18-R-24 - Agreemet with City of Seguin and the SSLGC regarding the sale of excess SSLGC waterCITY 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
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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.
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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.
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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: