2002-376O IN CE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS
APPROVING A BENEFICIAL REUSE WATER CONTRACT BY AND BETWEEN THE
CITY OF DENTON, TEXAS AND THE DENTON STATE SCHOOL; PROVIDING FOR THE
CITY MANAGER'S EXECUTION THEREOF; PROVIDING FOR THE EXPENDITURE OF
FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS:
SECTION 1. That the City Manager is hereby authorized to execute a Beneficial Reuse
Water Contract (the "Contract") by and between the City of Denton, Texas and the Denton State
School (acting by and through the Texas Department of Mental Health and Mental Retardation),
in substantially the form of the Contract which is attached hereto and made a part of this
ordinance for all purposes.
SECTION 2. That the expenditure of funds as provided for in said Contract is hereby
authorized.
SECTION 3. That this ordinance shall become effective immediately upon its passage
and approval.
PASSED AND APeROVED this the /q~[[- dayof C'~ff?J-/e~ ,2002.
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
HERBERT L. PROUTY, CITY ATTORNEY
S:\Our Do;ulentsiOrdi~inces\02~ee eficial Reuse Water Contract-DSS 2002.doc
THE STATE OF TEXAS §
COUNTY OF DENTON §
BENEFICIAL REUSE WATER CONTRACT
THIS CONTRACT for beneficial reuse of water is made and entered into on this the
/~/~ day of ~, 2002, by and between the CITY OF DENTON, TEXAS, a
Texas Municipal Corporation, 215 East McKinney Street, Denton, Texas 76201 (hereafter "CITY");
and the DENTON STATE SCHOOL, acting by and through the Texas Department of Mental Health
and Mental Retardation, of P.O. Box 368, Denton, Texas 76202 (hereaRer "PURCHASER").
WITNESSETH
WHEREAS, the PURCHASER has identified a use for treated wastewater effluent, for
beneficial reuse, hereinafter sometimes alternatively referred to as the "recla'uned water," or "reuse
water" in order to maintain its general landscaping at the Denton State School in Denton, Texas and
to be a more viable and cost-effective alternative than purchasing potable irrigation water; and
WHEREAS, the City of Denton, Texas, through its Pecan Creek Water Reclamation Plant,
expects to be able to supply to the PURCHASER treated wastewater effluent, for the purpose of its
reuse; and
WHEREAS, in connection with this Wastewater Effluent Transmission Line Project
("Project") the CITY shall construct a transmission line for the purpose of serving several entities
with treated wastewater effluent, which line extends by and is contiguous to the Denton State School
property, with its South terminus at the Oakmont Country Club in Corinth, Texas; and
WHEREAS, this Project generally involves a water-recycling project, and the quality of
effluent produced from the Pecan Creek Water Reclamation Plant presently meets the highest
standard for effluent reuse (Type I); and
WHEREAS, because this Contract involves the sale of treated wastewater effluent, as
distinguished from treated potable water suitable for human consumption, the ordinances of the City
of Denton, Texas concerning potable water rates do not apply to this Contract; and
WHEREAS, the Texas Natural Resource Conservation Commission (hereafter "TNRCC")
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has adopted the 30 TAC Chapter 210 Rules which regulate the use of reclaimed water, and
WHEREAS, the City of Denton, Texas has incorporated the 30 TAC Chapter 210 Rules in the
"Beneficial Reuse Water User's Handbook;" and
WHEREAS, on the 20~ day of December, 2000, PURCHASER and the CITY entered into a
"Letter of Subscription and Commitment" ("Commitment Letter") providing for PURCHASER'S
purchase of treated wastewater effluent from the CITY; specifying a monthly base payment, as in a
"take or pay" agreement utilized in the water industry, plus a volume rate per thousand gallons of
treated wastewater effluent, over a certain usage level; the Commitment Letter further provided for
delivery of the treated wastewater effluent by the CITY to the PURCHASER'S individual meter
point; made the delivery of treated wastewater effluent not subject to rationing; and provided for the
PURCHASER to increase its minimum monthly base amount of treated wastewater effluent in order
to meet its increased needs; and other relevant provisions; and
WHEREAS, PURCHASER and CITY have entered into that certain Interlocal Agreement
providing for utility easements, a water tank site and the installation of a reuse water irrigation
system on PURCHASER's property (the "Interlocal Agreement"); and
NOW THEREFORE, for and in consideration of the terms and conditions contained herein;
the promises and covenants made herein; the terms and provisions of the Letter of Subscription and
Commitment hereinabove referred to, and the consideration paid and to be paid by the TEXAS
DEPARTMENT OF MENTAL HEALTH AND MENTAL RETARDATION, the owner of the
described Property, hereafter called "PURCHASER", to the City of Denton, Texas, hereafter called
"CITY", the parties do hereby CONTRACT and AGREE as follows:
ARTICLE I.
PURCHASE, TRANSPORTATION AND DELIVERY OF REUSE WATER
§ 1.1 OBLIGATIONS. Purchaser has previously signed a Letter of Commitment and Intent
(hereafter the "Commitment Letter") attached hereto and incorporated herewith by reference as
Exhibit "A". The Letter provides that the PURCHASER will purchase reuse water from the CITY.
PURCHASER hereby agrees to take and pay for the quantity of reuse water that PURCHASER has
2
made a commitment per the Letter, for the purpose of on-site irrigation of the property owned or used
by PURCHASER at the point of delivery hereinafter described in Exhibit "B," attached hereto and
incorporated herewith by reference. If the PURCHASER at any time during the term of this Contract
needs, and can beneficially use reuse water in excess of the volume of re-use water set forth in Exhibit
"A", PURCHASER may request an additional supply of reuse water, which shall be made available
by CITY, in good faith, subject however, to product availability and transmission considerations.
§1.2 DELIVERY OF REUSE.WATER. CITY agrees to deliver, under the limitations and
conditions hereafter set forth in this Contract, the reuse water which PURCHASER needs on a
continuous basis at the delivery/individual meter point shown on Exhibit "B" attached hereto.
PURCHASER shall be responsible for construction and maintenance o fall distribution lines from the
existing CITY reuse lines. PURCHASER shall pay all associated costs for tapping fees, meters,
batching stations, and any other costs incurred by the CITY to provide the reuse water to the
PURCHASER. Each treated wastewater effluent customer of the CITY along the Project, shall have
its own reinforced concrete buried meter station. Title to, possession, and control of the reuse water
shall remain with the CITY until it passes through the PURCHASER'S meter and control valve at the
point or points of delivery as herein described; where title to, possession, and control of the reuse
water shall pass from the CITY to the PURCHASER. The CITY does not guarantee its ability to
furnish any reuse water supplied under this Contract at any particular pressure, but rather the pressure
delivered shall be such pressure as the CITY'S system will render at the PURCHASER'S point of
delivery.
§ 1.3 NO RATIONING OF WATER. The treated wastewater effluent sold by the CITY to
the PURCHASER shall not be subject to rationing during any period of drought, or during any period
of time that the use of potable water is curtailed or otherwise restricted pursuant to any drought
contingency plan, then in rome and effect.
ARTICLE II.
QUALITY AND USE OF REUSE WATER
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§2.1 QUALITY OF REUSE WATER. The quality o f the reuse water to be supplied by CITY to
PURCHASER under this Contract shall meet the quality requirements established in 30 TAC Chapter
210 for "Type I," as they may be amended from time-to-time, which quality requirements are
currently as shown below:
BOD5 or CBOD5 5mg/L
Turbidity 3 NTU
Fecal Coliform 20 CFU/100 ml*
Fecal Coliform 75 CFU/100 ml**
* Geometric mean
** Single grab sample (not to exceed)
The CITY shall perform required sampling and analysis on the reuse water as prescribed by
applicable regulatory agencies.
§2.2 USE OF REUSE WATER BY PURCHASER. PURCHASERSHALLUSETHEWATER
RECEIVED BY AND UNDER THIS CONTRACT FOR ON-SITE IRRIGATION PURPOSES
ONLY AND IN COMPLIANCE WITH ALL REQUIREMENTS OF 30 TAC CHAPTER 210.22,
210.23 AND 210.24. "On-site irrigation" refers to the use of water for maintenance and
beautification of the landscaping and facilities of the PURCHASER. THE REUSE WATER
SUPPLIED UNDER THIS CONTRACT IS NOT SUITABLE FOR HUMAN CONSUMPTION
AND SHALL NOT BE USED BY PURCHASER OR ANY THIRD PARTY FOR ORDINARY
DOMESTIC USE. PURCHASER shall take all necessary precautions to prevent consumption of the
subject reuse water by its employees or other persons, including the posting o fwaming signs in both
English and Spanish, in large and conspicuous printed letters at least four (4") inches high, at all
places where employees or other persons are likely to have access to the reuse water. The actual
establishment, maintenance, and enforcement of such safety precautions shall be under the exclusive
dominion and control of PURCHASER. PURCHASER assumes full legal responsibility for any and
all damages resulting from human consumption of the subject reuse water after it reaches the
PURCHASER'S point of delivery. PROVIDED HOWEVER, PURCHASER does not hereby waive
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any defense that may be available under the laws and the Constitution of the State of Texas, or
otherwise, in the event of any suit or action brought against it by any third-party for damages.
§2.3 USE OF REUSE WATER BY THIRD PARTIES. PURCHASER shall not sell, trade,
exchange, donate, or otherwise transfer the reuse water provided by this Contract to any third party,
and shall not permit or allow the reuse water to be used in any manner by any third parties.
§2.4 COMMINGLING OF REUSE WATER. PURCHASER shall construct or cause to be
constructed supply lines such that it is not possible for any reuse water supplied to PURCHASER
trader this Contract from PURCHASER to re-enter any potable water system. However, this shall not
prevent the commingling in water storage facilities of PURCHASER'S reuse water with other water
obtained by PURCHASER from another system or source for irrigation purposes. All such
commingling shall be subject, however, to applicable City of Denton regulations and ordinances, or
those of other governmental agencies governing the use of reuse water.
§2.5 DISCHARGE OF REUSE WATER PURCHASER shall not cause or permit the
discharge of reuse water off-site, either airborne or by surface runoff, unless permitted by the
TNRCC.
§2.6 EXCESS AMOUNTS OF REUSE WATER Excess reusewater, if any, must beretumed
by PURCHASER to the CITY's waste collection system.
§2.7 DRIFT OR SPRAY OF REUSE WATER PURCHASER shall not use reuse water in any
manner where the result would be any drift or spray to areas where the general public would be
exposed.
§2.8 WET GRASS CONDITIONS. PURCHASER shall applyreuse water in suchmanner as
to minimize wet grass conditions in unrestricted landscaped areas during the periods that the area
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should be in use.
§2.9 EFFECT ON GROUND WATER. PURCHASER shall utilize reuse water in a manner
that does not threaten or adversely affect ground water.
§2. I 0 CONDITION OF SOIL. PURCHASER shall not apply any reuse water to the ground
when the ground is either saturated or frozen.
§2.11 NUISANCE. PURCHASER shall be solely responsible for the prompt clean-up of any
nuisance conditions that exist on PURCHASER'S real property, which result from storage or the use
of reuse water received from the CITY.
§2.12 BENEFICIAL REUSE WATER USERS' HANDBOOK. PURCHASER confirms its
receipt of the "Beneficial Reuse Water Users' Handbook" (hereafter the "Handbook") published by
the City of Denton, Wastewater Utilities, and which Handbook was approved by the City of Denton
Public Utilities Board on the 7~' day of January, 2002. The CITY confirms that it will promptly issue
PURCHASER a copy of any new or amended Handbook that it may issue in the future.
PURCHASER is fully responsible for knowing the contents of the Handbook and fully complying
with it.
§2.13 RESPONSIBILITY OF THE PARTIES. CITY shallnot be responsible, nor liable for any
contamination of the reuse water or the inappropriate use or application of the reuse water supplied
under this Contract after it passes through the PURCHASER'S described point of delivery (Exhibit
"B" hereto). PURCHASER shall fully and absolutely indemnify the CITY, to the extent provided for
and allowed by law, for any and all damages and claims for damages arising from any contamination
of the reuse water supplied under this Contract after it passes through the PURCHASER'S point of
delivery; except regarding any damages resulting from the CITY'S failure to deliver the quality of
reuse water required by State law and by the terms and conditions of this Contract.
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ARTICLE III.
RATE AND METERING
§3.1 RATE CHARGED FOR REUSE WATER. The rate for reuse water based on the
Commitment Letter (Exhibit "A"), for a period of five (5) years from the effective date of this
Contract shall be two-fold:
(A) A monthly base charge of $700.00 per month, which covers up to 518,000 gallons of treated
wastewater effluent. This monthly base rate provision is similar to a "take or pay" provision used in
the water industry. The monthly base charge shall be due and payable by PURCHASER for each and
every month that the Contract is in effect, whether or not PURCHASER has utilized any treated
wastewater effluent for that month or not. There shall also be no carryover of surplus wastewater
effluent from year to year, based on the fiscal year October 1 through September 30 (the "Fiscal
Year"). However, the monthly 518,000 gallon usage may be carried over within the fiscal year so
long as the total gallon usage for any given month does not exceed 1,000,000 gallons and the total
gallon usage for the Fiscal Year does not exceed 6,216,000 gallons. Usage in excess of these limits
shall be billed at the rate specified in §3.1 (B).
(B) If applicable, a volume rate of $1.35 per thousand gallons of treated wastewater effluent, plus
a facility charge of $16.20, per monthly billing period in which the volume rate is applied.
§3.2 RATES AFTER F1VE YEARS. After five (5) years from the effective date of this
Contract, these rates may be adjusted annually by the CITY, on each October 1. The revised rates, if
any, will be based on water reclamation plant operation and maintenance and non-operating expenses
and wastewater treatment volumes from the most recently completed fiscal year. PROVIDED
HOWEVER, because of special considerations provided to the CITY by PURCHASER, the parties
agree that the applicable rate to be charged to PURCHASER after five (5) years from the effective
date of this Contract, shall not exceed fifty (50%) pement of the potable water rate for the City of
Denton, Texas.
§3.3 METERING.
CITY shall operate, maintain and read the muse meter/meters and shall bill
7
PURCHASER monthly based on such meter reading. If for any mason the meter shall fail to register
for any period, PURCHASER shall be billed for the amount of reuse water delivered for the
corresponding month of the year immediately preceding the failure, if such record is available. If
these records are not available, CITY shall reasonably estimate the amount of the consumption during
the period in question and bill PURCHASER on the basis of such estimate. In determining the
estimate of PURCHASER' S consumption, CITY shall average the applicable month for the past three
years. If there is not a three-year history, the CITY shall consider as a factor thc rain or drought
conditions for the applicable period. Further PURCHASER agrees that it shall not in any manner
interfere, tamper, or attempt to do anything with regard to the operation or functioning of such
meter/meters.
§ 3.4. PURCHASER'S OPTION. Purchaser may increase its minimum monthly base amount of
treated wastewater effluent purchased during the term of this Contract in order to meet its increased
needs by notifying the CITY, in writing, who will then determine a new monthly minimum monthly
base charge in light of the increase of the monthly base amount of treated wastewater effluent
purchased. The CITY shall be obligated to increase such monthly minimum base amount, subject
only to the condition that the CITY must be able to transport the increased volume of treated
wastewater effluent to PURCHASER through the existing treated wastewater effluent transmission
line.
ARTICLE IV.
TERM
§4.1 TERM AND RENEWAL OF CONTRACT. This Contract shall be for a termbeginning
with the effective date, and ending five (5) years after that date. This Contract may be renewed for
subsequent ten (10) year periods with the concurrence of both parties. Such extensions will be
permitted for the twenty (20) year period of the Water Easement provided for in the Site Contract.
The Purchaser shall provide written notice to the City at least six months in advance of expiration of
the Contract that the Purchaser desires to renew this Contract.
8
§4.2 EFFECTIVE DATE. This Contract shall be effective as of the date when all of the
following have been satisfied:
(A) PURCHASER'S and CITY'S execution of this Contract; and
(B) CITY has connected its treated wastewater effluent transmission line to the
PURCHASER'S delivery point and the same is operational; and
(C) CITY'S issuance of a written "Notice to Proceed" to PURCHASER.
§4.3 TERMINATION OF CONTRACT. This Contract shall be terminated if either party is
prevented from fulfilling an obligation under this Contract by any final judgment of a court of
competent jurisdiction, legislation, or other force majeure. PURCHASER may terminate the Contract
if PURCHASER is of the opinion that the reuse water quality is such as to prevent the PURCHASER
from using it for the purpose of irrigation. In that event, PURCHASER shall provide the CITY at
least sixty (60) days written notice of its intention to terminate the Contract. CITY may terminate this
Contract if monies required to be paid by PURCHASER pursuant to this Contract are not paid within
thirty (30) days of written notification issued by the CITY to PURCHASER at PURCHASER'S
billing address according to the CITY'S records. Either party may terminate this Contract upon the
failure of the other party to abide by the provisions of this Contract and to cure the alleged default,
after being provided thirty (30) days written notice to do so by the other party. This Contract also
may be terminated by the mutual agreement of PURCHASER and CITY.
ARTICLE V.
FACILITIES
§5.1 ON-SITE FACILITiES. PURCHASER shall construct and pay for all necessary facilities
to deliver, store, use and discharge or dispose of the reuse water from the point of delivery onto
Purchaser's property, until such re-use water is used, discharged, or disposed of, which facilities shall
be described for purposes of this Contract, as on-site facilities. Design and construction must meet
criteria established by CITY regulation and ordinance as well as those established by 30 TAC §210.
§5.2 SECURITY OF PURCHASER'S SERVICE SYSTEM. PURCHASER'S service system
shall be installed by PURCHASER so as to prevent operation by unauthorized personnel pursuant to
30 TAC §210.25.
§5.3 REQUIRED PIPING. PURCHASER shall use an existing separate non-potable, or shall
design and construct a separate non-potable water distribution system in compliance with 30 TAC
§210.25 and any other applicable local and state regulations.
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§5.4 STORAGE PURCHASER shall comply with storage as required by 30 TAC §210.23
and any other applicable local and state requirements.
§5.5 TAILWATER WATER CONTROLS. PURCHASER shall construct any required tailwater
water controls, as required by applicable local and state regulations.
§5.6 COST OF PURCHASER'S ON-SITE FACILITIES. PURCHASERshallhavefitleandbear
all responsibilities including the costs o f installing, operating, maintaining, pelmitting, hcensing, and
repairing any and all of PURCHASER'S on-site facilities, other than those facilities owned by the
CITY, unless provided for by other mechanisms.
§5.7 ACCESS TO PURCHASER'S PROPERTY. PURCHASER shall allow the CITY 24-
hour access onto PURCHASER'S property (only that property which is the subject of this Contract)
as necessary to operate, maintain, and inspect facilities owned by the CITY.
§5.8 THE DENTON STATE SCHOOL ELEVATED WATER STORAGE TOWER. Asapartof
the bargained for consideration provided for herein, PURCHASER agrees to convey to the CITY the
sole and exclusive right of use and benefit, in the form of an easement or other form of conveyance,
permitting the CITY's possession of the Elevated Water Storage Tower on-site for its treated
wastewater effluent operations. PURCHASER further agrees that once the CITY has discontinued its
usage of the Elevated Water Storage Tower for its effluent operations, that CITY, at CITY's sole cost,
will notify PURCHSAER and will be solely responsible for removing the Elevated Water Storage
Tower from PURCHASER's premises in a safe and prudent manner.
ARTICLE VI.
GENERAL PROVISIONS
§6.1 GOVERNING LAW; VENUE; LEGAL CONSTRUCTION. This Contract shall be
governed by and construed in accordance with the laws of the State of Texas. The obligations of the
11
parties to this Contract are performable in Denton County, Texas, and if legal action is necessary to
enforce same, exclusive venue shall lie in Denton County, Texas. In case any one or more of the
provisions contained in this Contract shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other
provision of this Contract, and this Contract shall be considered as if such invalid, illegal, or
unenforceable provision had never been contained in this Contract.
§6.2 ASSIGNMENT OF CONTRACT.
written consent of the other party.
This Contract cannot be assigned without the prior
§6.3 COMPLIANCE WITH APPLICABLE LAWS. This Contract is subject to all legal
requirements of the City Charter of the City of Denton, Texas, the Denton Code of Ordinances, and
other laws and regulations both state and federal; and PURCHASER agrees that it will promptly
comply with all applicable laws, regulations, orders, and roles of the Federal, State, County, City, and
all other applicable governmental agencies. Specifically, PURCHASER will comply with all
provisions of 30 TAC §210 as it is currently adopted or as it may be hereafter amended. These
regulations are included in the above-referenced "Beneficial Reuse Water Handbook."
§6.4 FORCE MAJEURE. Neither CITY nor PURCHASER shall be required to perform any
term, condition, or covenant in this Contract, so long as such performance is delayed or prevented by
force majeure, which shall mean acts of God, civil riots, floods, and any other cause, not reasonably
within the control of CITY and/or PURCHASER and which by the exercise of due diligence, CITY or
PURCHASER is unable, wholly or in part, to prevent or overcome.
§6.5 ENTIRE AGREEMENT. This Contract embodies the complete agreement of the parties
hereto, superseding any and all oral or written previous and contemporary contracts or agreements
between the parties and relating to matters contained in this Contract, except as otherwise provided
herein. This Contract may not be modified without the written agreement of both parties hereto.
12
§6.6 HOLD HARMLESS. PURCHASER, only to the extent allowed by applicable law,
agrees to protect, defend, and save the CITY, its representatives, officers, agents, employees, and
attorneys harmless from and against any and all claims, demands, and causes of action of every kind
and character, losses, costs, expenses, attorney's fees, and damages of every kind and character, for
injury to, or death of any person or damage to any property arising out of or in connection with the
construction, use, storage, maintenance, disposal, or discharge of reuse water of or from
PURCHASER'S on-site facilities. Also, this provision shall not apply if any claim arises and is
proximately caused by the CITY'S failure to deliver the quality of reuse water required by State law,
and by the provisions of this Contract. The provisions of this Subsection 6.6 shall not apply to any
liability resulting from the sole negligence of CITY, its representatives, officers, agents, employees,
or attorneys.
§6.7. HOLD HARMLESS GOVERNMENT REGULATION. In its performance of this
Contract, PURCHASER shall comply with all applicable federal, state, and local laws or regulations
related to the use or reuse of reuse water, or the environment, and will hold the CITY, its
representatives, officers, agents, employees, and attorneys harmless from and against any and all
claims, demands, suits, causes of action, losses, damages, costs, attorney's fees, and expenses arising
out of any noncompliance violation or alleged noncompliance violation by PURCHASER of any such
laws; PROVIDED HOWEVER, only to the extent provided by applicable law.
§6.8 REMEDIES. In the event that CITY is unable in good faith to comply with the delivery
of reuse water requirements to PURCHASER in this Contract, then PURCHASER'S sole remedy
shall be to take CITY potable water and to pay for the potable water so taken at the rates established
for the potable water used less a discount of $23.00 dollars per day for any 24-hour period in which
the CITY is unable to deliver reuse water. The exercise of this remedy by PURCHASER shall
require ten (10) days prior written notice by PURCHASER to the CITY. The CITY shall give
PURCHASER ten (10) days prior written notice of its inability to comply with the reuse water
13
requirements for foreseeable events and 24 hour notice for emergencies.
§6.9 REQUIRED PERMITS AND LICENSES. The parties shall each maintain in effect
during the term of this Contract, any and all federal, state, and/or local licenses and permits which
may be required of parties generally regarding the subject of reuse water.
§6.10 REQUIRED RECORDS. Both CITY and PURCHASER shall maintain such records as
are required by state regulations and shall notify the TNRCC in writing within five (5) days of
obtaining knowledge of reuse water use not specified and approved by the Executive Director of the
TNRCC.
§6.11 POLICE POWERS NOT AFFECTED. This provision does not affect the police powers
of the CITY of Denton, Texas or of any other governmental agency.
§6.12 BINDING EFFECT ON SUCCESSORS AND ASSIGNS. This Contractshallbebinding
upon and shall inure to the benefit of the parties hereto and their respective heirs, executors,
administrators, successors, and their assigns.
§6.13 CAPTIONS ANDCOUNTERPARTS. The captions to the various Articles and
Subsections of this Contract are for informational purposes only and shall in no way alter the
substance or meaning of the terms and conditions of this Contract. This Contract shall be executed in
duplicate original counterparts, each of which shall be deemed an original and constitute one and the
same instrument.
EXECUTED by the City of Denton, Texas ("CITY") and the DENTON STATE SCHOOL, acting by
and through the Texas Department of Mental Health and Mental Retardation (hereafter the
PURCHASER) acting by and through their respective duly authorized and empowered officers and
representatives, on this the/q~ day of ~~ ,2002.
14
"CITY"
CITY OF DENTON, TEXAS
A Texas Municipal Corporation
~IICI-IAEI5 CO'~DL~F, C~6f~anager
ATTEST:
JENNIFER WALTERS, CITY SECRETARY:
HERBERT L. PROUTY, CITY ATTORNEY
"PURCHASER"
DENTON STATE SCHOOL
Acting By and Through the Texas
Dept. of Mental Health and Mental Retardation
ATTEST
Karen F. Hale
Commissioner
APPROVED AS TO LEGAL FORM:
S:\Our Documents\Contracts\02~B'~neficial s~e Water Contract
Denton State School-MHMR(3).doe
15
EXHIBIT A
215 E. McKINNEY DENTON, TX 76201 · (940) 349-8230 · FAX (940)
349-8120
UTILITY ADMINISTRATION
December 15, 2000
Shirley Musgrave
Assistant Superintendent of Administration
Denton State School
3980 State School Road
Denton, Texas 76210
Re:
Utilities
Letter of Subscription and Commih':acnt
Purchase of Treated Wastewater Effluent from Denton Municipal
Wastewater Effluent Transmission Line Project
Dear Ms. Musgrave:
The purpose of this letter is to memorialize and secure Denton State School's
("Cu~tum~L') wLitten subscription and l'irm co~mnitment to participate as a customer o1'
Denton Municipal Utilities ("City") to purchase treatment wastewater effluent from the
City's Pecan Creek Water Reclamation Plant ("Plant"), in connection with the
Wastewater Effluent Transmission Line Project extending Southerly from the Plant
along Mayhill Road, and along State School Road, with its terminus at Oakmont Country
Club, in Corinth, Texas ("Project").
Generally speaking, the Project is a water-recycling project. The effluent quality
from the City's Plant meets the highest standard l'or effluent reuse (Type I). The City
intends to offer the sale of wastewater effluent from the Project as a viable and more
cost-effective alternative than some of its customers purchasing irrigation water.
The wastewater effluent transmission line ("line") will be approximately 13,600
linear feet in length, and consists of 18" diameter, and a small amount of 8" diameter
"Dedicated to Quality Service"
www. cityof denton, cum
PVC line. Each treated wastewater effluent customer of the City along the line will have
its own reinforced concrete buried meter station. The City's estimated cost to construct
and install the Project is $1.6 million.
The Cit3,, after careful analysis, has determined that the concentration of potential
treated wastewater effluent customers in the area of your business makes the
construction and installation of a wastewater effluent transmission line economically
viable. The Denton Public Utilities Board ("PUB") has indicated its support for the
general concept of the Project, but has expressed a concern regarding the City's ability to
recover its costs to be expended on the Project over a reasonable period of time.
Accordingly, in order for the City to proceed and move forward with this Project and in
order to justify thc expenditure of funds on this Project, City Staff has been instructed to
obtain firm written letters of subscription and commitment from the four targeted
potential wastewater effluent customers along the proposed route of the line in order to
justify the City's financial commitment to the Project. These four customers are:
Oakmont Country Club, Denton State School, Denton Regional Medical Center, and the
Professional Office Building. City Staff expects that before final approval of this
Projcct is sought from thc PUB and thc Denton City Coancil, that letters of subscription
and commitment will have to be obtained from all four of the targeted customers
ideutified above.
The basic concepts and general terms of the final separate Agreement to be
entered into by and between the Ci.ty and Customer in the near future are as follows:
1. The City requires a commitment from Customer to pay at a minimum, a monthly
base charge of $700.00/month with access to 518,000 thousand ga!!ens.~manth of treated
wastewater effluent for a minimum term of five years. The final Agreement shall be
drafted so that this provision is similar to a "take-or-pay" agreement used in the water
industry. The monthly base charge shall be due and payable by Customer for each and
every month that the Agreement is in effect, whether or not Customer has utilized any
effluent or not for that month. There shall be no carryover of surplus effluent from year
to year-based on fiscal year October 1 through September 30.
2. Thc Customer may increase its minimum monthly base amount of treated
wastewater effluent purchased during the term of the Agreement in order to meet its
increased needs by notifying the City, who will then determine a new monthly minimum
monthly base charge in light of the increase of the monthly base amount of effluent
purchased. The City shall be obligated to increase such monthly minimum base amount,
subject only to the condition that the City must be able to transport the increased volume
of effluent to Customer through the line.
3. The treated wastewater effluent sold by the City to Customer shall not be subject
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to rationing during any period of drought, or during any period of time that the use of
water is curtailed or otherwise restricted pursuant to any droughf contingency plan, then
in force and effect.
4. The treated wastewater effluent shall be delivered by the line by the City to
Customer's individual meter point.
5. The City reasonably projects that the Project will be substantially complete and
that it will be able to transport and sell treated wastewater effluent to Customer by June
2001. in the absence of any catastrophe, force majeure, or problems with easement
acquisitions.
By signing this letter of subscription and commitment, you are stating your
intention to subscribe as a City treated wastewater effluent purchaser under the above
basic terms and provisions. The City will rely on your commitment remaining firm, and
will expect you to enter into a final, more detailed Agreement encompassing all terms,
conditions, and covenants, at a time in the near future; all subject to the approval of the
PUB and the final approval of the Denton City Council.
We appreciate you interest and your desire to participate in this Project. The City
Staff looks forward to working with you on the Project and serving your treated
wastewater effluent needs.
Please contact me at the above address or telephone number if you have any
questions.
Sincerely,
Howard Martin
Assistant City Manager/Utilities
HM/msc
"Dedicated to Quality Service"
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APPROVED AND AGREED:
Deuton State School
Shirley ~usgr~e
Assistant Superintendent of Administration
Dated: /Z./Z£~ 0
Pat Martin
Director of Central Contract and
Procurement Support
Dated:
Max Harelik
Energy Management Specialist
Dated:
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