26-R-065 Amendment to Southern Plant Wastewater ServicesRESOLUTION 26-R-065
A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF
SCHERTZ, TEXAS AUTHORIZING FOURTH AMENDMENT TO
SOUTHERN PLANT WASTEWATER SERVICES AND FUNDING
AGREEMENT BY AND AMONG CIBOLO CREEK MUNICIPAL
AUTHORITY, THE CITY OF SCHERTZ, AND THE CITY OF CIBOLO
AND RELATED MATTERS IN CONNECTION THEREWITH.
WHEREAS, the Cibolo Creek Municipal Authority (the Authority), Schertz, and Cibolo
previously authorized and executed the Southern Plant Wastewater Services and Funding
Agreement by and among the Authority, Schertz, and Cibolo for an original 0.5 Million Gallons
per Day (MGD) wastewater treatment plant with an effective date of August 26, 2014 (the "2014
Funding Agreement"); and
WHEREAS, the Southern Plant Wastewater Services and Funding Agreement
contemplates that Schertz and Cibolo will have equal capacity in the Phase I treatment capacity
with Schertz having 0.25 MGD and Cibolo having 0.25 MGD and that the Debt Model for the
Southern Wastewater Treatment Plant Project, Phase 1, would be roughly split between the two
municipalities over the 30 year payment schedule with Schertz paying $9,903,675 and Cibolo
paying $10,104,300, if payments are made according to schedule.
WHEREAS, the Authority, Schertz, and Cibolo previously authorized and executed the
First Amendment to the Southern Plant Wastewater Services and Funding Agreement by and
among the Authority, Schertz, and Cibolo with an effective date of October 23, 2018 (the "First
Amendment"), to recognize the issuance of the 2018 Bonds and to amend Section 4(b) to reflect
the payment obligations of Schertz and Cibolo concerning the 2018 Bonds, as further
documented in Section 4(b) and Exhibit C to the 2014 Funding Agreement; and
WHEREAS, the Authority, Schertz, and Cibolo previously authorized and executed the
Second Amendment to the Southern Plant Wastewater Services and Funding Agreement by and
among the Authority, Schertz, and Cibolo with an effective date of August 11, 2023 (the
"Second Amendment"), to provide Cibolo with additional time to deliver written notice of its
intent to meet its obligations under the Agreement, extending the deadline for such notice to
November 27, 2023, and amending Section 4(g) of the Funding Agreement accordingly (the
2014 Funding Agreement as amended by the First Amendment and the Second Amendment
being referred to herein as the "Funding Agreement"); and
WHEREAS, the Authority, Schertz, and Cibolo previously authorized and executed the
Third Amendment to the Southern Plant Wastewater Services and Funding Agreement by and
among the Authority, Schertz, and Cibolo with an effective date of August 11, 2023, to provide
and define the obligations between Schertz and Cibolo concerning the repayment of the Southern
Plant Bonds, the costs of issuance, the annual maintenance and operations costs at the Southern
Plant, documenting and allocating the annual use of the capacity from the Southern Plant, the
establishment of the framework for the possible expansion of the Southern Plant, and the ability
to add prospective customers to benefit from the Southern Plant; and
WHEREAS, the Authority is currently in the process of obtaining a rerated capacity for
the Southern Plant (as defined in the Funding Agreement) (the "Rerate") based on a revised
peaking factor, which is anticipated to increase the Southern Plant's rated treatment capacity
from 500,000 gallons per day ("GPD") to up to 600,000 GPD, subject to approval by the Texas
Commission on Environmental Quality ("TCEQ"); and
WHEREAS, the Rerate is separate and distinct from the previously contemplated
expansion of the Southern Plant to 3,000,000 GPD (the "3 MGD Expansion"), and the Rerate
does not require the construction of new or additional plant infrastructure; and
WHEREAS, Schertz desires access to the full increase in rated capacity resulting from
the Rerate (from 500,000 GPD to 600,000 GPD) until the 3 MGD Expansion is completed and,
in consideration therefor, has agreed to pay a proportionately greater share of the annual debt
service on the 2014 Bonds and the 2018 Bonds, as a component of the Southern Plant Payments,
during the Interim Period (as defined herein); and
WHEREAS, the parties have agreed that, during the Interim Period, Schertz shall be
responsible for approximately 58.3% and Cibolo shall be responsible for approximately 41.7% of
the applicable annual debt service on the 2014 Bonds and 2018 Bonds, as set forth in the revised
payment schedules attached hereto as Exhibit A (the "Revised Debt Service Schedules"); and
WHEREAS, the actual percentages applicable during the Interim Period may be adjusted
from those set forth above in the event TCEQ approves a rerated capacity that results in an
increase of less than 100,000 GPD above the current rated capacity of 500,000 GPD, and the
parties agree to execute a written acknowledgment confirming the final percentages upon receipt
of TCEQ's approval; and
WHEREAS, upon completion and commissioning of the 3 MGD Expansion, the
payment obligations of Schertz and Cibolo shall revert to those set forth in the Funding
Agreement as in effect immediately prior to this Third Amendment; and
NOW THEREFORE, BE IT RESOLVED, THAT THE CITY COUNCIL OF THE CITY
OF SCHERTZ, TEXAS THAT:
Section 1. The City Council hereby authorizes the City Manager enter into the fourth
amended southern plant wastewater services and funding 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. /C�
PASSED AND APPROVED on the day of , 2026.
CITY OF SCHERTZ, TEXAS
A
Sheila Edmondson,
City Secretary
Exhibit "A"
Fourth Amended Southern Plant Funding Agreement
FOURTH AMENDMENT TO SOUTHERN
SERVICES AND FUNDING AGREEMENT BY
CREEK MUNICIPAL AUTHORITY, THE CITY
CITY OF CIBOLO
DRAFT
PLANT WASTEWATER
AND AMONG CIBOLO
OF SCHERTZ, AND THE
WHEREAS, this Fourth Amendment (the "Third Amendment") to the Southern Plant
Wastewater Services and Funding Agreement by and among Cibolo Creek Municipal Authority
(the "Authority"), the City of Schertz, Texas ("Schertz"), and the City of Cibolo, Texas ("Cibolo")
has an effective date of , 2026; and
WHEREAS, the Authority, Schertz, and Cibolo previously authorized and executed the
Southern Plant Wastewater Services and Funding Agreement by and among the Authority,
Schertz, and Cibolo for an original 0.5 Million Gallons per Day (MGD) wastewater treatment plant
with an effective date of August 26, 2014 (the "2014 Funding Agreement"); and
WHEREAS, the Southern Plant Wastewater Services and Funding Agreement
contemplates that Schertz and Cibolo will have equal capacity in the Phase I treatment capacity
with Schertz having 0.25 MGD and Cibolo having 0.25 MGD and that the Debt Model for the
Southern Wastewater Treatment Plant Project, Phase I, would be roughly split between the two
municipalities over the 30 year payment schedule with Schertz paying $9,903,675 and Cibolo
paying $10,104,300, if payments are made according to schedule.
WHEREAS, the Authority, Schertz, and Cibolo previously authorized and executed the
First Amendment to the Southern Plant Wastewater Services and Funding Agreement by and
among the Authority, Schertz, and Cibolo with an effective date of October 23, 2018 (the "First
Amendment"), to recognize the issuance of the 2018 Bonds and to amend Section 4(b) to reflect
the payment obligations of Schertz and Cibolo concerning the 2018 Bonds, as further documented
in Section 4(b) and Exhibit C to the 2014 Funding Agreement; and
WHEREAS, the Authority, Schertz, and Cibolo previously authorized and executed the
Second Amendment to the Southern Plant Wastewater Services and Funding Agreement by and
among the Authority, Schertz, and Cibolo with an effective date of August 11, 2023 (the "Second
Amendment"), to provide Cibolo with additional time to deliver written notice of its intent to meet
its obligations under the Agreement, extending the deadline for such notice to November 27, 2023,
and amending Section 4(g) of the Funding Agreement accordingly (the 2014 Funding Agreement
as amended by the First Amendment and the Second Amendment being referred to herein as the
"Funding Agreement"); and
WHEREAS, the Authority, Schertz, and Cibolo previously authorized and executed the
Third Amendment to the Southern Plant Wastewater Services and Funding Agreement by and
among the Authority, Schertz, and Cibolo with an effective date of August 11, 2023, to provide
and define the obligations between Schertz and Cibolo concerning the repayment of the Southern
Plant Bonds, the costs of issuance, the annual maintenance and operations costs at the Southern
Plant, documenting and allocating the annual use of the capacity from the Southern Plant, the
302891017.7
establishment of the framework for the possible expansion of the Southern Plant, and the ability
to add prospective customers to benefit from the Southern Plant; and
WHEREAS, the Authority is currently in the process of obtaining a rerated capacity for
the Southern Plant (as defined in the Funding Agreement) (the "Berate") based on a revised
peaking factor, which is anticipated to increase the Southern Plant's rated treatment capacity from
500,000 gallons per day ("GPD") to up to 600,000 GPD, subject to approval by the Texas
Commission on Environmental Quality ("TCEQ"); and
WHEREAS, the Rerate is separate and distinct from the previously contemplated
expansion of the Southern Plant to 3,000,000 GPD (the "3 MGD Expansion"), and the Rerate does
not require the construction of new or additional plant infrastructure; and
WHEREAS, Schertz desires access to the full increase in rated capacity resulting from the
Rerate (from 500,000 GPD to 600,000 GPD) until the 3 MGD Expansion is completed and, in
consideration therefor, has agreed to pay a proportionately greater share of the annual debt service
on the 2014 Bonds and the 2018 Bonds, as a component of the Southern Plant Payments, during
the Interim Period (as defined herein); and
WHEREAS, the parties have agreed that, during the Interim Period, Schertz shall be
responsible for approximately 58.3% and Cibolo shall be responsible for approximately 41.7% of
the applicable annual debt service on the 2014 Bonds and 2018 Bonds, as set forth in the revised
payment schedules attached hereto as Exhibit A (the "Revised Debt Service Schedules"); and
WHEREAS, the actual percentages applicable during the Interim Period may be adjusted
from those set forth above in the event TCEQ approves a rerated capacity that results in an increase
of less than 100,000 GPD above the current rated capacity of 500,000 GPD, and the parties agree
to execute a written acknowledgment confirming the final percentages upon receipt of TCEQ's
approval; and
WHEREAS, upon completion and commissioning of the 3 MGD Expansion, the payment
obligations of Schertz and Cibolo shall revert to those set forth in the Funding Agreement as in
effect immediately prior to this Third Amendment; and
WHEREAS, the governing bodies of each of the Authority, Schertz, and Cibolo have each
authorized the execution of this Third Amendment; NOW, THEREFORE,
Section 1. Defined Terms. Capitalized terms used but not defined in this Third
Amendment shall have the meanings assigned to them in the Funding Agreement.
Section 2. Amendment of Debt Service Payment Obligations — Interim Period.
(a) Commencing with the first full month following TCEQ's approval of the
Rerate, and continuing through the first full month after the 3 MGD Expansion is completed and
placed into service (the "Interim Period"), the monthly installments of the respective Southern
Plant Payment pertaining to the annual debt service payment obligations of Schertz and Cibolo
with respect to the 2014 Bonds and the 2018 Bonds shall be based on the Revised Debt Service
302891017.7 - 2 -
Schedules attached hereto as Exhibit A and incorporated herein by reference, reflecting allocations
of approximately 58.3% to Schertz and approximately 41.7% to Cibolo.
(b) The Revised Debt Service Schedules are based on the assumption that the
Rerate results in an increase in rated capacity of 100,000 GPD (i.e., from 500,000 GPD to 600,000
GPD). In the event TCEQ approves a Rerate resulting in an increase of less than 100,000 GPD,
the payment percentages applicable during the Interim Period shall be adjusted on a pro rata basis
to reflect the actual increase in rated capacity approved, and the parties shall execute a written
acknowledgment confirming the adjusted annual payment amounts as soon as practicable
following receipt of TCEQ's final approval. For example, if TCEQ approves only 50,000 GPD of
additional capacity (50% of the assumed 100,000 GPD), Schertz's incremental share would
increase proportionally by half of the differential between 50% and 58.3% for the Interim Period.
(c) Notwithstanding the payment schedule set forth in Section 4(b) of the
Funding Agreement and the payment schedule attached as Exhibit C thereto, during the Interim
Period, the allocation of the payments between Schertz and Cibolo with respect to the 2014 Bonds
and the 2018 Bonds, as a component of the Southern Plant Payments, shall be as set forth in Exhibit
A to this Third Amendment.
(d) Notwithstanding Sections 3(a) and 4(b) of the Funding Agreement, Cibolo's
right to subordinated use of the Southern Plant during the Interim Period shall correspond to its
actual payment share of the 2014 Bonds and the 2018 Bonds, as reflected in Exhibit A hereto.
(e) The Participants agree that, regardless of the payment obligations of each
Participant reflected in Section 4(b) of the Funding Agreement and Exhibit A hereto, the
Participants shall each be jointly and severally obligated to pay the Southern Plant Payments,
including the payment obligations with respect to the 2014 Bonds and the 2018 Bonds as a
component of the Southern Plant Payments during the Interim Period, as reflected in Exhibit A
hereto, in the event any Participant fails to make such payments. If a Participant fails to make the
Participant's share of a Southern Plant Payment, including the payment obligations with respect
to the 2014 Bonds and the 2018 Bonds as a component of the Southern Plant Payments as reflected
in Exhibit A hereto, and the other Participant is required to pay the defaulting Participant's share
of a Southern Plant Payment, then the Participant making the payment shall be entitled to recover
the amount of the payment, as reflected in Exhibit A hereto with respect to the 2014 Bonds and
the 2018 Bonds as a component of the Southern Plant Payments, plus interest from the defaulting
Participant as provided in Section 14(b) of the Funding Agreement.
(f) For the avoidance of doubt, the Participants agree that, during the Interim
Period, the payment obligations of each Participant reflected in Sections 3(b)(2) and (3), with
respect to Schertz, and Sections 4(e)(2) and (3), with respect to Cibolo, shall not be modified by
this Third Amendment.
(g) Except as modified by this Section 2 during the Interim Period, all other
terms and conditions of the Funding Agreement regarding the payment of the Southern Plant
Payments, including the payment of debt service on the 2014 Bonds and the 2018 Bonds, shall
remain in full force and effect.
302891017.7 -3-
Section 3. Reversion to Original Pad went Terms upon Completion of 3 MGD
Ex�,ansion.
(a) Upon the completion and commissioning of the 3 MGD Expansion,
[pursuant to a written determination provided by the engineer of the Authority,] and effective as
of the first day of the next succeeding full month, the payment obligations of Schertz and Cibolo
shall automatically revert to the applicable tern and year for the payment of the Southern Plant
Bonds as set forth in Section 4(b) of the Funding Agreement and in the First Amendment, as in
effect immediately prior to this Third Amendment, without the need for further action by the
parties; provided, however, that the parties agree to execute a written acknowledgment confirming
the date of reversion within fifteen (15) calendar days following such completion.
(b) For the avoidance of doubt, the reversion described in Section 3(a) shall not
affect any payment obligations that accrued during the Interim Period.
Section 4. Ratification. Except as expressly modified by this Third Amendment, each
of the Authority, Schertz, and Cibolo hereby authorizes, readopts, reconfirms, and ratifies the
Funding Agreement in all respects.
Section 5. Authority to Execute. Each person signing on behalf of the parties hereby
confirms that they have the authority to execute this Third Amendment on behalf of the party
indicated by their signature.
Section 6. Counterparts. The parties hereto acting under authority of their respective
governing bodies have caused this Third Amendment to be duly executed in several counterparts,
each of which shall constitute an original, all as of the day and year first above written, which is
the effective date of this Third Amendment.
[The remainder of this page intentionally left blank.]
302891017.7 - 4 -
CIBOLO CREEK MUNICIPAL AUTHORITY
President, Board of Directors
ATTEST;
Secretary, Board of Directors
STATE OF TEXAS §
COUNTY OF GUADALUPE §
Before me, on this day personally appeared the foregoing individuals, known to me to be the
persons whose names are subscribed to the foregoing instrument and who executed this document
in my presence.
Given under my hand and seal of office this day of .2026.
rotary ruonc, mate or i exas
(NOTARY SEAL)
302891017,7 S- l
CITY OF SCHERTZ, TEXAS
By: City Manager
ATTEST:
City Secretary
STATE OF TEXAS
COUNTY OF GUADALUPE
Before me, on this day personally appeared the foregoing individuals, known to me to be the
persons whose names are subscribed to the foregoing instrument and who executed this document
in my presence.
Given under my hand and seal of office this day of
Notary Public, State of Texas
(NOTARY SEAL)
302891017.7 S-2
52026.
CITY OF CIBOLO, TEXAS
By: City Manager
ATTEST:
City Secretary
STATE OF TEXAS §
COUNTY OF GUADALUPE §
Before me, on this day personally appeared the foregoing individuals, known to me to be the
persons whose names are subscribed to the foregoing instrument and who executed this document
in my presence.
Given under my hand and seal of office this day of , 2026.
Notary Public, State of Texas
(NOTARY SEAL)
302891017.7 S-3
EXHIBIT A
Revised Debt Service Schedules (Interim Period)
(a) City of Schertz - Payments @ 58.3% (Interim Period)
Fiscal Year Ending 9/30
Series 2014 Bonds
Series 2018 Bonds
Total Debt Service
2026
$239,176
$300,600
$539,776
2027
$240,692
$304,350
$545,042
$415,475
$415,475
2028
$239,059
$176,416
2029
$240,225
$175,250
2030
$241,158
$176,853
$418,011
2031
$238,943
$175,250
$414,193
2032
$239,526
$176,416
$415,942
2033
$239,875
$177,290
$417,165
2034
$239,992
$174,958
$414,950
2035
$0
$175,396
$175,396
Note: The fiscal years to which the Interim Period applies will be confirmed upon receipt of TCEQ
approval of the Rerate and completion of the 3 MGD Expansion. The above schedule reflects the
pro -rated 58.3% allocation for the applicable years based on the currently projected Rerate.
(b) City of Cibolo - Payments @ 41.7% (Interim Period)
Fiscal Year Ending 9/30
Series 2014 Bonds
Series 2018 Bonds
Total Debt Service
2026
$171,074
$0
$171,074
2027
$172,158
$0
$126,184
$172,158
$297,175
2028
$170,991
2029
$171,825
$125,350
$297,175
2030
$172,492
$126,497
$298,989
2031
$170,907
$125,350
$296,257
2032
$171,324
$126,184
$297,508
$298,385
2033
$171,575
$126,810
2034
$171,658
$125,142
$296,800
2035
$411,450
$125,454
$536,904
302891017.7 S-1
Note: The fiscal years to which the Interim Period applies will be confirmed upon receipt of TCEQ
approval of the Rerate and completion of the 3 MGD Expansion. The above schedule reflects the
pro -rated 41.7% allocation for the applicable years based on the currently projected Rerate.
302891017.7 S-2