2002-104ORDIN CE NO.
AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING A
WHOLESALE WASTEWATER TREATMENT SERVICES CONTRACT BETWEEN
THE CITY OF DENTON, TEXAS AND THE CITY OF KRUM, TEXAS; WHEREIN
DENTON AGREES TO PROVIDE WHOLESALE WASTEWATER TREATMENT
SERVICES TO KRUM; AUTHORIZING THE CITY MANAGER TO EXECUTE
SAID CONTRACT; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR;
AND PROVIDING AN EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. That the City Manager is hereby authorized to execute on behalf of
the City, a Wholesale Wastewater Treatment Services Contract between the City of
Denton, Texas and Kmm, Texas for wholesale wastewater treatment services to Krum,
substantially in accordance with the Contract which is attached hereto and incorporated
by reference herein.
SECTION2. That the expenditure of rinds as set forth in the Contract
Agreement is hereby authorized.
SECTION 3. That this ordinance shall become effective immediately upon its
passage and approval.
PASSED AND APPROVED this the ~ day of Ct~(2/~42.~ ,2002.
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APP D AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
S:\Our Documents\Ordinances\02\Wholesale Wastewater Treatment Contract-Krum-2002.doc
STATE OF TEXAS §
COUNTY OF DENTON §
WHOLESALE WASTEWATER TREATMENT SERVICES CONTRACT
BETWEEN THE CITIES OF DENTON AND KRUM~ TEXAS
THIS AGREEMENT made this ~ -~fday of ,4~,9£/' l , 2002, by and between the
City of Denton, Texas, a Municipal Corporation, acting herein by and through its City Manager,
hereinafter referred to as "Denton"; and the City of Krum, Texas, a Municipal Corporation,
acting herein by and through its Mayor, hereinafter referred to as "Krum"; and
WHEREAS, Denton owns and operates a wastewater collection, treatment, and disposal system
in Denton County, Texas, and of their respective systems, both the City of Denton and the City
of Kmm desire to avoid the duplication of services through coordination of the collection,
treatment, and reclamation of wastewater; and
WHEREAS, Denton and Krum desire to enter into a Contract for Denton to treat wastewater on
a wholesale basis for Krum; and
WHEREAS, the public health, welfare, and safety of the residents of Denton and Knnn require
the development of adequate systems of sewage collection and disposal; the elimination of water
pollution; and the preservation of the water resources of the area; and
WHEREAS, Denton and Krum are required to comply with standards and treatment methods for
wastewater as set forth in federal, state and local, laws, regulations and permits; and
WHEREAS, Denton and Krum have an interest in maintaining and restoring the chemical,
physical, and biological integrity of waters and water resources, especially those being used by
Denton and Krum; and insuring tl/e reduction of pollution in said waters and water resources;
and planning the use, development, restoration, preservation and enhancement of said waters and
water resources; and
WHEREAS, Krum desires to contract for wastewater treatment service On behalf of Customers
of Krum; and Denton desires to provide regional wastewater treatment service on a wholesale
basis to ICrum; and
WHEREAS, the enabling statute of the City of Kmm authorizes Denton and Knun to enter into
this Contract; and
NOW, THERFORE, Denton and Kmm, in consideration of the terms, covenants, and
conditions herein contained, do hereby AGREE as follows:
CONTRACT
Adoption of Preamble. All matters stated in the Preamble of this Contract are true and
correct, and are hereby incorporated into the body of this Contract as though fully set forth in
their entirety herein.
1.0 Def'mitions. When used in this Contract, these terms shall be defined as follows:
1.01 Act or "the Act". The Federal Water Pollution Control Act, also known as the Clean
Water Act ("CWA"), as amended (33 U.S.C. 1251, et seq.).
1.02 Biochemical Oxygen Demand (BOD). The quantity of oxygen utilized in the
biochemical oxidation of organic matter specified by procedure in Standard Methods, and results
expressed in terms of weight and concentration [milligrams per liter (mg/1)].
1.03 Calibration.. Verification of meter accuracy utilizing standard primary device
procedures and calibration signals and/or a separate flow measurement instrument.
1.04 Capital Improvements. Any of the following facilities which provide utility
services and benefits common to all wholesale and retail Customers, and that have a life
expectancy of one or more years located within the jurisdictional limits of Denton or the City of
Krum: wastewater treatment facilities; metering and sampling facilities; control systems;
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appurtenances; all major collectors and interceptors that are twelve inches (12") and greater in
diameter; and lift stations associated therewith.
1.05 Categorical IndustrialUser(CIU). An industrial user that is subject to
Categorical Pretreatment Standards according to 40 CFR Section 403.6 and 40 CFR Chapter I,
subchapter N, which are technology-based standards developed by EPA setting industry-specific
effluent limits.
1.06 Krum. Depending upon the context, this may refer to the City of Krum, or to
Krum's Customer, or other Customers of Krum being provided service pursuant to this Contract.
1.07 Krum Systems. The facilities of Krum used for pretreatment, collection, and
transportation of Wastewater to the Points of Entry into Denton's System.
1.08 Delivery. Facilities. All facilities necessary for the transmission of Wastewater from
the City of Krum System to the Denton System, that are on the City of Krum's side of the Point
of Entry which are constructed specifically to allow Denton to serve Krum.
1.09 Director. The Denton Water/Wastewater Utilities Director or the designee.
1.10 Direct Cost. Costs directly assignable to the wholesale customer, Krum.
1.11 Domestic Accounts. Single family and residential duplex dwellings served by
one water meter. This definition is used only in the context of determining billing on a per-
connection basis.
1.12 Denton Expense. Expenses incurred by Denton related to wholesale wastewater
service, such expenses to be allocated as a System Cost in future cost-of-service studies.
1.13 Denton System. Denton's wastewater collection and treatment system, including
the Point of Entry provided for herein.
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1.14 Krum Representative. Mayor of the City of Krum or designee.
1.15 Facility Expansion. The expansion of the capacity of an existing facility that serves the
same function as an othenvise necessary new Capital Improvement, in order that the existing
facility may serve new or expanded development. The term does not include the repair,
maintenance, modernization, or an expansion of an existing facility to better serve existing
development.
1.16 General Benefit Capital Facilities. Wastewater facilities that provide utility services
and benefits common to both Denton retail and Denton wholesale Customers, including
wastewater treatment facilities, metering and sampling facilities, control systems and
appurtenances, and all collectors and interceptors that are twelve inches (12") and greater in
diameter.
1.17 Indirect Discharge. The discharge or the introduction of industrial wastes from any
source regnlated under Section 307Co) or (c) of the Act (33 U.S.C. 1317), into the Denton System
(including holding tank waste discharged into the system).
1.18 IndustrialUser. A source of Indirect Discharge, which does not constitute a
"discharge of pollutants" under regulations, issued pursuant to Section 402, of the Act (33 U.S.C.
1342).
1.19 Industrial Wastes. All water-borne solids, liquids or gaseous substances resulting
from industrial, manufacturing or food processing operations; or from the development of a
natural resource; or any mixture of these with water or domestic sewage.
1.20.1 Inffitration. Water that has migrated from the ground into the wastewater system.
1.21 Inflow. Water, other than wastewater that enters a sewerage system (including
sewer service connections) from sources such as, but not limited to: roof drains, cellar drains,
yard drains, area drains, drains from springs and swampy areas, manhole covers, cross
connections between storm sewers and sanitary catch basins, cooling towers, storm waters,
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surface runoff, street wash waters or drainage. Inflow does not include, and is distinguished
from infiltration water.
1.22 Liquid Waste. The water-borne solids, liquids, and gaseous substances derived
from certain sources including, but not limited to: a grease trap, septic tank, chemical toilet
waste, and sand trap waste.
1.23 Metering and SamplingFacility. The meter, meter vault, and all metering and
telemetry equipment required to measure and/or sample wastewater flows of the City of Krum at
the Point of Entry(s) or into Denton's System.
1.24 Non-domestic Account. Commercial, industrial, multifamily or other accounts that
are not considered Domestic Accounts. This definition is used only in the context of determining
billing on a per-connection basis.
1.25 Non-MeteredArea. Areas within the City of Krum's boundaries that generate
wastewater that do not drain into a part of the City of Krum system for which wastewater flow is
measured by an approved metering and sampling facility.
1.26 Non-Categorical Industrial User (/U). Any non-domestic Industrial User, other
than a CIU, which introduces Wastewater into a publicly-owned treatment works (POTW).
1.27 Point of Entry.
System.
The metering facility; the point of connection to the Denton
1.28 Pretreatment.. The 'reduction of the amount of pollutants, the elimination of
pollutants, or the alteration of the nature of pollutant properties in wastewater to a less harmful
state prior to or in lieu of discharging or otherwise introducing such pollutants into a Publicly
Owned Treatment Works. Physical, chemical or biological processes can obtain the reduction or
alteration, or process changes by other means, except as prohibited by 40 CFR Section 403.6(d).
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1.29 PretreatmentRequirements. Pollutant concentration discharge limitation and
reporting requirements stipulated in Denton's Sewer Use Ordinance No. 93-112 and any
amendments thereto, Krum's ordinance, and Federal Pretreatment Standards promulgated by the
U.S. Environmental Protection Agency.
1.30 Significant Industrial User (SIU). Any industry, which discharges industrial wastes,
directly or indirectly into the City of Krum's System and/or Denton's System:
Discharges 25,000 gallons per day or more of regulated industrial wastewater.
Is subject to the National Pretreatment Standards or Categorical Standards of the U.S.
Environmental Protection Agency; or,
Has a reasonable potential, in the opinion of the Director, to adversely affect the Denton
System due to discharge of wastewater with abnormally high strength or containing
limited or prohibited substances.
1.31 Standard Methods. Those testing or analysis procedures as prescribed in the current
edition of "Standard Methods for Examination of Water and Wastewater," published by the
American Public Health Association and/or the U.S. Environmental Protection Agency "Manual
of Methodologies for the Examination of Water and Wastewater;" or will otherwise comply with
procedures specified in state and federal discharge permits held by Denton.
1.32 System Costs. Operating expenses and capital related costs incurred by Denton in
the provision of wastewater collection and treatment service to the wholesale class of wastewater
customers. Such costs are to be specifically identified by Denton as a component of the annual
cost of providing wholesale wastewater treatment service.
1.33 Total Suspended Solids (TSS). Solids, measured in mg/1, that either float on the
surface of, or are in suspension in, water, wastewater or other liquids, and which are largely
removable by a laboratory filtration device.
1.34 Wastewater. All liquid or water-carded waste products from whatever source derived,
whether treated or untreated, which are discharged into or permitted to enter into the Denton
System. The words "wastewater" and "sewage" are interchangeable.
1.35 Wastewater System Impact Fee. A capital contribution or recouping of the costs of
General Benefit facilities, capital improvements or Facility Expansion necessitated by and
attributable to new growth and development, and/or expanded growth and development of
existing Customers.
2.0 Connection to the Denton System.
2.1 Denton hereby grants to Kmm, upon compliance with the terms and conditions contained
herein, permission to connect Krum Systems to the Denton System. The City of Krum shall
deliver and discharge wastewater into the Denton System; and, Denton shall transport, treat, and
dispose of the wastewater received from the City of Krum, in accordance with this Contract,
unless the Parties otherwise agree in writing. The City of Krum shall provide all lines, metering
station(s), lift stations, and associated facilities and shall acquire ail property, interests, licenses,
and permits that are necessary to collect and transport Wastewater from the City of Krum to the
Denton System.
2.2 It shall be the sole responsibility of the City of Krum to convey and deliver the
Wastewater to the Point or Points of Entry approved by Denton and designated in Exhibit I.
Denton agrees to accept all Wastewater from Kmm at the Point(s) of Entry as designated on
Exhibit I, attached hereto and incorporated herein; and at such additional Points of Entry as may
later be mutually agreed upon by the Director for Denton and the Krum Representative. A Point
of Entry may be changed, or additional Points of Entry added upon mutual agreement, signed by
an authorized representative of each Party. The City of Krum shall pay for Denton's reasonable
operational and administrative costs incurred due to any change in the location of a Point of
Entry, if the change was requested by the City of Krum, or necessitated by the City of Kmm
discharge characteristics. Provided however, that if such change is necessitated by Krum's
discharge characteristics, Denton shall notify Krum of such need by providing written notice to
Krum at least sixty- (60) days prior to taking any action on such relocation. The notice shall
specify the total cost for which the City of Krum shall be responsible.
2.3 The cost of all Delivery Facilities necessary to convey Wastewater to the designated
Points of Entry, whether shown on Exhibit I, or mutually agreed upon at a later date, together
with the cost of connection of the City of Krum System to the Denton System including the
metering and sampling facilities, shall be borne by the City of Krmn in accordance with the
Interlocal Cooperation Agreement for construction of the Krum Line.
2.4 Unless mutually agreed to in writing by Denton and Krum, Krum shall be responsible for
the design, contracting, construction and financing of Delivery Facilities and acquisition of any
necessary rights-of-way and easements for such facilities. All designs, materials and
specifications for the Krum Line shall conform to Denton's requirements as a minimum
standard. Plans and specifications for Delivery Facilities, which connect to the Denton System,
shall be submitted to the Director for written approval, which shall be acted upon within ten (10)
business days, and which approval of Director, shall not be unreasonably withheld. No
construction shall begin until such approval has been given. Approval by Denton shall not be
unreasonably withheld, if the plans and specifications satisfy or' exceed Denton's minimum
standards. Krum agrees that Denton has the right to make periodic inspections during the
construction phase of the Delivery Facilities. Final acceptance of such facilities from the point
of connection up to and including the metering and sampling point is subject to the inspection
and written approval of the Director, or his designee.
2.5 To facilitate adequate five-year planning for the transportation and treatment of
wastewater, Denton will require that the following approval process be utilized when large
volume contributors are anticipated to be added to the system. Denton will require that a five-
year planning document revised annually that details projected increases in wastewater flow to
the Denton System be submitted to the Director for incorporation into the Denton planning
document. The City of Krum's planning document will be submitted annually by November 1.
The first such planning document shall be due on or before November 1, 2002, and a like
document is due to be submitted by Krum to the Director annually, on each November 1
thereafter. Knnn agrees not to provide service to, or contract or subcontrac~ with, any new single
retail customer (or any customer located outside the boundaries of the City 0fKrum whose need
for Wastewater service would exceed 25,000 gallons per day (GPD) additional treatment
requirements without the prior written approval by the City of Denton Director, which approval
shall not be unreasonably withheld.
2.6 Facilities within Denton CCN. Pipelines and other facilities constructed by or for
the City of Krum for the purposes of carrying out this Contract which are located within an area
for which Denton holds a certificate of public convenience and necessity to provide sewer utility
service, shall comply with standards and specifications approved by Denton. For such pipelines
and facilities, Denton may require that the improvements be oversized pursuant to a separate
participation agreement with the City of Krum. Denton shall have the right to approve the
location of any such oversized facilities. Upon completion of an oversized line and payment by
Denton of its participating share, the City of Krum shall transfer to Denton the ownership of the
oversized line and associated easements and property interests. Notwithstanding the foregoing,
Kmm shall maintain ownership of its wastewater capacity in the Krum Line Wastewater Project,
as described in the "Interlocal Cooperation Agreement for the Construction, Installation, and
Oversize Cost Participation of the Kmm Gravity Flow Wastewater Main" (hereafter the
Interlocal Cooperation Agreement) by and between the Cities of Denton and Krum, Texas.
2.7 Service Requirements. At such time in the future, should service requirements
become an issue, then Denton and Krum shall immediately discuss, and if resolution of the
problem is not susceptible to remediation, then to mediation on a good faith basis.
3.0 Maintenance of Denton and Customer Systems
3.1 Krum agrees to maintain its wastewater system(s) in good condition and to make repairs
in a timely manner and to require its customers to maintain and repair their respective systems.
Denton shall have the right to refuse to accept Wastewater for treatment if Krum's System(s) is
not being ma'mtained to those generally accepted standards set forth in TNRCC roles and
regulations, Chapter 317. Denton shall not have any responsibility or liability now or ever for
the operation of the City of Krum's System(s), except as agreed to in writ'mg by the parties
hereto.
3.2 Denton agrees to maintain its system in good condition and to make repairs in a timely
manner. Kmm shall not have any responsibility or liability now or ever for the operation of the
Denton System, except as specifically provided herein, or under separate written modification or
Agreement.
4.0 Metering and Sampling Facilities
4.1 Beginning on the effective date of this contract, Denton shall have the exclusive fight to
operate and maintain Krum metering and sampling facilities at all existing and future Points of
Entry, and Denton shall become solely responsible for the operation and maintenance associated
with these facilities. Krum shall have access to the metering facilities for inspection purposes
only. Knma shall not adjust or calibrate the meter and will continuously provide a route of
ingress and egress to said metering and sampling facilities for Denton. Denton shall have the
discretion to construct improvements, expansions, and replacements to said facilities as a System
Cost, subject to review and approval by Khan of all proposed construction, expansion, and
replacement plans and costs. Approval by Krum shall not be unreasonably delayed or withheld.
Kmm will also grant and provide to Denton such permits or easements as are necessary for the
continuous operation and maintenance of all metering and sampling facilities. All such costs
incurred by Denton for operation, maintenance, construction, expansion, and replacement of
Kmm metering and sampling facilities shall be considered System Costs. Such System Costs
shall be specifically identified by Denton as a component of the annual cost of providing
wholesale wastewater treatment service.
4.2 Unless otherwise agreed to by both parties in writing, Denton shall have the option to
construct Krum metering and sampling facilities not currently in existence. All construction
costs, including, but not limited to, site acquisition and preparation, design and engineering,
construction, and equipment for such facilities, together with the costs of necessary easements
and rights-of-way, shall be System Costs, and shall be subject to review and approval by Krum,
including all necessary modifications to accommodate a complete installation satisfactory to
Denton. Such approval shall not be unreasonably withheld or delayed. If Krum constructs new
metering and sampling facilities, Krum may either transfer ownership of such newly constructed
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facilities, together with all necessary access easements and rights-of-way, to Denton in a form
satisfactory to Denton or may grant Denton the right of ingress and egress to such facilities,
together with the authority to operate and maintain the facilities as specified in Section 4.1,
within sixty (60) days of such completion. Thereafter, Denton shall operate, mainta'm and
replace the facilities as a System Cost and treat any ownership transfer as a contribution for rate
purposes, but the same shall not be indicative of equity ownership.
4.3 Expenses incurred by Denton for the operation and maintenance of Krum metering and
sampling facilities shall be System Costs and shall include the.following:
A. Cost of electricity at the facility.
B. Cost of the installation of the telemetry service at the facility and to the control center
and cost of monthly lease charge for the telephone line.
C. Cost of meter calibratioia; including cost of insert meter, twice per year.
D. Cost of parts, materials and supplies required for repairs, calibrations and upgrading
of the facilities.
E. Normal labor cost plus fringe benefits and indirect costs for repairs, calibrations and
upgrad'mg of the facilities.
F. Maintenance of ingress and egress and meter facility site.
G. Meter reading costs.
H. Any other reasonable and customary operations and maintenance costs or charges
appropriately included in system costs applicable to wholesale wastewater customers.
4.4 Replacement of Metering and Sampling Facilities or components thereof as may be
occasioned by obsolescence due to age, excessive maintenance, growth or other reasons as
determined by the Director, shall be a System Cost.
4.5 The City of Krum shall construct, install, and maintain for each Point of Entry a control
manhole to allow Denton to monitor Wastewater received from Krum. Control manholes shall
be located and constructed in accordance with specifications approved by Denton, to allow
Denton to have unrestricted access at all reasonable times. Upon completion, the control
manholes shall become the property of Denton and shall be maintained and repaired by Denton,
at Denton's sole cost and expense.
4.6 Upon expiration or termination of this Contract, Denton shall transfer to Kmm the
ownership of any property easements, metering and sampling facilities and rights-of-way
conveyed to Denton pursuant to the terms of this Section. In the event the contract is transferred
to another entity and Denton continues to treat wastewater from the City of Knun, ownership of
the aforementioned items shall remain with Denton.
5.0 Rights-of-Way
Krum shall grant, without charge to Denton, such easements and the use of rights-of-way along
public highways or other property owned by Krum, as requested by Denton; or maintaining
mains or facilities within the boundaries of the City of Krum or of any present or future Krum
wastewater certificate of convenience and necessity ("CCN") to convey Wastewater delivered to
the Points of Entry. The parties hereto (and applicable Customers of the City of Kmm) will be
required to restore the other's property to a condition equal to its original condition, unless
otherwise mutually agreed in writing. Denton and Krum agree to coordinate their location of the
mains and/or facilities in the other's easements and rights-of-way in order to prevent future
conflicts insofar as reasonably practicable.
6.0 Metering and Sampling
6.1 All flow discharged into the Denton System by Krum shall be metered, unless
specifically agreed to by both parties in writing. Should both parties agree in writing that
metering is not possible, the agreed-upon method for determining the volume shall include an
adjustment for infiltration and inflow.
6.2 If, in the judgment of the Director, the sewage generated within one or more areas of the
City of Krum or of any present or future Kmm wastewater CCN cannot be accurately measured
by an approved type of metering station, then the charge for sanitary sewer service within that
drainage area will be made on a per-connection basis. In such cases, the volume of sewage for
billing purposes will be determined by adding the product derived from multiplying the number
of Domestic Accounts within the area, times the average gallons of Wastewater flow per
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Domestic Account within the metered area, plus the estimated Wastewater flow for Non-
Domestic Accounts based on an agreed-upon percentage of metered water consumption. The
total volume so derived each month will be used for calculating the total sewer charges due each
month for that drainage area and such charges will be added to other charges, if any, based on
metered connections. For all such non-metered areas, Kmm will be responsible for providing
data each month on the number of Domestic Accounts and the metered water volume of all Non-
Domestic Accounts. Krum will provide this data to Denton no later than the 5th day of each
calendar month. Alternatively, the Director and Krum Representative may agree in writing to a
non-metered system for such areas, based on water usage for the area during the three winter
months of December, January, and February.
6.3 Krum shall have access to the metering and sampling facilities at all reasonable times;
provided however, that any reading, calibration, or adjustment to such metering equipment shall
be done by employees or agents of Denton, or by other mutually approved third party Calibration
Agent, in the presence of representatives of Krum and Denton, if so requested by Krum.
Notification of any proposed tests shall be provided to the City of Kmm at least seventy-two (72)
hours prior to such test being conducted.
6.4 All readings of meters will be entered in ink upon bound journals maintained by Denton.
Krum shall have access to such records during reasonable business hours and shall be fumished
with monthly "totalizer" readings for each Point of Entry metering and sampling facility.
6.5 Denton shall calibrate and routinely service the meters at least once during each six- (6)
month period. Copies of the results of such Calibration and all related information shall be
promptly provided to Kmm. Denton shall notify the City of Krum at least seventy-two (72)
hours in advance of the date and time for any Calibration, and Kmm may observe if so desired.
6.6 Upon any Calibration, if it is determined that the accuracy envelope of such meter is
found to be lower than ninety-five percent (95%), or higher than one hundred five percent
(105%) expressed as a percentage of the full scale of the meter, the registration of the flow (and
billings related thereto) as determined by such defective meter shall be corrected for a period
extending back to the time such inaccuracy began. If such time is ascertainable; or, if such time
is not ascertainable, then for a period extending back one-half (1/2) of the time elapsed since the
date of the last calibration, but in no event further back than a period of six (6) months.
6.7 If additional meter calibrations are requested by the City of Krum over the normal
calibration frequency, then the following payment procedure will be used. Corrections to meter
Calibrations that are inside the plus or minus 5% range will be paid for by the City of Krum and
will be added to the City of Krum's next monthly bill for receipt of payment. Corrections
outside the plus or minus 5% range will be paid to Krum by Denton during the month following
such determination.
6.8 If any meter used to determine volume from the City of Krum is out of service or out of
repair so that the amount of Wastewater delivered through the period cannot be ascertained or
computed, within five percent (5%) accuracy, Wastewater volume shall be estimated and agreed
upon by the parties hereto upon the basis of the best data available. If a meter is determined to
be reading inaccurately by more than five percent (5%), a correction to the billing shall be made
as follows:
(a) Take the number of gallons measured by the meter for a period extending
back V2 of the time elapsed since the date of the last calibration of the meter;
(b) Multiply that amount by the pementage of inaccuracy to obtain the total
number of gallons not properly registered;
(c) Multiply the gallons by the applicable rate during the time of the inaccuracy to
get the amount to be debited or credited, as appropriate.
If a meter completely fails, a correction shall be made by using the average of the gallons of
wastewater billed for the prior three months, or some other mutually agreeable method, to obtain
a daily average, which shall be applied to the days for which the meter was not working. In the
event that the parties hereto cannot agree on the estimate of Wastewater volume delivered,
agreement on the flow volume will be determined by a committee composed of the Director (or
his designee) the City of Krum Representative (or his designee) and a third person to be mutually
agreed upon and the cost of the reconciliation process will be equally shared. Any adjustments
in billing provided in this Section, whether a credit or debit, may be satisfied immediately, or
may be made in equal installments over the time equal to the tune for which the failure or
inaccuracy was calculated.
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6.9 Denton shall obtain samPles three (3) times per year to determine the quality of the
wastewater for billing for the extra strength of the wastewater. Each set of samples will apply to
a four-month period for billing purposes. These samples shall be obtained at the designated
metering and sampling facilities or other mutually agreed-upon sampling points for the purposes
of billing for the strength of the wastewater. To determine the quality of the wastewater for each
of the three (3) sampling periods, Denton shall collect twenty-fOur (24) hour flow-weighted
composite samples for five (5) consecutive days. In case of a malfunction of the sampling
equipment for whatever reason for one or more days, additional days shall be added to obtain
five (5) samples. The five (5) samples will be averaged to determine the wastewater strength for
billing purposes. Unless the BOD or TSS exceeds 250 mg/1, no fee for extra strength shall be
applicable or charged. Denton will provide Knun with a minimum of seven (7) day advance
notification of intent to sample. If, at the request of Krum or at the request of the Director, more
extensive monitoring is desired, such additional monitoring shall be paid for by the party making
the request and shall be done in compliance with Section 7.5. If Krum requests such additional
monitoring, Denton shall invoice Krum for the operational and administrative costs and payment
shall be made within (30) thirty days after receipt of invoice.
The notification required in this section shall include the planned dates, times, and locations(s) of
sampling. Denton shall analyze the samples collected in accordance with Standard Methods.
Krum may be present during the initial set-up of sampling equipment and at the time of pick up
for each twenty-four (24) hour composite sample. Denton agrees, if requested, to split said
wastewater samples with Krum for independent analyses.
6.10 If, in the opinion of the Director, compliance monitoring is required, the Director may
order that additional monitoring be performed with or without prior notice to Krmn. Said
compliance monitoring is to be in addition to the periodic sampling set forth in Section 6.9. All
information obtained because of such compliance monitoring shall be provided to the City of
Krum. Denton will provide notice of the results of such compliance monitoring to Krum within
a reasonable time thereafter. Denton shall pay all costs for additional monitoring ordered at the
Director's discretion, pursuant to this paragraph.
6.11 Costs incurred by Denton under this Section 6 will be considered a System Cost.
7.0 Rates and Charges
7.1 Wholesale wastewater rates will be based upon generally accepted cost-of-service rate
methodologies developed by independent utility rate consultants as described herein. The
Director shall select the independent utility rate consultant. The cost of such studies will be a
Direct System Cost. All cost-of-service studies shall be conducted utilizing the utility cost basis
of determining revenue requirements applicable to the wholesale Wastewater class. The last rate
study was completed during 1999 by an independent consultant. Rate studies by an independent
utility rate consultant will be conducted at least every six (6) years. Internal rate reviews will be
conducted annually, based upon consultant rate study methodology, to review rates and charges,
to recover allocated costs. The City of Krum shall have access to all data used to calculate the
proposed rate to be charged, and the City of Krum will be provided at least sixty (60) -days
advance notice with opportunity to review and comment on any proposed rate changes.
7.2 The cost-of-service for the wholesale class shall include allocated reasonable and
necessary operation and maintenance expense, depreciation expenses, administrative expenses, a
fair and reasonable return on allocated capital facilities, and a street rental fee. To determine the
allocation, including inflow and infiltration of costs to the City of Knun, the following factors
shall be considered: total volume, rate of flow, wastewater quality, metering, and Kmm-related
costs (such as accounting, billing, monitoring, and Krum service).
"Capital-related costs" consists of depreciation expenses and return on the original cost rate base.
"Depreciation expense" will be based upon the original cost of all capital facilities, both invested
and contributed capital, which facilities are expected to be replaced by Denton at a future date in
order to maintain service. Costs to transport the wastewater will be based on interceptor lines
twelve inches (12") in diameter and greater. A street rental fee equal to four percent (4%) of
total wastewater operation and maintenance costs will also be charged by Denton. On a periodic
basis as determined by the Director, the depreciation rates on all General Benefit Capital
Facilities shall be studied, and new salvage values, useful lives, and annual rates of depreciation
shall be developed f~om such studies. The "net-book" rate base shall consist of all allocated
capital facilities (net of accumulated depreciation and less contributions to the Demon System),
and shall include construction work in progress, a reasonable allowance for working capital, and
a reasonable inventory of materials and supplies necessary for the efficient operation of the
Denton System. Working capital shall be based on one-eighth (forty-five days) of annual
wastewater operation and maintenance costs. Records of the original cost, the accumulated
depreciation on all capital facilities, and contributions to the Denton System shall be maintained
in the Denton fixed asset-tracking system. These records shall be available for inspection at the
Denton Utilities Financial Department during reasonable business hours upon request by Kmm.
7.3 Denton shall be allowed an adequate opportunity to earn a reasonable return on its
investment. The rate of return shall be sufficient to assure confidence in the financial soundness
of the utility, adequate to maintain and support its credit, enable it to raise the money necessary
for the proper discharge of its public duties, and shall be equal to the weighted average imbedded
rate of interest on all outstanding wastewater system revenue bonds plus one-and-one-half
percent (1.5%).
7.4 No more than every six (6) years, a detailed wholesale revenue requirement shall be
developed on an actual historical cost, test-year basis, allowing for reasonable and necessary
expenses of providing such wastewater service, and allowing for known and measurable changes
in costs. Such changes shall allow the spreading of non-recurring expenses over an appropriate
benefit period. The first test year Occurred October 1, 1997, through September 30, 1998. On a
not to exceed six (6) year cycle thereafter, a complete, detailed rate study will be performed with
the same methodology used in the previous rate study by an independent utility rate consultant.
Thereafter, changes in the methodology will be allowed if recommended by the independent
consultant. In the interim between complete detailed rate studies, wholesale wastewater rates
shall be adjusted by Denton using the same methodology adopted at the same time, of the last
complete detailed rate study utilizing the actual operating data for the twelve month period
ending September 30th of the prior year, adjusted for known and measurable changes in cost data
which may have occurred since the last audited statement.
7.5 The initial rates for this Contract shall be those adopted by the Denton City Council in
Ordinance No. 2001-335, enacted September 4, 2001, and effective October 1, 2001, as follows:
Volume Charge
$2.00 per 1,000 gallons
BOD Strength Charges
TSS Strength Charges
Facility Charges
Sampling Charge
Analysis Charge
$0.004228 mg/1 of BOD above 250 mg/1
$0.002317 mg/1 of TS S above 250 mg/1
$180.00/30 days
$35.00
$15.00
7.6 Amendment of Rate
The rate charged the City of Krum shall increase or decrease in accordance with any amendment
to the Rate Schedule applicable to the City of Krum, as approved by Ordinance of the City
Council of Denton, and normal and reasonable in cost of service. At least sixty- (60) days prior
to the effective date of any proposed amendment of the rate charged to Krum, Denton shall send
written notice of the proposed rate amendment to the City of Krum. If Denton fails to give
written notice at least sixty- (60) days prior to the effective date of the amended rate, the
amended rate shall become effective, as it applies to the City of Krum, on the sixty-first (61st)
day after the written notice is sent.
7.7 Denton shall render bills for Wastewater treatment and disposal service to Krum
monthly. The billing address, until further written notice is delivered to Denton, is the current
location of the Knun, Texas City Hall: City of Krum, Texas, 102 West McCart, P.O. Box 217,
Krum, Texas 76249. All such bills shall be due and payable by Krum not more than thirty- (30)
days from the billing date. The bills will show current charges, as well as past-due charges.
Current charges shall be the amount due for Wastewater collection, treatment and disposal
service provided since the prior billing period. Past-due charges shall be the total amount unpaid
from all prior billings as of the current billing date. Payments received shall first be applied to
the past due charges, if any, and thereafter to the current charges. For late payments, a finance
charge of ten percent (10%) per annum may be calculated from the date when the payment was
due until paid.
7.8 If Kmm disputes a bill and is unable to resolve the difference informally, Krum shall
notify the Director in writing. Dispute of a bill is not grounds for nonpayment. If Krum at any
time disputes the amount to be paid to Denton, Krum should nonetheless promptly make such
payment; but, if it is subsequently determined by agreement or conrt decision that such disputed
payment should have been less, or more, Denton shall promptly correct the charges. All such
amounts due and owing to Denton by Khan, or due and owing to Krum by Denton, shall be paid
plus ten (10%) percent per annum from the date when due until paid.
7.9 The parties agree that services obtained pursuant to this Contract are essential and
necessary to the operation of Krum's wastewater facilities, and that all payments made by Krum
shall constitute reasonable and necessary operating expenses of wastewater systems within the
meaning of Article 1113, Vemon's Annotated Texas Statutes, with the effect that the obligation
to make such payments shall have priority over any obligation to make any payments from such
revenue, with respect to all bonds or other debt obligations heretofore or hereafter issued by
Krum.
7.10 Krum agrees, throughout the term of this Contract, to fix and collect such rates and
charges for wastewater service in its system as will produce revenues in an amount equal to at
least:
(I) All the operation and maintenance expenses of such system, including specifically, its
payments under this Contract.
(II)All other amounts as required by law and the provisions of the ordinances 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.
8.0 Krum Concerns and Disputes
8.1 Krum shall notify the Director regarding any concern or dispute related to the wholesale
Customer volumes billed and/or wholesale rates charged. Denton shall provide explanations
and/or documentation which outlines the processes used by Denton in order for Krum to fully
understand how the monthly volumes and billings were determined and/or wholesale rates were
calculated.
8.2 If Krum disputes the monthly billing and/or rates, Kmm must continue to make prompt
monthly payments as required by this Contract. If, after a thorough review, Krum's concem or
dispute is determined to have merit and justification, the area of concem or dispute shall be
19
promptly adjusted and corrected. Unless otherwise specified in this Contract, the determination
or settlement in areas of dispute, will generally be judged in accordance with standard practices
used in the wastewater treatment and collection industry, while considering fairness to both
parties.
9.0 Industrial Connection and Monitoring
9.1 Kmm agrees that it will not permit any Significant Industrial User within its jurisdiction
to connect directly or indirectly, either to its system, without at least thirty- (30) days prim:
written notification to the Director of such intent to connect. Krum shall provide the Director
with such information pertaining to volume and composition of expected flow as may be
requested. After a review of the submitted data, the Director has the right to refuse the permit
only if such SIU would cause Wastewater discharged by the City of Kmm at the Point of Entry
to be in violation of this Contract.
9.2 Krum agrees to conduct any and all monitoring, sampling and inspection of Krmn System
and Industrial Users as necessary to insure that industrial waste introduced into the City of Krnm
System meets the quality standards set out in Section 10.2 hereof. Upon request to Krum, a
representative of Denton will be permitted to observe Krum's collection of samples from
Industrial Users, and Krum agrees to furnish Denton separate duplicate samples for independent
testing; and, upon request, to provide the Director sample analysis results and Pretreatment
records.
9.3 Kmm agrees that Denton shall have the right to sample wastewater at all Points of Entry
and at such other locations as may be mutually agreed to in writing by both parties, for the
purpose of determining the volume and quality of wastewater entering the Denton System.
Krum agrees to disconnect from its system any Industrial User found to be in violation of
allowable discharges or who refuses access to its facilities for the purpose of sampling
wastewater being discharged into the City of Krum System; provided, however, that said
disconnected Industrial User shall be afforded the same rights and privileges of appeal as
Industrial Users operating within Denton's jurisdiction. Provided, however, Denton may not
2O
require such Industrial User to disconnect from Krum's System, if the quality of the wastewater
delivered to the Point of Entry is in compliance with this Contract.
9.4 Following reasonable notice to the City of Krmn by Denton, Denton may enter Krum's
jurisdiction if Denton determines that questionable discharges or prohibited discharges are
entering the Denton System through the Point of Entry. Kmm agrees to assist Denton and to
coordinate with its Customers in locating and eliminating such prohibited discharges within the
Krum System.
9.5 The Director shall send written notice to the City of Kmm if it is determined that a
Customer is failing to provide a satisfactory pre-treatment program, or a discharge by the City of
Krum is in violation of the SUO or this Contract. The notice shall contain the following:
(a) the nature and description of the violation;
(b) the provision of the SUO or of this Contract being violated;
(c) the corrective action that must be taken; and.
(d) the time in which the corrective action must be taken.
Denton and Kmm shall cooperate to determine the source of any wastewater discharge violation
and agree to cooperate in remedying the violation; but, Krum shall be responsible for insuring
that the violation is properly and timely corrected. Krum's failure to take reasonable efforts to
have the violation corrected in the time specified shall be a breach of this Contract for which
Denton may terminate service to the particular Customer wherein the offending violation is
taking place.
10.0 Wastewater Quality
10.1 Kmm agrees that it shall enact operating policies and enforce an ordinance governing
industrial waste that are at least as stringent as the provisions of the current Denton Sewer Use
Ordinance No 93-112 (SUO).
10.2 The parties recognize that federal and state laws and regulations concerning Wastewater
treatment and discharges may periodically change during the term of this Contract, requiring
revisions in the SUO. It is the intent of this Contract that the SUO be reviewed periodically by
Denton and revised in accordance with the latest laws and regulations of federal and state
agencies having jurisdiction over wastewater treatment and discharges. Krum agrees, upon
reasonable notice, to enact and enforce ordinances or any amendments to the SUO, or any future
ordinances relating to industrial discharges, prohibited or controlled wastes, or Pretreatment
Requirements.
10.3 Denton shall give written notice to Krum at least ninety- (90) days prior to consideration
by the Denton City Council of any amendment of the SUO that amends a provision of the SUO
that applies to this Contract, or that adds a new provision to the SUO that Denton is required to
apply to wastewater received by Denton under this Contract.
10.4 Krum shall be responsible for giving notice of the proposed amendment to any of its
Customers affected by the amendment. Upon the effective date of the amendment to the SUO, it
shall be considered an amendment to this Contract and shall be attached hereto, showing the
amendment made. Krum shall adopt and enforce such proposed ordinances or amendments as
soon as reasonably practicable atler the effective date of the Denton ordinance or amendment,
provided that Kmm is properly notified of the ordinance or amendment required herein.
10.5 Knun agrees that the quality of the wastewater discharged into the Denton System shall
be equal to or better than the quality standards established by Denton Ordinance No. 93-112, or
to any amendment thereto adopted pursuant to Section 10.1.
10.6 Krum shall require all Significant Industrial Users within its jurisdiction that ultimately
discharge into the Denton System to apply for and obtain a permit from Knun allowing such
discharge. Such permit shall require Industrial Users to abate prohibited substances from their
discharge as a condition to discharging wastewater into the Krum System. The permit
application shall contain, as a minimum, the following:
2.
3.
4.
5.
Name and address of discharger
Agent for discharger
Type of industry
Products produced or services rendered
Chemicals being stored and/or used
22
6. Anticipated daily wastewater flow rates
Krum shall provide Denton a copy of such application and permit, if issued, within fourteen (14)
days after issuance.
11.0 Title to and Liabili ,ty for Damages and Responsibility for Treatment and Disposal of
Wastewater.
Liability for damages arising from the transportation, delivery, reception, treatment, and/or
disposal of all wastewater discharged into the Denton System hereunder shall remain with Kmm
to the Point of Entry, and upon passing through Point of Entry, title to such wastewater and
liability for such damages shall pass to Denton. As between Denton and Krum, each party
agrees to indemnify the other to the extent permitted by law and to save and hold the other party
harmless from any and all claims, demands, causes of action, damages, losses, costs, fines, and
expenses, including reasonable attorney's fees, which may arise or be asserted by anyone at any
time on account of the transportation, delivery, reception, treatment, and/or disposal while title to
the wastewater is in such party, or on account of a prohibited discharge by the City of Krum.
Denton has the responsibility for the proper reception, transportation, treatment and disposal of
all wastewater discharged into the Denton System, but not for prohibited discharges by any party
at any Point of Entry. Denton may, after treatment of such Wastewater, reclaim, use or sell the
water, sludge or any other product for reuse. Wastewater entering the Denton system becomes
the property of Denton.
12.0 Infiltration and Inflow
Krum agrees that it has an obligation to prevent infiltration and inflow into its system and then
into the Denton System. Knun further agrees that all future sewer connections within its
jurisdiction, which ultimately enter the Denton System, will be constructed in accordance with
applicable specifications and standards at least equal to those of the Denton System. Further,
Krum covenants and agrees to maintain strict supervision and maintenance of its system to
reasonably prevent connections through which surface dra'mage can enter the Denton System.
Krum shall not make, nor shall it permit to be made, any connection, which will contribute storm
23
water mn-off from rainwater, spouts, drainage areas, streets, gutter drain or other source of
rainwater into Krum's System.
13.0 Assistance
13.1 In the event, Kmm requests assistance with the Kmm System, Denton may, at its option,
assist Krum. Kmm agrees to pay Denton its actual costs incurred, including, but not limited to,
administration, labor and material expended, as documented by Denton. Nothing herein shall be
construed to require Denton to assist Kmm. Such costs will be invoiced to Krum and payment
made within thirty- (30) days after receipt of invoice. Should the City of Kmm request a long
term Operations and Maintenance Contract for the Krum system, then, in that event, a separate
contract can be prepared.
13.2 In the event, Denton requests assistance with the Denton System, Krum may, at its
option, assist Denton. Denton agrees to pay Kmm its actual costs incurred, including, but not
limited to, administration, labor and material expended, as documented by Krum. Nothing
herein shall be construed to require Krum to assist Denton. Such cosis will be invoiced to
Denton and payment made within thirty- (30) days after receipt of invoice.
14.0 Pretreatment Program
If requested by Krum, Denton will enter into a separate contract with Krum, or directly with a
particular Customer, to develop and/or administer a local Pretreatment service program for such
Customer on a cost reimbursement basis.
15.0 Reports and Records
If requested by the Director, Kmm, shall provide the following data on an annual basis:
A. Actual number of Customer accounts discharging into the Krum System;
B. Classification of Domestic and Non-Domestic Accounts within its service area by
number and percentage of accounts discharging into the Krum System.
24
Additional data which may assist Denton and/or Knma in developing methodology for
cost of service studies, planning studies for analyzing federal grants, and wholesale
system Impact Fees; provided, however that Denton shall not request data that will
require Kmm to incur unreasonable expenses in providing such data.
16.0 Notices
Any notice, communication, request, reply or advice herein provided or permitted to be given,
made or accepted by either party to the other party must be in writing to:
City of Denton:
City Manager
City of Denton, Texas
215 East McKinney
Denton, Texas 76201
Mayor
City of Kmm
102 West McCart,
P.O. Box 217
Kmm, Texas 76226
The parties hereto shall provide notice in writing of any change that may occur in their respective
addresses fi:om time to time.
17.0 Inspection and Audit
Complete records and accounts required by each party hereto shall be kept for a period of five
(5) years. Each party shall at all times, upon notice, have the right at reasonable times to
examine and inspect said records and accounts during normal business hours; and further, if
required by any law, role or regulation, make said records and accounts available to federal
and/or state auditors.
Whenever, under the terms of this agreement, Denton is permitted to give its written consent or
approval, Denton may give or may refuse such written consent or approval and, if given, may
restrict, limit or condition such consent or approval in any mariner it shall deem advisable;
however, consent will not be unreasonably withheld.
25
Whenever, under the terms of this agreement, Kmm is permitted to give its written consent or
approval, Krum may give or refuse such written consent or approval and, if given, may restrict,
limit or condition such consent or approval in any manner it shall deem advisable; however,
consent will not be unreasonably withheld.
18.0 Waiver, Remed% Severability
18.1 No waiver by either party hereto of any term or condition of this Contract shall be
deemed or construed to be a waiver of any other term, or condition, or subsequent waiver of the
same term or condition.
18.2 In addition to any other remedy as may be provided by law, this Contract shall be
specifically enforceable by the parties hereto. Venue for any action shall be in Denton County,
This Contract shall be governed in accordance with, and by the laws of the State of
Texas.
Texas.
18.3
It is agreed that, in the event any term or provision herein contained is held to be invalid
by any court of competent jurisdiction, the invalidity of such term or provision shall in no way
affect any other term or provision contained herein; further, this Contract shall then continue in
full force and effect as if such invalid term or provision had not been contained herein.
19.0 Ownership and Liabili.ty ·
19.1 Except as expressly provided herein, this Contract shall not be construed to create any
type of joint or equity ownership of any property, any partnership or joint venture, nor create any
other property rights or liabilities. Krum payments (whether past, present, or future) will not be
construed as granting to Kmm any partial ownership of, prepaid capacity in, or equity in the
Denton System. Provided however, Kmm shall have the continuing right to receive the services
provided for herein under the terms of this Contract.
19.2 Contracts made and entered into by either Kmm or Denton for the construction,
reconstruction or repair of any Delivery Facility shall include the requirement that the
independent contractor(s) must provide adequate insurance protecting both the City of Krum and
Denton as insured. Such contract must also provide that the independent contractor(s) covenant
26
to indemnify, hold harmless and defend both the City of Knun and Denton against any and all
suits or claims for damages of any nature arising out of the performance of such contract.
20.0 Compliance with Permit Conditions
Kmm acknowledges that Denton is the holder of discharge permits issued by the United States of
America and the State of Texas. Knun agrees that it will comply with all permit conditions in
any way relating to its collection system and any discharge into the Denton System. Krum
agrees that in the event, a fmc is assessed against Denton for any violation of any permit
condition, and the violation is attributable to any act of omission or commission by Krum, Krum
will pay to Denton the amount of such fine. If such fine is not attributable to Kmm, such fine
shall be paid by Denton.
21.0 Term of Contract/Effective Date
The term of this Contract shall be for thirty -(30) years, with the provision for two (2) 10-year
term extensions based on mutual agreement from the date first stated above. Thereafter this
Contract shall be subject to re-negotiation between the Parties hereto. Any party electing to
terminate this Contract must provide the other party with five (5) year's advance notice.
22.0 Force Maieure
No party hereto shall be considered to be in default in the performance of any of the obligations
hereunder (other than obligations of either party to pay costs and expenses), if such failure of
performance shall be due to an uncontrollable rome beyond the control of the parties, including
but not limited to: failure of facilities, flood, earthquake, tornado, storm, fire, lightning,
epidemic, war, riot, civil disturbance or disobedience, labor dispute, and action or non-action by
a failure to obtain the necessary authorizations and approvals from any governmental agency or
authority or the electorate, labor or material shortage, sabotage, or restraint by a court order or
public authority, which by the exemise of due diligence and foresight such party could not have
reasonably been expected to avoid and which by exercise of due diligence it shall be unable to
27
overcome. Either party rendered unable to fulfill any such obligation shall exemise due
diligence to remove such inability with all reasonable dispatch.
In the event the proper operation of the Denton System, as a result of the above, requires Denton
to temporarily interrupt all or part of the services to Kmm, no claims for damage shall be made
by Kmm against Denton. Denton will exercise its best efforts to insure that such interruptions
will not adversely affect the health and welfare of Krtun's residents. In the event the proper
operation of Krum System, as a result of the above, requires Kram to temporarily interrupt,
reduce or increase flow to the Denton System, no claims shall be made by Denton against Krtma.
23.0 Wastewater Impact Fees
The Denton City Council has adopted "Impact Fees" by amending Chapter 26 "Utilities" of the
Code of Ordinances, Ordinance No. 98-301, providing for the Assessment of Such "Impact
Fees."
23.1
When Denton wastewater service to Krtun initially begins, Kmm agrees to pay to Denton
a Wastewater System Impact Fee based on the calculated number of Single Family
Equivalents ("SFE's") initially served by Denton. The calculation of SFE's shall be
based on the Krum average daily wastewater flow, as mutually agreed upon by each
party, divided by 320 gallons. The number of calculated SFE's shall be multiplied by the
Denton wastewater impact fee to determine the total amount of impact fees due Denton.
This impact fee methodology shall apply to all Krum wastewater customers/connections
in existence at the time Denton wastewater service to Krum initially begins. If, at a date
after Denton wastewater service to Krum initially begins, Krum desires that Denton serve
additional customers/connections that were in existence at the time service initially
began, the impact fee shall be based on the mutually agreed upon average daily
wastewater flow divided by 320 gallons times the impact fee in existence at the time
service begins to these customers/counections. Nothing within this Contract shall be
deemed to prevent either Denton or Kmm from charging their own respective retail
Customers an impact fee in excess of the Wastewater System Impact Fee provided for
herein.
28
23.2 On a quarterly basis, Krum agrees to pay to Denton a Wastewater System Impact Fee for
each new or enlarged connection for Wastewater service made within Krum's service area
served by the General Benefit Capital Facilities of the Denton System. Krum agrees to place
quarterly impact fees received in an interest-bearing account and remit to Denton on a quarterly
basis the impact fees plus interest earned. The Wastewater System Impact Fee to the City of
Khan for each such connection shall be based upon the size of water meter and shall be equal to
the Wastewater System Impact Fee collected for the same size water mete~ made within the retail
service area of Denton, except as provided in Subparagraph 23.6 of this Section. Water meters
installed solely for irrigation purposes shall not be assessed a Wastewater System Impact Fee.
The calculation of the Wastewater System Impact Fee shall be consistent with all applicable state
and federal regulations, including Chapter 395, Texas Local Government Code, or any
amendment or successor statute. It shall include only those costs associated with wastewater
system capital expansions and capital improvements identified by Ordinance No. 98-301 or
amendments of said Ordinance, necessary to provide service to new growth and development,
and/or expanded growth and development of existing Customers. Nothing within this Contract
shall be deemed to prevent either Denton or Krum from charging their own respective retail
Customers an impact fee in excess of the Wastewater System Impact Fee provided for herein.
23.3 Denton agrees that all monies for Impact Fees remitted to it pursuant to this section will
be placed in a separate interest-beating account to pay only for the cost of constructing capital
improvements or facility expansions for the wastewater system as permitted by Chapter 395,
Texas Local Government Code, or any amendment thereto, or by any successor statute thereto,
and will not be used for operation and maintenance expenses. Once expended on capital
projects, such funds and all interest earned thereon will be considered a "contribution" for rate
setting purposes and shall not be included in the rate base for wholesale service or return on
investment calculation purposes. Depreciation expense will be based on the original cost of all
capital facilities both invested and contributed capital, which facilities are expected to be
replaced by Denton at a future date in order to maintain service.
29
23.4 Krum shall provide to Denton such information that relates to the making of new and/or
upsized connections within its jurisdiction as may be requested by the Director, including but not
limited to building permits, with each quarterly payment required in this Section.
23.5 Should Denton or Krum waive any impact fee due from a retail Customer for a new or
upsized connection to its respective system within its jurisdiction, Denton or Krum shall pay
such impact fee from other sources into the fund required for paying for the capital
improvements.
23.6 Denton agrees that only those capital improvements related to the wastewater system
identified in Ordinance No. 98-301 or amendments of said ordinance, shall be included in the
capital improvements plan for the purpose of determining Wastewater System Impact Fee;
provided, however, Denton may include other capital improvements for the purpose of
determining impact fees to its own retail Customers.
23.7 Prior to the adoption of any land use assumptions, capital improvements, or Impact Fees,
the City of Krum shall be furnished a copy of the proposed land use assumptions, capital
improvement plan or proposed Impact Fee at least thirty- (30) days pr/or to any scheduled
hearing thereon. Any revised Impact Fee adopted pursuant to such updated capital
improvements plan shall not take effect for a period of at least ninety- (90) days after adoption
by Denton.
24.0 Termination
24.1 This Contract is not intended to specify 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 either
party and shall be cumulative. Recognizing, however, that the failure of either party to perform
cannot be adequately compensated in money damages alone, both parties agree that in the event
of any default on its part, the other 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 be available. The remedy of termination for default precluded by this
3O
paragraph does not prohibit either Party from terminating this Agreement for default in
accordance with the terms of this Agreement, or as otherwise specifically provided herein.
24.2 Also this Contract may be terminated in whole or in part by the mutual consent of the
goveming bodies of the City of Krum and the City of Denton. Notwithstanding anything
contained herein to the contrary, any material breach, as defined herein, by either party hereto
shall be cause for termination of this Contract by the other Party in the manner set forth in this
Section.
24.3 For failure to pay for undisputed costs for services rendered in accordance with this
Contract, Denton may terminate this Contract sixty -(60) days following the date notice of
nonpayment is received by the City of Kmm, unless full payment is made by the City of Krum
within that time.
24.4 Denton shall deliver to Krum ninety- (90) days prior written notice of its intention to so
terminate this Contract if Krum fails to cure or adjust any breach other than non-payment
provided in Section 24.3 above, such breach, including in such notice a reasonably complete
description of the breach. In the event Krum does not agree that it is in such breach, default or
failure, Krum may respond in writing for Denton's further review; or, in the alternative Krum
may respond with a plan of action for Denton's approval, which approval will not be
unreasonably denied. Denton shall advise the City of Kmm in writing immediately upon
acceptance of the cure of any such breach. If within said ninety- (90) days Krum shall fail or
refuse to cure such breach to the reasonable satisfaction of Denton, then and in such event,
Denton shall have the right with six (6) months advance written additional notice to Krum, to
declare this Contract terminated. In the event of termination of this Contract, all rights, powers,
and privileges of Krum hereunder shall cease and terminate. The following breaches, defaults or
failure to perform a duty or obligation of any of the below subsections, shall be considered a
material breach of this Contract:
Failure to adopt and enforce any ordinance required to be adopted and enforced
herein, if Kmm has received notice as required in Section 10 of this Agreement;
f.
g.
h.
i.
j.
or if by a Customer of Krum, the failure of Kmm to take reasonable steps to
obtain such action by Customer.
Making any connection to the Denton system at any point except as provided in
Section 2.2 hereof.
Failure to provide Denton ingress and egress for purposes of sampling and
operation and maintenance of any metering or any sampling facility.
Failure to provide Denton with rights-of-way as required herein.
Failure to permit any sampling of Wastewater as provided for herein.
Failure to disconnect industrial users of Knnn pursuant to this Contract.
Failure to maintain the quality of discharge as required .in this Contract.
Failure of Kmm to comply with Section 10 hereof.
Failure of Kmm to comply with Section 23 hereof.
Failure of Denton to provide the services required by this Contract or to carry out
its duties and responsibilities under this Contract.
24.5 In case of any alleged breach, default, or failure to perform duties under this Contract,
not addressed by Sections 24.3 and 24.4 above, and in the event that Krum does not agree that it
is in such alleged breach, default or failure, Krum may respond in writing for Denton's further
review; or in the alternative Knun may respond with a plan of action for Denton's approval,
which approval will not be unreasonably denied. Knun may timely appeal Denton's
determination of breach or Denton's failure to approve its plan cure the alleged breach to the
Utility Account Review Committee of the City of Denton, Texas, as provided for in the Denton
Code of Ordinances, Chapter 26, as amended. Pending the outcome of Krnm's appeal, the
charges shall not be due and payable by Krum.
24.6 Any failure by Denton to terminate this Contract or the acceptance by Denton of any
benefits under this Contract for any period of time after such material breach, default, or failure
by Krum, shall not be determined to be a waiver by Denton of any rights to tenuinate this
Contract for any subsequent material breach, default, or failure.
24.7 Any failure by Kmm to so terminate this Contract, or the acceptance by Kmm of any
benefits under this Contract, for any period of time after such material breach, default, or failure
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by Denton, shall not be determined to be a waiver by Krum of any rights to terminate this
Contract for any subsequent material breach, default or failure.
25.0 Miscellaneous
25.1 This Contract is subject to all applicable federal and state laws and any applicable
permits, ordinances, or amendments adopted pursuant to Section 10.0 and any rules, orders, or
regulations of any state or federal governmental authority having or asserting jurisdiction.
Nothing contained herein shall be construed as a waiver of any right by either party to question
or contest any such law, ordinance, order, rule or regulation in any forum having jurisdiction.
25.2 The parties hereto agree to make any changes in this Contract made necessary by any
amendment or revision to state or federal regulations.
25.3 Upon prior notice by Denton, any duly authorized employee of Denton bearing proper
credentials and identification shall notify Krum of need for access to any premises located within
Krum's boundaries limits, or served by Krum for the purpose of inspections and observation,
measurement, sampling and testing and/or auditing, in accordance with the provisions of this
Contract. Krurn may elect to accompany the Denton representative. To the extent permitted by
law, Denton agrees to indemnify Krum and hold Krum harmless for any damage or any injury to
person or property caused by the negligence of such duly authorized employee while such
employee is in the course and scope of his employment.
25.4 In each instance herein where reference is made to a federal or state regulation, it is the
intention of the parties that, at any given time the current federal or state regulation shall apply.
If a publication or reference work referred to herein is discontinued or ceases to be the generally
accepted work in its field, or if conditions change, or new methods or processes are implemented
by Denton, new standards shall be adopted which are in compliance with state and federal laws
and any valid rules and regulations pursuant thereto.
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25.5 Section headings in this Contract are for convenience only and do not accurately or
completely describe the contents of any Section. Such headings are not to be construed as a part
of this Contract, or in any way defining, limiting or amplifying the provisions hereof.
25.6 Whenever any disputed matter herein is to be specifically determined by the use of a
mediator, the following procedure is to be followed. The party requesting that the dispute be
settled by mediation shall serve on the other party a request in writing that such matter be
handled by mediation. Krum Representative and Director shall mutually agree in writing on the
selection of an impartial mediator. Such agreement shall be made within ten (10) days from the
date that the request for mediation is received. If agreement is not reached on the selection of the
impartial mediator on or before the tenth (10th) day after the date that notice is received, the
Director shall immediately request a list of seven qualified neutral mediators on the list. If they
do not agree within five (5) working days after the receipt of the list, Krum Representative and
Director shall alternate striking a name from the list and the name remaining shall be the
impartial mediator. Kmm Representative and Director shall mutually agree on a date for the
mediation. The decision of the mediator shall not be final. Mediation shall not in any event toll
any default period under the Contract, unless approved mutually in writing by Denton and IQ'um.
IN WITNESS WHEREOF, the Parties hereto have caused this Contract to be executed in
duplicate originals by their respective officers thereunto duly authorized.
"DENTON"
CITY OF DENTON, TEXAS
A Texas Municipal Corporation
MICHAEL A. CO~,,i~
City Manager
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ATTESTED:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
By:
CITY OF KRUM, TEXAS
A Texas Municipal Corporation
LLEY, ayor
ATTEST:
KATHY RENSHAW, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
By:
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