or decreased in an amount to reflect the difference between the first payment and six and three hundred thirty-seven thousantha percent (6 337X) of the actual experienced joint-use cost of ordinary operation and maintenance for the preceding fiscal year Records of cost of operation and maintenance of the Project shall be available for inspection and examination by the City The extent of operation and maintenance of the Project shall be determined by the Contracting Officer and all records and accounting shall be maintained by the Contracting Officer In the event the City 4 Contract No DACW29-68-A-0099 Supplemental Agreement No. 2 should require additional operation and maintenance of the water supply storage over and above that deemed necessary by the Contracting Officer, the City shall bear the entire cost of such additional expense. "(3) Five and three hundred thirty-four thousandths percent (5.3342) of the cost of sedimentation resurveys and joint-use major capital replacements when incurred." "b In consideration of the Government's providing the aforesaid storage space of 54,425 acre-feet for future water supply use by the City, it is agreed that the City shall pay the following sums to the Government "(1) Four million nine hundred and eighty thousand one hundred and fifty-three dollars ($4,980,153), which is the estimated cost, including Interest during construction, of providing the storage space for future water supply use in payments in the amount of one hundred and ninety-six thousand five hundred and sixty-one dollars ($196,561) Except for the first payment, which shall be applied solely to the reduction of the principal, all payments shall include accrued interest at the rate of three and two hundred fifty-three thousandths percent (3.253X) per annum on the unpaid balance The aforesaid payments are more specifically set forth in Exhibit "C", bearing Contract No. DACW29-68-A-0099, Supplemental Agreement No. 2, attached hereto and made a part hereof, and the last payment shall be adjusted upward or downward, when due, to assure the repayment of all capital costs by the and of 50 years The first payment shall be due and payable within thirty (30) days following the 10th anniversary of the date the City is notified that deliberate impoundment has been made Payments thereafter shall be due and payable within thirty (30) days of the yearly anniversary date of the first payment under this contract "(2) Seven and four hundred sixty-six thousandths percent (7 4662) of the annual experien-ed joint-use cost of ordinary operation and maintenance of the Project The first payment estimated to be fourteen thousand and forty-nine dollars ($14,049) will be due and payaole within thirty (30) days following the 10th anniversary of the date the City is notified that deliberate impoundment has been made. Annual payments thereafter will be due and payable in advance on the anniversary date of deliberate impoundment and will be equal to seven and four hundred sixty- six thousandths percent (7 4662) of the actual experienced joint-use cost of ordinary operation and maintenance of the preceding Government fiscal year The second payment shall be increased or decreased in an amount to reflect the differences between the first payment and seven and four hundred sixty-six thousandths percent (7 4662) of the actual experienced joint-use cost of ordinary operation ant maintenance for the preceding fiscal year. Records of cost and operation and maintenance of % 5 Contract No DACW29-68-A-0099 Supplemental Agreement No 2 the Project shall be available for inspection and examination by the City. The extent of operation and maintenance of the Project shall be determined by the Contracting Officer and all records and accounting shall be maintained by the Contracting Officer In the event the City should require additional operation and maintenance of the water supply storage over and above that deemed necessary by the Contracting Officer, the City shall bea; the entire cost of such additional expense. "(3) Six and two hundred eighty-four thousandths percent (6 284%) of the cost of sedimentation resurvey- and joint-use major capital replacements when incurred " 2. Exhibits A, B, and C of Supplemental Agreement No 1 to the basic contract are replaced by Exhibits A, B, and C, thereto attached, bearing the Contract No DACW29-68-A-0099, Supplemental Agreement No 2. 3 This supplemental agreement shall be subject to the written approval of the Secretary of the Army and shall not be binding until so approved IN WITNESS WHEREOF, the parties hereto have executed this Supplemental Agreement No. 2 as of the day and year first above written. APPROVED THE UNITED STATES OF AMERICA BY Secretary of tbe~lr' my Early J ush III /I&J AssiJanl Socrcliry of the Army Colonel CE (CAi111orksl Contracting Officer DATE 4 CITY OF VING, k By • A n A n, Mayor P. O Box 3008 Irving, Texas 78061 (Post Office Address) ATTEST: Z - City @C' cretary, `iy Of Irving, Texas A DAST F / i 6 Attorney City of Irving, Pbxas - Contract No DACW29-68-A-0099 Supplemental Agreement No 2 I, Sally A Scripter , of the City of Irving, Texas, named as who signed this Supplemental Agreement 0099 on behalf of the City was then MAI that said Supplemental Agreement No. 2 of the CITY OF IRVING, TEXAS, by authot within the scope of its legal powers certify that I am the City Secretary City herein, that R Dan Matkin No 2 to Contract No DACW29-68-A- OR of the CITY OF IRVING, TEXAS, was duly signed for and on behalf ity of its governing body and is In Witness Whereof, I have hereunto affixed my hand and the seal of the CITY OF IRVING, TEXAS, this 8th day of July , 1978 Gil ry' City y-of Irving. Texas L CORPORATE SEAL Contract No DACW29-68-A-0099 Supplemental Agreement No 2 EXHIBIT A Contract No DACW29-68-A-0099 Supplemental Agreement No. 2 EXHIBIT A I - Reservoir Storases - Percent of (1) M32 water Usable supply space Elevation storage (ft m.s.l ) (ac-ft) Water Supply Storage M&I water supply Initial use City of Irving 16 923 469200 Future use City of Irving 19 936 54,425 Other M&I water supply users 63.141 172 375 Total M&I water supply storage 100 000 415 5-440.0 273 Flood control storage 440 0-446 2 131.400 Reservoir storage 404,400 II - Allocation of Estimated Construction Cost M&I water supply for initial use by the City of Irving M&I water supply for future use by the City of Irving M&I water supply use by others Subtotal - M&I water supply Flood control (non-reimbursable) Recreation (non-reimbursable) Total III - Costs to be Repaid by the City of Irving for Initial and Future MdI Water Supply Use Initial M&I water supply use 16 923% of cost allocated to M&I water supply (0 16923 x $23,454,738) Interest during construction (3_253% x k of 4-year period) Total (1) Storage remaining after 100 years of sedimentaticn $ 3,969,245 4,675,937 14,809,556 $23,454,738 27,602,183 12.653.079 $63,710,000 $ 3,969,245 258.239 $ 4,227.484 ✓ A-1 Contract No DACW29-68-A-0099 Supplemental Agroement No. 2 Future M6I water supply use 19.936% of cost allocated to M&I water supply (0.19936 x $23,454,738) Interest during construction (3.253% x 4 of 4-year perior ) Total $4,675,937 304,216 $4,980,153 IV - Allocation of Estimated Operation, Maintenance, and Major Replacement Cost City of City of / Irving Irving Other Initial Future M&I Flood M&I Water M&I Water Water Can- supply $ Supply- Su 1y ssFy trol $$T Rec T Total Oper 6 Maint Specific cost 0 0 0 81,939 949893 176,832 Joint-use cost 11,924 14,049 44,491 73,229 44,475 188,168 Total 110924 14.049 44,491 155,168 139,368 365,000 Major replacements Specific cost Joint-use cost Total 0 0 0 0 55,819 55,819 170 200 633 1.702 476 3,181 170 200 633 1,702 56,295 59,000 A-2 Contract No DACW29-68-A-0099 Supplemental Agreement No 2 V - Annual Charges for Initial and Future M&I Water Supply Use - City of Irving Initial M&I water supply use Interest and amorttsatlon of cost of MbI water $166,854 supply features (see computation below) Joint-use operation and maintenance costs equivalent to 6 of the actual joint-use operation and maintenance costs, computed as follows 37.44756% - percent of joint-use 06M cost allocated to M&I water supply 16.923% - percent M&I water supply space to be used by the City of Irving (initial) (37 44756% x 16923) - 6.337% of the actual joint-use 03M costs Estimated annual cost (.06337 x $188,168) - S 11,924 Joint-use major capital replacement and sedimentation resurvey costs, when incurred, equivalent to 5.334% of the actual joint-use major capital replacements and sedimentation resurvey costs, computed as follows 31.51961% - percent joint-use major capital replace- ment and sedimentation resurvey costs allocated to M&I water supply 16 923% - percent M&I water supply space to be used by the City of Irving (initial) (31 51961% x 16923) - 5 334% of the actual joint-use major capital replacements and sedimentation resurvey costs Estimated annual cost ( 05334 x $3,181) - $ 170 Total annual cost for initial M&I water supply $178,948 Computation of Annual Payment _ for Interest and Amortisation (Based on 50 payments, 49 of which bear interest on the unpaid balance) WHEREIN D - Annual payment D - R R - Amount to be repaid - $4,227,484 ((1+i)^-1) i - Interest rate - 0 03253 n - Number of payments ■ 50 D - 03253 (1+ 03253)49 x $4,227,484 - 0 0394689 x $4,227,484 (1+ 03253) 50 -1 D - $166,854 A-3 Contract No DACW29-68-A-0099 Supplemental Agreement No 2 Future M&I water supply use Interest and amortization of cost of M&I water supply features (see computation below) $196,561 Joint-use operation and maintenance costs equivalent to 7.466% of the actual joint-use operation and maintenance costa, computed as follows. 37.44756% - percent of joint-use O&M cost allocated to M&I water supply 19.936% - percent of M&I water supply space to be used by the City of Irving (Future) (37.44756 x .19936) - 7.466% of the actual joint-use 06M costs Estimated annual cost ( 07466 x $188,168) - $ 14,049 Joint-use major capital replacement and sedimentation resurvey costs, when incurred, equivalent to 6 284% of the actual joint-use major capital replacements and sedimentation resurvey costs, computed as follows 31 51961 - percent joint-use major capital replacement and sedimentation resurvey costs allocated to M3I water supply 19 936 percent of M&I water supply space to be used by the City of Irving (Future) (31.51961% x 19936) - 6 284% of the actual joint-use major capital replacements and sedimentation resurvey costs Estimated annual cost ( 06284 x $3,181) - $ 200 Total annual cost for future M&I water supply $210,810 Computation of Annual Payment for Interest and Amortization (Based on 50 payments, 49 of which bear interest on the unpaid balance) _ WHEREIN n-1) D w Annual payment D • R R a Amount to be repaid - $4,980,153 ((1+1) 1) i - Interest rate a 0 03253 n w Number of payments - 50 D 03253 It 03253149 x $4,980,153 $4,980,153 x 0394689 (1+ 03253) -1 D a $196,561 A-4 Contract No DACW29-68-A-0099 Supplemental Agreement No 2 EXHIBIT B AMORTIZATION SCHEDULE COST OF WATER SUPPLY FOR INITIAL USE BY THE CITY OF IRVINC I ,T U. 6 Q I A Y 144A. UO r `tract No OACW29-68-A-0099 ` n► It 'tr t'+1 f I 1 , vu jplemental Agre ement No. 2 Iqr•'•. l 1'LI.LFVI tl U3J.bJ EXHIBIT B A4V1IAL A40u4l AI't'LI bAIIUV HAU164tb p4YP,EV 1 no ALLOU V'n19t1. MArIM 41 INIt.III'JI ALLJ6 6Jb► Cibi QOVLDEC TC 166654.00 1 166Ub4.4J U. 166db4.43 4U6Ubse9.b6 166844.43 131.0V2*dS J4/bt.lb 4uebdbl-41 J 1669;4.4J IJ0961 41 Jb892.96 J9dYY14.44 4 1h6db4.4J Idl19JOV JIU60-b6 Jyb29lJ.dd b 166Rb4.4J Id8btsdo49 J826b.14 J914641.Ib 6 1666b4.43 127343.4') J9b1U.9J 3d7bIJ6.dl 7 164)1Sb4.43 126Ub8.20 40796.23 J8J4J40.b9 8 166854.43 1247JI010 42123.33 J792217.e1:1 9 1668b4.43 123J6C.83 4303.60 .!748723.69 10 1668b4.43 12194b*V6 449Ud.44 31UjIJI b.2z 11 1668b4.43 12046bell 46369.J2 36b7445.94 12 166db4943 118976.72 478//.71 36U9b6ts.22 13 1668b4.4J 117419.tb 4943b.17 3b60133.06 14 1668b4.43 Ilb811.13 b104J-JO 3b0YUdY.Id lb 1668b4.4J 1141b0.69 b27U3./4 34b6J86.03 16 166854.43 112436.24 b44lb-19 J4UIY67.84 17 166854.43 110666.01 b6184:5- At J34b719.44 18 166Rb4.43 10883K.11 bbU16.22 328776J.22 19 16AHb4.43 1069b0.94 b9903.49 3227db9./2 20 1668b4.4J IOb002.td 61d5O*Ib 3166OUI-b6 YI 16odb4.43 102990.13 6J864.20 J1U2143.Jd 22 166Kb4.43 100912.70 6bY41.70 JOJ62U1.69 23 16613b4.4J 98767.64 6606 6.7d 2Y6d114.Y1 2A 166db4.4J 96bb2-/d IUJUl.6b 2ts41dIJ.eb tb 166Kb4.4J 94l.6bodf 72btS8-bb 2d2bU 4.69 X6 1661b4.43 91YO4.b6 74949.61 21bUd14.d1 27 166Kb4.43 89460044 17381.99 d672bd6.dI ~d 16o(4b4.43 86)49.U1 /990b.40 2bYL9d1.41 19 Io68b4.4J 84349.68 82704.74 2b1U4/6.66 JO I66Kb4.4J HI66b.dL dbi8d.69 J42bdbd-UJ 31 1668b4.43 IK8Y4.62 K19bY.bI 2JJ7Jtd.22 32 166K54.43 76()JJ.2Y 9Udt1014 224obUI-09 3J 166>fb4.4J /JO Its. Ki 9J17b-bb 21St 131-bJ J4 166Kb4.4J IOUIK-36 96626.U7 2Ubb9Ub.4/ 35 166hb4sAJ 66418961 9997b-bt 19bb929.66 36 166Mb4.4J 63626.JY 1UJ22d.OJ Its b2701.6J 31 1b61SJ4.AJ 6O26d.Jd I06b86.04 114611b.bd 38 I66db4.AJ b68U1.14 IIUUbJ.,9 lbJ6U62.JU 39 IA6Kb4.4J bJ221.11 lIJ6JJ.J2 IbetAtd.9d 41) In(wKb4.4J 49b/A.br II/Jd).dl 14UbUV9-I1 41 166 ,j4.4J 4b /0l.ttc, 121 146. bb I2dJ9b2. of Ad 1668 b4.4J 41166995 1dbutsl-Alb llbbdbb.17 41 16424b4.4J J1691.dd I2YIb6.b4 IU2Y/Ud.6J 44 16bHb4.4J JJ496.4' IJJ3bK.UO K963b0-bJ 4b 1663b4.4J 291 Jd.29 IJ/0b.14 /bdo34.49 46 166KS4.AJ 24679.IIJ 14217 b. J9 blb47).U9 41 166444.43 l_UUb4.llb I46AUI) J6 469b/d./J 4A 16(tib4.OJ Ib214 bb Iblb/b./b J1bIU2.9b 49 Io64b494J 10.141.8) lb6bUb.b4 161b9b-42 -all I61, ibJ. 1 ? bdb6. IJ 161 b96. 44 U. Contract No DACW29-68-A-0099 Supplemental Agreement No 2 EXHIBIT C AMORTIZATION SCHEDULE COST OF WATER SUPPLY FOR FUTURE USE BY THE CITY OF IRVING 1k1,, 5, 11 AJ,511i b).111j a11a' r ' 1r P151 1 , Jn L tract No DACW29-68-A-0099 I h1 v 1 nA 1P , 1 t,wt j 1 0. U 1? 5j Supplemental Agreement No 2 EXHIBIT C AVdnAL Av,1h 4T %111'4.41 t I t 3 4 S is 7 H 9 10 I1 It, 13 14 1b 16 17 19 19 211 kl 1., 21 ,4 !6 X17 1K 21 311 JI 3, JJ 34 37 JA _ 31 3>5 J `J 4U 41 a~ 4S 44 45 46 4/ 41 49 1M Uvl Jr Ael-L Ik,111 WN 1'AYML4r 1V1ExLbr l9hbol.49 196bbf.4Y I9ob61.49 190619 49 196561.4) I9bb61.49 196561.49 196bo1.49 1)6561.49 196bh1.49 19Ab61.49 196561.49 196bb1.49 19hb61.4Y 196561.AV 196561.49 196561.49 196561.49 1911561 .49 196b61.4Y I9hb61.49 1969ble49 1')6561.49 I9obA1.4) 196*h1.49 19bb61.41) 19hbo1.41) Iv6bh1.49 1v6bA1.49 196561.49 IYhto61.4) 1)hbA1.AV IYbS(i1.4) 19ADhI A9 19»61.4) 196561.49 194b51.49 1)(v:tuI.A) 19hbhl.4) 1 )b.7o1 .4) 1 Jh,)61 .49 Iv6blil.49 I9b5r,1.49 19A561aA9 IYh561.49 196So1.49 19o561.49 I)hJ61.4) L00,ARe 6E0 TO U. 1bb61U.2J 154,78,04 I UV02.61 1 bi 4,5,. 39 1bUUIS.9b I4dS1)I.d4 1469Jb.4b 1453&)4.,1 143ub7.47 141936.yU 1401b).b5 1Jb314.7) 1J64JU.Jb 13447 4.,9 IJ24b4.bY 1JUJ69.19 120 1be96 1259Y2.6d I dJ 69 1. U>s 1413269 79 1Idd7Ye41 II6Jb,.41 11114!.21 I11U49e1J IOd,h7.41 1Ub39b.,1 1111429. ~ / 99J61.4o- 96,Ub. 14 9,941.16 39zo1U.J9 15689.97 o,496.JJ 78 /IS be 79 149b4. bb /U))1)e611 om 14.1el o1(396.69 jJJ41.UI bJd4'). / J 4),UJ.,5 4441) 68 4)4121).19 J AJ A9. 6d 2)UId.)J ,J36,4..)J 1799d.d9 I:1)u.lb 196j561.06 1 `)6561.49 4U9b1.26 4„bJ. 41 41bbdodd 4b07Y*II 46b4b.SJ 4dUS9e66 4962!.04 b12Jlead 5,9U4.UJ b4624.9Y bo4U1.9b Sd2Jb.7U 6J131.14 62Ud 1.2I b4106.90 66192.JO 6dJ4beb4 to b6d.d, 72do4e42 Ib2J4.70 //6d2.Ud bueu9eud d,dld.2d b5bl,.Jb t,d294.Ud 9116h.,9 94131.9J )7194.04 IU03bb.76 IUJo2U.JJ IU69Yl.lU 110471*b2 114Ub5.16 It 117:). /0 I,I6U6.94 Itbb6,.d, 1,964/.JJ I JJbb4.t1U IJM,19.4J 14111*.71 141JbA b IS,ISI.dI IbIIUI.JI I A&)t l l . Oil 1 6 /41`31. bb I/,YJh.VP / Ildb6e hl Id4JII UALA4LL ALLUI, W4 1 47b3b9lebu 474,64U.,b 47UUJb6.dd 46b6bYd.UU 4611618*bd 4b6bu7Je31 4blIUIJ.bJ 4467JY0.b6 44161bJ.Jl 4363, 49.JI 4JOd6,4.31 42 b„22.3d 419J9db.b'J 41JJdb4.b6 4U11167.J4 40U1660.44 3941468.13 Jd131,2.59 Jd02bb3.7d 312Y6d9.3d J6b44ZP4.69 Jb76/Id .59 J496b6J.SU J41J745.,a! JJ2d23,.d4 JLJy9Jd.75 JIAd 17,.47 3UZ4b4U.bJ 2Y57446.t)0 ,db7U')U./b 2/zJ4/U.41 26464/9eJ1 LbJODU/./d ,42194,.o4 2J04166.Y4 2ldebbU.UU ,Ub69v7.19 1),/s49.dl I/YJ4dD.JG I b»,hb. by IDI,b4Y.d9 1JOb191.64 121JUJ9.oJ IUDbYJdeb, b9J I26. /U /,h,Jd.14 bbJJUl.11 J74/Jd.bl I)UJ67.J2 ASSJRI3 CE OF CO 2LIx1 C:: '1I:H Tt i MPAR7, IT OF DEMISE DIZCC:l' U* D-1 TITLE. VI OF THE CIVIL RIGhTS ACT OF X964 CITY OF IRVIFG.(nereinafter called the "City") HEREBY AGMES THAT it will ccmplr w.tt•'title VI of the Civil Rights Act of 1964 (P L 88-352) and all reeji-a-cnts inposea by or pursuant to the Directive of the Department of Defense (32 CFR Part 300, issued as Department of Defense Directive 5500 11, Decenoer 28, 1964) issued pursuant to that tiitle, to the end that, in accordance with title VI of that Act and the Directive, no person in the United States shall, on the ground of race, color, or rational origin be eAcluded from participation in, be denied tze benefits of, or be otherwise subjected to discrimination under any program or activity in connection with the collection, dis- tribution, and use of water, for municipal and industrial purposes, , from storage space in the authorized Cooper Reservoir, which reservoir is to be constructea by the U S Ar y Corps of Engineers and in connection with which the City will receive financial assistance under the Water Supply Act of 1958, 43 United States Code 390b, and EMMBY GIVM ASSURANCE THAT it will immediately take any measures necessary to effectuate this agreement If any real property or structure thereon is provided or improved with the aid of Federal financial assistance extended to the City by the Department of the Army, assurance shall obligate the City, or in the case of any transfer of such property, any transferee, for the period during which the real property or structure is used for another purpose invol-,ing the provision of simile.- services or benefits If any personal property is so provided, this assurance shall obligate the City for tae perioa during wnich it retains ownership or possession of the property In all other cases, this assurance shall-obligate the City for the period during which tae Federal financial assistance is extended to it by the Department of the Army. THIS ASSURANCE is given in consideration of and for the purpose of obtaining any and all Federal grants, loans, contracts, property, 'discounts or other Federal financial assistance extended after the date hereon to the City by the Department, including installment payments after such date on account of arrangements for Federal financial assis- tance which were approved before such date The City recognizes and agrees that such Federal financial assistance will be extended in reliance on the representations and agreements made in this assurance, and that the United States shall have the right to seek judicial .w enforeeme-t of this assurance This assurance is binding on the C:t.(, its successors, trwsferccs, and assi;rAes, and the person or persons nhose sigratures appear bejo4 are authorized to sign this assurance on behalf o: tre City Dated 0 - G 7 CITY OF IRVIA'G (C ty) ~ileaf' gY x -.s / President, Chairman of Board, or comparable authorized official) 2b A. ®®s i c~~? /Qs 7~o6d , 2 - e F~Gtllblt D Cont. CL No. DACW29-68-A-0101 tupplemental Agreement No. 1 DUPLICATE SUPPLEMENTAL AGREEMENT NO. 1 BETWEEN THE UNITED STATES OF AMERICA AND THE SULPHUR RIVER MUNICIPAL WATER DISTRICT Of TEXAS FOR WATER STORAGE SPACE IN COOPER RESERVOIR Ibis Su plemental Agreement No. 1, entered into this /fday of 197 by and between the UNITED STATES Of AMERICA thereinafter a le the Government) represented by the contracting officer executing this agreement, and the SULPHUR RIVER MUNICIPAL WATER DISTRICT OF TEXAS, an agency of the State of Texas, with its principal office in the City of Commerce, Texas (hereinafter called the District)$ WITNESSETH THAT: WHEREAS, on 29 March 19689 the Government entered into Contract No DACW29-68-A-0101 with the District for the purchase of water supply storage space in Cooper Reservoir; and WHEREAS, on 29 March 1968, the Government entered into Contract No DACW29-68-A-0102 with the TEXAS WATER DEVELOPMENT BOARD, an agency of the State of Texas existing under the laws of Texas (hereinafter called the board); and WHEREAS, at the time the board entered into Contract No. DACW-29-68-A-0102, the board had Intended to construct the Sulphur Bluff and Naples Reservoirs (features of the Texas Water Plan) downstream of Cooper Reservoir; and WHEREAS, construction of these downstream reservoirs would have inundated areas now protected by existing channel and levee improvements already constructed under the Project as well as areas to be protected by future levee and channel improvements authorised to be constructed under the Project, and would have eliminated certain levee and channel improvements authorised for construction under the Project, and WHEREAS, the construction of these downstream reservoirs would operate to reduce the benefits allocable to the purpose of flood control in the Project, and thus increase the costs allocated to the purpose of the municipal and industrial water supply over those allocable to such purpose in the Project as authorised, and WHEREAS, the Board in a resolution dated 27 April 1966 indicated its willingness to bear the additional costs allocated to the purpose of municipal and industrial water supply in Cooper Reservoir resulting from the construction and operation of the downstream reservoirs, to the end that costs to purchasers of municipal and industrial water supply storage space in Cooper Reservoir would be the some both with and without construction of those teatures of the Texas WatsL Plan, and Contract No. pACW29-68-A-0101 supplemental Agreement No. 1 WHEREAS, an earlier plan for development of Cooper Reservoir included storage space, in the amount of 32,100 acre-feet for the purpose of water quality control; and WHEREAS, a minimum downstream release of S c.f.s# from Cooper Reservoir will be sufficient to satisfy the water quality needs for the Sulphur River, thus making unnecessary the provision of storage space in Cooper Reservoir for water quality control, and such minimum release being assured by the State of Taxis in accordance with state standards as approved by the federal Water Pollution Control Administration (whose functions were incorporated into the authority of the Environmental Protection Agency); and WHEREAS, the space previously reserved for water quality control has been reassigned, in equal amounts, to the North Texas Municipal Water District of Texas and to the City of Irving by the Texas Water Rights Commission; and WHEREAS, the North Texas Municipal Water District of Texas and the City of Irving have previously agreed to purchase the above space, and WHEREAS, the elimination of water quality control as a project purpose would operate to increase the costs allocated to the purpose of municipal and industrial water supply, both as to total cost and cost per unit of storage space; and WHEREAS, the Board had previously expressed its intention that as A result of the Board's financial involvement in the project, the unit cost to be paid by the purchasers of municipal and industrial Water supply storage space in Cooper Reservoir should be based on an alloca- tion of project costs with water quality control storage in the amount of 32,100 acre-fegt included as a projec"urpose, and WHEREAS, in accordance with the terms and conditions expressed in Contract No. DACW29-68-A-0102, the Board had obligated itself to pay the Government the additional costs allocated to municipal and indus- trial water supply in the Cooper Reservoir, inclusive of the additional joint-use annual cost for construction, the additional joint-use cost for operation and maintenance, and the additional cost for replacements and sedimentation resurvey, when incurred, resulting from modification of the Project in the Interest of the Sulphur Bluff Reservoir and Naples Reservoir features of the Texas Water Plan, and resulting from the elimination of water quality control as a project purpose, and % 0 2 . Contract Nu- DACW29-68-A-0101 Supplemental Agreement No. 1 WHEREAS, by letter dated 22 March 1973 the Board advised the CONarnmsnt that construction of the Sulphur Bluff and Naples Reservoirs will not be likely in the foreseeable future; and accordingly, that certain downstream loves and channel improvements that previously would have been affected or eliminated by the implementation of the Sulphur Bluff and Naples Reservoirs should therefore be reinstated into the formulation of project plans; that the fiscal responsibility of the purchasers of water supply storage space should be realined to reflect differences in costs duo to the elimination of the downstream reservoirs from further considerations in the development of the project; that the financial responsibility should be further realined such that the pur- chasers of municipal and industrial water supply storage space assume the increased costs to water supply which resulted from the elimination of water quality control as a project purpose; and WHEREAS, in essence, the Board desires to withdraw as a cost- sharing cosponsor in the development of the Project with the result that all of its fiscal responsibilities in connection with the development of the Texas Water Plan and its fiscal responsibilities in connection with the elimination of water quality control as a project purpose, in so far as these obligations relate to the water supply purpose of the Project, be redistributed to the purchasers of water supply storage space in Cooper Reservoir; and WHEREAS, the remaining purchasers of water supply storage space hove indicated a willingness to assume all of the fiscal responsibil- ities occasioned by the withdrawal of the Board as described above, and WHEREAS, the District has indicated its willingness to assume a proportional share of these fiscal responsibilities in accordance with the terms and conditions set forth in the-basic contract as amended by this supplemental agreement, and WHEREAS, because it is the policy of Congress that the "Federal Government should participate and cooperate with states and local interests in developing such water supplies" as proclaimed in Sec. 301(a) of the Water Supply Act of 1958, Public Law 85-500, approved 3 July 1958, it is deemed advisable for the Government to incorporate into the basic contract the above realinement of fiscal responsibilities as they relate to the District , NOW THEREFORE, the parties hereto do mutually agree to amend Contract No. DACW29-68-A-0101 in the following manner and the basic contract is so amended to read as follows, to wit. 1 Contract No. DACN29-68-A-0101 Supplemental Agreement No. i 1. Subparagraphs a, a(1), a(2), a(3), b, b(1), b(2), and b(3) of Article 5 of the basic contract are deleted and the following substituted therefor: "A- In consideration of the Government's providing the aforesaid storage space of 179750 acre-feet for initial water supply use by the District, it is agreed that the District shall pay the following $ums to the Government: "(1) One million six hundred and twenty-four thousand two hundred and forty-five dollars ($1,6240245), which is the estimated cost, including interest during construction, of providing the storage space for initial water supply use in payments in the amount of sixty-four thousand one hundred and seven dollars ($64,107). Except for the first payment, which shall be applied solely to the reduction of the principal, all payments shall include accrued interest at the rate of three and two bundred fifty-three thousandths percent (3 2532) per annum on the unpaid balance. The aforesaid payments are more specifically set forth in Exhibit "8" attached hereto and made a part hereof, and the last payment shall be adjusted upward or downward, when due, to assure the repayment of all capital costs by the end of 50 years. The first payment shall be due and payable within thirty (30) days following the date the District is notified that deliberate impoundment has been made. Payments there- after shall be due and payable within thirty (30) days of the yearly anniversary date of the first payment under this contract. "(2) Two and four hundred thirty-five thousandths percent (2.435X) of the annual experienced joint-use cost of ordinary operation and maintenance of the Project. The first payment estimated to be four thousand five hundred and eighty-one dollars (54,581) will be due and payable within thirty (30) days following the date the District is notified that deliberate impoundment has-Seen made. Annual payments thereafter will be due and payable in advance on the anniversary date of deliberate impoundment and will be equal to two and four hundred thirty- five thousandths percent (2 4352) of the actual experienced joint-use cost of ordinary operation and maintenance for the preceding Government fiscal year The second payment shall be increased or decreased in an amount to reflect the difference between the first payment and two and four hundred thirty-five thousandths percent (2 4352) of the actual experienced joint-use cost of ordinary operation and maintenance for the preceding fiscal year. Records of cost of operation and maintenance of the Project shall be available for inspection and examination by the District. The extent of operation and maintenance of the Project shall be determined by the Contracting Officer and all records and accounting Shall be maintained by the Contracting Officer In the event the District should require additional operation and maintenance of the water supply storage over and above that deemed necessary by the Contracting Officer, the District shall bear the entire cost of such additional expense. 4 Contract No DACW29-68-A-0101 Supplemental Agreement No. 1 "(3) TWO and forty-alas thousandths percent (2.049x) of the cost of sedimentation resurvey$ and joint-use major capital replacements when incurred. "b. In consideration of the Government's providing the aforesaid storage space of $4,000 acre-feet for future water supply use by the District, it is agreed that the District shall pay the followins sums to the Government: • "(1) lour million nine hundred and forty-one thousand one hundred and eighty-three dolaars ($4,941,183), which is the estimated cost, including interest during construction, of providing the storage space for future water supply use in payments in the amount of one hundred and ninety-five thousand and twenty-three dollars ($195,023) Zxcept for the first payment, which shall be applied solely to the reduction of the principal, all payments shall include accrued interest at the rate of three and two hundred fifty-three thousandths percent (3.2532) per annum on the unpaid balance. The aforesaid payments are more specifically set forth in Lxhibit "C" attached hereto and made a part hereof, and the last payment shall be adjusted upward or downward, when due, to assure the repayment of all capital costs by the and of 50 years The first payment shall be due and payable within thirty (30) days following the tenth anniversary of the date the District is notified that deliberate impoundment has been made. Payments thereafter shall be due and payable within thirty (30) days of the yearly anniversary date of the first payment under this contract. "(2) Seven and four hundred and seven thousandths percent (7.4072) of the annual experienced joint-use cost of ordinary operation and maintenance of the Project. The first payment estimated to be thirteen thousand nine hundred and thirty-seven dollars ($13,937) will be due and payable within thirty (30) days following--the tenth anniversary of the data the District is notified that deliberate Impoundment has been made Annual payments thereafter will be due and payable in advance on the anniversary date of deliberate Impoundment and will be equal to seven and four hundred and seven thousandths percent (7.4072) of the actual experienced joint-use cost of ordinary operation and maintenance of the preceding Government fiscal year. The second payment shall be increased or decreased in an amount to reflect the difference between the first payment and seven and four hundred and seven thousandths percent (7 4071) of the actual experienced joint-use cost of ordinary operation and maintenance for the preceding fiscal year Records of cost of operation and maintenance of the Project shall be available for inspection and examination by the District. The extent of operation and maintenance of the Project shall be determined by the Contracting Officer and all records and accounting shall be maintained by the Contracting Officer. 5 Inttect No. DACW29-68-A-0101 oupplemental Agreement No. 1 Im the event the District should require additional operation and maintenance of the Water Supply Storage over and above that deemed mecasaary by the Contracting Officare the District shall bear the entire cost of such additional expense. SIX and percent Of the cost of sedim resurveys and Joint-use thousandths major capital replacements when incurred." 2. Exhibits At Do and C of the basic contract are replaced by Exhibits At It and C. attached hereto bearing the Contract No, DACW29-68-A-01010 Supplemental Agreement No, 1 J. This supplemental agreement shall be subject to the written approval of the Secretary of the Arrays and shall not be binding until so approved. IN WITNESS WHEREOF* the parties hereto have executed this Supplemental Agreement No. 1 as of the day and year first above Written APPROVED: THE UNITED STATES OF AMERICA Secretary o th Army (Co ctin officer) A66q A.s.A. nl k eraNr.4 d the Army EARLY J. RUSH III DATE:__ (Lhiiw3rks) 1F111Y ir"/ Colonel. CE SULPHUR RIVER MUNICIPAL WATER DISTRICT OF TEXAS . a......a ....oa Water District of Texas APPROVED AS TO FORM: r' Attorney, Sulphur River Municipal Water District of Texas _ (Pr%siyde'nt)p~ (Post Office address) Cont..Ct No. DACW29-68-A-0101 Supplemental Agreement No. 1 I, r'.!, ' H. ._I • Atrtify that I as the Secretary of ihs SULPHUR RIVER MUNICIPAL WA ER DISTRICT F TEXAS herein; a body politic and corporate$ that N +io signed this contract on behalf of the D s !tc was then PRESIDENT of said SULPHUR RIVER MUNICIPAL WATER DISTRICT OF TEXAS$ that said contract was duly signed for and on behalf of the SULPHUR RIVER MUNICIPAL WATER DISTRICT OF TEXAS by authority of its governing body and is within the scope of its legal powers. IN WITNESS WHEREOF. I have hereunto affixed my hand and the seal of said SULPHUR RIVER MUNICIPAL WATER DISTRICT OF TEXAS this ic. ay of 1~~/L~~ . 197 Secreury. u phu River Muni pal Water District of Texas CORFORA73 SEAL Contract No. DACY29-68-A-0101 supplemental Agreement No. 1 LXHIBIT A Contract No. DACW29-68-A-0101 Supplemental Agreement No. 1 • EXHIBIT A I - Reservoir Storages Percent of M6I water Usable supply space Elevation storage (ft.o.s.l.) (ac-f t) Water supply storage: Municipal water supply Initial use Sulphur River Municipal Water District 6.502 Future use Sulphur River Municipal Water District 190780 Other M6I water supply users 73.716 Total water supply storage 100.000 415.5-440.0 Flood control storage 440.0-446 2 Reservoir storage (1) Storage remaining after 100 years of sedimentation II - Allocation of Estimated Construction Cost M6I water supply for initial use of Sulphur River Municipal Water District M6I water supply for future use of Sulphut= River Municipal Water District M&I water supply for use of others Subtotal - M&I water supply flood Control (non-reimbursable) Recreation (non-reimbursable) Total 17.750 54000 201.250 273,000 131.400 404.400 $ 1j525,027 40639.347 17.290.364 $239454x738 27,6029183 12.653.079 $63.710000 A-1 Contract No. DACW29-68-A-0101 Supplemental Agreesect No. 1 III Initial M61 water supply uses 6.5022 of cost allocated to NiI water supply (0.06502 x $23.454.738) 61.525,027 Interest during construction (3.2532 x b of 4-year period) 99,218 Total $1.624.245 future N&I water supply use 19.7802 of cost allocated to M&I water supply (0.19780 x $23.454,738) 549639 047 Interest during construction (3.2532 x h of 4-year period) 301, 836 Total 64041,183 IV - Allocation of Estimated Operation, Maintenances and Major Replacement Cost SRMWD SRMWD M&I M6I Other Initial Future M62 Hater Water water flood Supply Supply supply Control Roe Total 6/yr. 6/yr. $yr. 6 yr. 6/yr. 6/yr. Oper 6 Maine Specific cost 0 0 0 81,939 94.893 176,832 Joint-use cost 4,581 13.937 51 946 - 73,229 6 44,475 139 368 188,168 000 365 Total 4s581 13.937 46 51.9 155,1 8 , , Major replacements Specific cost 0 0 0 0 559819 55,819 Joint-use coat 65 198 740 1,702 476 3,181 Total 65 196 740 1,702 56,295 59,000 C Con.rect No. DACW29-68-A-0101 supplemental Agreement No. 1 Y- Initial M&I water supply use: Interest and amortisation of cost of NiI water supply features (see computation below) $ 64.107 Joint-use operation and maintenance costs equivalent to 2.4352 of the actual joint use operation and maintenance costst computed as follows: • 37.447562 ■ percent of joint-use O&M cost allocated to NiI water supply 6.5021 ■ percent NiI water supply space to be used by the Sulphur River Municipal Water District (Initial) (37.447562 x .06502 ■ 2.4352 of the actual joint-use O&M costs Estimated annual cost (.02435 x $188,168) S 4.581 Joint-use major capital replacement and sedimentation resurvey costs, when incurred, equivalent to 2.0492 of the actual joint-use major capital replacements and sedimentation resurvey costs, computed as followst 31.51961 ■ percent joint-use Major capital replace- sent and sedimentation resurvey costs allocated to M&I water supply 6.5022 ■ percent M&I water supply space to be used by the Sulphur River Municipal Water District (Initial) (31.519612 x .06502) ■ 2.049 of the actual joint-use major capital replacements and sedimentation resurvey costs Estimated annual cost (.02049 x $3,181) x--65 Total annual cost for initial M&I water supply $ 680753 Computation of Annual Payment for Interest and Amortization (Based on 50 payments, 49 of which bear interest on the unpaid balance) I(1~1)^-11 • D .03253 (1+ 0325309 x (1+ 03253) -1 - D ■ $64,107 ~ WHEREIN D ■ Annual prymeut R ■ Amount to be repaid $1,624,245 i Interest rate ■ 0 03253 o Number of payments ■ 50 $1,624,245 0 0394689 x $1,624,245 A-3 . Contract No. DACW29-68-A-0101 Supplemental Agreement No, 1 future MU water supply uses Interest and amortisation of cost of NU water supply features (ire computation below) $195,023 Joint-use operation and maintenance costs equivalent to 7.4071 of the actual joint-use operation and maintenance costs, computed as follows: 37.447561 - percent of joint-use O&M coat allocated to M&I water supply 19.7801 • percent of M&I water supply space to be used by the Sulphur River Municipal Water District (future) (37.447561 x .19760) - 7.4071 of the actual joint-use 04M costs Estimated annual cost (.07407 x $188,168) $ 139937 Joint-use major capital replacement and sedimentation resurvey costs, when incurred, equivalent to 6 2351 of the actual joint-use major capital replacements and sedimentation resurvey costs computed as follows. 31.519611 - percent joint-use major capital replacement and sedimentation resurvey costs allocated - to M4I water supply 19.7801 - percent of M3I water supply space to be used by the Sulphur River Municipal Water District (future) (31.519611 x .19780) - 6.235 of the actual joint-use major capital replacementir and sedimenta- tion resurvey costs Estimated annual cost 198 1.06235 x $3.161) Total annual cost for future M&I water supply $209.158 Computation of Annual Payment for Interest and Amortization (based on 50 payments. 49 of which bear interest on the unpaid balance) WHEREIN. D R D - Annual payment ((1+i)^-1) R ■ Amount to be repaid - $4.941,183 1 ■ Interest rate - 0 03253 n - Number of payments - 50 D - 03253 (1+ 032530 9 x $4,941,163 - $4,941,183 x 0394689 (1+ 03253) -1 0 - $195,023 A-4 Contract No. DACW29-68-A-0101 SUPPlemental Agreement No. 1 EXHIBIT g COST Of SULPHUR AMORTIZATION SCHEDULE WATER SUPPLY TOR INITIAL USE BY THE RIVER MUNICIPAL WATER DISTRICT Gantt? . DACW29-66-A-MUL tuswl. ntal Agreement No. 1 TIITAI. 0,1141 Is d4.'Ab.nn L10t2lIT 3 101411•('.14 i1► eAlf"LV1.1 '%1) I9TF1tLb1 nAlfs MF1.1:LV1 n01)JdbJ 1MVNUAL Animr ArML ICAII%Id UALANCL "AlhL4*r ut ALLUC NUMnJCK MA7AtJ1 f IN fERLS f ALWC CJU 1 Cob 1 1 64107027 Of 64107.97 1b6U1J/0/J 2 641111.idT b0lbIaled IJ3bb.VV 1*4678 1.7b 3 64101.117 50J16.g1 1JIVU046 1bJ11VV1 04d 4 641010L'7 4118611.791 144dJV.U7 Ib1V7bd.911 b 64101987 4V4ub0ol 14fu2.2b Ibu4u4).Vb 6 641019117 489d6.7b lbld0.b3 14udllb1r.4d 1 6411179117 444Jd9V11 Ibb74.3b I47JIVb.Ud 14 6410/.117 47923.04 16184.11 4 14001 Go U4 9 64107927 47JVGO56 16110.71 1440101jo14 10 641070117 460bId096 17115441 14d304b.83 11 641n/.117 46d9106d 17dib.b9 I4UbdJQOdJ 12 64107087 4b7111.14 ISJVb01J 13136VJb.11 13 64101.27 4bllJ.7b 1d993.bJ IJ67d410bd IA 6410/041 4449 b. 1%9 IV611.3l IJ4ddJu.11 lb b410101dl 4Jdb1093 11U/.Ali.J4 IJ279dO-44 16 641111.07 4JIVV0dd duV0d.u6 1407079.7d It 64101091 49bl9.01f wibdd.lV Iddb4d4.b9 Id "41070!9/ 41 IS 169K1 dldd9J0 4b 14dbJIV4.14 19 641111.0 41091. it ItJ0lb.bi IW4ul Id. 0,d 21) 64107097 4JJ4J0ul YJI64.1t6 1216414.J1 91 64101.27 4VbuVO.16 114bJl.Jl IIVldilouu Y/ 6414/0191 Jl4It l.J6 dbJJb.bl llubb41.40 9.1 641fi10dl 37V4to b9 961b9.b! 114uJdl.d1 94 64101okil J/u9b.b.' i./Jlu.6b 111JJ710Ib lab 6410700 36417.yo 97dd9.Jl ludb4Jl.d4 i1b b41Ul.YI JbJltl.7d d1%IV (t.bb 10bb6db-JU K1 641010di J4J7J097 dy7JJ.J1) Iud6ybd.00 1114 64147.1!1 JJ4U607b= J0 I000U. 9Y6dbl.4d /9 641U7.97 JL40d0Ub J169y.di V64rb9.d7 on 64101.-A/ J13100$9 JC/Ju.JV 9Jl691.dd .31 64107097 3nJId.17 JJ/9b.11 dVdl/YDo It 3A.. 64107041 WV419odl J4d1I4.46 d6JIJd.JI JJ 6410/041 Ljh07to 6V JbUd90bd d9f1Ud.7J 34 64107.91 d690b.6b 37901.69 Id9V0 I.Id 3b 641111097 Ib69b.414 Jd411.7V 7b14dV0JJ J6 6411)70%17 9444b.ib Jybbl.Jd IlldddoUI 11 6411)/017 1131bb.Ito 4u9b10 b1 61Udlo.bU 3M 641111..' I a:I lidJ.Is I 4da%KJ. hh bd*ilid. U4 JV 64101.1:1 Y,n 4nd.IJ 4Jbb90 1 b bK4VJJ-/U 40 6411)1*MI IVUd7.K! 4bJIV.Jd bJVI%b4.Jot 41 a41n1.id7 17b61.4b 40b4b.ul 49JJuN.b1 4d 641111911 IIIQ47.JJ 4KUb9.9b 447d4d•*6 43 641%!1.91 144dJ./4 4yb1J.J4 J9bbdb.dJ 44 o411)I.Y1 Iddbr.6v bldJl.bd J44Jf%1.64 Ab 44107.111 Ildu9.9J bdVU4014 dv146J.3u 4.. 64111/.dl 94dI.9b 240db.Jd dJbN3/.YN 47 • 64107.47 7104.'!V b64Ud.dd Ibu4bb-7u AR 641010;07 b4 IO.dd W19J7.U9 Idddld-bb e•1 641U7.Pi~ J97b-ll 60 IJI0 bJ edudl•lb bU 1141114. ib 001 9. 10 A/uN7- I b U. Contract No. DACW29-68-A-0101 Supplemental Agreement No. 1 EXHIBIT C COST OF SULPHUR AMORTIZATION SCHEDULE WATER SUPPLY FOR FUTURE USE BY THE RIVER MUNICIPAL WATER DISTRICT Con lie. 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I I. of 41461bY.6J 4JUbDguedt 4b6JD76.db 46$uYbY.Uu 4D IbbJld.63 4bd9Jb1.31 44d160Is7b 44Jd 4J,1.00 4Jd1D96.by 4JdYI06.6J 4L7440Y.ub 4dldv4d.44 4161161.44 Mot bobi, 1:11 4uJJluD.44 J916Juu.14 JYIubkfb.44 J4 4MI 1 be I j JIf97Yd•bO 47UJDU4.db J6d*dbdodd Jb40u4•ub J4bvdJd.6J Jib IUJd-41 JJudIoveIY Jill 4Dt%b-UU JI941JJ.ud 30iU7J/.7D 9VJ4JU4•db dbJ41JJ./d ILIJI)d4.dd Idbidb Me 41 dDIbIaJ.34 d4udVVu-7D 9dd61Jb.bo dlobool.J4 d04uyu1•uu IYlddod.IJ 17,VAbu.uJ 164dJId.YJ IbUuIl4.Ub IJb4Dlld061 IdUit&1.61 lu4l_ .by dd6ioJ-11 ILu»>-dJ b4dYll.bl J71dub. 16 Idulf11.6J V. r ~ ASSURANCE OF =rniANCE WITH Thzi DEPARncuT OF DEFENSE DIRECTIVE ::DER TITLE; VI OF THE CIVIL RIGHTS ACT OF 1964 • SULPHUR RIVER NMiICIPAL WATER DISTRICT (hereinafter called the • "District") HCREST AGREES THAT it will comply with title VI of the Civil Rights Act of 1964 (P.L. 88-352) and all requirements imposed by or pursuant to the Directive of the Department of Defense (32 CFR Part 300, issued as Department of Defense Directive 5500.11, December 28, 1964) issued pursuant to that title, to the and that, in accordance with title VI of that Act and the Directive, no person in the United States sha119 on the ground of race, color, or national origin be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any p-ogram or activity to connection with the collection, distribution, and use of water, for municipal and industrial purposes, from storage space in the authorized Cooper Reservoir, which reservoir is to be constricted by the U. S. Army Corps of Engineers and in connection with which the District will receive financial assistance under the Water Supply Act of 19589 43 United States Code 390b, and REMY GIVES ASSURANCE THAT it will immediately tax* ary measures necessary to effectuate this agreement. If any real property or structure thereon is provided or improved with the aid of Federal financial assistance extended to the District by the Department of the Army, assurance shall obligate the District, or in the case of any transfer of such property, any transferee, for the period during which the real property or structure is used for another purpose involving the provision of similar services or benefits If any personal property is so provided, this assurance shall obligate the District for the period during which it retains ownership or possession of the property. In all other cases, this--Assurance shall obligate the District for the period during which the Federal financial assistance is extended to it by the Departmen. of the Army. THIS ASSURANCE is given in consideration of and for the purpose of obtainiag any and all Federal grants, loans, contracts, property, discounts or other Federal financial assistance extended after the date hereon to the District by the Department, including installment payments after such data on account of arran5ements for Federal financial assistance which were approved before such date. The District recognizes and agrees that such Federal financial assistance will be extended in reliance on the representations and agreements made in this assurance, Lad that the United States shall have the right to seek Judicial enforcement of this Assurance. This assurance is binding on the District, its successors, transferees, and assignees, and the t person or persona Whose signatures appear below are authorised to sign + this assurance on behalf of the District. Dated 12 April 1961 . , 1910 Monroe St. Coame:ce, Texas district's mailing address SULPHUR RIVER INNICIPAL HATER DISTRICT (District) \ i esident, Cha sman~of Boa d, or comparable authorised official) _a^ tea. r •t r 2 i5x.V1017' c DUPLICATE CERTIFICATE OF ADJUDICATION LLRTIFICATE OF ADJUDICATION' 03-4797 OWNERS Sulphur River Municipal Water District c/o Donald W Abernathy, Sec-Treasure P 0. Box 310 Cooper, Texas 75432 COUNTIES Delta and Hopkins WATFRCOURSE South Sulphur River, tributary of the Sulphur River PRIORITY DATES November 19, 1965 BASIN Sulphur River WHEREAS, by final decree of the 202nd Judicial District Court of Bowie County, in Cause He 86-C1702-202 In Re The Adjudication of Water Rights in the Sulphur River Basin dated December 17, 1986 a right was recognized under Permit 2336 authorizing the Sulphur Ri,.er Municipal Water District to appro- priate waters of the State of Texas as set forth below, WHEREAS, by Public Law 760, 83rd Congress, 2d Session, 1954, as amended, Cooper Dan and Reservoir on the South Sulphur River in the Sulphur River Basin, a multi-purpose federal project located in Delta and Hopkins Counties, Texas, was duly authorized, I.HLREAS, a contract has been negotiated between the United States of America and local political subdivisions whereby water supply storage space in Cooper Reservoir has been allocated between elevation 440 0 and 415 5 feet above mean sea level as follows Percent of Water Usable Storage Supply Spare (acre-feet) Sulphur River Municipal Water District a 26 282 71,750 North Texas Municipal Water District City of Irving, Texas TOTAL 36 859 100,625 36 859 100,625 100 00 273,000 Initially in the silt storage space below elevation 415 5 feet malthere e will be 37,000 acre-feet, the water in which may be, With the approval o federal contracting officer, diverted proratably by the political subdi- visions above named in the percentages set forth, Certificate of Adj ication 03-4797 NOW, THEREFORE, this certificate of adjudication to appropriate vaters MuState of Texas In the nicipal Water District,+l subject to Bthen following d torso he aad lean River the ditions 1. IMPOUNDMENT Owner 1415.5 authorizedand 440 impound 0 feet above mean sea level not to exceed 71,750 acre-feet of water and below elevation 415 5 feet eel not to exceed 9720 acre-feet, making a total of 81,470 acre-feet of water Station 19+00 on the centerline of the dam will be located at a point wW Langham Survey, Abstract f 1218, Hopkins County, Texas 2 USE Owner is authorized to divert and use from Cooper Reservoir not to exceed 26,960 acre-feet of water per annum for municipal purposes and 11,560 acre-feet of water per annum for industrial purposes within the service area of the Sulphur River Municipal Water District 3 DIVERSION facilities, submit to Oner shall, prior to construction or installation of any data concerning the point and method for diversion of water and the maximum rate of diversion 4 PRIORITY the time priority of owner's right is November 19, 1965 5 SPECIAL CONDITIONS the A water diverted but not consumed shall be returned that water Sulphur River Basin at the disposal plants customers of the District B Construction or installation of all works herein authorized or required shall commence and b Commission completed within the time limits as established by the C Owner accepts this certificate of adjudication with full Commission, retains the knowledge and consent that he fstaLecof Texas right to regulate, by permit ductions into and withdrawals from Cooper Reservoir of such volumes of water downstream or other sources as may be devel- oped under the Texas Water Plan 2 certifiestc of Adjudication 03-4797 the locations of pertinent features related to this certificate are on page 2 of the sulphur River Basin Certificates of Adjudication Naps* shown shown are located in the office of the Texas Water commission, of which copies Austin. Texas. certificate of adjudication is issued subject to all terms$ con- This provisions in the final decree of the 202nd Judicial District ditions and Court of Bowie County, Texas, tion of Water Ri hts in the QUl hur River 8a in datad2 DecemberT179A19861and superpedea sll rights of the owner seserted in that cause This certificate of adjudication is issued subject to senior and superi- or water rights in the Sulphur River Basin is is Thin certifir sub the State of Texasapursuantte of ofathe R edjectRivertoCompactthe of This certificate of adjudication is issued subject of State water Texas Wat Co and its continuing right resourceseconsistentowith o the public policy of the State as set forth in the Texas Water Code TELAS WATER COMMISSION Paul gopkins. hairman DATE ISSUED MAR 31 1991 ATTEST Aa/ Mnry Ann Hefner Mary Ann Hefner, Chief Clark 3 M . I PERMIT ~O APPROPRIATL 57 ATE AATE11 APPLICATION NO 2414 PERMIT %0 2336 Pyrmitme Sulphur River Murecip9l Address Water District Recelted September 22 1965 Filed Granted January 4 1966 Counties T1 PE Regular 1910 11001,00 Street Commerce Texas November 10 1905 Delta and Hopkins Watercourse South Sulphur Rive- tribu- Watershed Sulphur River tary of Sulphur Riter KHEREAS the Texas hater Riglits Commission has caused due no ice publi- cation and bearing of the abuta application to be made and at the conclusion of the bearing granted the application with the coed non that permit would issue upon receipt b3 the Commission of a negotiated contract between the United States of America and the applicant for storage rights in Cooper Reservoir and ,A,xEPE3S by Public Las 780 83rd Congress 2d Session 1954 as amended Cooper Dam and Reservoir on the South Sulphur River in the Sulphur River Basin a multi purpose federal project located in Delta and Hopkins Counties Texas was duly autho-'zed and _ - WHEREAS a contract has beet negotiated betaean the United States of America and local po_tirsl subdivisions wbe-eb3 sate- st.pplj storage space in Coope- Reser- voir has bee- allocated between elevation 440 0 and 415 5 feet above mean sea level as follows Percent of hater Usable Storage Supply Space (acre-feet) Sulphur River Municipal Water District 26 282 71 750 Toth Texas puree pal P ate- Dist ct 36 859 100 625 City c' L-vuig'Texas 36 859 _ 100.625 TOTAL 100 00 273 000 InitiLit in the silt storage space below eieta ion 415 5 feet real the-0 till be 37 000 acre feet the Ovate- in v such may be with the approval d the fede-al con tractiag of` car diverted pro rataolj by the port cal subdivisions abote rained in the pe-centages act forth AOtt THEREFORE this pert it to impcLnd and use he public uatc-s of the State of Texas is be-eby issued to Sulphur Rive- 1lunic pal l ater Dist- ct s-bject to the 'oller-ing terms and conditions 1 I` eOLN'D`IENT Per= ties is autho- zed to'irpoand in Cooze- Feservo.r between elevat'ons 415 5 and 440 0 ms' not to exceed 71 750 acre feet of sate- and below eletauo +15 5 nis no to exceed 9-20 ac" feet making a total V 81 470 ac-s-fee Station 10-00 on the centerline of the dale is lots to at a point wr to oea-s a 05 30 ti 3o40 feet from the northearte-13 cc-oe- of t`e W tt Lang-an Orig -al Su-tea Abstract No 1218 Hepl_ns Cour t 7e\as c " 2 USE Permitter is autho zed to divert and use from Cooper Ruse- oir not to etcoed 26, 950 acre-feet or water per annum fo- n_11 n',nal p6 poses sad 11 560 acre-feet of water per annum for mdustrta, purposes witnm the somice area of Sulphur Rite- Municipal Water District and uncon sumed water will be returned to the Sulphur River Basin at the disposal plants of toe water customers of the District S DIVERSION Psrmittee shall prior to the construction or installation of any diversion facilities submit to the Commission for its approval data concerning the point and me nod for diversion of water and the maximum rate of diversion d TIME LIMITATIONS Construction or installation of all worts here n authorized or required shal. be commenced within two (2) years and com- pleted withm sic (6) years unless extended by the Comm ssion Permittee accepts this permit with bull knowledge and consent that the S ate of Taints retains the right to regulate by permit from the Commission introductions into and withdrawals from Cooper Reservoir of such volumes of water from dot-n- straam or other sources as may be developed under the Texas N star Plan Permittee agrees to be bound by the to--as conditions and pro%sions contained herein and such agreement is a cond. ion precedent to the gra- ing of this pe-mit All other matters requested in the application which are not specifically g-anted by this permit are denied This permit is issoed subject to the rules and regulations of the Texas It ate- Rights Commiss on and to its righ of coat-nual supervision Date Issued A:)-!!I 2, 1968 MEAL) Attest /s/ Audrey Strandtmaa Aucey Strandtrian Secretary /s/ Joe D Carter Joe D Carter Chairman Is/ O F Dent O F Dent Com- ssioner /s/ W E Be-ge- W E Be-20- Cocmissione _ t " 4xf41#s17 Cr. R, I DUPLICATE THE STATE OF TEXAS f f COUNTY OF DELTA f f RAW WATER SUPPLY CONTRACT This raw water supply contract (the "Agreement") is made and entered into between the Sulphur River Municipal Water District ("District"), a conservation and reclamation district and political subdivision of the State of Texas, created and functioning under Article XVI, Section 59, of the Texas Constitution and Article 8280-165, as amended, Vernon's Texas Civil Statutes, and the City of Commerce ("Commerce"), the City of Sulphur Springs ("Sulphur Springs"), and the City of Cooper ("Cooper"), bodies politic and corporate of the State of Texas, incorporated and operating under provisions of the Texas Constitution. RECITALS 1 The District is authorized by its enabling legislation (Article 8280-165, as amended, Vernor!''s Texas Civil Statutes) to acquire any and all rights in and to water conservation storage and water storage capacity in Cooper Reservoir (the "Project"), and the right to take water from the Project, pursuant to any contract which the District may make with the United States of America, acting through the United States Army Corps of Engineers (the "Government") in reference to such rights. 2. The District, relying on the commitments of the Cities described below in Recital No 3 and acting on behalf of each of the Cities, entered into a contract with the Government on March 29, 1968 for the purchase of 26.282% of the water supply storage space in the Project between elevations 440.0 and 415.5 feet above mean sea level, or 710750 acre-feet of storage space (17,750 acre-feet for immediate use and 54,000 acre-feet for future use). on July 15, 19761 the District entered into a supplemental contract with the Government, revising and amending the responsi- bilities and rights of the District and the Government under the original contract. The provisions of the above referenced contract and the supplemental contract between the District and the Government (collectively, the "Federal Contract") are adopted by reference herein for all purposes as if copied verbatim herein. 3. Each of the Cities adopted resolutions in 1965 requesting and obligating themselves to the District for the respective acre- feet of water storage in the Project set forth below: a. Commerce - 30,000 acre-foot (8,000 acre-feet for immediate use and 22,000 acre-feet for future use): b Cooper - 8,000 acre-feet (2,000 acre-feet for immediate use and 6,000 acre-feet for future use): and c. Sulphur Springs - 33,750 acre-feet (7,750 acre-feet for immediate use and 26,000 acre-feet for future use). 4. The District was granted a water use appropriation by the Texas Water Rights Commission on January 4, 1966, Permit No. 2336, for 26.282% of the water supply storage space in the Project -2- between elevations 440.0 and 415.5 feet above mean sea level, with usable storage of 71,750 acre-feet of water, and the right to divert and use not to exceed 26,960 acre-feet of water per annum for municipal purposes and 11,560 acre-feet of water per annum for industrial purposes within the service area of the District. 5. Permit No. 2336 was subsequently adjudicated by the Texas Water Commission, the successor agency of the Texas Water Rights commission, pursuant to the provisions of the Texas Water Rights Adjudication Act, codified in Texas Water Code S 11.3011 at seq., and the Texas Water Commission subsequently issued Certificate of Adjudication No. 03-4797 to the District on March 31, 1987, authorizing the District the right to impound 71,750 acre-feet of water in the Project between elevations 440.0 and 415.5 feet above mean sea level, and the right to divert and use not to exceed 26,960 acre-feet of water per annum for municipal purposes and 11,560 acre-feet of water per annum for industrial purposes within the service area of the District. 6 The District is authorized in its enabling legislation to enter into contracts with cities and others for supplying water from the Project. 7. Commerce, Sulphur Springs, and Cooper want to purchase, and the District is willing to sell, raw water from the District's share of the water conservation storage space in the Project, subject to the terms and conditions of this Agreement and all -3- applicable rules and regulations of the District and state and federal agencies. For and in consideration of the foregoing, and the mutual promises, covenants, obligations, and benefits described in this Agreement, the District and Commerce, Sulphur Springs, and Cooper agree as follows: Section 1. Definitions. The following terms and expressions as used in this Agreement shall have the following meanings, unless the context clearly shows otherwise. A. "Adjusted Annual Payment" means the Annual Payment, as adjusted during or after each Annual Payment Period, as provided for in this Agreement. 8. "Agreement" means this agreement. C. "Annual Payment" means the amount of money to be paid to the District by each of the Cities during each Annual Payment Period as its proportionate share of the Annual Requirement. D. "Annual Payment Period" means the period beginning on October 1 of each calendar year and ending on the last day of September of the next calendar year; provided, that the first Annual Payment Period under this Agreement shall be the period of October 1, 1990 through September 90, 1991 E "Annual Requirement" means the total amount of money required for the District to pay all Federal Contract Payments and -4- all District Operation and Maintenance Expenses during any one-year period beginning on October i of each calendar year and ending on the last day of September of the next calendar year; provided, that the first Annual Payment Period under this Agreement shall be the period of October 1, 1990 through September 30, 1991. F. "Cities" means Commerce, Sulphur Springs, and Cooper, cumulatively. G. "City" means Commerce, Sulphur Springs, or Cooper, individually. H. "Commerce" means the City of Commerce. 1. "Cooper" means the City of Cooper. J. "Date of Deliberate impoundment" means the date upon which the Project becomes operational for storage of water for any purpose as authorized and provided in the Federal Contract. K. "District" means the Sulphur River Municipal Water District. L "Diversion Facilities" means the water supply facilities owned or operated by, on behalf of, or with the consent and approval of a City, used or capable of use in furnishing water from the Project, including pumps, transmission lines, meters and metering equipment, and associated buildings and appurtenances. M. "Federal Contract" means the contract, as amended, between the District and the Government as referenced in Recital No. 2 of this Agreement -5- N. "Federal Contract Payments" means the amounts required to be paid by the District to the Government for the District's rights in the water conservation storage space in the Project under the Federal Contract and the amounts required to be paid by the District to the Government for any other financial obligations of the District under the Federal Contract. 0. "Government" means the United States of America acting by and through the United States Army Corps of Engineers or its successor agencies. P. "Operation and Maintenance Expenses" means all costs and expenses of operating, maintaining and administering the District's interest in the water conservation storage space in the Project, including (for greater certainty but without limiting the generali- ty of the foregoing) the costs of supervision, engineering, accounting, auditing, legal services, supplies, other services, administration of the District, and equipment, as necessary, to comply with the Federal Contract and with other regulatory requirements necessary to protect and preserve the District for the sole purpose of protecting the District's interest in the water conservation storage space in the Project and any sales or use taxes, or taxes, assessments, or charges of any similar nature incurred by the District from the gathering, impounding, taking, sale, use, or consumption of the water received by the Cities from the Project. Q. "Project" means Cooper Reservoir -6- R. "Reserve Fund" means the Reserve Fund authorized in Section 11.C. of this Agreement. S. "Sulphur Springs" means the City of Sulphur Springs. Section 2. Tsn. This Agreement shall be effective on the date it is signed by the District's authorized representative as shown on the signature page of this Agreement and shall continue in full force and effect for the useful life of the Project. Section 3. Volume. Subject to the limitations and conditions included in this Agreement, as well as the limitations and conditions described in the Federal Contract, the District agrees to sell raw water from the District's share of the water conserva- tion storage space in the Project to the Cities in the following amounts. (a) to commerce, 11,100 acre-feet per annum for municipal purposes and 4,760 acre-feet per annum for industrial purposes (b) to Sulphur Springs, 12,860 acre-feet per annum for municipal purposes and 5,514 acre-feet per annum for industrial purposes; (c) to Cooper, 3,000 acre-feet per annum for municipal purposes and 1,286 acre-feet per annum for industrial purposes. In addition to the amounts of water indicated in this Section, the,District agrees that if additional water should be determined to be available for appropriation from the District's share of the -7- sedimentation pool of the Project for use by the cities, then such additional water may be purchased by the Cities from the District upon the same percentage basis referenced in this Section, subsequent to the District securing any required approval from the Government and any other regulatory body, including the Texas Water Commission. Further, the District agrees that to the extent its share of water conservation storage space in the Project is made available for storage of additional waters from sources other than inflows into the Project by reason of use of water from the Project by one of the Cities, then such additional water conservation storage capacity made available by reason of such use by a City shall be made available to such City for storage of waters in addition to the inflows from the Sulphur River Basin into the Project; provided, however, the utilization by any such City of such additional water conservation storage capacity made available in the Project shall not impair the ability of the District to meet its contractual obligations under this Agreement to the other cities. Section 4. Diversion. The cities, individually or jointly, maylconstruct or cause to be constructed Diversion Facilities to divert raw water sold from the Project under this Agreement. The Diversion Facilities shall be located, constructed and operated in accordance with plans and specifications approved by the District -8- and, as necessary, the Government, and vicinity maps referencing the location of such facilities from a survey corner shall be prepared prior to construction thereof. Such Diversion Facilities shall be owned, operated and maintained by, on behalf of or with the consent and approval of the City or Cities who construct, or cause to be constructed, such Diversion Facilities. The District shall not be obligated in any way for payment of construction costs or operation and maintenance expenses of the Diversion Facilities Section 5. Place of Use. Unless authorized by the Texas Water Commission, raw water purchased by the Cities from the District under this Agreement shall be used only within the Sulphur River Basin. If a City desires to resale water diverted under this Agreement for use outside of the Sulphur River Basin, the City shall petition the District, requesting such authority, and the District shall authorize such transbasin diversion after securing Texas Water Commission approval and any other necessary approval of such transbasin diversion. Notwithstanding anything herein to the contrary, however, the District shall, within thirty (30) days after receiving any request for approval of a transbasin diversion, cause an application to be filed with the Texas Water commission requesting approval of any necessary amendments to the District's permit for water storage and diversion rights in the Project. -9- Section 6. 10jug8. The Cities agree to bear the transporta- tion and, if applicable, the evapotranspiration losses associated with or incident to the diversion and transportation of stored water from the Project to the place of use of the water. Section 7. Ouali~y. The water which the District offers to sell the Cities is non-potable, raw, untreated water from the Project. The Cities have satisfied themselves that such water is suitable for their needs. The District expressly disclaims any warranty as to the quality of the raw water or suitability of the raw water for its intended purpose. The raw water sold by the District' is available for purchase without warranty of merchant- ability or fitness. The Cities agree that any variation in the quality or characteristics of the raw water offered for sale as provided by this Agreement shall not entitle the cities to avoid or limit their obligation to make payments as provided for in this Agreement. There are no warranties which extend beyond the description contained in this Agreement. The District and the Cities shall cooperate to reasonably protect the Project from contamination. Section 8. Measurement. The Cities, individually or jointly, shall acquire or construct, or cause to be acquired or constructed, and shall operate, or cause to be operated, measurement devices that will accurately measure and record the amount of water taken -10- from the Project to comply with the District's obligations under the Federal Contract. When a City and the District agree on the construction of Diversion Facilities pursuant to the provisions of Section 4 of this Agreement, the location, size, design and accuracy required of measuring or metering devices shall be determinedi however, the Cities agree that the District shall not be required to pay for the design, installation or construction of such metering facilities, but such facilities shall be designed, installed or constructed pursuant to the approval of the District, and each of the Cities shall be responsible for payment thereof The District is specifically granted access to such measuring devices, upon reasonable notice to the City or Cities owning the devices, for the purposes of calibrating the devices or otherwise determining their accuracy. If any meters are out of service or out of repair so that the amount of water diverted from the Project cannot be ascertained or computed from the reading thereof, the water delivered through the period such meters are out of service or out of repair shall be estimated and agreed upon by the District and the City or Cities, as appropriate, upon the basis of the best available data, including estimating by mathematical calculation or by estimating the quantity of waters diverted by diversions during preceding periods under similar conditions when the measurement devices were registering accurately. Should the Cities share a Diversion Facility and measuring device, the measure of water taken shall be calculated from such -11- shared device after taking into account the measure of water taken by the Cities with whom the Diversion Facility and device are shared. Section 9. Source and Adeguac_v of Suooly. Water supplied by the District to the Cities under this Agreement shall be water impounded and captured in the District's share of water conserva- tion storage space in the Project, and from no other source The District will use its best efforts to remain in a position to furnish raw water from the District's share of water conservation storage space in the Project consistent with, and under limitations which may be imposed by, the Federal Contract. The right of the District to operate and maintain its interest in the water conservation storage space in the Project in a lawful manner, and consistent with the Federal Contract, is recognized by the Cities, and regardless of other provisions contained in this Agreement, the Cities recognize that the District shall never be required to breach the Federal Contract or to act unlawfully to supply water to the Cities. Section 10. Pledge of Revenue Each City represents and covenants that all payments to be made by it under this Agreement shall constitute reasonable and necessary "operating expenses" of its waterworks and sewer system, as that term is defined in TEX REV. CIV. STAT ANN. art. 1113 (Vernon 1963), and that all such -12- payments shall be made from the revenues of its waterworks and sewer systems. Each City represents and has determined that the water supplies to be obtained from the District's share of water conservation storage space in the Project are absolutely necessary and essential to the operation of its water system, and, accord- ingly, all payments required by this Agreement to be made by such City shall constitute reasonable and necessary operating expenses of its waterworks and sewer system, with the effect that the obligation to make such payments from revenues of such system shall have priority over any obligation to make any payments from such revenues, whether of principal, interest, or otherwise, with respect to bonds hereinafter issued by such City. Each City agrees throughout the term of this Agreement to continuously operate and maintain its waterworks and sewer system, and to fix and collect such rates and charges for water and/or sewer services to be supplied by its waterworks and sewer system so as to produce revenues in an amount equal to at least (i) all payments which such City has agreed to make to the District under this Agreement and (ii) all other amounts as required by the provisions of the ordinances or resolutions authorizing revenue bonds or other obligations of such City now or hereafter outstanding. Section 11. Payments by Cities. For the water supply to be provided to the Cities under this Agreement, the Cities agree to -13- pay the District, at the time and in the manner provided by this Agreement, their proportional shares of the District's Annual Requirement, and each City's proportional share shall equal each City's Annual Payment as calculated under this Agreement. Each City's proportional share of the District's Annual Requirement shall be determined by multiplying the District's Annual Require- ment by a fraction, the numerator of which is the amount of water conservation storage space in the Project for which the District must pay the Government on behalf of such City under the Federal Contract and the denominator of which is the total amount of water conservation storage space in the Project for which the District must pay the Government under the Federal Contract. Each City shall pay its Annual Payment to the District periodically, as necessary, to enable the District to timely pay the Federal Contract Payments and the District's Operation and Maintenance Expenses The Cities' Annual Payments shall be calculated as follows: A. Determination of Annual Requirement On or before the first (1st) day of June, and beginning on or before June It 1990, the District shall furnish each City with an estimated schedule of the Federal Contract Payments and Operation and Maintenance Expenses for the following Annual Payment Period, together with a District budget, approved by the Board of Directors of the District, with supporting budgetary or proposed budgetary data showing the basis for arriving at such schedule and budget The -14- District shall simultaneously supply the Cities with a schedule of the Annual Payments to be made by the Cities for the applicable Annual Payment Period. such schedule shall require each City to pay to the District its proportional share of the Federal Contract payments thirty (30) days prior to the date by which the District must make such payments to the Government and its proportional share of the operation and Maintenance Expenses in approximately equal quarterly installments with each quarterly installment to be paid on the first day of each quarter. Each City shall have thirty (30) days after receipt of said proposed budget to file its comments thereon with the District. After receipt of said comments, the District shall adopt a final budget for said period by September 30 of each year. The Cities shall pay their Annual Payments in accordance with the schedule. At the close of the Annual Payment Period, the District shall determine the actual Operation and Maintenance Expenses for the previous Annual Payment Period, and the allocation of such to each City, and the District shall utilize this determination, in part, for the purpose of establishing the Annual Payment of each City for the upcoming Annual Payment Period. The Annual Payments for any given Annual Payment Period may be re-determined at any time during the year, to the extent deemed necessary by the District. If the Annual Payment is redetermined during the Annual Payment Period, the District will promptly furnish the cities with updated schedules of payments which reflect the redetermination Each City -is- shall have thirty (70) days after receipt of any proposed budget amendments to file its comments thereon with The District. After receipt of said comments, the District shall adopt a revised budget for said period providing for Adjusted Annual Payments by each City. B. Annual Requirement. It is acknowledged and agreed that payments to be made by the Cities to the District under this Agreement will be the sole sources of revenues available to the District to provide the Annual Requirement, and that due to the possible changes in the Federal Contract Payments and Operation and Maintenance Expenses of the District$ the Annual Requirement may change from time to time during the term of this Agreement. It is further acknowledged and agreed that the Annual Requirement for each Annual Payment Period shall at all times be not less than an amount sufficient to pay or provide for the payment of the Federal Contract payments and all operation and Maintenance Expenses of the District C. Reserve Fund. Notwithstanding anything herein to the contrary, it is further provided that during the first ten (10) Annual Payment Periods, each Annual Requirement shall include an amount equal to 1/10th of the average annual payment required under the Federal Contract to be paid by the District to the Government for the District's share of water conservation storage space in the Project, to establish a Reserve Fund equal to one year's average annual payment to the Government for such payments. Such -16- amounts shall be payable in approximately equal quarterly install- ments with each quarterly installment to be paid on the first day of each quarter. Interest earnings on the Reserve Fund shall be credited against each respective City's Annual Payments. The Reserve Fund shall be used by the District solely to prevent a default by it under the Federal Contract and, when appropriate and sufficient, to pay the last remaining amounts due under the Federal Contract. D. Dispute. If a City at any time disputes the amount to be paid by it to District, the City shall nevertheless promptly make the disputed payment or payments, but if it is subsequently determined by agreement or court decision that the disputed amount paid by the City should have been lase, or more, the District shall promptly revise and adjust the City's Annual Payment in a manner that the City, or the District, will recover the amount due. E. Operation and Maintenance Expenses Specifically Allocable to a City. The parties recognize and Area that certain operation and Maintenance Expenses may be incurred by the District for the benefit of one of more, but not all, of the Cities. Notwithstand- ing anything herein to the contrary, the parties agree that in such event, such expenses shall be allocated to, and paid, by, the City or Cities on whose behalf such expenses are incurred. F. Expression of Price as a Cost Per Unit of Measure. If required by the rules of the Texas Water Commission, the District may perform the necessary mathematical computation to express the -17- price for water as previously provided herein as a cost per unit of measure; provided, however, such computation shall not change the cost for water as previously expressed herein, but shall solely be a re-expression of that price for regulatory purposes. Section 12. OwnershiR and Possession and Control. Ownership of the rights to use, and possession and control of, the water to be supplied by virtue of this Agreement shall be in the District up to its diversion by means of Diversion Facilities, at which point ownership of the rights to use, and possession and control of, the water diverted in accordance with the provisions of this Agreement shall pass to the City or its designee. Section 13. Default in Payments. All amounts due and owing to the District by each of the cities, respectively and separately, shall, if not paid when due, bear interest at the maximum lawful rate of interest on prejudgment debts t'h Texas, from the date when due until paid If any amount due and owing by a City to the District is placed with an attorney for collection, such city agrees to pay to the District, in addition to all other payments provided for by this Agreement, including interest, the District's collection expenses, including court costs and attorneys' fees. The District shall, to the extent permitted by law, suspend delivery of water from the Project to any City which remains delinquent in any payments due hereunder for a period of sixty (60) -Is- days, and the District shall not resume delivery of water while such City is so delinquents however, a City's obligation for payment of its Annual Payment shall not be waived or suspended as a result of the suspension of water delivery which may result fro' delinquent payment of amounts due and owing under this Agreement. The District shall pursue all legal remedies against such City to enforce and protect the rights of the District. It is understood that the foregoing provisions are for the benefit of the District's creditors, principally the Government, and for the benefit of the non-defaulting Cities. In the event a default by a City shall remain uncured for a period of ninety (90) days after written notice to the defaulting City, the rights of such defaulting City under this Agreement shall be forfeited, and the remaining Cities shall have the first option at securing the rights of the defaulting City under this Agreement within thirty (30) days after receiving notice from the District of the right to exercise such option,- on a basis which reflects each non-defaulting City's percentage interest in the water purchased under this Agreement, without considering the defaulting City's interest. If either of the non-defaulting Cities fails to fully and timely exercise its option, then the other non-defaulting City shall have an additional option to acquire the remaining portion of the rights of the defaulting city within thirty (30) days after notice from the District of its right to exercise such additional option. If the non-defaulting Cities fail to exercise -19- their options to purchase the defaulting City's rights hereunder in whole or in part, within such time periods, the District shall have the right and the obligation to seek out other purchasers of the rights. However, the Cities recognise and agree that the District has no adequate source of revenue to pay the Federal Contract Payments and operation and Maintenance Expenses allocable to a defaulting City, and until a now purchaser is secured for the defaulting City's interest in the Project, the non-defaulting Cities shall have the obligation to make the payments required herein of the defaulting City to the District. Section 14. Waiver and Amendment. Failure to enforce, or the waiver of any provision of this Agreement, or any breach or nonperformance by the District or the Cities, shall not be deemed a waiver by either the District or the Cities of the right in the future to demand strict compliance with, and performance of, any provision of this Agreement. No waiver or waivers of any breach or default (or any breaches or defaults) by any party hereto or of performance shall be deemed a waiver hereof in the future, nor shall any such waiver or waivers be deemed or construed to be waiver of subsequent breaches or defaults of any kind, characters, or description, under any circumstances. No officer or agent of the District or the Cities is authorized to waive or modify any provision of this Agreement. No modifications to or rescission of -20- this Agreement may be made except by a written document signed by the District's and the Cities' authorized representatives. Section 15. Consent. Aonroval or ot_*_er Action. Whenever this Agreement provides that the consent, approval or other action of any party hereto is required, such consent, approval or other action shall not be unreasonably withheld or delayed. Section 16. Texas Water Commission Rules. The effectiveness of this Agreement is dependent upon the District and the Cities complying with the rules of the Texas Water Commission, specific- ally including 31 TAC 5295.101 and 31 TAC SS297.301-108 as of the effective date of this Agreement. The District will file a signed copy of this Agreement with the Executive Director of the Commis- sion as required by the rules of the Commission. The cities may not divert raw water from the Project unless and until the District notifies the Cities that the District has received written notification from the Commission that a copy of this Agreement has been received by the Commission and accepted for filing The Cities shall submit written reports monthly to the District, on forms provided by the District, indicating the total amount of water diverted under this Agreement for the preceding month. Section 17. Other Requirements. This Agreement is subject to all conditions, provisions, and limitations included in the -21- Federal Contract. Further, this Agreement is subject to all applicable federal, state and local laws and any applicable ordinances, rules, orders and regulations of any local, state or federal governmental authority having jurisdiction including, but not limited to, the ratefixing power of the Texas Water Commission. However, except as otherwise provided in Section 26 of this Agreement, nothing contained in this Agreement shall be construed as a waiver of any right to question or contest any law, ordinance, order, rule or regulation in any forum having jurisdiction. Section IS. Remedies. It is not intended hereby to specify (and this Agreement shall not be considered as specifying) an exclusive remedy for any default, but all such other remedies (other than termination) existing at law or in equity may be availed of by any party hereto and shall be cumulative. Recogniz- ing, however, that the District's undertaking to provide and maintain a supply of water hereunder is an obligation, failure in the performance of which cannot be adequately compensated in money damages alone, the District agrees, in the event of any default on its part, that the Cities shall have available to them the equitable remedies of mandamus and specific performance, in addition to any other legal or equitable remedies (other than termination) which may also be available. -22- Section 19. Indemnity. The cities agree, jointly and severally, to indemnify the District for and/or hold the District harmless from and defend any claim that may arise in connection with the quality, quantity, use, impoundment, transportation or measurement of water, and any claim that may arise as a result of installing, inspecting, adjusting or testing measuring and recording equipment. Section 20. Force Naieure. If for any reason of "force majeure," either the District or a City shall be rendered unable, wholly or in part, to carry out any obligation under this Agree- ment, other than the obligation of a City to make the payments required under the terms of this Agreement, then if the party shall give notice of the reasons in writing to the other parties within a reasonable time after the occurrence of the event or cause relied on, the obligation of the party giving the notice, so far as it is affected by the "force majeure," shall be suspended during the continuance of the inability then claimed, but for no longer period. The term "force majeure" as used in this Agreement shall mean acts of God, strikes, lockouts, or other industrial distur- bances, acts of public enemy, orders or actions of any kind of government of the United States or of the State of Texas, or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, restraints of government and people, -23- civil disturbances, explosions, breakage or accident to dams, machinery, pipelines, or canals or other structures or machinery, partial to entire failure of water supply, and any inability on the part of the District to deliver water, or of a City to receive water, on account of any other cause not reasonably within the control of the party claiming an inability. Regardless of the foregoing, however, a City's obligation to make payments required hereunder to the District shall never be excused by reason of "force majeure." section 21. AssigMent or Sale of Riahts. The Cities understand and agree that neither this Agreement nor any of a City's rights hereunder may be assigned or sold, in whole or in part, without the District's express written consent; provided, however, any city may assign or sell all or any portion of its rights under this Agreement to another City upon giving thirty (30) days prior written notice to the District; and provided further that nothing in this section shall apply to or prevent a sale of water by any of the Cities. Prior to the assignment or sale of a City's rights under this Agreement to an entity other than a City, the City desiring to assign or sell its rights shall grant the other cities a right of first refusal to secure such rights under the same terms and conditions upon which the assigning/sellinq City proposes to assign or sell its rights to another. Upon written notice to the other Cities of a city's intent to assign or sell its -24- rights hereunder, the other cities shall have sixty (60) days to provide a written offer to secure such rights, under the same terms and conditions upon which the assigning/selling city intends to assign or sell its rights, or this right of first refusal is waived. If more than one of the Cities desire to secure the rights a City intends to assign or sell, each such City shall have the right to secure same, on a basis which reflects those Cities' percentage interest in the water purchased under this Agreement, without considering the assigning/selling City's interest. Section 22. Sole Agreement. This Agreement constitutes the sole and only agreement of the District and the Cities, and supersedes any prior understanding or oral or written agreements between the District and the Cities respecting the subject matter of this Agreement. Section 23. Sgverability. The provisions of this Agreement are severable, and if, for any reason, any one or more of the provisions contained in this Agreement shall be held to be invalid, illegal or unenforceable in any respect, the invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement and this Agreement shall remain in effect and be construed as if the invalid, illegal or unenforceable provision had never been contained in the Agreement. -25- Section 24. Authorized Representatives. The authorized representative of the District is the President of its Board of Directors. The authorized representative of each City is its Mayor. Section 25. Notices. All notices, payments and communica- tions ("notices") required or allowed by this Agreement shall be in writing and be given by depositing the notice in the United States mail, postpaid and registered or certified, with return receipt requested, and addressed to the authorized representative of the party to be notified. Notice deposited in the mail in the previously described manner shall be conclusively deemed to be effective from and after the expiration of three (3) days after the notice is deposited in the mail. Notice given in any other manner shall be effective only if and when received by an officer of the authorized representative of the party to be notified. For purposes of notice, the addresses of and"the authorized representa- tive for receipt of notice for each of the parties shall be shown above the signatures of the individuals who signed this Agreement on behalf of the District and the Cities. Any party may change its address or authorized representative by giving written notice of the change to the other parties at least fifteen (15) days before the change becomes effective. -26- SECTION 26. Place of Performance. All amounts due under this Agreement, including, but not limited to, the Annual Payments or damages for the breach of this Agreement, shall be paid or done in Delta County, Texas, and Delta County, Texas is hereby acknowledged and agreed to be the place of performance of the obligations referenced in this Agreement. In the event that any proceeding is brought in state court to enforce this Agreement or any provision hereof, the same shall be brought in Delta County, Texas. SECTION 27. Duplicate Originals. The Cities and the District acting under authority of their respective governing bodies shall authorize the execution of this Agreement by their authorized representatives in four (4) counterparts, each of which shall be an original. EFFECTIVE as of the date signed by all of the authorized representatives. SULPHUR RIVER MUNICIPAL WATER DISTRICT P.O. Box 536 Sulphur Springst Texas 7548 TITLE: DATE• -27- ATTESTs APPROVED AS TO FORM AND LEGALITY- BY: ATTORNEY FOR THE DISTRICT CITY OF COMMERCE 1119 Alamo Commerce, Texas 75428 ~J BY TITLE i' DATE ATTEST. :ITY OF SULPHUR SPRINGS South 125 Davis Sulphur Springs, e a 75482 BY: TITLE DATE 4141 ATTESTt CITY OF COOPER 101 N.W. First Street Cooper, /fTexas 775432 BY: TITLE. 711~wZ DATE: 3 ATTEST: -29- O UPL I CATE Exhibit J TO HE ATTACHED