05-28-86 Meeting of the La Porte Area Water Authority Minutes (approved on 6-4-86)

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CITY OF HOUSTON Kathryn J. Whitmire, Mayor Post Office Box 1562 Houston, Texas 77251 CITY COUNCIL MEMBERS: Lorry McKaskle . Ernest McGowen. Sr. . George Greanias . Rodney Ellis . Fronk 0. Mancuso . John G. Goodner . Christin Hartung Dole M. Gorczynski . Ben T. Reyes' Jim Westmoreland . Eleanor Tinsley' Jim Greenwood' Anthony W. Hall. Jr. . Judson Robinson. Jr. . CllY CONTROLLER: Lance Lalor June 16, 1986 -- z:: C r- i! L: ~ ,- 1 'i r= r! - ~---~ Mr. Jack Owen LaPorte Area Water Authority P.O. Box 1115 Laporte, Texas 77571 J UN ') 0 ~OQ" '''' l"uQ CITY :;;~oFFiCE SUbject: Capital Cost Sharing Southeast Water Purification Plant Dear Mr. Owen: I appreciated the opportunity to meet with you and the Board Members of the LaPorte Area Water Authority last Wednesday evening to discuss the status of the Southeast Water Purification Plant and to answer the various questions raised about capital cost participation in the project. The following points summarize our discussions: 1. We have received bids for construction of the Southeast Water Plant and expect to execute a construction contract and issue a notice to proceed with construction within the next two months. 2. The general conditions for capital cost participation in the Southeast Plant are outlined in the agreement with Webster previously submitted to you. We would expect that all capital cost participants would have a proportional "voice" in establishing the operating budget of the facility; and that, while there is no true "equity ownership" in the plant, each participant would have the right to transfer capacity, resell water, and utilize its "share" of the capacity in much the same way that it would had the plant actually been constructed and owned by the participant. 3. Our current contract form obligates each participant to pay a proportional share of the plant operations and maintenance 'costs based on water actually used. Thus, there is not "take or pay" provision for operations and maintenance costs. Each participant would have "right of first refusal" to participate in any future plant expansion projects, but would not be obligated to do so.