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1973-Q-6-Contract-Sewer zj- fJ - ~ MINUTES PERTAINING TO THE PASSAGE AND ADOPTION OF AN ORDINANCE AUTHORIZING EXECUTION OF A CON- TRACT FOR SEWERAGE SERVICE CITY OF SCHERTZ x X X X X X THE S TA'l'E OF TEXAS COUNTIES OF GUADALUPE AND BEXAR ON THIS, the 6th day of March, 1973, the City Council of the City of Schertz, Texas, convened in reqular ~es~ion at the regular meeting place thereof in the City Hall, the meeting being open to the public and notice of said meeting, giving the date, place and subject thereof, having been posted ae prepcribed by Article 6252-17, Section 3A, V.A.T.C.S., with the following members pre~ent and in attendance, to wit: JESSE W. GRAHAM MAYOR ROBERT E. SCHWARTZ HUGH G. SANDIFER LEON R. CHAMBLESS RICHARD MANSFIELD MRS. NELL FUNK ) ) ) ) ) ALDERMEN and with the following absent: Non e , constituting a quorum; and among other proceedings had were the following: The Mayor introduced a proposed ordinance. The ordinance wa~ read ~n full. Alderman _u_ F,~nk made a motion that any rule re- quiring ordinances to be read more than one time or at more than one meeting be suspended, and that said ordinance be pap~ed ap an emergency measure. The motion was seconded by Alderman ,.~hall1.1?.!ess and carried by the following vote: AYES~ Aldermen Schwartz, Sandifer, Chamb1e~s, Mansfield and Funk. NOESi None. Alderman Chamb1~~~<._,,_ made a motion that the ordinance be passed finally. The motion was seconded by Alderman Funk and carried by the following vote~ AYES: Aldermen Schwartz, Sandifer, Chambless, Mansfield and Funk. NOES: None. The Mayor announced that the ordinance had been finally passed. The ORDINANCE is as follows: AN ORDINANCE approving the form of a proposed con- tract for sewerage service to be executed by and between the City of Schertz, Texas, and the Cibo1o Creek Municipal Authority, and making provision for the execution thereof; and de- claring an emergency. WHEREAS, this governing body has been negotiating with the Board of Directors of the Cibo1o Creek Municipal Authority on the terms and conditions of a proposed contract for sewerage service; and, WHEREAS, it now appears that an acceptable contract has been prepared, the same being attached hereto and made a part hereof for all purposes, now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXA S : SECTION 1: That the form of proposed contract for sewerage service mentioned in the preamble hereof is hereby approved by this City Council. SECTION 2: That this ordinance, with the form of contract attached hereto, shall be made a part of the permanent records of the City, and the City Secretary is directed to record the same in the official minutes of this City Council. SECTION 3: The Mayor and City Secretary are authorized and directed to execute the proposed contract (in such form) as the act and deed of this City and this City Council. SECTION 4: The fact that it is to the best interest of the City to approve a proposed contract for sewerage service between . the City and the Cibolo Creek Municipal Authority at the earliest possible date constitutes and creates an emergency and an urgent public necessity requiring that any rule providing for ordinances to be read more than one time or at more than one meeting of the City Council be suspended, and requiring that this ordinance be passed and take effect as an emergency measure, and such rules and provisions are accordingly suspended, and this ordinance is passed as an emergency measure and shall take and have effect and be in full force from and after its passage. PASSED AND APPROVED, this the 6th day of March, 1973. ATTEST: f7~/j{J~~ MaYO~ty of Schertz, Texas Q:A. f ~ ~ " /s;Lf.~J-/:<:1 L ~~ec~etary, City of Schertz, C .Texas (City Seal) copy THE STATE OF TEXAS l l COUNTY OF GUADALUPE 1 CONTRACT FOR SEWERAGE SERVICE This contract made and entered into as of the ,--2/a;: /J.i,kJL:CJ.J , 1973, by and between the Cibolo Munic-ipa 1 Authr>ri ty, (hereinafter ca lIed HAuthori ty" City of Schertz l Texas, (hereinafter call(~d "City" . WITNESSETH Whereas, the Authority was created and establ. hed as a governmental agency, body politic and corpo e, and a conserva- tion and reclamation district under Arti~ ~ VI, Section 59 of the Constitution of Texas by Chapter 347, cts of the 62nd Legislature, Regular Session, 1971; a~" Whereas, the Texas lva ter Qua Ii ty Boa d as des igna ted the Authority as the governmental entit develop a regional. sewerage system in tha t area of th bolo Creek Wa tershed heretofore designated (by Board No. 70-0327-2) as a regional area and has charged th thority with the responsibility of the design, construction and 0 eration of such regional sewerage system; and Whereas, such regional sewera consist of sewage treatment system of the Authority is to ants, outfall and interceptor be and is responsible for the ntenance of all portions of the n the aforesaid area that are eligible 660 as of July 1, 1972, while other collector) are to be maintained and political subdivisions in such area, and lines and the Authority design, construction and sanitary sewer system . for grant under Publ. portions of the syst constructed by var.i others; and. Whereas, the Cit the purpose of includes the the premises d (such exhibit s heretofore issued its bond obligations for iring a sanitary sewer system and such system L .ng sewage treatment plant which is located on cribed in E hibit A attached to this contract eing made a part hereof for all purposes); and Whereas, the said sewage treatment plant of the City is to be incorporate as an integral part of the regional sewerage system and the e cut ion hereof by the parties is considered proper and expe ent in order to provide the regional or area-wide waste collect n, treatment and disposal system which is necessary to preven pollution or maintain and enhance the quality of water in th area;, and eas, the parties hereto, by their respective governing bodies ereby find and determine: (1) that.a regional or area-wide system is necessary and desirable to prevent pollution and maintain or enhance the quality of water in the area; and (2) that the proposed regional system of the Authority is capabl~ or, in the reasonably foreseeable future, 1. can be made capable of serv1c1ng the waste water collection, treatment and disposal needs of all of the said area; and (3) that the Authority as owner or operator of said system is agreeable to providing such services in full conformity with the aforesaid order of the Texas Water Quality Board, and (4) that the operation of the sewage treatment plant by the Authority will be more economical (by reason of scale) than the continued operation of the sewage treatment plant by the City; and (5) it is the desire of the parties signatory that costs for performing sewage transportation and treatment, should be distributed to the users to assure (a) uniform charges, (b) economic efficiency, administrative simplicity, and (c) revenue adequacy so the region as a whole will benefit from improved quality of the treatment of sewage and the consequent improvement of the quality of water and the environment in the region; and Whereas, this contract is intended to assist in implementing State policy to establish and control the quality of water in the State and control, prevent and abate the pollution thereof, and encourage and promote the development and use of regional and area-wide waste collection, treatment and disposal systems to serve the waste disposal needs of citizens of the State; and Now, Therefore, the parties hereto, in consideration of the mutual agreements and undertakings hereinafter set forth, hereby contract and agree as follows: 2 . ARTICLE I Defini tions SECTION 1.01: Unless the context shall indicate a contrary meaning or intent, the terms below defined, for all purposes of these contracts and any contract amendatory or supplemental to either of them, shall be construed or used and are intended to have meanings as follows: (a) "additional contracting party or parties" means any city or other person, as defined in Chapter 25 of the Water Code, other than the parties hereto, who shall enter or have entered into a contract with the Authority under which the Authority is to furnish service to such City or other person through the system. (b) "de bt of the s ys tern" mea ns " (i) the amount required by the proceedings authorizing the issuance of bonds of the Authority to be set aside and provided for the payment and security of each series of bonds delivered by the Authority to provide for the construction of all or part of the system or for the improvement, repair, or extension thereof, and (ii) the cost of the treatment plant of the City which is located on the premises described in Exhibit A, and the cost of the treatment plant of any additional contracting party which (a) is located in whole or in part in the service area of the Authority and (b) which party (as the owner thereof) executes a contract with the Authority whereby the Authority operates the same. Cost of any such treatment plant shall be determined as provided in Section 4.11. (c) "engineer" means an independent consulting engineer of national repute as may be selected by the Authority for services in connection with the system. (d) "fiscal year" means the twelve-month period beginning ~~b~ I of each year. (e) "industrial waste ordinance" means any order, resolution, or ordinance adopted by the parties or additional contracting parties to control or regulate the discharge into the system of (i) liquid and water-carried wastes from industrial processes, as distinguished from sanitary sewage,or (ii) garbage (solid wastes from the preparation, cooking and dispensing of food, and from handling, storage and sale of produce) or 3. (iii) "grease" (fats, ~vaxes, oils, and other similar materials in waste water, as determined by procedures specified in the then latest edition of "Standard Hethod for Examination of Water and Haste Hater" published by American Public Health Association,Inc.). (f) The words "local setoJerage facilities" shall mean all facilities owned or operated by the City or one or more of the additional contracting parties for the local collection of sewage to be delivered to the system. (g) "maintenance and operation expense" means all costs of repairs and replacements of the system, all costs of maintenance and operation of the system including (for greater certainty but with- out limiting the generality of the foregoing) supervision, general administrative, engineering, accounting, auditing, annual reports, and payments made by the Authority in satisfaction of judgments resulting from claims not covered by the system's insurance, or any costs arising in connection with the operation of the system, and legal expense, and any other supplies, insurance, services and equipment necessary for proper operation and maintenance of the system. Such term shall not include depreciation. (h) "meter" means any device used to measure se~vage flow. (i) "metered discharge" means the volume of sewage flow, expressed in millions of gallons, introduced into the system. (j) "point of entry" is a designated location on the system at which a particular contracting party may discharge sewage into the system. (k) "sanitary sewage" means liquid and water-carried waste discharged from the sanitary conveniences of dwellings and other buildings. (l) "system" means (i) the Sewage Treatment Plant or plants owned or operated by the Authority together with all future extensions, betterments, replace~ ments, or additions thereto constructed or other- wise acquired with the proceeds of financing accomplished by the Authority and (ii) the other facilities (including interceptors) to provide for the receiving, transporting, treating and disposing of sewage which the Authority is obligated to receive under the terms of this or similar contracts; said term shall include only those facilities which are constructed or acquired or the use of which is arranged for by the Authority 4. to afford service in the service area of the Authority which can economically and efficiently be served by said system irrespective of whether the facilities of said system are physically interconnected. Specifically, the term includes any facilities leased by the Authority or operated for or on behalf of the City or an additional contracting party. 5. ARTICLE II Representations and Agreements SECTION 2.0l: The City's Representations and Agreements. In connection with its undertakings hereunder, the City represents as follows = (a) In its capacity as a duly incorporated city of Texas, it is empowered under applicable laws of Texas, particularly under the Interlocal Coopera- tion Act and the Texas Water Code to enter into the engagements prescribed for it under this agreement and to perform all obligations which may result therefrom, and its governing body has duly authorized execution of this agreement. (b) It will exclusively use the waste collection, treatment and disposal system or systems to be provided under the terms of this agreement and in accordance with the terms and conditions herein set forth. (c) It will timely pay to the Authority the full amount it is required to pay under the provisions of this contract for the services supplied by the system. (d) During the time this contract is in force and effect, it will not expend any funds for the construction of additional capacity of waste water treatment. (e) That it will (i) plan, construct, maintain and finance local sewage facilities, (ii) set retail rates to individual customers for utility service adequate to meet its obligation including those hereunder, (iii) bill and collect for local sewer services; (iv) set and enforce construction standards (plumbing codes and building ordinances) for local lines based on regional standards; (v) issue tap permits on local lines but not on lines forming a part of the system. (f) That it will cooperate ~vith the Authority in the performance of the duties and responsibilities assigned to the Authority by this contract. (g) Any sewer tateral, main, or sub-main serving two or more residential or commercial units of the city which is connected in the future directly or indirectly with the system shall be designed by, and the construction shall be supervised by, competent engineers. Such engineers shall, in the preparation of plans and specifications for such construction, incorporate therein requirements and methods of construction approved by the city and the Authority. 6. SECTION 2.02: Representations and Agreements of Authority. Authority represents to the City and agrees with such party that: (a) it will use its best efforts to obtain maximum State and Federal grant assistance in construct- ing the system to the end that capital costs shall be kept at a minimum. (b) it will finance and construct the initial improvements, extensions, and interceptors which are to constitute a part of the system in its initial stage of development; and (c) during the period of the development and expansion of the regional system (including the planning, construction, and financing stages), the operation and maintenance of the city plant (described in Exhibit A) shall be the responsi- bility of the Authority. (d) the Authority will: (i) to prepare comprehensive regional plans for water quality management, control and abatement of pollution in its service area which (1) are consistent with any applicable water quality standards established pursuant to current law; (2) endeavor to maintain disposal systems as will provide the most effective and economical means of collection, storage, treatment and purification of waste, and recull~ends means to encourage rural, municipal and industrial use of such works and systems; and (3) recvlluHend maintenance and improvement of water quality standards within said area and recommend methods of adequately financing those facilities as may be necessary to implement the p la n . (ii) to J01n in the performance of planning functions with any public agency and enter into planning agreements for such term and upon such conditions as may be deemed desirable so as to provide coordinated planning on an area-wide scale; (iii) to evaluate the planning as facilities are completed; (iv) to encourage the development and enforcement of waste water standards within its service area. The planning by the Authority shall be comprehensive in nature, shall consider the sources of water, uses of water, recycling, pollution sources, pollution abatement techniques 7. and devices as well as the use of water within the region. Local influence and input shall be obtained for planning of interceptors. SECTION 2.04: Construction. The Authority agrees to proceed as promptly as possible with the construction of the improvements which will constitute a part of the initial system. 8. ARTICLE III Procedures to Insure Quality SECTION 3.01: Points of Entry. The system shall accept sewage only from the City and additional contracting party. Sewage will be accepted into the system at points of entry. The Authority shall provide additional points of entry as may be required by the City provided any additional point of entry (after initial construction is completed) is found to be economically feasible by the engineer. The initial points of entry for the City are set forth in Exhibit C to this contract. SECTION 3.02: Quality. (a) the city agrees to limit its discharge into the system to those that are defined as admissible discharges in the industrial waste ordinance and curtail the discharge of any wastes that have the characteristics of pro- hibitive discharge under said ordinance. (b) The parties hereto recognize that various Federal and State regulations agencies periodically modify the standards on prohib- itive discharges; and revisions to the industrial waste ordinances of the parties hereto will periodically become necessary so as to comply with these latest standards. It is the intention of this contract that the respective industrial waste ordinances be reviewed periodically by the parties and each hereby covenants to revise its ordinance in accordance with the latest standards of any Federal or State agency having regulatory powers within 90 days of the receipt of notice from one party to the other of such change. SECTION 3.03: Testing Qualitv. At regular intervals of not more than one month, the Authority will collect twenty-four hour composite samples of all sewage at each point of entry and cause same to be analyzed by American Public Health Association Standard Methods. Should the analysis disclose concentrations higher than permitted by the industrial waste ordinance, the Authority will at once inform city of such disqualification. It shall be the obligation of city to require the offending originator of said highly concentrated materials to undertake remedial pretreatment before discharge into the city's local sewage facilities. The engineers will cooperate with engineers of city in reaching a satisfactory solution but will not undertake to specify the pre- treatment process to be employed. In some borderline cases of excessive strength of industrial waste the industry originating and the city may be desirous and the Authority may be agreeable to negotiate terms under which the Authority will accept and trea t the over-strength was te, but Authority makes no cvulluittment 9. to perform such service. SECTION 3.04: Responsibility for Wastes. The City (i) shall have full responsibility in connection with all wastes handled by its local sewage facilities and (ii) agrees to save and hold the Authority harmless from all claims, demands and causes of action which may be asserted by anyone on account of the transportation, delivery and disposal of said wastes while they are in the process of being handled by such local sewage facilities. SECTION 3.05: Provision for Metering. The Authority will install, operate and maintain as a part of the system the necessary equipment and devices of standard type for properly measuring all sewage discharged into the system. Each user shall have access to such metering equipment at all reasonable times for inspection and examination, but the reading, calibration, and adjustment thereof shall be done only by employees or agents of the Authority, and each such user shall have access to the record books kept by the Authority at its office during reasonable business hours. SECTION 3.06: Calibration of Meter. Not more than three times in each year of operation, the Authority shall calibrate its meters provided for the city, if requested in writing by the city to do so, in the presence of a representative of such party, and the parties shall iointly observe any adjustments which are made to the meters in case any adjustment is found to be necessary. SECTION 3.07: Inaccuracies of Meter. If, upon any test, the percentage of inaccuracy of any meter is found to be in excess of five percent (5%), registration thereof shall be corrected for a period of time extending back to the time when such inaccuracy began, if such time is ascertainable, and if such time is not ascertainable, then for a period extending back one-half (1/2) of the time elapsed since the date of the last calibration, but in no event further back than a period of six months. If, for any reason, any meters are out of service or out of repair so that the amount of sewage, discharged cannot be ascertained or computed from a reading thereof, the amount of sewage discharged during the period such meters are out of service or out of repair shall be estimated by the engineer and agreed upon by the parties hereto on the basis of the best data available. SECTION 3.08: Check Meter. The City may, at its option and at its own expense, install and operate a check meter to check each meter installed by the Authority, but the measurement for the purpose of this agreement shall be solely by Authority's meters, except in the cases hereinbelow in this section specific- ally provided to the contrary. All such check meters shall be of standard make and shall be subject at all reasonable times to inspection and examination by any employee or agent of the Authority, but the reading, calibration and adjustment thereof shall be made only by the City, except during any period when a check meter may be used by the operator under specific written consent of the owner of the check meter for measuring the amount of sewage discharged into the system, in which case the reading, 10. calibration, and adjustment thereof shall be made by the Authority with like effect as if such check meter or meters had been installed by the operator. SECTION 3.09: Unit of Measurement. The unit of measure- ment for sewage hereunder shall be gallons, U. S. Standard Liquid Measure. ll. ARTICLE IV Fiscal Matters SECTION 4.01: Types of Payments for Service. For and in consideration of the undertakings of the Authority hereunder, the city agrees it will make payments to the Authority of the following payments: (a) Base monthly payment - a pro rata cost of main- tenance and operation expense of the System (including power, chemicals and supplies required in the treatment of sewage). (b) Sewer payment - an amount adequate to discharge its pro rata part of the amount required for the amortization of the debt of the system. Such payment shall, with respect to the debt of the system, be not less than one-twelfth (l/l2) of the requirements to become due within the fiscal year to which the budget relates, provided the Authority may adjust such payments as required to provide for the accumulation of the full amount of the sewer payments on the first day of the month preceding the time debt service requirements become due. In making a determi- nation of the amount of the sewer payments, consideration shall be given to the amount on hand in the interest and sinking fund, whether from investment income, provision for interest during construction from bond proceeds, or other sources. (c) Additional monthly payment - any amount estab- lished as the charge to the city for the treatment for each l,OOO gallons of sewage delivered into the system which does not meet the requirements for admissible discharge. "SECTION 4.02: Proration of Base Monthly and Sewer Payments. The pro rata portion of expense the city is to bear under the provisions of subparagraphs (a) and (b) of Section 4.0l shall be the proportion of such expense for the treatment of admissible discharge which the amount of admissible discharge delivered through its local sewage facilities to the system bears to the total amount of such admissible discharge so delivered through all local sewage facilities. SECTION 4.03: Time for Making of Payments. (a) On or before the first day of the month hereafter specified and on or before the first day of each month thereafter, each city shall pay: (1) Base monthly payments - on or before the first day of October, 1974. (2) Sewer payment - on or before tte first day of October, 1974. 12. (3) Additional monthly payment - the month following the delivery of the prohibited discharge to the system. '(b) On or before the first day of , 1973, and on or before the first day of each month thereafter, through and includll1g September 1, 1974 (and not for any months thereafter when the provisions of paragraph (a) of this Section shall be applicable), the City shall pay to the Authority 209 for each 1,000 gallons of sewage delivered by it to the Authority at a point of entry. During such period (so long as the debt of the system is not increased), such payment shall constitute the full amount required to meet the base monthly payment and the sewer payment for which provision is made in paragraphs (a) and (b) of Section 4.01. The amount due as an additional monthly pay- ment (Section 4.0l(c)(for sewage which is not an admissible discharge) shall not be reduced or affected by the payments hereunder. The amount set forth in the preceding paragraph shall be subject to adjustment as provided in Sections 4.07(b) and 4.07(c). The Authority shall also adjust the payment due from the city and other contracting parties (during the time payments are made on the basis of the number of gallons of sewage delivered) to take into account the infiltration of ground water into the system from the local sewage facilities. The Authority shall use the records of the U. S. Weather Bureau or any other records deemed accurate. SECTION 4.04: Covenant. of Timely Payment. The city covenants that it will timely make (i) the sewer payments in accordance with the provisions hereof irrespective of whether service of the system is available to it or used if so avail- able to it, or service has been discontinued; (ii) the base monthly payments; and (iii) the additional monthly payments, if any, as the same shall become due and payable. SECTION 4.05: Late Payment Penalty. Should the city fail to make any payment at the times herein specified, inter- est on such amounts shall accrue at the rate of six per centum (6%) per annum from the date such payment becomes due until paid in full with interest as herein specified. In the event such payment is not made within sixty (60) days from the date such payment becomes due, Authority may, instituted a proceed- ing for a mandatory injunction requiring the payment of the amount due and interest thereon, such action to be instituted in a court of competent jurisdiction. SECTION 4.06: Priority of Charges - City to Fix Ade- quate Rates. (a) the city represents and covenants that all payments to be made by it hereunder shall constitute "operating expenses" of its sanitary sewer system vJith the effect that the obligation to make such payments from its utility system revenues under this contract shall be an operating expense as defined by Article ll13 of the Revised Civil Statutes of Texas, 1925, as amended. (b) the city further agrees to fix and collect such rates and charges for utility services to its customers as will, in 13. combination with any other funds legally available and reasonably assured for the purpose, make possible the prompt payment of all eXpenses of operating and maintaining its utility system and all payments contracted hereunder. SECTION 4.07: The Budget. All parties executing this instrument recognize a portion of the cost which is to be paid for service supplied by the system will be calculated on the basis of estimated quantities of sewage treated and estimated expenses; that the Authority will be required to accumulate funds with which to pay its debt service requirements; that the maintenance and operating expense of the system must be provided. According- ly, the following procedures ~vill be employed: (a) On or before the 15th day of July prior to the close of the initial fiscal year, and on or before the 15th day of each July thereafter, the Authority shall determine the amount of the base monthly payments to be due the Authority by each user for the ensuing fiscal year. (b) During the months of January and July of each year that the city is obligated to make a base monthly payment, or when an additional contracting party becomes obligated to pay a portion of the expense that otherwise would be borne by a party hereto, the Authority shall review the amount which each user has been required to pay under the annual budget to determine if such amount is insufficient or excessive, and in the event the amount paid or scheduled to be paid by any such user of the system is found to be insufficient or excessive, the budget for the remainder of the fiscal year or succeeding fiscal year or years will be adjusted accordingly for the ensuing month or months with the view that all base monthly payments for the fiscal year will be adequate for the intended purpose thereof as well as adequate to provide or maintain an operating fund for the operator which is two times the average base monthly payment. (Upon any termination of this contract, any user of the system (city or other contracting party) shall be entitled to the return of such money as it has deposited with the Authority for the operating expenses, after provision has been made for the payment of expen- ses properly chargeable thereto.) In the event the Authority finds the base monthly payments will be or might be insufficient to provide the amounts required under the provisions of this contract, the Authority may -- at any time -- review and adjust the base monthly payments accordingly for the balance of the fiscal year, or the succeeding fiscal year or years; provided, however, no such adjustment may be made without the approval of the City unless the Authority finds by resolution that the reserve (two base monthly payments initially paid in) ~vil1 or may be depleted prior to the end of the fiscal year. Any additional amount which the city is required to pay by reason of an adjustment shall be paid by the city to the Authority on or before the 15th day after notification by the Authority of the amount due and the same shall be treated as the same character of obligation as a sewer payment. (c) When the debt of the system is increased, the Autho- rity shall forthwith (within 30 days of the delivery of its obli- gations) compute the additional amount required, if any, as a sewer payment to become due prior to the time such debt will be included in the regular budget process, and shall notify the city and other contracting parties of the additional amount to be paid monthly in order to fully provide for such additional debt. l4. (d) Within 7 days after the completion of the annual budget or any amendment thereto, the governing officials of the Authority shall transmit a copy thereof to the city and each additional contracting party. Within 10 days of the receipt of such budget (or amendment) the city and each additional contracting party may indicate any exceptions or suggestions and the same shall be transmitted to the Authority. Due consideration shall be given by the Authority to any exceptions or suggestions by any such contracting party and the same shall be incorporated insofar as consistent with the Authority's rights and obligations. In the event any annual budget (or amendment) shall increase or decrease the base monthly payment due, the reason therefor shall be set forth by the Authority in writing at the time of notifying any city or additional contracting party of the adjustment in the base monthly payment. Each annual budget (or amendment) shall contain a schedule of the base monthly payments to be made by the city or additional contracting parties for the use of the system. SECTION 4.08: Records of Authority~ The Authority shall keep detailed records and accounts of the expenses mentioned so the same may be divided or prorated as herein- above provided. In no event shall any of the expense charged to the city include depreciation or nonallocable expenses. The Authority covenants that the expenses it is to assume and pay by reason of the provisions of this contract will be paid out of funds available to it. SECTION 4.09: Adjustments to Charges. It is agreed the following adjustments shall be made: (a) Sale or Reuse of Waste Water. Any income derived by the Authority from the sale or reuse of effluent shall be credited to the city and additional contracting parties in the same proportion as flow contributed by the city and additional contracting party to the system. The adjustment shall be made annually immediately after the close of each fiscal year and shall be a credit on maintenance and operating expenses owed by the particular user. (b) Use of Existing Facilities. For .the payment of the debt of the system the city shall be entitled to receive compensation for its existing treatment plants or interceptors, either or both (described in Exhibit A). Such credit shall be evidenced by an offset against the sewer payment to be made monthly and the annual budget shall take such credits into account for budget purposes; all credits to which the city shall be entitled shall be given monthly as set forth in Exhibit B. SECTION 4.10: Nature of Obligation of City. (a) The payments required to be made by the city under the terms of this contract shall be due and payable as herein specified in any and all events and regardless of whether there shall be, for any reason, a delay in the completion of all or any part of the improvement program and regardless of whether the system shall have been wholly or partially destroyed or damaged. The agree- ments of the city and each additional contracting party to make the payments required shall be and are separate and independent 15. covenants and no city shall have a right of setoff, recoup- ment or counterclaim, except as credit is permitted for a city or additional contracting party under the provisions of Section 4.09(b) of this contract (or a similar contract with any additional contracting party) for the use by the Authority of existing facilities. As to the base monthly payments and additional base monthly payments, however, the city may discontinue payment of same during any period during which such city shall not be tendered any service by the system by wrongful affirmative act of the Authority_ The Authority shall never have the right to demand payment of any obligation assumed by the city out of funds raised or to be raised by taxation. Any obligations assumed or imposed on a party hereto shall never be construed as a debt of such party of any kind as to require it under the Constitution and laws of this State to levy and collect taxes to discharge such obligation, it being expressly understood by the parties hereto that the funds required for all payments due by city are to be collected from the sources referred to in the next succeeding section. The city agrees to operate and maintain its local sewage facilities in such manner and to make such charges for the services supplied thereby to all customers so that the revenues derived therefrom will always be adequate to enable such city to promptly make all payments due Authority under the provisions of this agreement, and all payments so made shall be deemed expenses of maintaining and operating the local sewage facilities of the city. (b) It is understood that at this time the Authority is not in position to guarantee the construction of the contemplated improvements to system or on the date on which same may first be made available. The Authority does agree, however, to make diligent efforts to provide all contemplated improvements to the system facilities, but shall not be liable to the city for any damages occasioned by delay unless such is attributable to its own fault. SECTION 4.11: Cost of Treatment Plant. The cost of the treatment plant of the city, as well as the cost of a treat- ment plant of additional contracting party, shall be determined by the engineer as follows: (a) The amount of bonds issued for sewer purposes shall be determined. (b) the amount of bonds issued to provide the sewer treatment plant (including improvements) shall be determined. (c) the amount of bonds issued for sewer treatment plant purposes shall be expressed in terms of the per centage of the total bonds issued for sewer purposes (hereinafter called "applicable per centage"). (d) The amount of outstanding bonds (as of January 1 of the year in which the contract is executed) of the party as issued for sewer purposes (under clause (a) of this Section) shall be determined as well as the interest on such bonds to final principal maturity. (e) the total debt service requirements determined under l6. clause (d) shall be multiplied by the applicable per centage which product is the total cost of the treatment plant for the purpose as such term is used in the definition of the debt of the system. 17. ARTICLE V Miscellaneous Provisions SECTION 5.0l: Contract Term - City's Rights at End of Term. The obligation of the city to promptly make all pre- scribed monthly payments shall commence with the delivery of the first series of the Authority's bonds issued to provide the initial improvements to the existing sewage treatment plants (unless a later date is specified in the resolution authorizing their issuance) and continue for a term (i) of 50 years or (ii) until all debt of the system has been retired, whichever shall last occur. At the end of such term, Authority agrees all contracting parties (including the city) shall have the right to an extension of the term of this contract beyond such initial period for an additional term of sixty (60) years under identical terms and conditions provided the city and all additional contracting parties are then agreeable. SECTION 5.02: Modification of Provisions. This contract may be changed and modified only with the consent of the govern- ing bodies of all parties signatory. Such modification may be requested by either party, in which event a joint meeting of the governing bodies or of their duly authorized and appointed representatives shall be held not less than thirty (30) days after the giving of such notice. At such joint meeting the suggested changes or modifications shall be considered, dis- cussed and settled. No such change or modification may be made which will affect adversely the payment when due of all monies required to be paid by the city under the terms of this contract and no such change will be effective which affects adversely or causes a violation of any covenants contained in the resolution or order authorizing the issuance of Authority's bonds. If for any reason the city may desire the construction of any additional facilities over and above those now contem- plated and provided same are within the legal and economic capabilities of Authority, provision therefor shall be made by means of a supplement hereto, the terms of which are to be negotiated between such city and the Authority. Should the Authority desire to construct any such additional facilities for the purpose of meeting its obligations to the city or additional contracting party, the Authority shall not proceed with any work on such facilities other than preliminary planning without following the procedures described in this section. Nothing herein shall restrict the power of the Authority to enter into additional contracts with additional contracting parties provided the revenues of this contract are not pledged or hypotheca ted in any manner thereunder. SECTION 5.03: Regulatory Provisions. This contract shall be subject to all valid rules, regulations and laws applicable thereto, as promulgated by the United States of America, the State of Texas, or any other governmental body or agency having lawful jurisdiction or any authorized representative or agency of any of them. 18. SECTION 5.04: Taxes. In the event any sales or use taxes, or taxes of any nature, are hereafter imposed upon the sale or use of sewage water received by system under this contract or against the Authority or the system, the amount of such taxes shall be treated as operating expenses of the system. SECTION 5.05: Title to Water and Sewage. Title to all water and sewage put into the system under this agreement shall pass to the Authority at the point of entry upon passing through the meter installed at that point. SECTION 5.06: Easements. The city agrees that the Authority may have such easements over any easements, right- of-way or property held by such city so that the facilities and required equipment may be appropriately provided. SECTION 5.07: Force Ma; eure. (a) If for any reason of "force majeure" any of the parties hereto shall be rendered unable wholly or in part to carry out its obligations under this agreement, other than the obligation of the city to make the payments required under the terms of Article IV hereof, then if such party shall give notice and full particulars of such 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 such notice, so far as it is affected by such "force majeure", shall be suspended during the continuance of the inability then claimed, but for no longer period, and any such parties shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "force majeure" as employed herein shall mean acts of God, strikes, lock-outs, Or other industrial disturbances, acts of public enemy, orders or actions of any kind of the Government of the United States or of the State of Texas or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earth- quakes, fires, hurricanes, storms, floods, washouts, droughts, arrests, restraints of government and people, civil disturbances, explosions, breakage or accident to dams, machinery, pipelines, or canals or other structures or machinery, on account of any other cause not reasonably within the control of the party claiming such inability. It is understood and agreed that the settlement of strikes and lock-outs shall be entirely within the discretion of the party having the difficulty, and that the above requirement that any force majeure shall be remedies with all reasonable dispatch shall not require the settlement of strikes and lock-outs by acceding to the demands of the opposing parties when such settlement is unfavorable to it in the judgment of the party having the difficulty. No failure of the Authority to meet any obligation by reason of force majeure shall relieve the city from its obligations to make the payments required under the terms of Article IV hereof. (b) No damage shall be recoverable from Authority by reason of the causes above mentioned. (c) It is expressly recognized by the city that the Authority may be compelled to make necessary alterations, repairs or extensions of new or additional facilities from time to time 19. during the life of this contract and any suspension of service to the city due to such operation shall not be cause for claim of damage on part of Authority provided all reasonable effort is used by the Authority to provide city with service in accordance with this contract. In such case the Authority shall give city as much advance notice as may be practicable of the suspension or curtailment of service and of the estimated duration thereof. SECTION 5.08: Notices. Any notice, request, demand, statement, or bill provided for in this agreement shall be in writing and shall be considered to have been duly delivered when sent by registered mail, addressed as follows: as the case may be, except that routine communications may be' sent by ordinary mail and except that either party, by the filing of an appropriate written notice to the others, may specify some other individual to tvhom cuuuuunications there- after are to be addressed. SECTION 5.09: Covenant to Enforce Contractual Obligations. The Authority covenants that it will enforce the obligations of the city hereunder (as well as any obligations contained in similar contracts with additional contracting party) as may be required to accomplish the purpose of this contract. Either party may enforce any obligations hereunder owed by it by the other party. SECTION 5.10: Right to Provide Service to Others. The parties hereto recognize that the system is to serve the entire region; that the Authority is obligated to cause the facilities to be designed accordingly, and as additional treatment facilities may be required to so provide them; that Authority shall have the right to enter into such contracts as may be in the best interests of the Authority and additional contracting parties, and all cities hereunder but in no event shall any such contract be on terms more favorable to any additional contracting party than is available to the city hereunder unless the governing body of the city shall also approve such other contract. SECTION 5.ll: Consequences of City Default. The Authority and the city agree that in the event of default or threatened default in the payment of principal of or interest on the debt of the system, any court of competent jurisdiction upon petition of the holders of 25% of the principal amount of the then outstanding bonds of the Authority shall appoint a receiver with authority to collect and receive all resources pledged to the debt of the system, enforce all rights arising fram default, if any, by any city, or additional contracting party, in making payment under the agreement, employ and discharge agents and employees of the Authority, take charge of the pledged funds on hand and manage the proprietary affairs of the Authority without consent or hindrance by the Authority. The court may further vest the receiver with such powers and duties as the court may find necessary for the protection of the holders of the bonds. ... 20. SECTION 5.12: Further Agreements of the Parties. The parties hereto specifically recognize that the City has here- tofore issued, sold and delivered two series of revenue bonds that are payable from and secured by a first lien on and pledge of the net revenues of its waterworks and sanitary sewer system; that the bonds so issued and delivered (which remain outstanding) are: "City of Schertz, Texas, Utility System Revenue Bonds, Series 1968," dated March l, 1968; and "City of Schertz, Texas, Utility System Revenue Bonds, Series 1972," dated March 1, 1972. The City represents to the Authority: (1) There is no provision in the ordinance authorizing the issuance of such revenue bonds which prohibits the City from leasing its existing treatment plant facilities (described in Exhibit A) to the Authority or which prohibits the execution of this contract.' (2) that the franchise given to the Authority by this instrument to use and utilize public roads, streets and places of the City does not contravene the prohibition of the afore- said ordinance against the installation of a competing system; that the system of the Authority will be a complementary system to the collection system which the City will continue to operate. (3) The execution of this contract and the operation thereunder will not in any way impair the obligation of contract by and between the City and the owners of its outstanding bonds payable from revenues of its utility system since: (a) The City elects to appoint the Authority as its agent in the operation of the existing sewer treatment plant, and (b) The accomplishment of the required treatment by the Authority for and on behalf of the City will result in economies of operation and capital expenditure. (c) The regional plan to be accomplished by the integration of the use of the City's existing sewer treatment plant is to the best interest of the City, its citizens, and the holders of bonds of the City, the said plan being the result of the combined efforts of the parties hereto as well as the additional contracting parties and appropriate action of the Texas Water Quality Board in the administration and implementation of governmental policy not inconsistent tvith the existing contractual obligations of the City. The parties hereto recognize and it is specifically agreed that: (l) During the term of this contract (and extensions thereof) the Authority shall have the exclusive right to the use and utilization of the sewage treatment plant located on the premises described in Exhibit A; that the Authority, without hindrance from the City or its employees or other agents, may operate, maintain, repair, enlarge, improve, extend, provide for additions to or other control, manage and keep up the said existing plant. 21. (2) The city shall not be responsible for any expense incurred in connection with such existing system except for the payments for which provision is made in Article IV. (3) At the end of the term of this contract (including extensions thereof) the Authority shall promptly vacate the premises and return the operation thereof to the City unless the City requests or an appropriate agency requires operation by the Authority to continue. SECTION S.l3: Abandonment of Use of Existing Plant. It is specifically recognized by the parties hereto that the Authority may during the term of this contract (or extensions thereof) build additional sewage treatment plants so as to make the continued operation of the plant located on the premises (described in Ex- hibit A) uneconomical so it will be to the best interest of the parties and other contracting parties to discontinue the opera- tion of such existing plant. Should the Authority discontinue the operation of the existing plant (located on premises described in Exhibit A) then: (l) The exclusive right of the Authority under Section 5.12(3)(c)(l) shall terminate six months after such use is discontinued, and . (2) During such six month period, the Authority shall have the right to the salvage of all or part of the properties affixed to or located upon the premises, and (3) Upon the expiration of such six month period, the city shall again acquire the exclusive right to the premises and properties located thereon. The six month period herein provided is intended to allow time for the salvage of any properties capable of being used'by the Authority (in the performance of its obligations hereunder) or disposed of as the Authority may, in its sole discretion determine; 'the intent of the parties further being that (i) any cost of sal- vage will be a maintenance and operating expense of the Authority and any money realized from such salvage will serve as a reduction of such expense, and (ii) the city should, within a reasonable time, again obtain the use of the land (and any remaining improve- ments thereon) for its corporate purposes. Except as specified in this Section, the abandonment of the use of such plant has no effect upon the obligations of the parties. SECTION 5.14: Severability. The parties hereto agree that if any of the provisions of this contract contravene or be held invalid under the laws of this State, same shall not invalidate the whole agreEment but it shall be construed as though not containing that particular provision and the rights and obligations of the parties shall be construed and in force accordingly. 22. IN WITNESS WHEREOF, the parti~s hereto, acting under autho- rity of their respective governing bodies, have Gaused this contract to be duly executed in several counterparts, each of which shall consitute an original, all as of the day and year first above written. CITY OF SCHERTZ, TEXAS /,;1 '~~! / /: ,/ / ", ,'i :' By I ",1 /YlC.//;/ ., ' ~d.,nf<_ // Mayor CIBOLO CREJ?;K M~ICIPAL AUTHORITY ",:~,,~,~.'''' ".,1 ~ \~ ,,~ - .' By i;/',,':':;:~" President, . ,//.. ,/<;/ ,i ,~" /' I . /;" ' c_.... l;.__~"'" ,Board of Dire6tors <, ATTEST: ift:/ )L.;i I> ! A 11 ','/'-L L'(/-((,)( ,tL":'l/ ,/ City Secretary (Ci ty Seal) : ;/~~~ Secietary,-~oard of~ors (Authority Seal) THE STATE OF TEXAS X X COUNTY OF GUADALUPE X BEFORE ME, the undersigned authority, in and for Guadalupe County, Texas, on this day personally appeared Jesse W.Graham, Mayor of the City of Schertz, Texas, known to me to be the person whose name is subscribed to the foregoing instrument and known to me to be the Mayor of the City of Schertz, Texas, and acknowledged to me that he executed the same for the purposes and consideration therein expressed and in the capacity therein stated as the act and deed of said CITY OF SCHERTZ, TEXAS. \ ,," _. GIVEN, UNDER MY HAND AND SEAL OF OFFICE this the (~}.\ tr\- day }\V' ,L} ) of -L {j rjjec'_l ./ , 1973. (Notary Seal) C, //L" / '/ ~_. ' I' ", ~. / ' _.c'-~ ' . - ~/ A (,:, . -"..."'- , ' Notary pUb.!ic'; Guadalupe County, Texas ".. x X X BEFORE ME, the undersigned authority, in and for .-i3G"~ County, Texas, on this day personal!y appeared Odo Riedel, President of the Board of Directors of the CIBOLO CREEK MUNICIPAL AUTHORITY, known to me to be the person whose name is subscribed to the foregoing instrument and known to me to be the President of the Board of Directors of CIBOLO CREEK MUNICIPAL AUTHORITY, and acknowledged t~me that he executed the same for the purposes and consideration therein expressed and in the capacity therein stated as the act and deed of said CIBOLO CREEK MUNICIPAL AUTHORITY. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the~/~ day of ..Lll f).I!.-C- -jJ , 197 3 ~, .l / / ~/ '" / ,- ')!/ /~ tT'-t"'~...~ "''':.....,;/.".- ~~~ Notary' P~~;'i~::'~;e*,~ftfvr~ County, HI""" ",nr ri.lKa~ 'I' g-/~2J THE STATE OF TEXAS COUNTY OF 8 t=X/fJ:: (Notary Seal) 23., n' EXHIBI'l' A Description of land upon the city of Schertz existing sewage treatment plant is located: Being 3.369 acres of land lying adjacent the Cibolo Creek in Guadalupe County, Texas and is more particularly described by metes and bounds as follows: Beginning at an iron pin which is the boundary line between the Helma Dietz property and the otto Dietz property and which lies south 300 0' east a distance of 2,540.5 feet. from an iron pin in the south right-of-way line of FM Highway 78; Thence, south 300 00' east along a fence line for the eastern boundary of this tract a distance of 665.0 feet to an iron pin set for the southeast corner of this tract: Thence, 620 53' west along a fence a distance of 296.0 feet to an iron pin set for the most southern corner of this tract: 'l'hence, north 300 00' west a distance of 245.0 feet to a corner; Thence, nort.h 000 02' 41" east a distance of 461.17 feet to a point in a fence line; Thence, north 540 47' east along a fence line a distance of 65.0 feet to the place of beginning containing 3.369 acres of land. Contained upon the said 3.369 acres of land are the complete sewage treaWlent works of the City of Schertz, Texas and consist of the following: Headworks, Imhoff tank, single stage trickling filter, final clarifier, chlorinator and chlorination chamber, pump house, sludge drying beds, piping and valves, and final effluent discharge pipe. 24. EXHIBIT B Credit to be allowed the City of Schertz under the provi- sions of Section 4.09(b): Cost of Treatment Plant as determined under Date of Issue 6-l-62 Original Amount $30l,000 Applicable % 42.' 2l Section 4.1l: Sewer Treatment Cost $l27,050 outstanding debt as of l-1-73: Date of Issue Principal 6-l-62 $260,000 Interest to Maturity $l57,408 $176,188 42.21% of issue equal For the fiscal year (budget year) shown below, l/12 of the total annual credit shall be given monthly: Year Ending 9-30 (42.2l%) Annual Requirement for Sewer Purposes 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 ' 1997 1998 1999 2000 200l . f'., ll' II $6,049.965'09,11/ /7" I,j.t 6,388. 06 ~ ~ 2, ~5 ; I 6,296.47S-2,-/7 6 204.45 ell' olf 6:1l2.435t//:37 6,020. 83 ~ol, "1 tj~,. 6,343. 74S'J. ~ ,(.,!, 6 236.535-;<.'//71 6: 129. 3l~-ID"?~ 6,022. 10~o/' s ____ 6,329. 39s~ 7'V} 6 206. 98S'1712- ,- 6: 084.57 5'07, lJ~.. 5 , 9 6 2 . 16 t/ q l" ': ~; 6 254.265'"21, 6: l16. 65 J~/) '7- ),2-' 5,979.05 :J 9f'b'(~i/ 6 2 5 5 94 5 1 ,I, .." ,. ".s:-L, 6 l02. 72 ';-0 ) , . ' ',1 5,949.50Ll"i~~" :) 6,2l1.20 ;;--/),1,1; 6,042.78 j (. -s ' .',. 6,288.87:[/<'1 c,; 6,105.35 c;-ot g.. 5,921.64 tfq;, :~ : 6,l52.53 (:11 ./ '7?' I,~ 5,953.72 't/ fL, 6 l69.4lSI' , , ,'~' ! I 4.297.402"::" ' $l76,188.00 ')r.:- .' :J .' EXHIBIT C The initial points' of entry (Section 3.01) where the Aut.ho:rity will accept sewage from the City of Schertz and from the local sewage fqcilities of said City are: At the inside face of the head works which is located at the City of Schertz, Texas sewage treatment facilities. 26 ~ EXHIBIT "C" The initial point of entry (Section 3.01) where the Autho~ity will accept sewage from the City of Schertz and from the local sewage facilities of said City is: 1. At the metered manhole indicated by Attachment "1" attached hereto. This exhibit to the contract replaces the original Exhibit "C" of the original contract. PASSED, ADOPTED, and APPROVED this the \\~ day of ~~\.\ , 1978. C ~~~~~ RichardE. Prater . 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