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18-R-24 - Relating to water sales Resolution No. 2018R-037CITY OF SEGUIN RESOLUTION NO. 2018R-037 STATE OF TEXAS A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEGUIN, TEXAS, APPROVING THE TERMS AND CONDITIONS OF A TRI.LATERAL AGREEMENT BETWEEN THE CITY OF SCHERTZ, THE CITY OF SEGUIN, AND THE SCHERTZSEGUIN LOCAL GOVERNMENT CORPORATION RELATING TO WATER SALES; AND DECLARING AN EFFECTIVE DATE WHEREAS, the original agreement that formed Schert/Seguin Local Government Corporation (the "SSLGC") requires that each city and the SSLGC grant permission to either city for the sale of water to an entity not under current contract at the time the agreement was signed; and WHEREAS, the Cities and the SSLGC have drafted this Tri-Lateral Agreement to allow each City to directly sell SSLGC water provided that sufficient capacity exists; and WHEREAS, the Tri-Lateral Agreement also provides that the SSLGC can use some of its collected impact fees to install a second delivery point for the City of Schertz; and WHEREAS, the Trial Lateral Agreement also provides that either City may use available proportionate allocations of the other Cities 50% of the water supply, and WHEREAS, the City of Schertz has approved this Tri-Lateral Agreement and city staff recommends its approval. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEGUIN, TEXAS: PART l: The terms and conditions of the attached Tri-Lateral Agreement between the City of Schertz, the City of Seguin, and the Schertz/Seguin Local Government Corporation is hereby approved. PART 2: behalf of the City The City Manager, Douglas Faseler, is authorized to execute the Agreement on PART 3: passage. This Resolution shall be in full force and effect immediately from and after its PASSED AND ADOPTED on the 20th day of March 2018 Naomi Manski, City Secretary L o-u) MA 3-20-2018 2018R-037 ATTEST: STATE OF TEXAS COUNTY OF GUADALUPE Tri-Lateral Agreement Relating to the Water Sales This Tri-Lateral Agreement Relating to the Water Sales ("Agreement") is executed by and among the City of Schertz, Texas ("Schertz"), the City of Seguin, Texas ("Seguin"), andthe Schertzr'Seguin ttar"h lo Local Government Corporation ('SSLGC') as of , 2018 (the "Effective Date"). Schertz and Seguin are both Texas '1. The Parties entered into an agreement captioned "Regional Water Supply Contract" dated Novembe|15, 1999 that addressed the flnancing, construction, and operation of a regional water supply project benefitting Schertz and Seguin (the "1999 Agreement"). Sometimes herein Schertz and Seguin are referred to as the "Cities". 2. The 1999 Agreement provides the contractual authority for the SSLGC to operate, maintain, and manage the SSLGC utility system on a regional basis for the drrect benefit of the residents and ratepayers of Schertz and Seguin and with respect to their respective utility systems. 3. The Parties intend for this Agreement to be evidence of their respectrve approvals and consents required by Section 2.08 of the 1999 Agreement, as follows: (i) the reallocation of costs of an additional point of delivery for Schertz pursuant to Section 2.14 of the '1999 Agreement; (ii) the supply of water to other persons and/or third party wholesalers pursuant to Section 2.'16 of the 1999 Agreement; and (iii) the sharing of each Party's capacity as set forth in Section 2.1 5 of the 1999 Agreement (but not the respective obligation of Schertz and Seguin to the holders of SSLGC's bonds pursuant to Section 3.01 of the Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the receipt and sufftciency of which are hereby acknowledged, the Parties hereto hereby agree as follows: s s 3A42t32#254175 FTNAL 03,09-2018 home-rule cities and the SSLGC is a Texas non-profrt, publlc corporation created by and to act on behalf of Schertz and Seguin pursuant to Subchapter D of Chapter43l (Sections 431 .101-431.109) of the Texas Transportation Code and other applicable law each of which is authorized to enter into this Agreement pursuant to the authority as further described below. Schertz, Seguin, and the SSLGC are jointly referred to as the "Parties," and individually, each a "Party." Recitals: '1 . Schertz and Seguin may each enter into contracts to supply water to third party wholesalers and/or other persons who currently do not have a contract with the ssLGC, provided, however, to the extent SSLGC is the source for the water supplied by the city under such contract, upon compliance with the 1999 Agreement and other applicable law the city entering into such contract shall be responsible, as among the parties, for having 1 the proportionate capacity of water available in SSLGC facilities to satisfy the requirements under such contract, together with the requirements of the city entering into such contract. Priorto entering into such contract, Scher2 orSeguin, as appropriate shall notify SSLGC as to the amount of water anticipated to be sold so that the capacity to provide the additional water supplies can be verified and the corresponding sales can be calculated into future rate setting by SSLGC. 2. Should any third party wholesaler and/or other person with an existing water supply contract with SSLGC desire additional SSLGC water and SSLGC has the capacity to supply the additional water, SSLGC will enter into such an agreement and not Schertz or Seguin individually. ln compliance with Sections 3.09 and 8.01 of the 1999 Agreement and Section 38 of the SSLGC bond resolution (the "Bond Resolution") adopted on October 20,2016 authorizing the issuance of obligations designated as Schertz/Seguin Local Government Corporation Contract Revenue Bonds, New Series 2016 (Texas Water Development Board SWIRFT Project Financing), dated August '1, 2016, in the principal amount of $43,670,000 (the "Outstanding Bonds") the Parties acknowledge that no more than 10% of the capacity of the System (as defined in the Bond Resolution) may be contractually sold on a long{erm basis to any private party or entity or to any agency of the federal government in order to protect and preserve the tax-exempt status on the Outstanding Bonds. 3. ln compliance with the '1999 Agreement, the Parties agreed that an additional point of delivery requested by Schertz, to be located in the general vicinity of the southern area of Schertz, would be installed by the SSLGC and that Schertz would pay the costs of installing the point of delivery in accordance with Section 2.14 of the 1999 Agreement. The Parties now agree that the prior arrangement shall be modified and that the SSLGC will pay the cost of installing the point of delivery from the SSLGC's fund receiving the proceeds from impact fees paid by Schertz and Seguin. The Parties acknowledge the current balance of such fund is sufficient to pay the cost of installation, but should the amount of the funds be inadequate, then Schertz will pay for the installation costs of the point of delivery in excess of the funds available to SSLGC in the impact fee fund. 4. Schertz and Seguin agree that each of the Cities, as well as the SSLGC, is allowed to share or use any available proportionate allocations of the other city's 50% share of the groundwater produced from the existing wells located in Gonzales County producing water from the Carrizo Aquifer (the "Gonzales Wellfield") rn the Gonzales Wellfield with each other and with SSLGC to provide the water production, treatment, and transmission capacity from the Gonzales Wellfjeld required to satisfy the requirements of Schertz and Seguin and the requirements of the supply of water to th ird pa rty wholesalers and/or other persons as may be allowed pursuant to this Agreement and the 1999 Agreement until that availability does not exist. The Cities and SSLGC shall be notified as early as possible that using more than a member City's allocation may be necessary so that all Parties can plan accordingly. 2 3842132 #2s417 5 FTNAL 03-09-2018 5. The general provisions of the 1999 Agreement, as set forth in Article Vlll, sections 8.01 through 8.22, are incorporated by reference into this Agreement as if set forth verbatim herein. lN WITNESS WHEREOF, the Parties hereto acting under authority of their respective governing bodies have caused this Agreement to be duly executed as of the Effective Date. SCH ERTZ/SEG U I N LOCAL GOVERNM ENT COR TION Attest City Secretary Attest. City Secretary ?* ard of D .-ln.q,-AS..; ofD CITY OF TEXAS C By SEGUIN, TEXAS By. 3 3842132 #254175 FTNAL 03-09-2018 6. This Agreement is not intended to amend and should not be construed to amend the 1999 Agreement, its covenants or obligations entered into in connection therewith, or any other existing agreements, specifically including but not limited to agreements with the Texas Water Development Board. To the extent any provision of this Agreement irreconcilably conflicts with a provision of any existing agreement to which SSLGC is a party, the provisions of such other agreement shall prevail. By: G@PV RESOLUTION NO. 18-R-24 A RESOLUTION BY TIIE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING THE CITY TO ENTER INTO AN AGREEMENT WITH THE CITY OF SEGTJIN AND THE SCHERTZ SEGUTN LOCAL GOVERNMENT CORPORATTON (SSLGC) REGARDING TIIE SALE OF EXCESS SSLGC WATER AND OTTMN MATTERS IN CONTIECTION TIIEREWITII WHEREAS, the City of Seguin has requested approval from the City of Schertz for the City of Seguin to enter into a contract(s) with a 3'd party wholesa_ler for the sale of SSLGC excess water as is required in the founding documents of the SSLGC; and, WHEREAS, both Cities and SSLGC have come to agreement that if either City desires to enter into a contract with a new 3'd party wholesaler for the purchase of excess SSLGC water no additional approval is necessary and that if a current customer approaches either City to inquire about purchasing more excess water that they will be directed to SSLGC for this additional sale; and WHEREAS, both Cities and SSLGC have come to agreement that if either City is expected to exceed the amount of water available to them in their annual allotment that SSLGC may use excess water in the other City's allotment to overcome this deficit; and WHEREAS, both Cities and SSLGC have come to agreement that the construction of a second delivery point for the City of Schertz is an appropriate use of SSLGC impact fees and that this construction should take place when requested by the City of Schertz; and WHEREAS, city staff has worked with the City of Seguin and SSLGC to construct the attached agreement that is acceptable to all three parties; and WHEREAS, the City Council has determined that it is in the best interest of the City to enter into the attached agreement to establish expectations on excess water sales and other matters in connection therewith; THEREFORE, BE IT RESOLVED BY TIIE CITY COI.INCIL OF TI{E CITY OF SCI{ERTZ, TEXAS T}IAT: Section 1. The City Council hereby authorizes entering into the agreement in substantially the same form as attached. Section 2. The City Council, by this authorization gives approval to the City of Seguin to sell excess water from their annual allotment to a 3'd parfy wholesaler as stipulated in the 1999 agreement and the attached agreement once executed. Section 3. 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 Councit. Section 4. A11 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 6. 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 7. 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, allas required by Chapter 551, Texas Government Code, as amended. Section 8. This Resolution shall be in force and effect from and after its final passage, and it is so resolved. PASSED AND ADOPTED, this 13th day of March,2018. CITY O TEXAS R. Carpenter, Mayor ATTEST: Dennis,ecretary (CITY SEAL) Section 5. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America.