HomeMy WebLinkAboutO-2000-2383
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ORDINANCE NO. 2000- J.3i 3
AN ORDINANCE APPROVING AND AUTHORIZING A COST SHARING AGREEMENT ON
THE SOUTHEAST WATER PURIFICATION PLANT BETWEEN THE LA PORTE AREA
WATER AUTHORITY AND THE CITY OF HOUSTON; MAKING VARIOUS FINDINGS
AND PROVISIONS RELATING TO THE SUBJECT; FINDING COMPLIANCE WITH THE
OPEN MEETINGS LAW; AND PROVIDING AN EFFECTIVE DATE HEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE:
Section 1. The City Council hereby approves and authorizes
the contract, agreement, or other undertaking described in the
title of this ordinance, in substantially the form as shown in the
document which is attached hereto and incorporated herein by this
reference. The Mayor is hereby authorized to execute such document
and all related documents on behalf of the City of La Porte. The
City Secretary is hereby authorized to attest to all such
signatures and to affix the seal of the City to all such documents.
Section 2. The City Council officially finds, determines,
recites, and declares that a sufficient written notice of the date,
hour, place and subject of this meeting of the City Council was
posted at a place convenient to the public at the City Hall of the
ci ty for the time required by law preceding this meeting, as
required by the Open Meetings Law, Chapter 551, Texas Government
Code; and that this meeting has been open to the public as required
by law at all times during which this ordinance and the subject
matter thereof has been discussed, considered and formally acted
upon.
The City Council further ratifies, approves and confirms
such written notice and the contents and posting thereof.
Section 3. This Ordinance shall be effective from and after
its passage and approval, and it is so ordered.
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ORDINANCE NO. 2000-~3iJ
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PASSED AND APPROVED, this 21st day of February, 2000.
ATTEST:
1!J~1:.~ifi!ftL
City Secretary
APPR,.QvED:'
.7::;; -aA
G:w. Askins
city Attorney
By:
PORTE
PJ\.GE 2
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L.O. File No. 80.99146-01
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COST SHARING AGREEMENT
SOUTHEAST WATER PURIFICATION PLANT
(RESTATED AND AMENDED)
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TABLE OF CONTENTS
Page No.
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1
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DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20'
1.21
1.22
1.23
1.24
1.25
1.26
1.27
1.28
1.29
1.30
1.31
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L.O. File No. 80-99146-01
"Annual O&M Budget" ..................................... 2
"Contingency Reserve" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
"CW A" ...................................................2
"Day" ..................................................... 2
"Demand Allocation" ....................................... 2
"Demand Allocation Factor" ................................. 2
"Distribution Allocation" .................................... 3
"D' t'b . C 'ty" 3
IS rl utlon apacl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ~ .
"Distribution Allocation Factor" .............................. 3
"Fiscal Year" .............................................. 3
"Interest Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ~ . . . . . . . . . . . . . 3
"Major Replacement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"M . P .. t D' t " 3
anaglng artlclpan Irec or . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
"MGD" ................................................... 3
"Modification Project Cost" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"O&M" . . . . . . . . . . . . . . . . . . .' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"O&M E " . .. 4
xpense .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
"Operating Advisory Committee" ... . . . . . . . . .'. . . . . . . . . . . . . . . . . 4
"Other Projects" ............................................4
"Participan ts" ............................................. 4
"Participant Director" ....................................... 5
"Peak Hour" .............................................. 5
"Plant" .................. r. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Plant and Raw Water Recoupment Cost" . . . . . . . . . . . . . . . . . . . . . . 5
"Point(s) of Delivery" ....................................... 5
"Production Capacity" ........................................ 6
"Pumping Allocation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Pumping AIIocation Factor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Pumping and Distribution Recoupment Cost" . . . . . . . . . . . . . . . . . . 6
"Pum' C 'ty" 6
pIng a pacl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
"Raw Water Storage and Transmission Facilities" ...............6
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1.32 "Substantial Completion" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.33 "Treated Water Pumping Facilities" . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.34 "Treated Water Transmission Facilities" .......................8
1.35 "Trinity River .,c\uthority" ................................... 8
ARTICLE 2
. CONSTRUCTION OF MODIFICATIONS TO
THE PLANT TO PROVIDE 120 MGD FIRM CAPACITY. . . . . . . . . . . . . . . . . . . . 9
2.1 In General. . . . . . . . . : . . . . . . . .'. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 Construction and Design-In General. . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.3 Review of the Construction of the Modification
Project by Participants ..................................... 10
2.4 Payment of Modification Project Cost and
RecoupmentCosts by Participants ............................ 11
2.5 Completion of the Modification Project. . . . . . . . . . . . . . . . . . . . . . . . 13
2.6 Additional Pumping and Distribution Allocations ....... . . . . . . . . 13
ARTICLE 3
OPERATION AND MAINTENANCE OF THE PLANT. . . . . . . . . . . . . . . . . . . . . 15
3.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2 Relationship of Participants ................................. 15
3.3 Duties of Managing. Participant-In General ....................16
3.4 Annual O&M Budget ...................................... 16
3.5 Operating Advisory Committee .............................. 17
3.6 Demand and Pumping Allocations. . . . . . . . . . . . . . . , . . . . . . . . . . . . 19
3.7 Other Projects ............................................ 21
3.8 Major Replacements ....................................... 22
3.9 Operation in the Event of a Loss in Production or Pumping
Capacity ................................................. 22
3.10 Measurement of Water .....................................23
3.11 Facilities Between the Point of Delivery and Transmission Line . . . 24'
3.12 Calibration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.13 Estimated Water Consumption ..............................25
3.14 Check Meters ............................................. 26
3.15 Back Flow Previention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 4
OPERATION AND MAINTENANCE CHARGES.......................... 27
4.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.2 Operation and Maintenance Charges ......................... 27
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ARTICLE 5
MISCELLANEOUS ................................................... 31
5.1 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
5.11
5.12
5.13
5.14
5.15
5.16
5.17
5.18
5.19
5.20
4.3
4.4
4.5
EXHIBITS
A
B.
C-1
C-2
C-3
D-l
D-2
E-
E LaPorte
E Pasadena
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O&M Expense Calculations ................................. 28
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Contingency Reserve ....................................... 30
Failure to P~y When Due ....'............................... 30
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Title to All Water Prod,uced by the Project. . . . . . . . . . . . . . . . . . . . .32
Unit of Measurement . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . 32
Water Quality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Water Conser\Tatioo.' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Regulatory Action ......................................... 33
The Managing Participant to Keep Books ..................... 33
AssignmeJ;lts .............................................. 33
Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Force Majeure ............................................ 34
No Additional Waiver Implied,. . . . .. . . . . . .. . . . . . . . . .. . . . . . . . . 35
Entire Agreement; Amendments ............................. 35
Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Dispute Resolution and Remedies ............................ 36
Sale of Water ............................................. 37
Authorship ................................................ 37
Severability . . . . . . . . . . . . . . . .,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Contract Term ............................................ 37
No Partnership Created Hereby . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Map Showing Raw, Water Storage and Transmission J?acilities
Map Showing Treated Water 1.'ransmission Facilities
Schedule of Actual and Estimated Costs for the Plant
Schedule Showing Recoupment of Unrecovered Raw Water and Plant
Costs
Schedule Showing Recoupment of Prior Year CW A Debt Service
Schedule Showing Actual Costs for Pumping and Distribution
Schedule for Recoupment of Pumping and Distribution Costs
Calculation of Annual Budget
Calculation of Annual Budget, 'LaPorte Area Water Authority
Calculation of Annual Budget, Pasadena
Calculation of Investment by Participant
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PARTICIPANT EXHIBITS
I. Maps of Points of Delivery
II. Schedules of Demand, Pumping and
Distribution Allocations and Costs
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COST SHARING AGREEMENT
SOUTHEAST WATER PURIFICATION PLANT
(RESTATED AND AMENDED)
Tms COST SHARING AGREEMENT for the Southeast Water Purification Plant is made
on the date of the City of Houston countersignature by and between the CITY OF HOUSTON
("Managing Participant") and GULF COAST WATER AUTHORITY (CITY OF GALVESTON,
OTY OF LEAGUE CITY), CLEAR LAKE CITY WATER AUTHORITY (THE CITY OF
NASSAU BAY), CLEAR BROOK CITY MUNICIPAL UTILITY DISTRICT, THE
LAPORTE AREA WATER AUTHORITY, HARRIS COUNTY MUNICIPAL UTILITY
DISTRICT NO. 55, THE CITY OF PASADENA, THE CITY OF SOUTH HOUSTON, THE
CITY OF WEBSTER, Till; CITY OF FRIENDSWOOD, and BA YBROOK MUNICIPAL
UTILITY DISTRICT NO. 1 ("Participants").
RECITALS
WHEREAS, the Participants entered into various Contracts with the Managing Participant
for cost sharing in the construction and operation of the Southe~t Water Purification Plant ("Plant"),
which had a production capacity of 80 million gallons of water per day (MGD); and
WHEREAS, the Participants are agreeable to cost sharing in certain modifications to the
Pl~t such that the production capacity will be increased to 120 MGD;
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WHEREAS, the Participants are agreeable to standardize their relationships to one another
as well as the Managing Participant in one Agreement, which will supersede their existing
agreements; and
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WHEREAS, a portion of capacity of the Plant presently owned by the Gulf Coast Water
Authority on behalf of the City of Galveston is subject to pending sales to other Participants, and the
Participants agree to incorporate this reallocation of capacity ownership into this Agreement;
NOW, THEREFORE, the Participants agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "Annual O&M Budget" is defined in Section 3.4 and Exhibit "E."
1.2 "Contingency Reserve" is defmed in Section 4.5.
1.3 "CW A" means the Coastal Water Authority.
1.4 "Day" means the period beginning 8:00 a.m. and ending at 8:00 a.m. the next calendar
day or such 24 hour period agreeable to the Participant Director and the Managing Participant
Director.
1.5 "Demand Allocation" means that portion of Production Capacity measured in MGD
which a Participant is entitled to take during a day.
1.6 "Demand Allocation Factor" is the percentage of the Production Capacity which a
Participant is entitled to take during a day.
The Participants' Demand Allocation Factors are specified in the Participant Exhibits. The
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sum of the Demand Allocation F8:ctors of all the Participants to this Agreement at any given time,
including the Managing Participant, shall always total one hundred percent (100%).
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1.7
"Distribution Allocation" means that portion of the Distribution Capacity in the
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Treated Water Transmission Facilities measured in MGD which a Participant is allowed to take in
an hourly period.
1.8 "Distribution Capacity" means the maximum rate at which the Treated Water
Transmission Facilities can deliver. The Distri1:Jution Capacity equals 250 MGD, expressed as peak
hour transmission rate.
1.9 "Distribution Allocation Factor" is the percentage of the Treated Water Transmission
Facilities, which a Participant is entitled to taking during an hourly period.
1.10 "Fiscal Year" means the Managing Participant's fiscal year, which currently runs from
July 1 to June 30.
1.11 "Interest Rate" means the 20 City Municipal Bond Index at the beginning of the Fiscal
Year.
1.12 "Major Replacement" means any single repair or replacement for the Plant requiring
the expenditure of $1 00,000 or more.
1.13 "Managing Participant Director" means the Director of Managing Participant's
Department of Public Works and Engi~eering.
1.14 "MGD" is an abbreviation for the flow rate ofa million gallons of water per day.
1.15 "Modification Project Cost" includes:
.1 Cost for facilities to increase the reliable capacity of the Plant to 120 MGD,
including engineering, testing, construction, construction management, legal,
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auditing expenses, contractor claims expenses and cost for servIces
performed by employees of the Managing Participant. Reference Exhibit "C-
1."
.2 Costs for restriction devices and facilities to accommodate changes in codes
and governmental regulations, including engineering, testing, construction,
contractor claims expenses, construction management, legal, auditing
expenses and the cost for services performed by employees of the Managing
Participant. Reference Exhibit "e-I."
"Modification Project" is defined in Subsection 2.1.1. Costs that are borne in common by
both fs .1 and .2, such as engineering and auditing expenses, will be apportioned between fs .1 and
.2 based on actual construction costs for fs.1 and .2.
1.16 "O&M" is an abbreviation for operations and maintenance.
1.17 "O&M Expense" is an amount of operation and maintenance expenses to be paid by
each Participant computed as set forth in Section 4.3 herein.
1.18 "Operating Advisory Committee" means the committee so designated in accordance
with Section 3.5.
1.19 "Other Projects" are defined in Section 3.7.
1.20 "Participants" means an the entities designated in the Preamble including the
Managing Participant.
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1.21
"Participant Director" means the General Manager of the Participant or any other
person designated by Participant to act as the "Participant Director." Any notice by the Participant
of an alternate designation or revocation of designation shall be in writing and delivered to all
Participants pursuant to the notice provisions herein.
1.22 "Peak Hour" is th~ 60 consecutive minute period during the day during which the
maximum amount of flow is delivered.
1.23 "Plant" means those water purification facilities located south of Genoa-Red Bluff
Road and north of Ellington Field (known as the "Southeast Water Purification Plant"), as well as
the facilities referenced in Section 3.11. "Plant" does not include any facilities owned by CW A or
the Treated Water Transmission Facilities even though Participants have purchased capacity in these
facilities. See Exhibits "C-l" and
"C-2."
1.24 "Plant and Raw Water Recoupment Cos~" includes:
.1 Unrecovered capital costs for the Managing Participant's initial construction of the
Plant as shown in Exhibit "C-2."
.2 . .' CW A debt service costs for the 96" Raw Waterline as described in Exhibit "C-3."
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1.25 "Point(s) of Delivery" shall mean the point(s) at which treated surface water
produced by the Plant is supplied to the respective Participants at the location(s) of the flow control
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devices. The Points of Delivery are shoWn on the Participant Exhibits.
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1.26 "Production Capacity" means the maximum rate of production of water from the
Plant. The Production Capacity of the Plant after Substantial Completion of construction of the
Modification Project is 120 MGD expressed as a peak day production rate..
1.27 "Pumping Allocation" means that portion of the Plant's pumping and treated water
storage capacity measured in MGD, which a Participant is entitled to take during any hourly period.
1.28 "Pumping Allocation Factor" is the percentage of the Plant's pumping and related
treated water storage capacity which a Participant is entitled to take during an hourly period.
The Participants' Pumping Allocation Factors are specified in the Participant Exhibits.
1.29 "Pumping and Distribution Recoupment Cost" includes
.1 Capital costs for additional capacity in the Treated Water Pumping Facilities
and the Treated Water Transmission Facilities as shown in Exhibit "0-1."
.2 Unrecovered capital costs for the Managing Participant's initial construction
of the Treated Water Pumping Facilities and Treated Water Transmission
Facilities as shown in Exhibit "0-2."
1.30 "Pumping Capacity" means the maximum rate of delivery of water from the Plant.
The i~tial Pumping Capacity equals 200 MGD, expressed as a peak hour pumping rate.
1.31 "Raw Water Storage and Transmission Facilities" means the Lake Livingston
Reservoir and the Trinity River Channel downstream from Lake Livingston to the CW A Pumping
Station located on the Trinity River north of the Redmond Community and south of the City of
Liberty, Texas. The CW A facilities that transport raw water from the Trinity River are:
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The CW A Trinity River Pumping Station, the CW A canal, the Lynchburg Pumping
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Station and Reservoir, and the CW A untreated water transmission Line A as shown
Exhibit "A."
.2 Line B as shown on Exhibit "A," which begins at the Lynchburg Pumping Station
and follows Line A to its irttersection with State Highway 225 and extends
westward.
.3 Line C as shown on Exhibit "A," which follows Line A and near the San Jacinto
Monument extends westward to the East Water Purification Plant.
.4 Line A 1 as shown on Exhibit "A," which connects to Line A, with interconnection
to Line A2, which feeds untreated water to the Plant.
.5 Line A2 as shown on Exhibit "A," which parallels untreated water transmission line
Al from the San Jancinto Monument to the Southeast Water Purification Plant.
. 1.32 "Substantial Completion" is the date on which the Modification Project can be used
for the production of treated water as determined by the Managing Participant Director.
1.33 "Treated Water Pumping Facilities" are those facilities located on the site of the Plant
which are downstream of the Treated Water Storage Facilities located on the site of the Plant and
upstream of any and all transmission or distribution pipelines which connect the Plant to the
Managing Participant's distribution and transmission pipeline system.
Under no circwnstances
shall the term Treated Water Pumping Facilities include any pipeline facilities belonging to the
Managing Participant, whether transmission or distribution, which are located off-site of the Plant.
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1.34 "Treated Water Transmission Facilities" are the pipeline facilities having a peak
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capacity of250 MOD, constructed by the Managing Participant, which connect the Treated Water
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Pwnping Facilities to the existing 42" line along Old Galveston Highway (State Highway 3) at Point
C on Exhibit "B" and continue on to connect to other Managing Participant water lines. The Treated
Water Transmission Facilities line is depicted ort Exhibit "B" as being the ~e from Point B through
Point C to Point D.
1.35 "Trinity River Authority," hereinafter referred to as "TRA," means that agency which
controls that portion of the Raw Water Storage and Transmission Facilities located on the Trinity
River.
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ARTICLE 2
CONSTRUCTION OF MODIFICATIONS TO
THE PLANT TO PROVIDE 120 MGD FIRM CAPACITY
2.1 In General
2.1.1 It is agreed that each Participant has an equio/ ownership interest in the Plant's
Pumping and Production Capacity in proportion to its capital investment from time to time in such
Pumping and Production Capacity. The Participant Exhibits show the initial and projected
ownership interests up to the time of completion of the Modification Project. The Participants agree
to the construction of certain rehabilitation and modifications to the Plant in order to ensure the Plant
can provide the 120 MGD firm capacity of potable water for the Participants ("Modification
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Project"). The Participants also recognize that the Managing Participant did not recover certain costs
for (1) the Plant and Raw Water Transmission Facilities and (2) Distribution and Pumping Facilities.
2.1.2 In order to pay for the cost of the Modification Project and obtain the 120 MGD firm
production capacity, (1) each of the Participants agrees to pay its pro rata share of Modification
Project Cost and (2) each Participant (except the Managing Participant) agrees to pay the Plant and
Raw Water Recoupment Cost. Those Participants desiring an increase in Pumping and Distribution
. Allocation Factors shall pay the Pumping and Distribution Recoupment Cost. The Participant
Exhibits show the allocation of such costs for each Participant. It is anticipated that all of the City
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of Galveston's beneficial interest in the Plant, which is held in the name of the Gulf Coast Water
Authority, will be sold to other Participants prior to the date of operation of the Modification Project
and the City of Galveston will accrue no benefit from the Modification Project. Thus, each of the
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Participant purchasers of the City of Galveston's beneficial interest in the Plant shall pay to the
Managing Participant its pro rata share of the costs described in this Section 2.1.2 as if such transfer
had already occurred on the effective date of this Agreement. Each such Participant's interest before
and after the transfer is described in its Participant's Exhibit.
Notwithstanding the aforesaid, the Gulf Coast Water Authority, acting on behalf of the City
of Galveston and the City of League City, shall have all other obligations and rights under this
Agreement corresponding to its pro rata ownership interest in the Plant from time to time.
2.2 Construction and Desi~n-In General
The Participants approve of the "City of Houston Southeast Water Purification Plant
Immediate Firm Capacity Improvements" report, prepared by' Camp Dresser & McKee, Inc. and
incorporated herein by reference. The Managing Participant shall manage the design and
construction of the Modification ProJect.
2.3 Review of the Construction of the Modification Proiect by Participants
2.3.1 During all working hours of the construction period, the Participant Directors and
anyone authorized by such Directors shall have access to the Plant premises and may inspect or
review the Plant and all engineering specifications and documents related to the Plant.
2.3.2 The Managing Participant shall give all other Participants an opportunity to review
any changes in the design or specifications of the Modification Project.
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2.4
Payment of Modification PrQject Cost and Recoupment Costs
2.4.1 After bids have been received but prior to contract award for the Modification Project
and upon notice to Participants, Participants shall pay the Managing Participant the estimated cost
of their pro rata shares of the Modification Project Cost, as well as their allocated Recoupment Costs.
Participants' respective Pumping, Demand and Distribution Allocation Factors and estimates for the
Modification Project Costs are shown on Participant Exhibits, together with allocated Recoupment
Costs.
Participants shall have the option of paying Modification Project Costs through an escrow
account payable monthly for actual costs based on written demand from the Managing Participant
Director.
In the event a Participant is unable to make payment during this period because its financing
has not yet closed, the Managing Participant Director on a case by case basis may grant the
Participant a time extension to a date no later than the first month of the Participant's fiscal year
beginning after the Managing Participant's Council Award of the construction contract for the
Modification Project. If any such extension is given, Participant shall pay the Managing Participant
interest for deferral of the principal amount at the Interest Rate.
In the event bids exceed by 20% the estimated Modification Project Costs shown herein, the
Participant Directors will confer with the Managing Participant Director concerning disposition of
bids and any Participant (except the Managing Participant) will have the right to withdraw from
participation in the Modification Project.
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2.4.1 Participants' contributions for the Modification Project Costs shall be kept by the
Managing Participant in an account with interest accruing to the benefit of each Participant. Funds
from the account may be spent by the Managing Participant only' for Modification Project Cost.
2.4.2 Within ninety (90) days of the fonnal acceptance of the completed construction of
the Modification Project by the Managing Participant City Council, the Managing Participant
Director shall cause an accounting to be made of the Modification Project Cost.
2.4.3 The Managing Participant shall engage its then-current independent certified public
accounting finn to audit the Managing Participant's accounting. As soon as the finn has completed
the audit, the Managing Participant shall submit the audited accounting to the Participants.
2.4.4 The accounting shall state the difference between the estimated Modification Project
Cost paid by the Participants, and the actual Modification Project Cost.
2.4.5 If the Modification Project Cost, as detennined by the audited accounting, is less than
the estimated Plant Modification Cost, resulting in an' overpayment by the Participants of their pro
rata shares, the Managing Participant shall refund such difference with interest accrued, at the
Interest Rate, to each Participant within ninety (90) days of the date of the receipt of the accounting
by Participants.
2.4.6 If the Plant Modification Cost, as detennined by the accounting, is more than the
estimated Modification Project Cost paid by the Participants, resulting in an underpayment by the
Participants of their pro rata shares, the Participants shall pay such difference with interest
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. determined at the Interest Rate to th~ Managing Participant within ninety (90) days of the date of the
receipt of the accounting by the Participants.
2.4.7 If a Participant does not pay its underpayment within such ninety (90) day period, the
Participant's Demand Allocation Factor shall be reduced to reflect the actual percentage of
Modification Project Cost paid by the Participant. .
2.5 Completion of the Modification PrQject
2.5.1 When the Managing Participant Director gives the construction contractor notice of
Substantial Completion for the Modification Project, the Managing Participant shall notify each
Participant Director and designate a day for the initial operation of Plant at 120 MGD firm capacity.
2.5.2 The Managing Participant shall provide each Participant full access to the Plant and
to the books and records of the Modification Project, including all engineering reports, design
specifications, change orders, correspondence, plant accounts, construction plan accounts or any
other written document or instrument associated with or pe.rtaining to the co~struction of the
Modification Project.
2.6 . Additional Pum.pini and Distribution Allocations
Certain Participants are requesting additional Pumping and Distribution Allocations as shown
in the Participant Exhibits. The Pumping and Distribution Allocation Factors for these Participants
will be adjusted upon payment to the Managing Participant of the respective amounts shown in the
Participant Exhibits.
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The Managing Participant Director is authorized to sell as available Pumping and
Distribution Capacity to Participants.
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ARTICLE 3
OPERATION AND MAINTENANCE OF THE PLANT
3.1 In General
3.1.1 The Participants, as co-owners of the Plant, understand that, except as otherwise
specified herein, the Managing Participant will serve as managing owner for construction at the Plant
as well as for the maintenance and operation of the Plant and shall have charge of its business and
general conduct. .
3.1.2 The Participants shall have an interest in the conduct, affairs and decisions of the
Plant in proportion to the Participant's capital contribution. The Participants shall have the authority
to enter the Plant premises upon proper identification provided to Plant security personnel.
3.1.3 The Participants are willing to make capital contributions and payment of O&M
Expenses as specified herein on the basis that the Managing Participant as managing owner agrees
to use its best efforts to assure proper construction, operation and maintenance of the Plant and its
structures, equipment and facilities, and proper conduct of all employees, agents or contractors, to
pay debts when due and to obey all applicable federal, state or local regulations.
3.2 Relationship of Participants
3.2.1 The relationship of the Participants is of a fiduciary character. The Managing
Participant is trustee with respect to the Participants, with respect to the operation of the Plant and
care of all joint property specified herein. Each Participant shall act in the highest good faith toward
the other in conducting the operation of the Plant as well as their respective duties under this
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Agreement. Each Participant is under obligation, on demand of the other, to render true and full
information and performance of all matters affecting the Plant and its operations under the terms of
this Agreement:
3.3 Duties of Manaiing Participant-In General
3.3.1 The Managing Participant shall 'keep and maintain an accurate accounting system
based on accepted accounting standards that provides docwnentation of the costs of constructing and
operati~g the Plant. Such records shall be maintained for a minimwn period offive (5) years and
as otherwise required by law. All such docwnents and records shall be available to the Participants
for inspection, copying or audit at reasonable times and places and upon reasonable notice.
3.3.2 The Managing Participant shall provide an adequate program to insure that the Plant
is maintained in a state of repair in a cost-effective manner, including a five (5) year Capital
Improvement Program, which shall be updated annually, and subject to review by the Participants.
3.3.3 The Managing Participant shall employ and supervise employees, agents, consultants
and contractors connected with the Plant in a cost-effective manner by employing only those that are
reasonably necessary for proper operation and maintenance of the Plant.
3.4 Annual O&M Budget
The Managing Participant shall submit for review to all Participants, not later than sixty (60)
days prior to the beginning of the Managing Participant's fiscal year, an estimated Annual Budget
consisting of various departmental components that constitute the O&M expenditures. The
components are described in greater detail in Exhibits "E," Exhibit "E Pasadena" and Exhibit "E
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LaPorte Area Water Authority." The estimated Plant production will also be provided, along with
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the breakdown of the production per Participant. The estimated Annual Budget and the estimated
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Plant production will be used to calculate the annual estimated cost per thousand gallons for the
ensuing fiscal year. The final Annual Budget will be submitted to the Participants when the
Managing Participant's City Council approves its yearly budget.
3.5 Operating Advisoxy Committee
3.5.1 To facilitate the review and approval rights set out in this Agreement, the Managing
Participant will provide for the Operating Advisory Committee to include all Participants. The
Operating Advisory Committee shall be composed of Participant Directors or their designees,
including the Managing Participant. The chair of the Operating Advisory Committee shall be elected
each Fiscal Year by the weighted majority of the Participants. "Weighting" shall be based on total
investment of each Participant, including Production Allocation, Pumping Allocation and
Distribution Allocation. (Reference Exhibit "F" for anticipated investments for each Participant after
completion of the Modification Project.)
3.5.2 The Operating Advisory Committee shall have access at all reasonable times to the
books, records and accounts pertaining to the Plant. The Managing Participant agrees to solicit the
advice and counsel of the members of the Operating Advisory Committee with regard to the
operation, maintenance and expansion of the Plant and each member shall be given full opportunity
from time to time to express his or her views regarding such matters.
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3.5.3 Except in the case of emergency repairs required by the Plant, the Managing
Participant shall include members of the Operating Advisory Committee in the development of any
Request for Qualifications, Request for Proposals, and Invitation to Bids that lead to contracts for
which the Managing Participant intends to seek reimbursement. The Managing Participant shall
provide the Operating Advisory Committee the proposed scope of services, qualifications, costs and
other information submitted by the responding contractors or consultants. Before selection of a
consultant, the Operating Advisory Committee may appoint two or more members to sit on the
selection committee, who will have no authority to provide scoring for the evaluation matrix or
otherwise vote for selection of the consultant. The selected Operating Advisory Committee me~bers
may convey information pertaining to the selection to the Operating Advisory Committee. All
Participants recognize that information obtained from review of proposals is CONFIDENTIAL and
agree to maintain such information as confidential such that no proposer is given a competitive
advantage by disclosure of the information, and no trade secret or other confidential proposal
information is disclosed to unauthorized persons. The Managing Participant Director shall seek the
counsel and advice of the Operating Advisory Committee regarding the scope of service and an
assessment of the costs and qualifications of the proposers or bidders prior to submittal to the
Managing Participants governing body.
3.5.4 Each Participant Director (or designee) shall have the right to attend meetings
between the Managing Participant and contractors or consultants regarding the Modification Project
and other major service or construction activities for the Plant. The Managing Participant shall use
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its best efforts to provide Participants advance notification for the meetings through the Operating r \
Advisory Committee or other means reasonably available.
3.6 Demand and Pumping Allocations
3.6.1 The Demand, Pumping and Distribution Allocations of Capacity are described on
each Participant's Exhibit. The sum of all Participant Factors for Demand, Pumping and Distribution
Capacities must equal 100% for each Capacity. The Managing Participant shall deliver water from
the Plant to the Participants at pressure meeting the requirements of state law at their respective
Points of Delivery. Subject to Section 3.6.5, no Participant (including the' Managing Participant)
may take water from the Plant that exceeds the Production Capacity of the Plant multiplied by the
Participant's then-current Demand Allocation Factor (expressed as a decimal), nor may such
Participant take water from the Plant at a rate which exceeds the Pumping and Distribution Capacity
of the Plant multiplied by the Participant's then-current Pumping or Distribution Allocation Factor
(expressed as a decimal). The Managing Participant shall monitor and control the amounts of water
and the rates at which water is taken by the other Participants. The monitoring and control measures
may include controls, valves and related appurtenances, which shall be set to restrict instantaneous
flows to equal the Participant's Pumping Allocation.
3.6.2 The Participants recognize that it is not feasible for the Managing Participant to meter
water delivered to it from the Plant, because of multiple points of connection. Hence, all
Participants (including the Managing Participant) agree that control and measurement of water for
the Managing Participant will be as follows:
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3.6.3 Flow measurement for the Managing Participant will be generally calculated by
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subtracting the total flow to the other Participants from the total production of the Plant. The
Managing Participant agrees to operate its water transmission system such that the water it takes
(measured as provided herein) is within its Demand, Pumping, and Distribution Allocations by
restricting flow through valves or reallocating water flow from its East Water Purification Plant.
3.6.4 In the event another Participant cannot obtain water from the Plant at the pressure
required herein (as measured upstream of the Participant's meter), such Participant may deliver
notice to the Managing Participant, who. shall provide it best efforts to increase pressure to the Point
of Delivery by increasing the production of the Plant or diverting water from the East Water
Purification Plant, restricting the internal valves in its own system, removing aforce majeure or
other hindrance that may be causing the low pressure, and restricting Participants that may be taking
more water than allowed under this Agreement as provided in Subsection 3.6.1. The Managing
Participant may also restrict flow as necessary in emergency situations (fires, major leaks, etc.) or
when the purchased distribution capacity is exceeded by actual flows.
3.6.5 Once the hydraulics of the Ph~.nt and water distribution system are better known and
subject to the acquisition of any necessary flow monitoring and control facilities, all members of the
Operating Advisory Committee by unanimous vote may adopt procedures that will allow unused
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Demand, Pumping and/or Distribution Capacity to be used in common by the Participants on a
temporary basis. (permanent redistribution of capacity is subject to the assignment requirements of
Section 5.8)
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3.7 Other PrQjects
If the Managing Participant undertakes additional expansions of the Plant ("Other Projects"),
any Participant shall have the right to purchase additional Demand, Pumping and/or Distribution
Allocations out of such expansion by paying Managing Participant its pro-rata' share of the cost for
such expansion as well as unreimbursed original capital costs (if any) as shown in Exhibits "C-2,"
"C-3" and "D-2," and executing an amendment to this Agreement affirming Participant's obligation
to make payment for construction of the Other Project and the Managing Participant's obligation to
construct the expansion and operate the same generally as provided herein for the Plant.
The Managing Participant shall give 150 days' advance written notice to Participants of any
proposed expansion of the Plant. At any time during the ISO-day notice period, any Participant
desiring to purchase capacity in the expansion must give the Managing Participant written notice of
intent to purchase additional Demand, Pumping and/or Distribution Capacity in such expansion.
The Managing Participant and Participants agree; in making any such amendment, to act
timely and in good faith in order to permit an orderly enlargement or expansion of the Plant for the
lowest cost reasonably obtainable without causing undue dela~.
The Managing Participant reserves the right to charge its standard rates for untreated water
for water produced by Other Projects in lieu of the raw water component of the O&M Expense.
3.8 Major Replacements
The Managing Participant shall perform such Major Replacements as necessary for the
operation and maintenance of the Plant and to supply water to the Participants. Plans and
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specifications (if applicable) for such Major Replacements shall be prepared by the. Managing
Participant and submitted to the Operating Advisory Committee for review. Each Participant shall
pay its pro rata share of the cost of any such work based on the following. For Major Replacements
costing less than or equal to $500,000, the expense shall be treated as an O&M Expense and billed
according to the ordinary O&M Expense billing procedure. For purposes of Major Replacements
costing in excess of $500,000, the expense shall be treated as a capital expense, with funding
temporarily supplied by the Managing Participant's short term borrowing to be reimbursed by the
Participants with interest within a 270-day repayment period that runs from the date of notice to
proceed to the contractor. Such Major Replacements must be paid by the Participants in the ratio
of their respective Demand, Pumping or Distribution Allocation Factors, as applicable. A Participant
may prepay its prorated share of a Major Replacement costing in excess of $500,000 without penalty.
A Participant shall never be required to pay for portions of replacements, additions or transmission
facilities that provide capacity or water solely to other Participants.
3.9 Operation in the Event ofa Loss in Production or Pumping Capacit;y
If production of water from the Plant is lost or substantially reduced, any Participant may
request the Managing Participant Director to provide interim alternative water supply service. The
cost of such interim alternative water service shall be the total usage by the Participant (in thousands
of gallons) times the current budgeted O&M Expense (computed on the basis of thousand gallon
units). Provided, however, if the Participant takes water from the alternate source for a period of
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time longer than one hundred eighty (180) days, operation and maintenance expenses shall be based
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on the Managing Participant's contract treated water rate.
If alternate supplies are not available in sufficient quantities to supply the ~articipants water
at their respective Demand Allocations, Participants agree that Managing Participant shall reduce
the flow to all Participants pro-rata as required by Tex. Water Code ~ 11.039(a).
3.10 Measurement of Water
Managing Participant will maintain and operate at the Points of Delivery, measuring
equipment capable of measuring accurately all of the water to be produced by the Plant and delivered
to the Participants. The measuring equipment will include telemetry devices capable of transmitting
data (rate of flow, pressure, etc.) to the Managing Participant. Participants may monitor the
telemetry data through access facilities approved by the Managing Participant Director. Each
Participant shall havC? access thereto at all reasonable times for inspection and examination. The
reading, calibration and adjustment of such measuring equipment shall be performed by the
Managing Participant and entered upon proper books or records to be maintained by the Managing
Participant. Upon request, Participant may have access to such books or records during reasonable
business hours. Such books or records shall be kept by the Managing Participant for at least five (5)
years.
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3.11 Facilities between Point of Delivexy and Transmission Line
With respect to any water conveyance facilities located between a Participant's Point of
Delivery and connection to the Managing Participant's transmission lines (except backflow
prevention devices), the Participant agrees:
.1 That it shall not permit any tap to be made to such facilities;
.2 That all such facilities, together with the measurement equipment, flow
control devices and related appurtenances, shall be and remain part of the
Plant;
.3 That it shall take all responsible steps to prevent leaks or discharges from
such facilities and shall not suffer, permit, cause or allow any water to be
taken or used from such facilities, except through the meter equipment; and
.4 That the Managing Participant shall make the repair and charge the
Participants for the cost of maintaining the line to the Points of Delivery as
well as the costs of maintaining the meters, flow control devices, and related
appurtenances. These costs are included in the 0 & M Expense as defined
herein.
3.12 Calibration
Not less than once in each year of operation, the Managing Participant shall calibrate the
measuring equipment of each Participant in the presence of a representative of the Participant.
Additional calibrations shall be made by the Managing Participant if requested in writing by the
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Participant Director. Provided, however, if a Participant requests more than one (1) inspection of -('-,
the measuring equipment in anyone (1) calendar year, the Participant shall bear the total cost of any
additional inspections if the measuring equipment is found to be operating correctly. The Managing
Participant and such Participant may jointly observe any adjustments which are made to the
measuring equipment, if any adjustments are found to be necessary.
3.13 Estimated Water Consumption
Should the test of the measuring equipment in question show that the equipment registers
either more than 102% or less than 95% of the water delivered for a given flow rate, the total
quantity of water delivered to Participant will be deemed to be the average daily consumption as
measured by the measuring equipment when in working order, and the meter shall be calibrated to
the manufacturer's specifications (in the case of Venturi meters) or the A WW A specifications (for
all other types of meters) for the given rate of flow, or replaced by the Managing Participant with
accurate measuring equipment that is tested before it is placed in service. This adjustment shall be
for.a period extending back to the time when the inaccuracy began, if such time is ascertainable; and
if such time is not ascertainable, for a period extending back to the last test of the measuring
equipment or 120 days, whichever is shorter.
As used in this paragraph, the expression "given rate of flow" means one of the following
flow rates. The Managing Participant Director shall choose the "given rate of flow" based on the
particular meter installation and consumption for each calibration or test:
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.1 The total quantity of water delivered during the preceding period (usually a calendar
month) as reflected by the totalizer, converted to gallons per minute;
.2 High, low, and intermediate rates of flow in the now range, as reflected by the flow
recording devices; or
.3 A WW A-specified test flow rates for that size and type of meter.
3.14 Check Meters
Participants may, at their option and expense, install and op~rate check meters, but all official
measurements of water shall be made by the Managing Participant's measuring equipment, except
in cases of specific written consent to the contrary by the Managing Participant Director. Check
meters must be installed in such a manner that they do not interfere with the accuracy of the
measuring equipment at the Point of Delivery.
3.15 Back flow Prevention
Each Participant (except the Managing Participant) shall install and maintain an air
gap or back flow prevention assemblies downstream from its Point of Delivery as required by the
Managing Participant Director. Participants must demonstrate that the back flow prevention
assemblies successfully pass testing once each calendar year. Testers must be accredited by the
Texas Natural Resource Conservation- Commission or other state regulatory authority having
jurisdiction.
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ARTICLE 4
OPERATION AND MAINTENANCE CHARGES
4.1 In General
It is expressly understood by the Participants to this Agreement that the Participants shall
directly reimburse the Managing Participant on a periodic basis for the expenses incurred in
producing and pumping the water delivered to the Participants. Each Participant pledges to enact
rates and fees for its customers sufficient to pay the O&M Expenses.
4.2 Operation and Maintenance Char~es
4.2.1 Each Participant shall pay O&M Expenses in arrears monthly at the rate per
thousand gallons established in the then-cun:ent Annual Budget established under Section 3.4
and Exhibits "E," "E Pasadena" and "E LaPorte Area Water Authority," plus applicable costs for
any shared debt service and transmission maintenance costs.
'4.2.2 The Managing Participant will bill each Participant on or about the tenth (lOth)
day of the month at the rates calculated as provided herein.
Each quarter, the Managing Participant shall prepare a cost accounting of the O&M
Expenses that shows the actual O&M Expenses for each Participant as well as the amount of
O&M Expenses paid by the Participant. The accounting is for the purpose of information only,
except the final yearly accounting described in Subsection 4.2.3.
4.2.3 Within 180 days of the close of the Managing Participant's fiscal year, the
Managing Participant shall prepare an accounting of the O&M Expenses. The Managing
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Participant shall engage its then-current independent certified public accounting finn to audit the
accounting of costs. As soon as . the finn has completed the audit, the Managing Participant shall
submit the audited accounting to the Participants. The Managing Participant and Participants
agree to "true-up" the previous payments made for services during the fiscal year such that each
Participant who has underpaid will make timely payment of all O&M Expenses owed in the next
monthly billing following the audit, and the Managing Participant agrees to give credit to each
Participant who has overpaid O&M Expense for the fiscal year, such credit to be given in the
monthly billing following the audit.
4.2.4 The Managing Participant agrees to provide the independent auditor all expense,
meter readings and cost data required for the audit, including any documents or records available
to Participants under this Agreement.
4.2.5 The audit must include an itemization for each Participant of all costs and meter
recordings used to compute the O&M Expenses.
4.3 O&M Expense Calculations
For the purposes of this Agreement the yearly O&M Expense for each Participant, except
the City of Pasadena and the LaPorte Area Water Authority, is computed according to the
following fonnula below. (Pasadena's O&M Expense is the same as below except replace
Exhibit "E" with Exhibit "E Pasadena"; LaPorte's O&M Expense is the same as below except
replace Exhibit "E" with Exhibit "E LaPorte Area Water Authority" and eliminate factor "0" in
the formula.)
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O&M Expense =
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"A" is the amount of water (in thousands of gallons) produced by the Plant and delivered
to the Participant at its Point of Delivery during the given year.
"B" is the total amount (in thousands of gallons) of water produced by the Plant during
the year.
"C" is the total Managing Participant expenditures during the given year for the operation
and maintenance of the Plant (including reasonable costs for services of Managing
Participant employees as well as costs offrre and liability insUrance), including expense
items described in Section 3.4 and Exhibit "E," but excluding debt service on bonds,
notes, and other evidence of indebtedness issued for capital purposes.
"0" is the total Managing Participant expenditures fot the operation, maintenance and
debt service for the Raw Water Storage and Transmission Facilities during the year,
including payments to CW A and the Trinity River Authority, including expense items
described in Section 3.4 and Exhibit "E," but excluding any debt payments for facilities
for which Participants have purchased capacity.
"E" is the total amount of water sold to the Managing Participant's water customers that is
"diverted from the Trinity River into Line A, as designated on Exhibit "A," during the
given year. As defined herein, "E" includes such raw water received at the Managing
Participant water tre~tment plants receiving Trinity River water through Line A as well as
the billable quantity (including take-or-pay amounts as applicable) taken by the Managing
Participant's raw water customers, but excludes line loss by evaporation, leakage, etc.
"F" is the CW A Debt Service expense (allocated 93.11 % to the Plant) for the 96- inch
raw water pipeline leading to the Plant, times the then-current portion of the pipeline used
(currently 126 MGO/240 MGO).
"G" is a pro rata share of the total Managing Participant expenditure for the repair of
water transmission lines leading from the Plant to the Points ofOelivery. The Managing
Participant expenditure shall be calculated by dividing the repair cost by the capacity of
the effected line. The cost shall include reasonable costs for services of the Managing
Participant employees but shall not include expenditures for the sale of bonds, notes and
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other evidences of indebtedness issued to finance the capital cost of the transmission
lines.
"H" is 2.5% of [(AIB) x C] + [(AlE) x D] or such lesser amount necessary to fund the
Contingency Reserve.
"I" is the Participant's Demand Allocation Factor.
4.4 Continiency Reserve
The Managing Participant will maintain a separate interest-bearing account to include all
funds generated from O&M Expense billings to the Participants for a Contingency Reserve,
which shall not exceed $1,000,000. The Managing Participant may use funds from the
Contingency Reserve to reimburse itself for (1) emergency repairs, (2) Major Replacements
costing in excess of $500,000 for which the Managing Participant has not been reimbursed
within 270 days, or (3) difference between actual O&M Expenses incurred and O&M Expenses
paid on basis of Annual Budget. The Managing Participant shall provide an accounting for all
expenditures from the Contingency Reserve with its monthly .invoice to the Participants.
4.5 Failure to Pay When Due
Should. a Participant fail to tender payment within thirty (30) days of invoice of any O&M
Expense (or any part thereof) or should the Managing Participant fail to refund any overpayment
to a Participant within thirty (30) days of the date due, interest thereon shall accrue at the rate of
ten percent (10%) per annum from the date due until paid.
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ARTICLE 5
...
MISCELLANEOUS
5.1 Insurance
5.1.1 The Managing Participant shall carry all risk fIre and property coverage insurance
on the Plant in an amount at least equal to the replacement cost of the portion of the Plant that is
located above ground, with a standard deductible amount established by the insurance policy
contract of the Managing Participant. Premiums for the insurance policy shall be included in the
O&M Expense and paid pro rata by the Participants as provided els~where in this Agreement. (In
the event of casualty covered by the insurance, the Managing Participant will bill Participants for
payment of the deductible as a "Major Replacement" as provided elsewhere in this Agreement.)
5.1.2 If the Plant shall be damaged or destroyed by fIre or other casualty, the Managing
Participant shall apply the proceeds from any fire or casualty insurance either (1) to repair such
damage or destruction so as to restore the Plant as nearly as possible to the condition thereof
immediately prior to such damage or destruction, or (2) to construct, install, or otherwise add to
the Plant improvements substantially equal in value to the portion of the Plant which was
damaged or destroyed, and of usefulness comparable to that destroyed or damaged such that the
Production Capacity and the Pumping Capacity specified elsewhere herein are maintained.
A:\EWB 1097S.RVI
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5.1.3 Copies of all insurance policies shall be forwarded to Participants upon request.
Insurance requirements may be adjusted by agreement of the Managing Participant Director and
the Participant Directors.
5.1.4 The Managing Participant shall carry liability insurance in the amount of
$5,000,000 occurrence/aggregate, including completed operations and pollution liability
insurance. All Participants will be carried as "additional insureds" on the policy.
5.2 Title to All Water Produced by the Proiect
Title to all water produced by the Plant shall remain in the Managing Participant until the
same shall pass through the Points of Delivery. Thereafter, Participants shall have exclusive title,
control and possession thereof and be solely responsible therefor.
5.3 Unit of Measurement
The unit of measurement for water produced and delivered by the Plant shall be one
thousand (1,000) gallons, U.S. Standard Liquid Measure.
5.4 Water Quality
The potable water to be delivered hereunder shall meet the minimum water quality
standards for human consumption prescribed by the Texas Natural Resource Conservation
Commission and any other federal or state agency having jurisdiction.
5.5 Water Conservation
On or before the year from the effective date of this Agreement, each Participant shall
approve and implement a water conservation program as required by the Texas Natural Resource
Conservation Commission pursuant to 30 T AC ~ 288, as amended from time to time.
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5.6
ReiUlatory Action
Participants recognize that the obligations of the Managing Participant to render operation
and maintenance services as provided in this Agreement are subject to all present and future
permits, rules or regulationS issued or adopted from time to time by any regulatory authority
having jurisdiction, and the Participants agree to cooperate in making such applications and in
taking such actions as may be desirable to obtain compliance therewith.
5.7 The Manaainll Participant to Keep Books
The Managing Participant shall keep books, records, and all other documents related to
the costs of operating the Plant for at least five (5) years and thereafter as required by law, and
said books, records, and other documents shall be available upon reasonable notice for
inspection, copying or audit by Participants.
5.8 Assianments
This Agreement shall bind and benefit the Participants and their legl;ll successors;
however, a Participant share (or part thereof) shall not be assignable (1) to a non-Participant
unless all Participants are given notice and 30 days to match the offer of the non-Participant; (2)
to a non-Participant except with the written approval of the Managing Participant Director; and
(3) to any entity without first obtaining written consent of the Managing Participant Director.
. Written consent for (3) shall not be withheld unless the assignment would create a condition that
would deprive any Participant from obtaining water from the Plant in accordance with the terms
of this Agreement.
A:\EWBI0975.RVI
L.D. File No. 80-99146-0 I
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5.9 Governing Law
This Agreement shall in all respects be subject to the regulatory authority of the State of
Texas and shall be interpreted, construed and governed by, and in accordance with the laws of
the State of Texas.
5.10 Force Majeure
If a Participant is rendered unable, wholly or in part, by force majeure to carry out any of
its obligations under this Agreement, then the obligations of the Participant to the extent affected
by such force majeure and to the extent that due diligence is being used to resume performance at
the earliest practicable time, shall be suspended during the continuance of any inability so caused
to the extent provided, but for no longer period. Such cause, as far as possible, shall be remedied
with all reasonable diligence. The term "Force Majeure," as used herein, shall include, without
limitation of the generality thereof, acts of God, acts of the public enemy, orders 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, earthquakes, fire, hurricanes, storms, floods,
washouts, droughts, arrests, restraints of government and people, civil disturbances, explosions,
breakage or accidents to machinery, shortage or contamination of surface water, and any other
inabilities of such Participants, whether similar to those enumerated or otherwise, which are not
. ;
I
within the control of such Participant and which such Participant could not have avoided by the
exercise of due diligence and care.
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L.O. File No. 80-99146-01
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5.11 No Additional Waiver III\Plied
~r\
t
The failure of any Participant hereto to insist in anyone or more instances upon
performance of any of the terms, covenants or conditions of this Agreement, shall not be
construed as a waiver or relinquishment of the future performance of any ~uch term, covenant or
condition by any other Participant hereto, but the obligation of such other Participant with
respect to such future performance" shall cont~ue in full force and effect.
5.12 Entire Agreement: Amendments
Subject to Section 5.19 and existing assignment agreements between Participants, this
instrument contains all the agreements made between the Participants and the Managing
Participant with regard to equity ownership and operation of the Plant and is the full and final
expression of such agreement. Unless otherwise provided herein, the Agreement may only be
amended by written instrument signed by all Participants.
5.13 Notices
5.13.1 Until the Participants are otherwise notified in writing by the Managing
Participant Director, the address of the Managing Participant is and shall be as follows:
Director, Department of Public Works and Engineering
City of Houston
P.O. Box 1562
Houston, Texas 77251
5.13.2 Until the Managing Participant is otherwise notified in writing by a Participant,
the address of such Participant is the address listed on the Participant Exhibits attached hereto.
The Managing Participant will maintain a list of Participant addresses.
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L.C. File No. 80-99146-01
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5.13.3 All written notices, statements and payments required or permitted to be given
under this Agreement shall be deemed given by the third day following the deposit in a United
States Postal Service mailbox or receptacle, of certified or registered mail, return receipt
requested, with proper postage affixed ~ereto, addressed as set forth above or at such other
address as shall be designated by written notice.
5.14 Parties in Interest
This Agreement shall be for the sole and exclusive benefit of the Participants and shall
not be construed to confer any rights upon any other party. The Participants shall never be
subject to any liability in damage to any customer of the others with rights hereunder for any
failure to perform under this Agreement.
5.15 Dispute Resolution and Remedies
5.15.1 The Participants agree that if disputes arise regarding the tenns or performance of
this Agreement or any review or approval called for hereunder, the respective Participants or
their Directors agree to meet and use their best efforts to resolve same.
5.15.2 It is not intended hereby to specify an exclusive remedy for any dispute or default,
but all remedies existing at law or in equity, including specific perfonnance, may be utilized by
Participants and shall be cumulative. Provided, however, as a necessary condition for declaration
of default under this Agreement, the non-defaulting Participant shall give the defaulting
Participant at least thirty (30) days' notice of default with the opportunity to cure during the
notice period.
A:\EWBI097S.RVI
L.O. Fil~ No. 80-99146-01
F~bruary 10,2000
36
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5.16 Sale of Water
The Participants hereto are free to sell water obtained pursuant to this Agreement as they
may choose.
5.17 Authorship
It is agreed that this Agreement shall not be construed more strictly against any
Participant because that Participant authored particular provisions of this Agreement.
5.18 Severability
If any part of this Agreement is for any reason found to be unenforceable against one or
more Participants, all other parts remain enforceable unless the .result materially prejudices the
other Participants.
5.19 Contract Term
Except as provided herein, this Agreement shall be effective on the Date of
Countersignature and shall be perpetual, except if the term is limited by law for a Participant
(City Charter, Water Code) ~e term for such Participant shall be the longest allowed by law.
Sections 4.2, 4.3, 4.4, and Exhibits "E," "E Pasadena" and "E LaPorte Area Water Authority"
shall not take effect until July 1,2000, and Section 3.6 and the Demand Allocation changes
(related to firm capacity) shall not take effect until the fIrst month following Substantial
Completion of the ModifIcation Project. Prior agreements between the Managing Participant and
the other Participants will remain effective as applicable before these dates.
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5.20 No Partnership Created Hereby
The Participants agree that no partnership relationship or joint venture is created by this
Agreement and that no Participant is made an agent or representative of the other for any
purpose.
IN WITNESS WHEREOF, Participants have executed this Agreement in multiple
copies, each of which shall be deemed to be an original, as of the date of countersignature by the
City Controller of the Managing Participant.
A:\EWB I097S.RVI
t.D. File No. 80.99146-01
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THE LAPORTE AREA WATER AUTHORITY
?-~
ATTEST:
Secretary
Board of Directors
President
Board of Directors
APPROVED
CITY OF LA PORTE, TEXAS
By:
Mayor
Executed for and on behalf of City
pursuant to authority granted by
Council Ordinance No.
passed .20_.
a copy of which is attached hereto
for reference.
ATTEST/SEAL:
City Secretary
APPROVED AS TO FORM:
City Attorney
'1_.. .
U:\WPALES\CONTRArnEWB\2000\SIGN.WPD
January 31. 2000
e
CITY OF HOUSTON, TEXAS
By:
Mayor
Executed for and on behalf of City
pursuant to authority granted by
Council Ordinance No.
passed , 19
a copy of which is attached hereto
for reference.
A TIEST/SEAL:
City Secretary
APPROVED:
Director, Department of Public
Works and Engineering
APPROVED AS TO FORM:
Sr. Assistant City Attorney
L.D. File No.
COUNTERSIGNED:
City Controller
DATE COUNTERSIGNED:
A:\EWB I 097'.RV 1
L.O. File No. 80-99146-01
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(] RESERVOIR
ELL INCTGH
FIELD
tiQIES&.
1) FORMER UNE A
2) FORMER UNE B
3) FORMER UNE C
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EXHIBIT A
SEWPP RAW WATER
TRAN~MI~~I()N ~Y~WM
V-""""""" I~ ~ ~ \_ :
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..' n-~ II '.: Ir~ '.." IIi np~~ ~~. n~ U I U Il~
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:. ,Ijj :.~-~' ~ I i~ \1 EI--5=l~ ~~ I h
i1 ::o:;=>. ..!. . -= . \. Ji3 ''':IF!lill \'
: :'. 0 ~\s,.u ;tft .'\. M:I~ II IE!rI ~ ~ ~ ~ ~~~ 1
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LEGEND
o POINT OF DEUVERY
EXHIBIT B
SEWPP TREATED WATER
TRANSMISSION SYSTEM
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EXHIBIT C1
SCHEDULE OF ACTUAL AND ESnMATED COSTS FOR PLANT
I Estimated Modified Projed Costs as of 8/17/99
CWA SWPP Regulating Station
CWA Bypass Air Release Valves
Flocculator. Improvements
Sedimentation Basin Launder Orifices
Transfer Pump Station
Transfer P. S. Wet Welllmrovements
Elevated Backwash Tank Improvements
Ground Storage Tank Level Transmitters
Generator Containment
Chlorine Storage Area Scrubbers
Coagulant Feed Pump
Lime Slurry System
Bulk Chemical storage Seal Trench
Bulk Chemical Storage - storm Drains
Transfer Pump Station Electrical
Interim Process Waste Electrical Feeder
Return Ro~ Pump station "B" Electrical Feeder
Transfer Pump station Low Level Lockout
Chemical Feed Loss of Flow Control
Distributed Control (SCADA) System
Security - Access Control System
Security - CCTV System
Fencing
"'-Distribution System - Flow Control*
Pasadena Backflow Preventers*
Less: Pasadena Backflow
Filter study Engineering Costs
Improvements' Project Engineering Cost
Improvements Projed Construction Management
Subtotal
Additional Capital Allocations Recoupment (8chibit C2)
Retroactive CWA Debt SeNice (8chibit C3)
Total
Capacity per Component .
Cost per Gallon - Construction and Engineering
Cost per Gallon - Recoupment
Cost per Gallon - CWA Debt SeNice
Cost per Gallon - Total
Rehabilitation!
Firm 120 MGD Reaulatorv Total
$. 260,000 $ - $ 260,000
10,000 - 10,000
140,000 - 140,000
13,000 - 13,000
1,209,000 - 1,209,000
26,000 - 26,000
- 455,000 455,000
- 2,000 2,000
- 2,000 2,000
- 500,000 500,000
52,000 - 52,000
325,000 - ~25,OOO
- 26,000 26,000
- 32,500 32,500
975,000 - 975,000
130,000 - 130,000
65,000 - 65,000
5,200 - 5,200
78,000 - 78,000
621,667 1 ,243,333 1,865,000
- 32,500 32,500
- 100,000 100,000
- 200,000 200,000
- 1,459,000 1,459,000 '"
35,000 - 35,000
$ 3,944,867 $ 4,052,333 $ 7,997,200
(35,000) - (35,000)
$ 3,909,867 $ 4,052,333 $ '7,962,200
260,720 - ~60, 720
2,287,199 2,209,551 . 4,496,750
850,000 - 850,000
-
3,007,123 3,007,123
2,469,587 2,469,587
$ 12,784,496 $ 6,261,884 $ 19,046,380
40,000,000 80,000,000
$ 0.1827 0.0783
0.0752
0.0617
$ 0.3196 $ 0.0783
EXHIBIT C2
Raw Project Original Original New New
Original Cost (a) Cost (a) Allocation %(a) Allocation $ (a) Allocation % Allocation $ Increased $
$ 14,367,830 $ 14,367,830 801250 $ 4,597.706 1261250 $ 7,241.386 $ 2.643,681
21,261,056 7,492,883 2251225 7,492.883 2251225 7492.883 -
$ 35.828,886 $ 21,860,713 $ 12,090,589 $ 14.734.268 $ 2 643 681
I .
CALCULATION OF UNRECOVERED ORIGINAL CAPITAL COSTS
. - -.--- . .... -.____.....vw. I
SEWPP Original Original New New
Original Cost Cost (73%) Allocation % Allocation $ Allocation % Allocation $ Increased $
$ 6.675,192 $ 4.872.890 801750 $ 519,n5 1201750 $ 719,662 $ 259,88
1.149,372 - 0 - 0
606,238 442.554 801750 47,206 1201750 70.809 23.603
145,660 106.332 801750 11.342 1201750 17,013 . 5.671
6,285.148 4,588.157 80/160 2,294,078 801160 2.294,078 -
2.692,423 1.965,469 80180 1,965.469 80180 1,965.469 -
-
728,232 531.609 80180 . 531,609 80180 - 531,609 -
80.393,507 58.687,260 80/80 58,687,260 '80180 58,687.260 -
1.695,900 1.238.007 BOn5O 132.054 1201720 206,335 74.280
6.102,064 4.454.507 80180 4.454,507 80180 4.454.507 -
25,150 25,150 80180 25,150 80180 25,150 -
$ 106.498,884 $ 76.911 934 $ 68,668.450 $ 69,031.892 $ 363.442
I .. . -
Raw Water Supply:
Pipeline CWA - 96" Pipeline
Pump Station. CWA
Treatment Plant (SEWPP):
Land Acquisition
Site Cleanup
Engineering:
Preliminary
Siting Study
Final Design -160 mgd
Final Design - ea mgd
Construction
Construction
138 KV Electric
Construction Mol
Audit Fees
Total Raw Water Supply and SEWPP
3,007.123
$
83,768,161
$
80.759,039
$
98,m.647
1995.
$
Source: KPMG Audit of SEWPP Construction Costs as of November 30,
The unrecovered costs after this expanaIon wiD be $15.006.486.
142.127.no
$
(a)
(b)
-
'-
FIScal
Year
1996
1997
1998
1999
2000
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EXHIBIT C3
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CWA BOND DEBT SERVICE - SERIES 1995 BONDS
CONSTRUCTION OF 96" RAW WATER UNE
RECOVERY OF PRIOR YEAR DEBT SERVICE
CWA Bond Series SEWPP Allocation Allocation to 80
1995 Debt Service of Debt SeNice (1) " MGD SEWPP (2)
$ 2,608,990 $ 2,429,231' $ 809,744
2,809,890 2,616,289 872,096
2,806,223 2,612,874 870,958
2,806,705 2,613,323 871,108
2,806,465 2,613,100 871,033
$ 12,884,817 $ 4,294,939
Allocation to 126
MGD SEWPP (3)
$ 1.275,346
1,373,551
1,371,758
1,371,994
1,371,8n
F\ I
. ~
, .1
.1
$
~
Additional 46 MGD
Debt SeNice
$ 465,602
501.455
500,800
500,886
500,844
$ 2,469,587
1) Allocation of $45 million bond debt seNice to 96" raw water pipeline for SEWPP
based on the following:
96" line construction cost (est.)
Line "C" projed cost (est.)
Issuance cost, discount, accrued Interest
Cost (mRlions)
$ 40.3
3.0
1.7
45.0 $
$
2) Allocation to 80 MGD SEWPP based on the following:
96" Line Capacity
Module Capacity
Module % of Allocation
240 MGO
80 MGD
33.33%
3) Allocation to 126 MGO SEWPP based on the following:
96" Line Capacity
Module Capacity
Module % of Allocation
240 MGO
126 MGO
52.50%
4) The balance of the unrecovered costs will be $6,120,291
through 2000 and varies annually thereafter.
Allocation of
Issuance Costs
$ 1.6 $
0.1
(1.7)
Costs After
Allocation
41.9
3.1
$
45.0
. . .",
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EXHIBIT D1
SCHEDULE OF ACTUAL COSTS OF PUMPING/DISTRIBUTION
Land Acquisition
Site Cleanup
Engineering:
Preliminary
Siting Study
Final Design - 160 MGO
Final Design
Construction
Construction
138 KV Electric
Construction Mgt.
Audit Fees
Total
Capacity per Component
Cost pe~ Gallon
(See Emibit 02 for Details)
Final Project Costs
Distribution (Treated High Sel'Jiee Treated
Water Une) Water Pumping Total
$ - $ 480,614 $ 480,614
.
- . - -
- - -
169,920 43,649 213,569
- 10,488 10,488
- 848,495 848,495
845,586 726,954 1,572,540
- 196,623 196,623
10,637,248 21,706,247 32,343,495
- 127,193 127.193
- 1,647,557 1,647,557
- - -
$ 11,652,754 $ 25,787,819 $ 37,440,573
250,000,000 200,000,000
$ 0.0466 $ 0.1289 $ 0.1755
EXHIBIT 02
Raw Project Original Original New New
Orlalnal Cost (a) Cost (45%) (a) Allocation %(a) Allocation Sea) Allocation % Allocation $ Increased $
$ 1,132,802 '$ 509.761 22512025 $ 56.640 25On5IJ $ 169,920 $ 113.280
1,879,080 845,588 225/675 281,862 2501250 845,588 563,724
23,638 329 10,637.248 225/675 3,545749 25OJ25IJ 10,637.248 7,091,499
$ 26 650211 $ 11.992,595 $ 3.884,251 $ 11,652,754 $ 7.768.503
250.000,000
$ 0.0488
~LCULATION OF UNRECOVERED ORIGINAL CAPITAL COST8
strlbuUon (Treated Water Pipeline):
Preliminary Engineering
Final Design
Construction
Capacity Included In Costs
DlstrlbuUon Cost per Gallon
-
--
'~~~":a-..."'~~."
HS Pumping Original Original New New
Orlalnal Cost Cost (27%) Allocation" Allocation $ Allocation % Allocation $ Increased $
$ . 6,875,192 $ 1,802,302 8Dn5IJ $ 192,246 2001750 $ 480,614 $ 288.368
1,149,372 0 0 0 0 0 0
606,238 163,684 8Dn5IJ 17,480 2001700 - 43,649 26,189
145,680 39,328 8Dn50 4,195 2001700 - 10,488 6,293
6,285,146 1,696,989 80/160 848,495 80/160 848.495 -
2,692,423 726,954 80/80 726,954 200120O 726,954 -
728.232 196,623 80/80 196.623 200120O 196,623 -
80,393,507 21,706,247 80/80 21,706,247 200120O 21,706,247 -
1,695.900 457,893 8Dn5IJ 48,842 2001720 127,193 78,351
6,102,084 1,847,557 80180 1,847,551 200120O 1,847,551 -
25,100 - 80/80 - 200/200 - -
$ 106,498,884 $ 28,437,578 $ 25,388.618 $ 25 787.819 $ . 399,201
200,000,000
$ . 0.1288
",
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1995.
gh Service Treated Water Pumping
land Acquisition
Site Cleanup
Engineering:
Preliminary
. Siting Study
Final Design - 160 rngd
Final Design - 80 mgd
Construction
Construction
138 KV Electric
Construction Mol
Audit Fees
Capacity Included in Costs
Pumping Cost per Gallon
Source: KPMG Audit of SEWPP Construction Costs as of November 30.
The unrecovered costs after thIe expansion wiD be $2,989,600.
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EXHIBIT E
CALCULATION OF ANNUAL BUDGET
The Operation and Maintenance budgeted O&M Expenses, as currently calculated, consist of"the
following:
(Item C in formula given in Section 4.3):
.1 Total City of Houston Non-Contract Plant Expenditures (including Salary and Benefits,
Telephone, Electric, Insurance, Water Production Personnel, Meter Reading and Billing, and
Other Related Direct Expenditures).
.2 Total Contracted Water Services (includiIig any operating contract settlements, legal
expenses and contractor claims).
.3 Overhead Costs (based on a proportionate share of Management & Support, Finance and
Administration, and Indirect Costs) with a fixed allocation of9% of Total Contracted Water
Services per item .2 above.
(Item D in formula given in Section 4.3):
The Operation and Maintenance expenses budgeted by Houston for TRA and CW A as well as
the respective debt service as itemized below
.4 TRA Debt Service
.5 CWA Debt Service for all Series Bonds, except 1987, 1991, 1995.
.6 CW A Debt Service, Series 1987 and 1991 times 17.525 %.
.7 Future City Debt Service in support of Raw Water Storage and Transmission Facilities
(Item F in formula given in Section 4.3):
The..CW A Debt Service expense (allocated 93.11 % to the Plant) for the 96 inch raw water
pipeline leading to the Plant, times the then-current portion of the pipeline used (currently 126
MGD/240 MGD).
.8 The formula for calculating the estimated budgeted cost per thousand gallons is as follows:
(CIB) X (1 +H) + (DIE) X (1+H) = estimated cost per 1,00.0 galllons, with Band E described as
follows:
B = the total amount of water estimated to be produced by the Plant during the given year.
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EXHIBIT E (continued)
CALCULATION OF ANNUAL BUDGET
E = the total amount of water estimated to be sold to Houston water customers that is diverted
from the Trinity River into Line A, as designated on Exhibit "A" during the given year. As
defined herein "E" includes such raw water estimated to be received at Houston water treatment
plants receiving Trinity River water throu~ Line A as well as the billable quantity (including
take-or-pay amounts as applicable) to be taken by Houston raw water customers, but excludes
line loss by evaporation, leakage, etc.
.9 Additional annual estimated costs consist of the following:
+ Item F CW A Debt Service times the portion of the Raw Water Storage and
Transmission Facilities currently used, compared to the 96" line capacity. Currently equal
to 52.5 percent (126 MGD/240 MGD).
+ Item G, or estimated water transmission line expense, per participant.
+ Item H Contingency Reserve, equal to 2.5 percent of the cost per 1,000 gallons for
Items C + D.
.10 The cost per Participant Wbuld then equal the cost per 1,000 gallons times the Participant's
estimated gallons/l,OOO for the given year (including the 2.5 % for Contingency Reserve), plus
Item F times the Participant's Demand Allocation Factor, pl~s Item G, ifany.
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EXIDBIT E - LAPORTE AREA WATER AUTHORITY
CALCULATION OF ANNUAL BUDGET
The Operation and Maintenance budgeted O&M Expenses, as currently calculated, consist of the
following:
(ItemC in formula given in Section 4.3): ,
.1 Total City of Houston Non-Contract Plant Expenditures (including Salary and Benefits,
Telephone, Electric, Insurance, Water Production Personnel, Meter Reading and Billing, and
Other Related Direct Expenditures).
.2 Total Contracted Water Services (including any operating contract settlements, legal
expenses and contractor claims).
.3 Overhead Costs (based on a proportionate share of Management & Support, Finance and
Administration, and Indirect Costs) with a fixed allocation of9% of Total Contracted Water
Services per item .2 above.
(Item D in formula given in Section 4.3):
The Operation and Maintenance expenses budgeted by Houston for TRA and CW A as well as
the respective debt service as itemized below
.4 TRA Debt Service
.5 CW A Debt Service for all Series Bonds, except 1987, 1991, 1995.
.6 CW A Debt Service, Series 1987 and 1991 times 17.525 %.
.7 Future City Debt Service in support of Raw Water Storage and Transmission Facilities
(Item F in formula given in Section 4.3):
The CW A Debt Service expense (allocated 93.11 % to the Plant) for the 96 inch raw water
pipeline leading to the Plant, times the then-current portion of the pipeline used (currently 126
MGD/240 MGD).
.8 The formula for calculating the estimated budgeted cost per thousand gallons is as follows:
. .
(CIB) X (1 +H) + (DIE) X (1 +H) = estimate~ cost per 1,000 galllons, with B and E described as
follows: .
B = the total amount of water estimated to be produced by the Plant during the given year.
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EXHIBIT E -LaPORTE AREA WATER AUTHORITY (continued)
CALCULATION OF ANNUAL BUDGET
r\
E = the total amount of water estimated to be sold to Houston water customers that is diverted
from the Trinity River into Line A, as designated on Exhibit "A" during the given year. As
defined herein "E" includes such raw water estimated to be received at Houston water treatment
plants receiving rrinity River water throu~ Line A as well as the billable quantity (including
take-or-pay amounts as applicable) to be taken by Houston raw water customers, but excludes
line loss by evaporation, leakage, etc.
.9 Additional annual estimated costs consist of the following:
+ Item F CW A Debt Service times the portion of the Raw Water Storage and
Transmission Facilities currently used, compared to the 96" line capacity. Currently equal
to 52.5 percent (126 MGD/240 MGD).
+ Item H Contingency Reserve, equal to 2.5 percent of the cost per 1,000 gallons for
Items C + D.
.10 The cost per Participant would then equal the cost per 1,000 gallons times the Participant's
estimated gallonsll,OOO for the given year (including the 2.5 % for Contingency Reserve), plus
Item F times the Participant's Demand Allocation Factor.
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EXHIBIT E
CALCULATION OF ANNUAL BUDGET - PASADENA
The Operation and Maintenance budgeted O&M Expenses, as currently calculated, consist of the
following:
(Item C in formula given in Section 4.3):
.1 T 0t3I City of Houston Non-Contract Plant Expenditures (including Salary and BenefilS,
Telephone, Electric, Insurance, Water Production Personnel, Meter Reading and Billing, and
Other Related Direct Expenditures).
.2 Tola! Contracted Water Services ( including any operating contract settlements, legal
expenses and contractor claims).
.3 Overhead Costs (based on a proportionate share of Management & Support, Finance and
Administration, and Indirect Costs) with a fixed allocation of9% of Total Contracted Water
Services per item .2 above.
(Item D in formula given in Section 4.3):
The Operation and Maintenance expenses budgeted by Houston for TRA and CW A as well as
the respective debt service as itemized below
.4 TRA Debt Service
.5 CWA Debt Service for all Series Bonds, except 1987, 1991, 1995, times 84.7 %.
.6 CWA Debt Service, Series 1987 and 1991 times 17.525 %, then times 84.7%.
.7 Future City Debt Service in support of Raw Water Storage and Transmission Facilities
(Item F in formula given in Section 4.3):
The CW A Debt Service expense (allocated 93.11 % to the Plant) for the 96 inch raw water
pipeline leading to the Plant, times the then-current portion of the pipeline used (currently 126
. MGD/240 MOD).
.8 The formula for calculating the estimated budgeted cost per thousand gallons is as follows:
(CIB) X (1 +H) + (DIE) X (1 +H) = estimated cost per 1,000 galllons, with B and E described as
follows:
B = the total amount of water estimated to be produced by the Plant during the given year.
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EXHIBIT E - PASADENA (continued)
CALCULATION OF ANNUAL BUDGET
E = the total amount of water estimated to be sold to Houston water customers that is diverted
from the Trinity River into Line A, as designated on Exhibit "An during the given year. As
defined herein "E" includes such raw water estimated to be received at Houston water treatment
plants receiving Trinity River water through ,Line A as well as the billable quantity (including
take-or-pay amounts as applicable) to be taken by Houston raw water customers, but excludes
line loss by evaporation, leakage, etc. .
.9 Additional annual estimated costs consist of the following:
+ Item F CWA Debt Service times the portion of the Raw Water Storage and
Transmission Facilities currently used, compared to the 96" line capacity. Currently
equal to 52.5 percent (12.6 MGD/2~0 MGD).
+ Item G, or estimated water transmission line expense, per participant.
+ It.em H Contingency Reserve, equal to 2.5 percent of the cost per 1,000 gallons for
Items C + D.
.10 The cost per Participant would then equal the cost per 1,000 gallons times the Participant's
estimated gallons/l,OOO for the given y~ar (including the 2.5 % for Contingency Reserve), plus
Item F times the Participant's Demand Allocation Factor, plus Item G, if any.
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EXHIBIT F
CALCULATION OF TOTAL INVESTMENT BY PARTICIPANT
Original Investment Total
Investment FY 2000 Investment Percent
Gulf Coast Water Authority $ 24,373.666 $ 3,378.720 $ 27.752,386
Less: Capacity Sold $ 11.539,918 $ 11.539,918
League City $ 12,833,748 $ 3,378,720 $ 16,212,468 10.81
Webster $ 3,369,608 $ 842,751 $ 4,212,359 2.81
South Houston $ 2,848,968 $ 837,528 $ 3,686,496 2~46
Pasadena $ 17,093,807 $ 6,334,097 $ 23,427,904 15.62
Harris Co. MUD #55 $ 1,153,386 $ 1,071,384 $ 2,224,770
Plus: Capacity Bought $ 2,318,695 $ 2,318,695
Harris Co. MUD #55 $ 3,472,081 $ 1.071,384 $ 4,543,465 3.03
LaPorte Area WA $ 4,831,404 $ 1,009,453 $ 5,840,857
Plus: Capacity Bought $ 3,425,120 $ 3,425,120
Less: Capacity Sold $ 1,710,000 $ 1,710,000
LaPorte Area WA $ 8,256,524 $ (700,547) $ 7,555,977 5.04
Friendswood $ 3,418,761 $ 1,336,804 $ 4,755,565 3.17
Clear Lake City WA $ 12,046,367 $ 6,489,240 $ 18,535,607
Plus: Capacity Bought $ 5,796,738 $ 5,796,738
Less: Capacity Sold $ 114.000 $ 114,000
Clear Lake City WA $ 17,843,105 $ 6,375,240 $ 24,218,345 16.15
Baybrook MUD #1 $ 1,650,470 $ 316.583 $ 1,967,053 1.31
Clear Brook City MUD $ 1,375,392 $ 445,110 $ 1,820,502 1.21
City of Houston $ 67,040,991 $ 3,125,802 $ 70,166,793
Less: Recoupment Costs $ 4,214,809 $ 4,214,809
Less: Capacity Sold $ 8,388,382 $ 8.388,382
City of Houston $ 58,652,609 $ (1.089,007) $ 57,563,602 38.39
TOTAL $ 130,815,073 $ 19,148,663 $ 149,963,736
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EXHIBIT F (continued)
CALCULATION OF TOTAL GALLONS BY PARTICIPANT
Demand Pumping Distribution
Allocation Allocation Allocation
Gulf Coast Water Authority
Original 21.0000 21.6900 27.1125
Capacity Sold (10.0000) (10.2760) (8.9450)
Incremental Purchase 5.5000 5.0860 2.2325
Subtotal 16.5000 16.5000 20.4000
Webster
Original 2.7000 4.4000 5.5000
Incremental Purchase 1.3500 1.4310 0.3310
Subtotal 4.0500 5.8310 5.831 0
South Houston
Original 2.5000 2.2220 2.7775
Incremental Purchase 1.2500 1 .5280 0.9725
Subtotal 3.7500 3.7500 3.7500
Pasadena
Original 15.0000 13.3340 16.6675
Incremental Purchase 7.5000. 16.4270 13.0935
Subtotal 22.5000 29.7610 29.7610
Harris Co MUD #55
Original 0.9750 1.1560 1.4450
GCWA Purchase 2.0000 2.0440 2.5550
Incremental Purchase 1.4875 2.2810 '1.4810
Subtotal 4.4625 5.4810 5.4810
LaPorte Area Water Authority
Original 4.2000 4.6600
GCWA Purchase 3.0000 3.1200
Incremental Purchase 0.6000 1.9700
Subtotal 7.8000 9.7500
Friendswood
Original 3.0000 2.6660 3.3325
Incremental Purchase 1.5000 3.7240 3.0575
Subtotal 4.5000 6.3900 6.3900
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EXHIBIT F (continued)
CALCULATION OF TOTAL GALLONS BY PARTICIPANT
Demand Pumping Distribution
Allocation Allocation Allocation
Clear Lake City Water Authority
Original 10.0000 13.3340 16.6675
GCWA Purchase 5.0000 5.1120 6.3900
Incremental Purchase 7.5000 18.2140 13.6025
Subtotal 22.5000 36.6600 36.6600
Baybrook MUD #1
Original 1.2000 3.0000 3.7500
Incremental Purchase 0.6000 0.3750 (0.3750)
Subtotal 1.8000 3.3750 3.3750
Clear Brook City MUD
Original 1.0000 2.5000 3.1250
Incremental. Purchase 0.5000 1.3455 0.7205
Subtotal 1.5000 3.8455 3.8455
TOTAL (prior to City) 89.3625 121.3435 115.4935
City of Houston
Original 18.4250 131.0380 169.6225
Capacity Sold (52.3815) (35.1160)
Incremental Purchase 9.2125
Subtotal 27.6375 78.6565 134.5065
TOTAL 117.0000 200.0000 250.0000
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EXHIBIT I
.CITY OF LAPORlE
CONNECTION POINT
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EXHIBIT II
I,aPORTE AREA WATER AUTHORITY
SUl\'IMARY
CAPACITY ALLOCATIONS AND COSTS
LaPorte
Prior to
Transfer
Demand Allocation
Existing 4.200
Eligible Capacity
Total Capacity
Pumping Allocation
Existing 4.660
Incremental Capacity
Total Capacity
Distribution Allocation
Existing 0.000
Incremental Capacity
Total Capacity
LaPorte
After GCW A Percent
Transfer'" Factor
7.200 9.000
Mill} '\.
7:800 6.500
7.780 3.890
L210
9.750 4.875
0.000 0.000
Costs (or Demand Allocation
Modification Project
Plant & Raw Water
Recoupment Cost(Cl)$0.07521gal
CWA Debt Service(Cl)$0.0617/gal
Costs for 120 MGD
firm capacity.
Reference Exhib.it(Cl)$0.1827/gal
Costs for
Rehabilitation and
Regulatory Requirements
Reference Exhibit(Cl)$0.0783/gal
$45,120
37,020
109,620
56~,760
Costs (or Additional Pumping Capacity
Additional MGD
Sold by Houston(Dl)$0.1289/gal 253,933
Costs (or Additional Distribution Capacity
Additional MGD
Sold by Houston(Dl)$0.0466/gal
Rehate (or 5;ale to Participants
Sale - MGD
Sale - $
TOTAL $1,009,453
*The GCWA Transfer is estimated to take place March 2001.
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EXHIBIT n (continued) ;-\
LaPORTE AREA WATER AIJTHORITY
PARTICIPANT ADDRESSES
LaPorte Area Water Authority
Steve Gillett
Public Works Director,
City of LaPorte
P.O. Box 1115
LaPorte, Texas 77572