26-R-039 Wastewater Transmission and Treatment Agreement GVSUDRESOLUTION 26-R-039
A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF
SCHERTZ, TEXAS AUTHORIZING A WASTEWATER TRANSMISSION
AND TREATMENT CAPACITY LEASE AGREEMENT WITH THE
GREEN VALLEY SPECIAL UTILITY DISTRICT (GVSUD) AND
RELATED MATTERS IN CONNECTION THEREWITH.
WHEREAS, The City Council of the City of Schertz, Texas (the City) has previously
discussed and desires to participate in the design and construction of the expansion of the south
wastewater treatment plant that is owned, managed, maintained, and operated by the Cibolo
Creek Municipal Authority (CCMA); and
WHEREAS, the City has entered into the Regional Wastewater Treatment Contract
South Wastewater Treatment Plant Expansion Project with CCMA for that expansion; and
WHEREAS, the expansion of the South Plant which will provide additional needed
sewer treatment capacity to the City of Schertz is not anticipated to be completed for four or five
years; and
WHEREAS, the City is experiencing tremendous growth in the area if southern Schertz
that is served by the South Plant, and
WHEREAS, in order to provide needed sewer treatment capacity until the completion of
the South Plant expansion, staff recommends entering into the Wastewater Transmission and
Treatment Capacity Lease Agreement with GVSUD.
NOW THEREFORE, BE IT RESOLVED, THAT THE CITY COUNCIL OF THE CITY
OF SCHERTZ, TEXAS THAT:
Section 1. The City Council hereby authorizes a Wastewater Transmission and
Treatment Capacity Lease Agreement generally per the attached Exhibit "A."
Section 2. The recitals contained in the preamble hereof are hereby found to be true,
and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a
part of the judgment and findings of the City Council.
Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with
any provision of this Resolution are hereby repealed to the extent of such conflict, and the
provisions of this Resolution shall be and remain controlling as to the matters resolved herein.
Section 4. This Resolution shall be construed and enforced in accordance with the
laws of the State of Texas and the United States of America.
Section 5. If any provision of this Resolution or the application thereof to any person
or circumstance shall be held to be invalid, the remainder of this Resolution and the application
of such provision to other persons and circumstances shall nevertheless be valid, and the City
Council hereby declares that this Resolution would have been enacted without such invalid
provision.
Section 6. It is officially found, determined, and declared that the meeting at which
this Resolution is adopted was open to the public and public notice of the time, place, and subject
matter of the public business to be considered at such meeting, including this Resolution, was
given, all as required by Chapter 551, Texas Government Code, as amended.
Section 7. This Resolution shall be in force and effect from and after its final
passage, and it is so resolved. ��ff��
PASSED AND APPROVED on the T- ' day of ��026.
CITY OF SCHERTZ, TEXAS
Ral Rodriguez, or
ATT S
Sh ' a tdmondsonj City Secretary
Exhibit "A"
Wastewater Transmission and Treatment Capacity Lease Agreement
WASTEWATER TRANSMISSION AND TREATMENT CAPACITY LEASE
AGREEMENT
This Wastewater Transmission and Treatment Capacity Lease Agreement (the "Lease
or "Agreement") is entered into by and between GREEN VALLEY SPECIAL UTILITY
DISTRICT, a Texas special utility district created pursuant to, and operating under, the authority of
Chapters 49 and 65, Texas Water Code ("GVSUD" or "Lessor") and CITY OF SCHERTZ, TEXAS,
a Texas home rule municipality ("Schertz" or "Lessee"} (each a "Party" and collectively, the
"Parties"), for the purpose of providing the terms and conditions by which Lessor's right and
entitlement to certain wastewater transmission and treatment capacity shall be leased to Lessee for
use in enabling Lessee to provide retail wastewater service to Lessee customers.
RECITALS
WHEREAS, Lessor and Lessee are parties to that certain April 27, 2023 Wastewater Line Capacity
Agreement (the "Line Capacity Agreement'), a true and correct copy of which is attached as Exhibit
A to this Lease; and
WHEREAS, among other terms and conditions of the Line Capacity Agreement, Schertz assigned
to GVSUD 75,000 gallons per day ("gpd") average daily flow capacity in Schertz's Woman
Hollering Creek Trunk Line/Lift Station ("WHCTL/LS") at no cost to GVSUD and agreed to assign
up to an additional 75,000 gpd average daily flow capacity at Schertz's actual cost paid, for a total
of up to 150,000 gpd of transmission capacity in the WHCTL/LS; and
WHEREAS, Lessor and Lessee are parties to that certain April 27, 2023 Cibolo Creek Municipal
Authority South Wastewater Treatment Plant Capacity Agreement (the "Treatment Capacity
Agreement"), a true and correct copy of which is attached hereto as Exhibit B to this Lease; and
WHEREAS, among other terms and condition of the Treatment Capacity Agreement, Schertz
assigned to GVSUD 75,000 gpd average daily flow of treatment capacity out of its undivided interest
in the Cibolo Creek Municipal Authority South Wastewater Treatment Plant ("CCMA South Plant")
at no cost to GVSUD, and up to an additional 50,000 gpd average daily flow treatment capacity at
Schertz's actual cost, for a total of up to 125,000 gpd average daily flow CCM South Plant treatment
capacity; and
WHEREAS, Schertz has determined that it has an immediate need for additional wastewater
transmission and treatment capacity in the area served by the CCMA South Plant pending the
proposed capacity expansion of the CCMA South Plant to serve development; and
WHEREAS, Lessee, together with the City of Cibolo, Texas, jointly formed and continues to fund
the Cibolo Valley Local Government Corporation ("CVLGC") for the purpose of obtaining
groundwater rights and the development of a public water supply project to provide additional
supplies of potable water for the benefit of the citizens of Schertz and Cibolo; and
WHEREAS, CVLGC has acquired approximately 11,000 acre feet per year ("afpy") of groundwater
rights through leases located in Wilson County, Texas, along with other assets, including but not
limited to designs, plans, analysis related to a water production, transmission and conveyance
infrastructure, and real property interests, including well sites, easements and other valuable assets
(the "CVLGC Assets:); and
WHEREAS, events subsequent to the formation by CVLGC and CVLGC's acquisition of
groundwater rights, including but not limited to Lessee's participation in the Schertz Seguin Local
Government Corporation ( "SSLCG"), have caused Lessee to determine that it may no longer have
an interest or need to develop the project with the groundwater rights acquired by CVLGC or to
continue to maintain those groundwater rights through the payment of royalties and/or delay rentals;
and
WHEREAS, Lessor has determined that it does not have an immediate need for and is willing to
temporarily: (1) the 150,000 gpd average daily flow WHCTLILS transmission capacity assignable
to GVSUD pursuant to the Line Capacity Agreement; or (2) the 125,000 gpd average daily flow
CCMA South Plant treatment capacity pursuant to the Treatment Capacity Agreement; and
WHEREAS, Lessor has further determined that it is willing to' temporarily lease to Lessee pursuant
to this Lease both; (1) its entitlement to 150,000 gpd average daily flow of WHCTL/LS transmission
capacity under the Transmission Capacity Agreement; and (2) its entitlement to 125,000 gpd average
daily flow of treatment capacity in the CCM South Plant; and
WHEREAS, Lessor is willing to lease to Lessee a portion of its wastewater transportation and
treatment rights, subject to the terms and conditions of this Lease.
NOW THEREFORE, the Parties, for and in consideration of the covenants and agreements herein
set forth to be kept and performed by them respectively, the Parties agree together as follows:
AGREEMENT
Recitals Incorporated: Each of the recitals in this Lease are incorporated into this Lease by
reference for all purposes.
2. Affeements Inco orated: The Line Capacity Agreement and Treatment Capacity
Agreement, and each of their respective terms and conditions are incorporated into this Lease
by reference for all purposes.
3. Demise: Lessor, for and in consideration of the covenants and agreements hereinafter set
forth to be kept and performed by both Parties, does hereby demise and lease to Lessee for
the Lease Term (hereinafter defined) 150,000 gpd average flow wastewater transportation
capacity in the WHCTL/LS, and 125,000 gpd average flow wastewater treatment capacity
in the CCMA South Plant (collectively, the "Capacity"). Lessee shall be solely responsible
for all obligations and undertakings of GVSUD regarding the specified Capacity as set forth
in the Line Capacity Agreement and the Treatment Capacity Agreement, for the Term of the
Lease, including, but not limited to, metering and reporting obligations, maintenance and
repairs, the payment of any and all rents, charges and assessments, and specifically including,
but not limited to, any impact fee associated with the CCMA South Plant treatment capacity.
Wastewater Capacity Lease Page 2
During the Term of the Lease, Lessor shall have no responsibility or liability to Lessee for
treatment charges, maintenance fees, CCMA impact fees or other expenses incurred by
Lessee in its use of the leased Capacity.
4. Lease Term: The Lease will be effective upon execution (the "Effective Date"), the Term
of the Lease will commence on the Commencement Date, as further defined herein, and will
expire on that day that is the last day of the fifth year following the Commencement Date
unless renewed in writing as provided in Section 5 of this Lease. The Commencement Date
will be the earlier to occur of (i) ninety (90) days following the Effective Date; or (ii) such
earlier date as Lessee actually commences the transportation and treatment of wastewater
utilizing the leased capacity under this Lease.
5. Option to Renew: Provided that Lessee is not in default under -this Lease beyond applicable
notice and cure periods at the time of the exercise of the Option granted herein, Lessee is
granted the option (the "Option") to renew this Lease for one additional term of one year (the
"Renewal Term") commencing on the next day after the expiration of the Initial Term.
Lessee shall exercise the Option, if at all, by delivering Lessor written notice of the exercise
of the Option at least 90 days prior to the expiration of the Initial Term. Lessee's lease of the
transport and treatment capacity during the Renewal Term will be upon the same terms as
for the Initial Term, except that the Rent (hereinafter defined) will adjust as hereinafter
provided and during the Renewal Term. Lessee will have no further right to renew this
Lease, and no continuation of the Lease is or will be implied. Lessee shall develop
alternative or replacement capacity prior to the expiration of this Lease.
6. Rent.
A. Initial Tenn. Lessee agrees to pay to Lessor Annual Rent for the Capacity in quarterly
installments, in advance, beginning on the Commencement Date of $62,500 per,quarter
for a total Annual Rent of $250,000.00. Further, Lessee agrees to provide a right of first
refusal to the Lessor if the Lessee determines to convey the Lessee's interests in the
CVLGC Assets free and unencumbered from any liens or limitations on Lessor's
ownership and use of the CVLGC Assets.
B. Renewal Term. Provided that Lessee has complied with all terms and conditions of this
Lease, the Parties agree to negotiate in good faith the annual Rent for the Renewal Term
upon receipt of notice by Lessee to Lessor pursuant to the Notice provisions of this Lease
of Lessee's intent to exercise its option for the Renewal Term.
C. Payment of Rent. With the exception of Each installment of quarterly Rent shall be due
and payable on the first day of the quarter by Automated Clearing House ("ACH").
7. O; ,eration of the Wastewater Infrastructure. Lessee shall at all times during the Lease Term
be solely responsible for the operation and maintenance, repair and replacement of the
WHCTL/LS. Lessee shall operate the WHCTL/LS in accordance with all applicable laws
and in accordance with industry standards.
Wastewater Capacity Lease Page 3
8. Representations. Warranties and Covenants of Lessor: Lessor represents, warrants and
covenants to Lessee that:
A. Title. Lessor has good, marketable and indefeasible property rights to the Capacity
subject to this Lease.
B. Authority. Lessor has all requisite power and authority, has taken all actions required by
its organizational documents and applicable law, and has obtained all necessary consents,
to execute and deliver this Lease and to consummate the transaction contemplated in this
Lease.
C. Other Agreements, etc. Neither the execution of this Agreement nor the confirmation by
Lessor of the transactions contemplated hereby will (i) conflict with or result in any
breach of the terms, conditions or provisions of, or constitute a default under; (ii) violate
any restriction to which Lessor or the Capacity subject to this Lease; or (iii) constitute
the violation of any applicable laws
D. Proceedings. There are no attachments, executions, assignments for the benefit of
creditors, or voluntary or involuntary bankruptcy proceedings, or under any debtor relief
laws, contemplated by or pending or threatened against Lessor or the capacity rights in
the WHCTL/LS or CCMA South Plant capacity.
E. Litigation. Lessor is not now a party to any material litigation, arbitration or
administrative proceeding (i) with any person or entity having or claiming any interest
in the Capacity subject to this Lease; or (ii) affecting or questioning Lessor's property
interest in the Capacity rights in the WHCTL/LS or CCMA South Plant subject to this
Lease.
F. Compliance with Laws. To the best of Lessor's knowledge and belief, all applicable laws
bearing on the Capacity volumes subject to this Lease have been complied with and this
Lease will not violate any such laws.
G. Consents. As of the Commencement Date, no consent to the execution or implementation
of this Lease is required from any third party
H. True and Correct. To Lessor's best knowledge, after reasonable inquiry, all information
and other items heretofore or hereafter submitted to Lessee by or on behalf of Lessor are
true, correct and complete. Lessor is not aware of any omission to supply Lessee with
any material information or other items with respect to Lessor's capacity rights in the
WHCTL/LS or CCMA South Plant subject to this Lease.
Lessor acknowledges that the execution of this Lease by Lessee has been made, and the lease of the
Pipeline System by Lessee will have been made, in material reliance by Lessee on Lessor's
representations and warranties contained in this Paragraph 8.
Wastewater Capacity Lease Page 4
9. Representations. Warranties and Covenants of Lessee: Lessee represents, warrants and
covenants to Lessor that:
A. Authority. Lessee has all requisite power and authority, has taken all actions required by
its organizational documents and Applicable Laws, and has obtained all necessary
consents, to execute and deliver this Lease and to consummate the transactions
contemplated in this Lease.
B. CVLGC Assets. Lessee will make a good faith effort to obtain the legal authority and
all requisite approvals to convey all of its undivided interest in the CVLGC Assets to
Lessor should it make the determination that the Lessee to convey Lessee's interest in
the CVLGC assets.
C. Proceedings. There are no attachments, executions, assignments for the benefit of
creditors,:or voluntary or involuntary bankruptcy proceedings, or under any debtor relief
laws, contemplated by or pending or threatened against Lessee.
D. Consents. No consent to the execution or implementation of this Lease is required from
any third party.
E. Licenses. Lessee possesses or will possess all licenses, certificates and permits that are
required to fulfill its obligations hereunder.
F. Liens. Lessee has no authority, express or implied, and will not create or place any lien
or encumbrance of any kind or nature whatsoever upon, or in any manner bind the interest
of Lessor or Lessee in the capacity leased hereunder, including those who may furnish
materials or perform labor for any construction or repairs.
G. Litigation. Lessee is not now a party to any material litigation, arbitration or
administrative proceeding affecting or questioning Lessee's ability to perform its
obligation under this Lease.
H. True and Correct. To Lessee's best knowledge, after reasonable inquiry, all information
and other items heretofore or hereafter submitted to Lessor by or on behalf of Lessee are
true, correct and complete.
Lessee acknowledges that the execution of this Lease by Lessor has been made, and the lease of the
Pipeline System by Lessor will have been made, in material reliance by Lessor on Lessee's
representations and warranties contained in this Paragraph 9.
10. Aereement to Hold Harmless: To the extent authorized by law governing municipalities and
special district, each Party hereto shall defend, protect and hold the other free and harmless
from and against any and all claims, liabilities, damages, costs, penalties, forfeitures, losses
or expenses (including attorneys' fees) for death or injury to any person or damage to any
property whatsoever arising or resulting in whole or in part, directly or indirectly, out of the
Wastewater Capacity Lease Page 5
acts or omissions of the counterparty or its employees, contractors or agents or arising out of
any breach by the other party to this Lease.
11. Insurance:
A. Maintenance of Existing Coverage. Lessor and Lessee will maintain such or similar
insurance coverages in place as exist at the time of execution of this Agreement to the
extent pertinent to the respective obligations of each herein.
B. Waiver of Subrogation. Lessor and Lessee and all parties claiming under them mutually
release and discharge each other from all claims and liabilities arising from or caused by
any casualty or hazard which is covered by insurance carried on the WHCTL/LS or
carried in connection with property on or activities conducted on the easements/rsghts-
of-ways on which the WHTCL/LS is located, and waive any right of subrogation which
might otherwise exist in or accrue to any person on account thereof.
12. Assignment: This Lease may not be assigned by either Party without the prior written
consent of the other Parry. The foregoing restrictions on assignment shall not apply to (a) a
transfer by a party to an affiliate, provided that the assignment shall not relieve the assignor's
obligations under this Lease.
13. Surrender ul2on Termination. Upon the expiration of the Lease Term, Lessee shall surrender
up the WHCTL/LS and CCMA South Plant Capacity with all of Lessee's obligations
hereunder fully performed.
14. Events of Default:
A. Events of Default by Lessor. The occurrence of any of the following shall constitute a
material default and breach of this Lease by Lessor:
(1) A failure by Lessor to observe and perform any material provision or covenant of
this Lease to be observed or performed by the Lessor, where such failure continues
for thirty (30) days after written notice thereof by Lessee to Lessor, except that this
thirty (30) day period shall be extended for a reasonable period oftime if the alleged
default is not reasonably capable of cure within said thirty (30) day period and
Lessor proceeds to diligently cure the default.
B. Events of Default by Lessee. The occurrence of any of the following shall constitute a
material default and breach of this Lease by Lessee:
(1) Any failure by Lessee to pay Rent or make any other payment required to be made
by Lessee hereunder, where such failure continues for thirty (30) days after receipt
of written notice from the Lessor, subject to the right of Lessee, reasonably
exercised, to contest any such payment. In the event Lessee withholds any such
payment, and it is determined that such withholding was wrongful, Lessee shall pay
Wastewater Capacity Lease Page 6
interest to Lessor on such monies wrongfully withheld at the maximum amount
allowed by law.
(2) A failure by Lessee to observe and perform any other material provision or
covenant of this Lease to be observed or performed by the Lessee, where such
failure continues for thirty (30) days after written notice thereof by Lessor to
Lessee, except that this thirty (30) day period shall be extended for a reasonable
period of time if the alleged default is not reasonably capable of cure within said
thirty (30) day period and Lessee proceeds to diligently cure the default.
(3) Any failure of Lessee's representations or warranties to remain true and correct
throughout the Lease Term; provided that no event of default shall occur if such
representation or warranty is again true and correct within thirty (30) days after
receipt of written notice from Lessor.
(4) The making by Lessee of any general assignment for the benefit of creditors.
15. Notice:Any notice or communication required or permitted in this Lease shall be given in
writing, sent by (a) personal delivery, or (b) expedited delivery service with proof of delivery,
or (c) United States mail, postage prepaid, registered or certified mail, return receipt
requested, addressed:
if to Lessor, as follows:
City of Schertz
1400 Schertz Parkway
Schertz, Texas 78154
Attention: City Manager
with a copy to:
Denton, Navarro, Rodriguez, Bernal, Santee & Zech, P.C.
2517 North Main Avenue
San Antonio, Texas 78212
Attention: T. Daniel Santee
and, if to Lessee, as follow
Green Valley Special Utility District
605 FM 465
Marion, Texas 78124
Attention: General Manager
Wastewater Capacity Lease Page 7
with a copy to :
TERRILL & WALDROP, PLLC
810 West 10a Street
Austin, Texas 78701
Attention: Shan Rutherford
or to such other address or to the attention of such other person as shall be designated by the
applicable party and on fifteen (15) days' notice from time to time in writing and sent in
accordance herewith. Any such notice or communication shall be deemed to have been given
either at the time of personal delivery or, in the case of delivery service or mail, upon receipt.
16. No Rent Abatement. In no event shall a problem at Lessee's facilities or at the CCMA South
Plant excuse Lessee's obligations to pay Rent hereunder, unless and to the extent such
problem was caused by Lessor.
17. Limitation of Liability: Neither Party shall be liable for punitive or consequential damages
of any kind arising out of or in any way connected with the performance of or failure to
perform this Agreement.
18. Goods and Services: The Parties acknowledge and agree that as of the Effective Date of
this Lease, the mutual commitments stated herein for the lease of transportation and
treatment capacity by Lessor to Lessee constitute an agreement for Lessor to provide goods
and services to Lessee under Chapter 271, Subchapter I, Texas Local Government Code, and
this Lease is subject to Chapter 271, Subchapter I, Texas Local Government Code.
19. Miscellaneous:
A. Headings/Gender. Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to include the
plural, unless the context otherwise requires. The captions inserted in this Lease are for
convenience only and in no way define, limit or otherwise describe the scope or intent of
this Lease, or any provision hereof, or in any way affect the interpretation of this Lease.
B. Successors and Assigns. Without limiting the terms of Paragraph 12 above, the terms,
provisions and covenants and conditions contained in this Lease shall apply to, inure to
the benefit of, and be binding upon, the parties hereto and upon their respective heirs,
executors, personal representatives, legal representatives, successors and assigns, except
as otherwise herein expressly provided.
C. Entire Agreement. This Lease constitutes the entire understanding and agreement of the
Lessor and Lessee with respect to the subject matter of this Lease, and contains all of the
covenants and agreements of Lessor and Lessee with respect thereto. Lessor and Lessee
each acknowledge that no representations, inducements, promises or agreements, oral or
written, have been made by Lessor or Lessee, or anyone acting on behalf of Lessor or
Lessee, which are not contained herein, and any prior agreements, promises,
Wastewater Capacity Lease Page 8
negotiations, or representations not expressly set forth in this Lease are of no force or
effect. This Lease may not be altered, changed or amended except by an instrument in
writing signed by both parties hereto.
D. Severability. If any clause or provision of this Lease is illegal, invalid, or unenforceable
under present or future laws effective during the tern of this Lease, then and in that event,
it is the intention of the Parties hereto that the remainder ofthis Lease shall not be affected
thereby, and it is also the intention of the Parties to this Lease that in lieu of each clause
or provision of this Lease that is illegal, invalid or unenforceable, there be added, as a
part of this Lease, a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and enforceable.
E. Effective Date of Lease. All references in this Lease to "the date hereof' or similar
references shall be deemed to refer to the last date, in point of time, on which all Parties
hereto have executed this Lease.
F. Counterparts. This Lease may be executed in counterparts, each being deemed an
original, but together constituting only one instrument.
G. Attorneys' Fees. In the event it becomes necessary for either party hereto to file a suit
respecting the subject matters of this,Lease including without limitation to enforce this
Lease or any provisions contained herein, the party prevailing in such action shall be
entitled to recover, in addition to all other remedies or damages, reasonable attorneys'
fees incurred in such suit.
H. Law Governing and Venue. THIS LEASE SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF TEXAS, AND VENUE AND JURISDICTION FOR ANY
ACTION OR PROCEEDING RESPECTING THE SUBJECT MATTERS OF THIS
LEASE INCLUDING WITHOUT LIMITATION TO ENFORCE THIS LEASE OR
ANY PROVISIONS CONTAINED HEREIN SHALL BE EXCLUSIVELY IN THE
COURTS LOCATED IN GUADALUPE COUNTY, TEXAS.
I. No Waiver. No waiver by either party of any provision of this Lease or of any default,
event of default or breach hereunder shall be deemed to be a waiver of any other provision
of this Lease, or of any subsequent default, event of default or breach of the same or any
other provision. Either party's consent to or approval of any act requiring consent or
approval shall not be deemed to render unnecessary the obtaining of consent to or
approval of any subsequent act requiring consent. No act or thing done by Lessor or
Lessor's agents during the term of this Lease shall be deemed an acceptance of a
surrender of its rights and entitlements under the Line Capacity Agreement and the
Treatment Capacity Agreement, unless done in writing signed by Lessor.
J. Interpretation. The parties hereto agree that it is their intention hereby to create only the
relationship of Lessor and Lessee, and no provision hereof, or act of either party
hereunder, shall ever be construed as creating the relationship of principal and agent, or
a partnership, or a joint venture or enterprise between the Parties hereto.
Wastewater Capacity Lease Page 9
K. Amendments. This Lease may not be modified or amended, except by an agreement in
writing signed by Lessor and Lessee. The Parties may waive any of the conditions
contained herein or any of the obligations of the other Party hereunder, but any such
waiver shall be effective only if in writing and signed by the Party waiving such
conditions or obligations, except as specifically set forth herein.
[Signature Pages Follow]
Wastewater Capacity Lease Page 10
GREEN VALLEY SPECIAL UTILITY DISTRICT, Lessor
A S
Phillip K. Gage. General Manager
Date: Y-awo'-"
CITY OF SCHERTZ, TEXAS, Lessee
By:
Steve Williams. City Manager
Attest.
Sheila Edmonson, City Secretaiy
Date:
H*flsfen-aler C'apac•iti, Lease Page I !
Exhibit A
WASTEWATER LINE CAPACITY AGREEMENT
BETWEEN
THE CITY OF SCHERTZ, TEXAS
I
GREEN VALLEY SPECIAL UTILITY DISTRICT
FOR THE WOMAN HOLLERING CREEK TRUNK
LINE AND LIFT STATION
Wastewater Line Capacity Agreement
Woman Hollering Creek Page 0
WASTEWATER LINE CAPACITY AGREEMENT
This Wastewater Line Capacity ("Agreement") is made and entered into as of the day of
.2023 (the "Effective Date) by and between the City of Schertz,
Texas ('Scher ') a municipal corporation of the State of Texas, and Green Valley Special Utility
District ("GVSUIY ), a political subdivision of the State of Texas, individually referred to herein
as a "Party" and collectively as `Parties".
RECITALS
WHEREAS, the Parties entered into a Mediated Settlement Agreement ("MSA") and agreed to
use their best efforts to draft a final Comprehensive Settlement Agreement consistent with the
MSA; and,
WHEREAS, an essential term of the MSA is the development of an Agreement that allocates
current and future flow capacity within the Woman Hollering Creek Trunk Line/Lift Station
("WHCTL/LS") for the transport of wastewater that originates within the respective certificated
sewer service areas of the Parties, to a termination point located at the Cibolo Creek Municipal
Authority South Wastewater Treatment Plant ("CCMA South Plant"); and,
WHEREAS, Schertz is in process of constructing the WHCTL/LS with an initial capacity average
daily flow of 765,870 gallons, currently estimated to be the equivalent of 3,126 Living Unit
Equivalents CLUE'), with an LUE equaling 245 gpd, currently at an estimated cost per LUE of
$4,132.00 ($12,918,000/3,126) or $16.87 per gallon ($12,918,000/765,870); and,
WHEREAS, the Parties have agreed that Schertz will assign WHCTL/LS initial capacity of 75,000
gallons per day at no cost to GVSUD, and will assign WHCTL/LS capacity sufficient to service
up to an additional total of 75,000 gallons per day) at the City of Schertz final actual cost paid,
inclusive of principal and interest, currently estimated to be $1,264,392.00; and,
WHEREAS, the Parties hereby find that the terms and conditions set forth herein represent that
which the Parties believe to be in the best interest of each entity and their respective existing and
future customers.
NOW THEREFORE, the Parties, for and in consideration of the covenants and agreements herein
set forth to be kept and performed by them respectively, have agreed to and do hereby agree
together as follows:
Wastewater Line Capacity Agreement
Woman Hollering Creek Page i
AGREEMENT
I.
PURPOSE AND SCOPE OF AGREEMENT
A_ The purpose of this Agreement is to establish the terms, conditions, and cost associated
with Schertz's agreement to assign/convey WHCTL/LS initial capacity sufficient to
service a total of 75,000 gpd at no cost to GVSUD, and convey/assign WHCTL/LS
capacity sufficient to service up to an additional total of 75,000 gpd at a point certain, in
the future, for the transport of wastewater that originates within the respective certificated
sewer service areas of the Parties, to a termination point located at the CCMA South Plant.
GVSUD may initially connect up to 306 LUEs to the system, subject to modification as
further provided in this Agreement. As used throughout this Agreement, any reference to
gallons per day (gpd) shall mean the gpd based upon average daily flow as determined by
the Parties through the monitoring on flow meters at the points where GVSUD wastewater
flows enter the Schertz lift station or trunk lines. The Parties agree that the capacity
assigned in this Agreement is capacity owned by Schertz in the CCMA South Plant that
must be utilized by the flowage of wastewater into the CCMA South Plant through Schertz
owned infrastructure. In doing so, the Parties agree that the Tri-Party Agreement that
allocates capacity in the CCMA South Plant is not implicated.
B. The scope of this Agreement covers the WHCTL/LS and service areas of the Parties as
depicted in Exhibit A attached. The Parties understand and agree that future service to
additional service areas and the assignment/conveyance of capacity in the CCMA South
Plant must be the subject of one or more additional agreements, subject to approval, for an
assignment of a portion of Schertz's wastewater treatment capacity in the CCMA South
Plant, and future expansion of CCMA South Plant capacity by the parties to that certain
South Plant Wastewater Services and Funding agreement dated August 26, 2014 between
Cibolo Creek Municipal Authority ("CCMA"), Schertz, and the City of Cibolo (the "Tri-
Party Agreement").
C. The assignment/conveyance of any capacity in the WHCTL/LS necessarily requires that
Schertz be successful in the assignment of wastewater treatment capacity owned by Schertz
in the CCMA South Plant to GVSUD, as contemplated by that certain CCMA South Plant
Capacity Agreement between Schertz and GVSUD approved and executed
contemporaneously with this Agreement.
it.
THE WHCTL/LS CAPACITY
Section 2.1 Project Constructimi
(a) Schertz is in the process of constructing and paying for the WHCTL/LS and all
facilities necessary to collect and convey wastewater to the CCMA South Plant including but not
limited to sanitary sewer collection lines; lift stations; appurtenances; easements and rights of
Wastewater Line Capacity Agreement
Woman Hollering Creek Page 2
ways; connection to the existing CCMA South Plant; and associated design, testing and inspection
of facilities.
(b) The WHCTL/LS was designed and is being constructed to convey 765,870 gallons
per day, to support a currently estimated 3,126 LUE's based on a currently estimated LUE
equivalency of 245 gallons per day. The WHCTL/LS was estimated to cost $12,918,000.00, or
$16.87 per gallon.
Section 2.2 WHCTL/LS Plans and Specifications
(a) All construction plans, design calculations and specifications of the WHCTL/LS
and any amendments thereto necessary to design and construct GVSUD tie-ins shall be provided
by Schertz to GVSUD. GVSUD shall provide tie-in, metering and lateral line designs and
specifications in accordance with Schertz construction standards and specifications, or an agreed
upon equivalent.
(b) Schertz and GVSUD shall coordinate all future tie-ins and the calculation of
average daily flows per tie-in at the time of the earlier of. plat submittal, building permit submittal,
or request for connection for developments in the GVSUD Service Area served by the
WHCTL/LS.
III.
ASSIGNMENT OF CAPACITY
Section 3.1 Capacity Assignment
(a) Subject to the pre -requisite stated in I (C) above, and the terms and conditions stated
herein, Schertz does hereby assign to GVSUD wastewater flow capacity in the Schertz's
WHCTULS sufficient to provide wastewater service for 75,000 gpd an initial total of 306 LUE's.
(equivalent to 75,000 gpd average daily flow) at no cost to GVSUD.
(b) Discharge to the system will be metered and actual flows will be evaluated annually
(beginning one year after the start of flow from GVSUD to the WHCTL/LS) to assess actual
average and peak flows. If evaluation reveals that additional connections can be made without
flow into the system exceeding an average daily flow of 75,000 gpd, the allowable number of
LUEs (based on a unique adjusted average daily flow) that may be connected under the agreed
upon initial allocation of 75,000 gpd will be adjusted no less than annually by utilization of the
calculation reflected in the spreadsheet attached hereto as Exhibit B. GVSUD will not allow
connection beyond the original 306 LUEs based on 245 gallons per day per LUE until an annual
adjustment based on the methodology reflected in Exhibit A is approved in writing by authorized
representatives of the Parties.
(c) Subject to the pre -requisite approval stated in I (C) above, and the temis and
conditions stated herein, Schertz shall assign/convey to GVSUD wastewater flow capacity in the
WHCTL/LS sufficient to provide wastewater service to an additional total of 75,000 gallons per
day at an estimated cost of $16.87 per gallon to GVSUD with the final cost per gallon being based
Wastewater Line Capacity Agreement
Woman Hollering Creek Page 3
on the final demonstrated cost of initial construction of the WHCTL/LS divided by the initial
design average daily flow.
(d) GVSUD shall pay for the additional total of 75,000 gpd in a lump sum, up front
total amount of $1,264,392.00 or as adjusted based on Section III (c) above. The requirement to
assign the additional capacity for the stated consideration shall be the point in time when a
development application is submitted that reflects that 75% of the initial total of 306 LUE's
(subject to a modified number of LUE's as allowed for in Section IH(b) above) assigned have been
allocated to development. Allocation of capacity to development shall be the first of plat approval,
building permit application or request for connection.
(e) Notwithstanding any other terms of this agreement, GVSUD agrees to make timely
investigation and cause repair to be made to its collection and conveyance system if inflow and
infiltration or illicit discharges to the WHCTL/LS are suspected or detected.
(f) GVSUD will be responsible for ensuring that the influent entering the WHCTL/LS
from their service area complies with the Schertz' and CCMA's pretreatment requirements.
GVSUD agrees to enforce these pretreatment requirements and take such action as is necessary to
control the strength of raw industrial sewage reaching the WHCTL/LS in order that the quality of
discharge from the CCMA South Plant as required by any permit may be maintained. GVSUD
will assist and cooperate in good faith at all times to ensure compliance with applicable, federal
state and local regulations and permit requirements, including any request for information and
records.
(g) The Parties acknowledge that the costs stated above are for capacity in the
WHCTL/LS and do not include all the costs. It is the further understanding of the Parties that it is
intended for GVSUD to pay the same costs and fees in the same manner and amounts that Schertz
pays for receiving wastewater treatment at the CCMA South Plant.
IV.
Treatment Charge and Maintenance Fees
Section 4.1 Treatment Char °e
GVSUD will pay Schertz a monthly treatment charge based on the actual metered flows into the
WHCTL/LS to offset the treatment cost charged to the City of Schertz by the CCMA to treat
wastewater.
Section 4.2 Maintenance Fee
GVSUD will pay Schertz an Annual Line Maintenance Service Fee ("ALMSF") by February 1 of
each year based on the allocated LUEs as of January 1 of each year. The ALMSF is intended to
cover the cost of sewer main and lift station operation and maintenance in the WHCTL. The
ALMSF for February 1, 2024 shall be based on the then -applicable LUE to gallons per LUE
equivalency, with the initial cost of $40.00 per day based on 245 gallons per day per LUE. The
ALMSF is subject to no greater than a 3% annual increase, and any such increase shall require
Wastewater Line Capacity Agreement
Woman Hollering Creek Page 4
notice of not less than 90 days prior to the conclusion of GVSUD's budget cycle which ends on
September 30 of each year.
V.
REPRESENTATIONS
Section 5.1 Reeresentations
(a) Each Party represents that:
(1) This Agreement, the transactions contemplated herein, and the execution
and delivery of this Agreement have been duly authorized.
(2) This Agreement, the representations and covenants contained herein, and
the consummation of the transactions contemplated hereby, will not violate or constitute a
breach of any contract or other agreement to which the Party is a party, or any order,
judgment, or decision against the Party.
(3) After proper authorization and execution by each Party, and upon receipt of
all required statutory and regulatory approvals by each Party, this Agreement is a valid and
binding Agreement of each Party enforceable according to its terms.
(b) Each signatory to this Agreement represents that they are duly authorized to sign
the Agreement on behalf of entity they purport to represent herein for the terms and consideration
contained herein.
VI.
DEFAULT REMEDIES
Section 6.1 Default by GVSUD
In the event of default by GVSUD, Schertz may give written notice of such default to GVSUD,
specifying the failure or default relied upon. If GVSUD fails to fully cure the default specified in
such notice within thirty (30) days after receipt of such notice and GVSUD has failed to use
reasonable efforts to attempt to cure such default, Schertz shall have the right to pursue all legal or
equitable remedies, except as otherwise provided in this Agreement or applicable law. Schertz
may employ attorneys to pursue its legal rights and, if Schertz prevails before any court or agency
of competent jurisdiction, GVSUD shall be obligated to pay all expenses incurred by Schertz,
including reasonable attorney's fees.
Section 6.2 efault by Schertz
In the event of default by Schertz, GVSUD may give written notice of such default to Schertz
specifying the failure or default relied upon. If Schertz fails to fully cure the default specified in
such notice within thirty (30) days after receipt of such notice and Schertz has failed to use
reasonable efforts to attempt to cure such default, GVSUD shall have the right to pursue all legal
or equitable remedies, except as otherwise provided in this Agreement or applicable law. GVSUD
Wastewater Line Capacity Agreement
Woman Holleting Creek Page 5
may employ attorneys to pursue its legal rights and, to the extent permitted by law, if GVSUD
prevails before any court or agency of competent jurisdiction, Schertz shall be obligated to pay all
expenses incurred by GVSUD, including reasonable attorney's fees.
VIL
MISCELLANEOUS
Section 7.1 Severabilitti
The provisions of this Agreement are severable and, if any provision or part of this Agreement or
the application thereof to any person or circumstance shall ever be held by any court of competent
jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Agreement and
the application of such provision or part of this Agreement to other persons or circumstances shall
not be affected thereby.
Section 7.2 motions
The captions appearing at the first of each numbered section or paragraph in this Agreement shall
never be considered or given any effect in construing this Agreement.
Section 7.3 ApSlicable Law and Venue
This Agreement shall be governed by, and construed in accordance with, the laws of the State of
Texas. Any action in law or equity brought to enforce or interpret any provision of this Agreement
shall be brought in a court of competent jurisdiction with venue in the Guadalupe County.
Section 7.4 Parties in Interest
This Agreement shall be for the sole and exclusive benefit of the Parties signatory hereto and does
not confer any benefit to any third party and no such third party shall have standing to sue or
enforce this Agreement.
Section 7.5 Entire Agreement
This Agreement constitutes the entire agreement and supersedes all prior agreements and
understanding, both written and oral, between Schertz and GVSUD, with respect to the subject
matter hereof, but shall be read, interpreted and implemented as a component of the
Comprehensive Settlement Agreement between the Parties.
Section 7.6 Waiver and Amendment
Failure to enforce or the waiver of any provision of this Agreement or any breach or
nonperformance by either Party shall not be deemed a waiver by the other Party of the right in the
future to demand strict compliance and performance of any provision ofthis Agreement. No officer
or agent of either Party is authorized to waive or modify any provision of this Agreement. No
Wastewater Line Capacity Agreement
Woman Hollering Creek Page 6
modifications to or recession of this Agreement may be made except by a written document signed
by each Parties authorized representatives.
Section 7.7 Notices
All notices, payments and communications ("notices") required or allowed by this Agreement shall
be in writing and be given by depositing the notice in the United States mail postpaid and registered
or certified, with return receipt requested, and addressed to the Party to be notified. Notice
deposited in the mail in the previously described manner shall be conclusively deemed to be
effective from and after the expiration of three (3) days after the notice is deposited in the mail.
For purposes of notice, the addresses of the designated representatives for receipt of notice for
each of the Parties shall be as follows:
Schertz: City of Schertz
1400 Schertz Parkway
Schertz, Texas 78154
Attention: City Manager
With a copy to: Denton, Navarro, Rocha, Bernal, & Zech, P.C.
2517 N. Main Avenue
San Antonio, Texas 78212
Attention: T. Daniel Santee
GVSUD_ Green Valley Special Utility District
P.O. Box 99
Marion, Texas 78124
Attention: General Manager
With a copy to: Terrill & Waldrop
810 W. 101' Street
Austin, Texas 78701
Attention: Shan S. Rutherford
Section 7.8 Force Ma'eure
If for any reason of force majeure, either Schertz or GVSUD shall be rendered unable, wholly or
in part, to carry out its obligations under this Agreement, then if the Party shall give notice of the
reasons in writing to the other Party within a reasonable time after the occurrence of the event, or
cause relied on, the obligation of the Party giving the notice, so far as it is affected by the force
majeure, shall be suspended during the continuance of the inability then claimed, but for no longer
period. The term "force majeure" as used in this Agreement shall mean acts of God, strikes,
lockouts, or other industrial disturbances, acts of public enemy, orders or actions of any kind of
government of the United States or of the State of Texas, or any civil or military authority,
insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods,
washouts, droughts, arrests, restraints of government and people, civil disturbances, explosions,
breakage or accident to machinery, pipelines, or other structures and any inability on the part of
Wastewater Line Capacity Agreement
Woman Hollering Creek Page 7
Schertz to provide sewer service on account of any other cause not reasonably within the control
of Schertz.
Section 7.9 Multiple Ori inals
This Agreement shall be executed in a number of counterparts, each of which shall be deemed for
all purposes an original and all such counterparts shall together constitute and be one and the same
instrument.
Section 7.10 Amendment.or Modification
This Agreement may be modified, amended, or terminated only by a written instrument executed
by duly authorized representatives of both Schertz and GVSUD.
Section 7.11 Binding Agreement; Assi ent
(a) This Agreement shall be binding upon and inure to the benefit of the successors
and assigns of the respective Parties hereto provided, however, that nothing herein shall prevent
the Parties hereto or their respective successors, legal .representatives, or assigns, by mutual
agreement in writing, from revising or amending this Agreement as may be necessary in the future
because of changed circumstances or otherwise.
(b) GVSUD may not assign all or any part of its rights and obligations hereunder
without the express written consent of Schertz but such consent shall not be unreasonably withhefd.
Section 7.12 Remedies.
It is not intended hereby to specify (and this Agreement shall not be considered as specifying) an
exclusive remedy for any default by either Party, but all such other remedies existing at law or in
equity shall be cumulative including, without limitation, specific performance may be availed of
by either Party, as may be allowed by applicable law. The prevailing Party shall be entitled to any
reasonable attorney's fees, court costs or other expenses incurred in bringing or defending any suit
alleging such default or claim.
Section 7.13 Actual Damages.
No Party shall be liable or have any responsibility to the other for any indirect, special,
consequential, punitive or delay -related or performance -related damages including, without
limitation, lost earnings or profits. Such limitation on liability shall apply to any claim or action,
whether it is based in whole or in part on agreement, negligence, strict liability, tort, statute or
other theory of liability.
Wastewater Line Capacity Agreement
Woman Hollering Creek Page 8
Section 7.14 Governmental Functions.
(a) Notwithstanding any provision to the contrary herein, this Agreement is a contract
for and with respect to the performance of governmental. functions by governmental entities.
(1) The services provided for herein are governmental functions, and Schertz
and GVSUD shall be engaged in the conduct of a governmental function while providing
and/or performing any service pursuant to this Agreement.
(2) The relationship of GVSUD and Schertz shall, with respect to that part of
any service or function undertaken as a result of or pursuant to this Agreement, be that of
independent contractors.
(3) Nothing contained herein shall be deemed or construed by the Parties, or by
any third party, as creating the relationship of principal and agent, partners, joint ventures,
or any other similar such relationship between the Parties.
(b) Each Party reserves and does not waive any defense available to it at law or in equity as to
any claim or cause of action whatsoever that may arise or result from or in connection with this
Agreement. This Agreement shall not be interpreted nor construed to give to any third party the
right to any claim or cause of action, and neither Schertz nor GVSUD shall be held legally liable
for any claim or cause of action arising pursuant to or in connection with this Agreement except
as specifically provided herein or by law.
(c) Neither Party waives or relinquishes any immunity or defense on behalf of itself, its Board
Members, Councilmembers, officers, employees, and agents because of the execution of this
Agreement and the performance of the covenants and agreements contained herein.
IN WITLESS WHEREOF, the parties have herein unto set their hands on duplicate originals, on
this" day of — _ 2023.
CITY OF SCHERTZ
Steve William City Manager
ATTEST:
SUila EdmondsVn, City Secretary
Wastewater Line Capacity Agreement
Woman Hollering Creek
GVSUD
Steve—Eooper, Board P-resident
ATTEST:
es Hen ri Board Secretary
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Exhibit B
CIBOLO CREEK MUNICIPAL AUTHORITY
SOUTH WASTEWATER TREATMENT PLANT
CAPACITY AGREEMENT
BETWEEN
THE CITY OF SCHERTZ, TEXAS
VLru
GREEN VALLEY SPECIAL UTILITY
DISTRICT
CIBOLO CREEK MUNICIPAL AUTHORITY SOUTH WASTEWATER TREATMENT
PLANT CAPACITY AGREEMENT
This Cibolo Creek Municipal Authority South Plant Wastewater Treatment Capacity Agreement
("Agreement') is made and entered into as of the day of ,
2023 (the "Effective Date') by and between the City of Schertz, Texas ("Schertz'l a municipal
corporation of the State of Texas, and Green Valley Special Utility District ("GVSUD"), a political
subdivision of the State of Texas, individually referred to herein as a "Party" and collectively as
"Parties".
This Agreement does not amend the terms, conditions or funding obligations of that certain South
Plant Wastewater Services and Funding agreement dated August 26, 2014 between Cibolo Creek
Municipal Authority ("CCMA"), Schertz, and the City of Cibolo (the "Tri-Party Agreement").
RECITALS
WHEREAS, the Parties entered into a Mediated Settlement Agreement ("MSA") and agreed to
use their best efforts to draft a final Comprehensive Settlement Agreement consistent with the
MSA; and,
WHEREAS, an essential term of the MSA is the development of an Agreement that allocates
current and future capacity within the Cibolo Creek Municipal Authority South Plant ("CCMA
South Plant") for the treatment of wastewater that originates within the respective certificated
sewer service areas of the Parties; and,
WHEREAS, Schertz is a participant in the Tri-Party Agreement that establishes the terms and
conditions to fund the construction of the CCMA South Plant and to receive wholesale wastewater
treatment services from the plant; and,
WHEREAS, Schertz has agreed to assign a portion of the treatment capacity rights owned by
Schertz so that the wastewater conveyed to the CCMA South Plant contemplated by the MSA may
be treated; and,
WHEREAS, the Parties to this Agreement have determined that it is in their best interest to
negotiate and agree upon the terms and conditions for an assignment of a portion of the treatment
capacity rights owned by Schertz in the CCMA South Plant as part of their Comprehensive
Settlement Agreement; and,
WHEREAS, the Parties hereby find that the terms and conditions set forth herein represent what
the Parties believe to be in the respective best interest of each Party and their respective existing
and future customers.
NOW THEREFORE, the Parties, for and in consideration of the covenants and agreements herein
set forth to be kept and performed by them respectively, have agreed to and do hereby agree
together as follows:
AGREEMENT
CCMA South Plant Capacity Assignment Page I
1[.
ESSENTIAL TERMS OF AGREEMENT
A. Current Capacity
1. Schertz assigns CCMA South Plant treatment capacity at no cost to GVSUD
sufficient to service a maximum of 75,000 gpd. As used throughout this Agreement, any
reference to gallons per day (gpd) shall mean the gpd based upon average daily flow as
determined by the Parties through the monitoring on flow meters at the points where
GVSUD wastewater flows enter the Schertz lift station or trunk lines. The Parties agree
that the capacity assigned in this Agreement is capacity owned by Schertz in the CCMA
South Plant that must be utilized by the flowage of wastewater into the CCMA South Plant
through Schertz owned infrastructure. In doing so, the Parties agree that the Tri-Party
Agreement that allocates capacity in the CCMA South Plant is not implicated.
2. Schertz agrees to assign up to an additionW 50,000 gpd capacity upon request by
GVSUD at the City of Schertz actual cost paid, inclusive of principal and interest, for the
pro mta share of cost for the 50,000 gpd for said W WTP. The additional capacity may not
be requested until a minimum 60,000 gpd out of the initial 75,000 gpd assigned to
GVSUD has been utilized.
3. Full payment for the additional 50,000 gpd capacity of $2,030,643.60 shall be
made to Schertz by GVSUD when the CCMA South Plant begins receiving flows from
GVSUD in excess of the initial 60,000 gpd of average daily flow.
4. The capacity, terms and conditions contemplated herein are subject to, and may
be limited by, the available capacity of the trunk lines transporting wastewater to the
CCMA South Plant. The Parties will develop an information sharing protocol to track the
status of capacity utilization.
5. Schertz agrees to undertake all necessary efforts to effectuate the assignment of
the wastewater capacity in the CCMA South Plant contemplated in this Agreement,
including to the extent determined to be necessary, obtaining the consent of all parties to
the Tri-Party Agreement to such assignment.
6. GVSUD will pay Schertz a monthly treatment charge based on the actual metered
flows into Schertz-owned and operated wastewater trunklines and/or lift stations to offset
the treatment cost charged to the City of Schertz by the CCMA to treat wastewater.
7. GVSUD will pay Schertz an amount equal to any impact fee charged by CCMA
at time of connection, it being the agreement and understanding of the Parties that the first
phase of the CCMA South Plant has been fully financed pursuant to the terms of the Tri-
Party Agreement and such impact fees are expected to be utilized for the purpose of
offsetting capital costs associated with the planned future expansion of the CCMA South
CCMA South Plant Capacity Assignment Page 2
Plant as well as for any. other lawful purpose for impact fee proceeds. The Parties
acknowledge that a new study and impact fee may be adopted by CCMA that could
require amendment of the Tri-Party Agreement. Green Valley SUD will evaluate and
review the existing Tri-Party Agreement to determine and identify whether the terms and
obligations are or are not acceptable to Green Valley SUD. The Parties intend to reach
consensus on the interpretation of the terms and obligations in the Tri-Party Agreement,
and to seek approval of an amendment to that agreement with other parties, if necessary
to effectuate the terms hereof.
B. Future Capacity
1. The Parties acknowledge that the City of Schertz and CCMA have agreed that
future expanded capacity in the CCMA plant will be provided to GVSUD at a price and
terms that are equal or better to those provided to the City of Schertz. GVSUD and the
City of Schertz will cooperate, with CCMA's support, to achieve any agreements or
amendments to the Tri Party Agreement deemed necessary.
2. It is the understanding of the Parties that prior to beginning design and eventual
construction of future CCMA South Plant expansions, CCMA will provide written notice
to GVSUD of the proposed expansion. GVSUD will have 60 days to provide a written
response to CCMA indicating whether it is interested in pursuing the acquisition of a
portion of the capacity in the proposed CCMA South WWTP expansion. Thereafter,
GVSUD shall exercise due diligence to determine the feasibility of financing for the
acquisition of capacity in the proposed CCMA South Plant expansion, and thereafter,
within 60 days of its expression of interest, shall either notify CCMA in writing of its
commitment to fund and pay for the additional capacity GVSUD requests, or of its
decision not to participate in the proposed expansion.
3. GVSUD shall pay the operational and maintenance, treatment and impact fee costs
for capacity in future CCMA South Plant expansions that are equal to those charged by
CCMA to Schertz for Schertz capacity in such future expansions.
4. In the event the City of Schertz obtains any additional capacity in the CCMA
South Plant as a result of non -acquisition of all or a portion by the City of Cibolo of its
250,000 gpd under the Tri Party Agreement, the City of Schertz agrees to negotiate in
good faith with GVSUD to provide shared allocation of additional capacity in the first
phase of the CCMA South Plant.
5. The Parties acknowledge the capacity assignment of this Agreement are between
GVSUD and Schertz, and that any such capacity assignment does not amend the Tri-Party
Agreement, including any existing payment obligation between Schertz and CCMA in the
Tri-Party Agreement. GVSUD's utilization of any such capacity assignment in this
Agreement will be subject to the existing terms and conditions of Schertz's rights under
the Tri-Party Agreement. This includes the payment of CCMA impact fees which would
CCMA South Plant Capacity Assignment Page 3
otherwise be payable in the same manner and amounts as if the capacity was being used
and developed by the City of Schertz in its certificated area.
6. GVSUD may utilize the capacity assigned in this Agreement for wastewater flows
originating from properties south of IH 10 at a price and terms equal to or less than those
applicable to the City of Schertz when transported in facilities owned and operated by
GVSUD. in such event, GVSUD will assess and collect CCMA impact fees which would
otherwise be payable in the same manner and amounts as if the capacity was being used
and developed by the City of Schertz in its certificated area. Should such occur, GVSUD
will provide CCMA with the opportunity to file an application at the TCEQ to expand the
impact fee service area to include such land so that impact fees can be assessed and
collected or will work with CCMA to implement an alternative solution to effectuate this
same purpose. The Parties to this Agreement have a mutual understanding and expectation
that the transferred or sold "capacities" in treatment facilities covered by this Agreement
are intended for and will be primarily used for customers and development in the City
limits or ETJ of the City of Schertz, or in the "wedge" area where certificated to
GVSUD.
II.
REPRESENTATIONS
Section 2.1 Rgwesentations
(a) Each Party represents that:
(1) This Agreement, the transactions contemplated herein, and the execution
and delivery of this Agreement have been duly authorized.
(2) This Agreement, the representations and covenants contained herein, and
the consummation of the transactions contemplated hereby, will not violate or constitute a
breach of any contract or other agreement to which the Party is a party, or any order,
judgment, or decision against the Party.
(3) After proper authorization and execution by each Party, and upon receipt of
all required statutory and regulatory approvals by each Party, this Agreement is a valid and
binding Agreement of each Party enforceable according to its terms.
(b) Each signatory to this Agreement represents that they are duly authorized to sign the
Agreement on behalf of entity they purport to represent herein for the terms and consideration
contained herein.
III.
DEFAULT REMEDIES
Section 3.1 Default bv GVSUD
CCMA South Plant Capacity Assignment Page 4
In the event of default by GVSUD, Schertz may give written notice of such default to GVSUD,
specifying the failure or default relied upon. If GVSUD fails to fully cure the default specified in
such notice within thirty (30) days after receipt of such notice and GVSUD has failed to use
reasonable efforts to attempt to cure such default, Schertz shall have the right to pursue all legal or
equitable remedies, except as otherwise provided in this Agreement or applicable law. Schertz
may employ attorneys to pursue its legal rights and, if Schertz prevails before any court or agency
of competent jurisdiction, GVSUD shall be obligated to pay all expenses incurred by Schertz,
including reasonable attorney's fees.
Section 3.2 Default by Schertz
In the event of default by Schertz, GVSUD may give written notice of such default to Schertz
specifying the failure or default relied upon. If Schertz fails to fully cure the default specified in
such notice within thirty (30) days after receipt of such notice and Schertz has failed to use
reasonable efforts to attempt to cure such default, GVSUD shall have the right to pursue all legal
or equitable remedies, except as otherwise provided in this Agreement or applicable law. GVSUD
may employ attorneys to pursue its legal rights and, to the extent permitted "by law, if GVSUD
prevails before any court or agency of competent jurisdiction, Schertz shall be obligated to pay all
expenses incurred by GVSUD, including reasonable attorney's fees.
IV.
ABSCELLANEOUS
Section 4.1 Severability
The provisions of this Agreement are severable and, if any provision or part of this Agreement or
the application thereof to any person or circumstance shall ever be held by any court of competent
jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Agreement and
the application of such provision or part of this Agreement to other persons or circumstances shall
not be affected thereby.
Section 4.2 Ca. tions
The captions appearing at the first of each numbered section or paragraph in this Agreement shall
never be considered or given any effect in construing this Agreement.
Section 4.3 A;.,:licable Law and Venue
This Agreement shall be governed by, and construed in accordance with, the laws of the State of
Texas. Any action in law or equity brought to enforce or interpret any provision of this Agreement
shall be brought in a court of competent jurisdiction with venue in the Guadalupe County.
Section 4.4 Parties in Interest
This Agreement shall be for the sole and exclusive benefit of the Parties signatory herein and does
not confer any benefit to any third party and no such third party shall have standing to sue or
enforce this Agreement.
CCMA South Plant Capacity Assignment Page 5
Section 4.5 Entire Agreement
This Agreement constitutes the entire agreement and supersedes all prior agreements and
understanding, both written and oral, between Schertz and GVSUD, with respect to the subject
matter hereof, but shall be read, interpreted and implemented as a component of the Final Mediated
Settlement Agreement between the Parties.
Section 4.6 Waiver and Amendment
Failure to enforce or the waiver of any provision of this Agreement or any breach or
nonperformance by either Party shall not be deemed a waiver by the other Party of the right in the
future to demand strict compliance and performance of any provision of this Agreement. No officer
or agent of either Party is authorized to waive or modify any provision of this Agreement. No
modifications to or recession of this Agreement may be made except by a written document signed
by each Parties authorized representatives.
Section 4.7 Notices
All notices, payments and communications ("notices') required or allowed by this Agreement shall
be in writing and be given by depositing the notice in the United States mail postpaid and registered
or certified, with return receipt requested, and addressed to the Party to be notified. Notice
deposited in the mail in the previously described manner shall be conclusively deemed to be
effective from and after the expiration of three (3) days after the notice is deposited in the mail.
For purposes of notice, the addresses of the designated representatives for receipt of notice for
each of the Parties shall be as follows:
Schertz: City of Schertz
1400 Schertz Parkway
Schertz, Texas 78154
Attention: City Manager
With a copy to: Denton, Navarro, Rocha, Bernal, & Zech, P.C.
2517 N. Main Avenue
San Antonio, Texas 78212
Attention: T. Daniel Santee
GVSUD: Green Valley Special Utility District
P.O. Box 99
Marion, Texas 78124
Attention: General Manager
With a copy to: Terrill & Waldrop
810 W. 10"' Street
Austin, Texas 78701
Attention: Shan S. Rutherford
CCMA South Plant Capacity Assignment Page 6
Section 4.8 Force Majeure
If for any reason of force majeure, either Schertz or GVSUD shall be rendered unable, wholly or
in part, to carry out its obligations under this Agreement, then if the Party shall give notice of the
reasons in writing to the other Party within a reasonable time after the occurrence of the event, or
cause relied on, the obligation of the Party giving the notice, so far as it is affected by the force
majeure, shall be suspended during the continuance of the inability then claimed, but for no longer
period. The term "force majeure" as used in this Agreement shall mean acts of God, strikes,
lockouts, or other industrial disturbances, acts of public enemy, orders or actions of any kind of
government of the United States or of the State of Texas, or any civil or military authority,
insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods,
washouts, droughts, arrests, restraints of government and people, civil disturbances, explosions,
breakage or accident to machinery, pipelines, or other structures and any inability on the part of
Schertz to provide sewer service on account of any other cause not reasonably within the control
of Schertz.
Section 4.9 Multi: le On:: inals
This Agreement shall be executed in a number of counterparts, each of which shall be deemed for
all purposes an original and all such counterparts shall together constitute and be one and the same
instrument.
Section 4.10 Amendment or Modification
This Agreement may be modified, amended, or terminated only by a written instrument executed
by duly authorized representatives of both Schertz and GVSUD.
Section 4.11 Binding Agreement; Assignment
(a) This Agreement shall be binding upon and inure to the benefit of the successors
and assigns of the respective Parties hereto provided, however, that nothing herein shall prevent
the Parties hereto or their respective successors, legal representatives, or assigns, by mutual
agreement in writing, from revising or amending this Agreement as may be necessary in the future
because of changed circumstances or otherwise.
(b) GVSUD may not assign all or any part of its rights and obligations hereunder
without the express written consent of Schertz but such consent shall not be unreasonably withheld.
Section 4.12 Remedies.
It is not intended hereby to specify (and this Agreement shall not be considered as specifying) an
exclusive remedy for any default by either Party, but all such other remedies existing at law or in
equity shall be cumulative including,' without limitation, specific performance may be availed of
by either Party, as may be allowed by applicable law. The prevailing Party shall be entitled to any
reasonable attorney's fees, court costs or other expenses incurred in bringing or defending any suit
alleging such default or claim.
CCMA South Plant Capacity Assignment Page 7
Section 4.13 Actual Dama a,,es.
No Party shall be liable or have any responsibility to the other for any indirect, special,
consequential, punitive or delay -related or performance -related damages including, without
limitation, lost earnings or profits. Such limitation on liability shall apply to any claim or action,
whether it is based on whole or in part on agreement, negligence, strict liability, tort, statute or
other theory of liability.
Section 4.14 Governmental Functions.
(a) Notwithstanding any provision to the contrary herein, this Agreement is a contract for and
with respect to the performance of governmental functions by governmental entities.
(1) The services provided for herein are governmental functions, and the City and
GVSUD shall be engaged in the conduct of a governmental function while providing and/or
performing any service pursuant to this Agreement.
(2) The relationship of GVSUD and the City shall, with respect to that part of any
service or function undertaken as a result of or pursuant to this Agreement, be that of
independent contractors.
(3) Nothing contained herein shall be deemed or construed by the Parties, or by any third
party, as creating the relationship of principal and agent, partners, joint ventures, or any
other similar such relationship between the Parties.
(b) Each Party reserves and does not waive any defense available to it at law or in equity as to
any claim or cause of action whatsoever that may arise or result from or in connection with this
Agreement. This Agreement shall not be interpreted nor construed to give to any third party the
right to any claim or cause of action, and neither the City nor GVSUD shall be held legally liable
for any claim or cause of action arising pursuant to or in connection with this Agreement except
as specifically provided herein or by law.
(c) Neither Party waives or relinquishes any immunity or defense on behalf of itself, its Board
Members, Councilmembers, officers, employees, and agents because of the execution of this
Agreement and the performance of the covenants and agreements contained herein.
IN WITNESS WHEREOF, the parties have herein unto set their hands on duplicate originals, on
this day of _ _ _ _ _ 2023.
CCMA South Plant Capacity Assignment Page 8
CITY OF SCHERTZ
Steve Williams, City Manager
ATTEST: ,
'61 a Edmond- ity ecretary
GVSUA
Stew6'C oper, 4oard President
AT'I'EST:
es He rd Secretary
CCMA South Plant Capacity Assignment Page 9