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HomeMy WebLinkAbout08-01-11 Regular Meeting of the La Porte Area Water AuthoritySTATE OF TEXAS X COUNTY OF HARRIS X CITY OF LA PORTE X LA. PORTS AREA WATER AUTHORITY AGENDA NOTICE IS HEREBY GIVEN OF A REGULAR MEETING OF THE LA PORTE AREA WATER AUTHORITY TO BE HELD THURSDAY, AUGUST 1, 2011 IN THE DOWNSTAIRS CONFERENCE ROOM OF THE PUBLIC WORDS SERVICE CENTER, 2963 NORTH 23RD STREET, LA PORTE, TEXAS, BEGINNING AT 6:00 PM. 1. CALL TO ORDER, 2. CONSIDER APPROVAL OF MINUTES FROM FEBRUARY 2, 2011 MEETING. CONSIDER APPROVAL OF AN OPERATOR'S AGREEMENT BETWEEN THE CITY OF LA TORTE AND THE LA PORTE AREA WATER AUTHORITY. 4. CONSIDER APPROVAL OF FY 2011.2012 LPAWA OPERATING BUDGET. DISCUSS CITY OF HOUSTON 2009 TRUE UP PAYMENT REQUEST AND PROVIDE THE GENERAL MANAGER WITH DIRECTION 6. DISCUSS CITY OF HOUSTON 2010 TRUE UP PAYMENT REQUEST AND PROVIDE THE GENERAL MANAGER WITH DIRECTION 7. CONSIDER APPROVAL OF INTERLOCAL AGENCY AGREEMENT WITH THE CITY OF PASADENA FOR REIMBURSEMENT TO THE CITY OF PASEDENA FOR EXPENSES RELATED TO POTENTIAL CHANGE IN SE HOUSTON WATER PURIFICATION PLANT OPERATOR AND /OR MANAGER. 8. GENERAL MANAGER'S REPORT. 9. BOARD COMMENTS. A. MATTERS APPEARING ON AGENDA, B. INQUIRY OF STAFF REQUIRING A STATEMENT OF SPECIFIC FACTUAL INFORMATION OR A RECITATION OF EXISTING POLICY. 10. ADJOURNMENT. THIS FACILITY HAS DISABILITY ACCOMODATIONS AVAILABLE. REQUESTS FOR ACCOMODATIONS OR INTERPRETIVE SERVICES AT MEETINGS SHOULD BE MADE 48 HOURS PRIOR TO THIS MEETING. PLEASE CONTACT THE CITY SECRETARY'S OFFICE AT 281 - 4715020 OR TDD LINE 281 -471 -5030 FOR FURTHER INFORMATION. THERE MAY BE A QUORUM OF CITY COUNCIL MEMBERS PRESENT AT THE MEETING. COUNCIL WILL TAKE NO ACTION BUT MAY PARTICIPATE IN DISCUSSIONS. Patrice Fogarty City Secretary Date pasted LA PORT Y, AREA WATXR AUTHORITY !MINU'T'ES YUsBRUARY 2, 2011 The meetnig was celled to ardor at (00 PM by President Dennis Sieger. Alembers P r , Pseut: President Dennis Steger, Vice 1 ? 1oWdent David fand( i, 8oeretafy Ken11Cth Sclilather, Member Rawly Woodard M embers Absent: Member Steve Valerius. Others Present: General Manager J2on Bottoms, Asst. Director of Public Works Don Pennell, Director of 1; Jltanee Micbael Dulby, City Controller Phy €lts Ritieltart, Pattillo, Bro%vn, K hill Null l..a %ve, and Mnrgall's Poll)[ Asst, City Administrator Brian Schmidcr, 2. PlOW011 Of OMCCrs. tennis S'te1,T4:r motioned to Oce1 David auda Presidenf socoml by 1 midy Woodard, lobm wos u nanimmis. Motion by Dennis Steger to elect Tien Schlather Vice Presidom second by Rmidy Woodward, motion was elnailinlons. twiotlofl by Dciinjl Steger to elect Stave Vator lllg Sec :etary, SCL'tllld K ell 5ohlnther motion was 11iionimol€s. 3_ The 1111 tultcs from flip mcothig !told August 5, 2010 were revimed, Motion by Dem€is Steger, secured by Ken gcfilather to approve the 11111tutes as presented, 2vMotiolt was nna €iiluous. 4, Paola L.€:1 %ve With Pattillo, BrO ill, laud !-fill presented th e2010 finallciaL relxart.'1'Lre fn 111 fouled that the lac Polte Area Water Atltllority Conformed to accounting p rinciples generally aleceptud in the United S1,91m of America. Randy Woodard had questions regardi ng the brokerage, sale mid purchase cif bonds for Mlellael Dolby aclvisetl that lie may follow tip with Michael Dolby after the. electing. A motion by David 3talda to approve the Financial !report far tire. year elided Septemller 30, 2010 as provided by Peltillo, Brmmi and Hilt, second by Randy Woodard, motion %vas tulan.illious. .5. General Manager !ton Bottoms passed the (loneral Manager's report ovor to Asst, PUblie Works Director Ikon Pennell. Mr. Pennell reviewed wilft Board Members the City tp(/hatlston taking over of operations of 1 1to Southeast Water Plant f years 2005 to present, jlld operating agreement tvitll participants or the ,Southeast Plant, City of Hottstan request r _Or "tmo tip ", and the Participating intlmhers Proposed letter rebutting the "true 1€p" clai r��I6'ti&l wvas tirade by L]eotl€s Steger to leave the Water Authority President sign the "true up" €ellt�t l'l Jotter and David .landa second flip 1114001€. Motioll was ttnaniluolls. ,' I r fi. Tliere being no 1tlrthar business, tllcmoting adjouriied al 6:415 -y14�f ! iyCei'CtQi'y PASSEL] AND APPROul) ON TE118 DAY P1'eSldent Memo To: La Porte Area Water Authority Board Prom: David Mick, Public Works Director CC: Icon Bottoms, Don Pennell, Michael Dolby Date: July 21, 2011 Re: Background Information for August 1, 2011 Agenda Items LPAWA Board: Thank you for your time and consideration of the items on the August 1 agenda. We have a lot to discuss at this next meeting. Please don't hesitate to forward any comments or questions as they come up when you review this packet. Agenda Item 3: Consider approval of an operator's agreement between the City of La Porte and the LPAWA. The curj ,nt agreement expired July 1. The new agreement is attached (Appendix A). There are no changes to the agreement other than the dates and cost adjusted for the epi -u as provided in the prior agreement(s). Agenda Item 4: Consider approval of FY 2011 -2012 LPAWA Operating Budget. The City of Houston (COH) submitted a budget rate of $0.635411000- gallons for the upcoming fiscal year (Appendix B). This new rate is 29% higher than the budget rate provided by COH two -years ago. The proposed budget for the three member cities is provided in (Appendix C) for FYI 1-12. FY10 -11 is also provided for comparison. While the COH budget rate increase is significant, it was largely offset this year by a decrease in both the projected O &M cost and the capital recovery fee. The City of La Porte's cost is projected to increases 3% this next fiscal year. The cost to Morgan's Point will decrease slightly due to atr expected decrease in water usage. The Shoreacreas cost is estimated to increase 22% this next year to accommodate a new concrete plant, Agenda Items 5 and 6: Discuss City of Houston 2009 and 2010 True Up Payment Request and provide the General Manager with Direction. in January of this year, COH provided a prel'uninary accounting of their proposed "true up" billings for the Fiscal Years 2007, 2008, 2009, and 2010. After some discussion at their February 2 meeting, the LPAWA Board directed the General Manager to weric through the co- owners committee and to follow the lead of the City of Pasadena as the largest water consumer other tban COH. The co- owners committee minus COH bas met a 1 City of La Porte Public Works . Memo To: La Porte Area Water Authority Board Prom: David Mick, Public Works Director CC: Icon Bottoms, Don Pennell, Michael Dolby Date: July 21, 2011 Re: Background Information for August 1, 2011 Agenda Items LPAWA Board: Thank you for your time and consideration of the items on the August 1 agenda. We have a lot to discuss at this next meeting. Please don't hesitate to forward any comments or questions as they come up when you review this packet. Agenda Item 3: Consider approval of an operator's agreement between the City of La Porte and the LPAWA. The curj ,nt agreement expired July 1. The new agreement is attached (Appendix A). There are no changes to the agreement other than the dates and cost adjusted for the epi -u as provided in the prior agreement(s). Agenda Item 4: Consider approval of FY 2011 -2012 LPAWA Operating Budget. The City of Houston (COH) submitted a budget rate of $0.635411000- gallons for the upcoming fiscal year (Appendix B). This new rate is 29% higher than the budget rate provided by COH two -years ago. The proposed budget for the three member cities is provided in (Appendix C) for FYI 1-12. FY10 -11 is also provided for comparison. While the COH budget rate increase is significant, it was largely offset this year by a decrease in both the projected O &M cost and the capital recovery fee. The City of La Porte's cost is projected to increases 3% this next fiscal year. The cost to Morgan's Point will decrease slightly due to atr expected decrease in water usage. The Shoreacreas cost is estimated to increase 22% this next year to accommodate a new concrete plant, Agenda Items 5 and 6: Discuss City of Houston 2009 and 2010 True Up Payment Request and provide the General Manager with Direction. in January of this year, COH provided a prel'uninary accounting of their proposed "true up" billings for the Fiscal Years 2007, 2008, 2009, and 2010. After some discussion at their February 2 meeting, the LPAWA Board directed the General Manager to weric through the co- owners committee and to follow the lead of the City of Pasadena as the largest water consumer other tban COH. The co- owners committee minus COH bas met a 1 number of tines since the February 2 meeting. information gathering by the committee included meetings with a local attorney, also a litigating attorney from Dallas, and an independent accountant. The co- owners group also heard presentations from two engineenng firms that submitted proposals to prepare new agreements that would govern the plant operator and the plant manager moving forward. A recap of the particularly relevant items follows for the Board's consideration: The SE Houston Plant owned by area governmental agencies. THIS IS NOT A CITY OF HOUSTON PLANT. • The City of Houston is: a) operator by contract with the ownership group (since 2005) and b) plant manager (since at least 2001). They are paid $600,000 + annual cpi -u adjustments for plant manager and reimbursed O &M costs per the operator's agreement. The City of Houston lobbied for and received a contract as plant operator in 2005 claiming that they could run the plant more economically than the contract operator at the titre. The contract with- the previous o perator was terminated. The rates have increased 40% since. o The operator (COH) is governed by a manager /operator's agreement. Several pages fi-otn the operators agreement is attached (Appendix D). Key sections to note: 0 4.2.3 — the operator mast submit their final accounting of the O &M costs within 180 -days of the managing member's fiscal year (June 30 in this case). [Tire 2009 true -up was submitted one -year beyond 180 -days (Appendix Q. 2010 submitted several months beyond the 1S0- days (Appendix F). Also these submittals did not qualify as an audited report required by the operator's agreement.] o 4.2.2 — the managing member is to submit quarterly reports to keep the co- owners apprised of costs in relation to the budget. [Clearly the introduction of 30% "true -up" charges several months or several years after the close of the fiscal year accounting period is contrary to the spirit of this provision.] o 4.2.3, 4.2.4, 4.2.5 -- these sections discuss the need for audited accounting of each year's billings to the co-owners. [An audited report must accompany the annual true up invoices. The report submitted by the City of Houston as the independent audit included this statement provided by the accounting firm: "We we not engaged to, and did not conduct an audit, the objective of which would be the expression of an opinion on the accounting records. "] o 4.4 — the managing member can hold a contingency but it SHALL NOT exceed $1,000,000. COH currently holds approximately $2,000,000 set aside as contingency and continues to add a 2.5% surcharge to their invoices to the co- owners adding to the contingency balance. 0 Page 2 • The City of Houston advised the co- owners that if they do not contest the 2009 and 2010 true -up invoices, COH will not bill 2007 and 2008. • The attorneys advising the co- owners suggest that the owners are on solid ground in refusing to pay the 2009 true -up invoice and reasonably solid ground for the 2010 true -up. • Potential worst -case exposure for the co- owners (combined): a) 10% annual interest for unpaid balances, b) $300,000 - $500,000 attorney fees, c) double attorney fees if determined that the co- owners are to by COH legal fees, d) attorneys suggest no chance we lose our water rights and no chance they shut off water — a judge wouldn't allow it. • On May 12, 2011 the co- owners, after consulting with their attorneys, advised the City of Houston that the owners will look for another operator and manager for the SE Plant. • The LPAWA response to the COH 2009 and 2010 true -up invoices are included in Appendices F and li respectively. With regard to the 2009 invoice, COH's reply to the LPAWA response is also included with Appendix E. Agenda Item 7: Consider Approval of an interlocal Agency Agreement 'vvith the City of Pasadena for Reimburseinent to the City of Pasadena for Expenses Related to a Potential Change in both the Manager and Operator of the SE Houston 'Water Purification Plant, The costs associated with contesting the City of Houston invoices includes legal, accounting, and engineering. The City of Pasadena will enter into professional services contracts as needed for the completion of this work, Pasadena will be billed directly and in turn invoice each co -owner for their prorated share of the expense based on the co- owner's annual water consumption. Before executing the agreement, the Board will need to know if any of the other owners are declining to share in the cost which would increase the LPAWA share. The draft agreement is included in (Appendix G). Costs that might be anticipated include $395,000 for an engineering firm to prepare a scope of services and new contracts for the plant operator and plant manager, roughly estimate $10,000 for independent audit, perhaps $300,000 - $500,000 in legal fees assuming litigation and a trial. If all owners participate, the LPAWA share of the expenses (8 %) would be in the range of $56,000 to $72,000. One engineering firm indicated that they would be able to manage the plant for considerably less money than the owners now pay to the City of Houston. As much as $350,000 a year less. Accepting this to be the case, the LPAWA share of the savings would be $28,000 /year, and the break -even point is less than 3 -years out. The required time to break -even is accelerated if there is any savings at all on the O &M side which seems likely. (end memo) s Page 3 LA TORTE AREA WATER AUTHORITY MINUTES FEBRUARY 2, 2011 Tire meeting was called to order at 6:00 PM by President Dennis Steger. Members Present: President Dennis Steger, Vice President David Janda, Secretary Kenneth Schlather, Member Randy Woodard Members Absent Member Steve Valerius, Others Present: General Manager Ron Bottoms, Asst. Director of Public Works Don Pennell, Director or Finance Michael Dolby, City Controller Phyllis Rinehart, Pattillo, Brown, & Hill Paula Lwe, and Morgan's Point Asst. City Administrator Brian Schneider. 2, Election of Officers. Dennis Steger motioned to elect David Janda President second by Randy Woodard, motion was unanimous. Motion by Dennis Steger to elect Ken Schlather Vice President second by Randy Woodward, motion was unanimous. Motion by Dennis Steger to elect Steve Valerius Secretary, second by Ken Schlather motion was unanimous. 3. The minutes from the meeting held August 5, 2010 were reviewed. Motion by Dennis Steger, second by Ken Schlather to approve the minutes as presented. Motion was unanimous. 4. Paula Lwe with Pattillo, Brown, and Hill presented the 2010 financial report. The firm: found that the La Porte Area Water Authority conformed to accounting principles generally accepted in the United States of America. Randy Woodard had questions regarding the brokerage, sale and purchase of bonds for Michael Dolby advised that he may follow up with Michael Dolby after the meeting. A motion by David Janda to approve the Financial Report for the year ended September 30, 2010 as provided by Pattillo, Brown, and Hill, second by Randy Woodard, motion was unanimous, S. General Manager Ron Bottoms passed the General Manager's report over to Asst. Public Works Director Don Pennell. Mr. Pennell reviewed with Board Members the City of Houston taking over of operations of the Southeast Water Plant Roin years 2005 to present, the operating agreement with participants of the Southeast Plant, City of Houston request for "true up ", and the participating members proposed letter rebutting the "true up" claim. Motion was made by ]aonnis Steger to have the Water Authority President sign the "true up" rebuttal letter and David Janda second the motion. Motion was unanimous. 6. There being no further business, the meeting adjourned at 6:45 PM, Secretary PASSED AND APPROVED ON THIS DAY President Appendix A OPERATOR'S AGREEMENT This agreement, entered into this day of AUGUST, 2011, by and between the La Porte Area Water Authority, acting by and through its duly authorized officers (hereinafter sometimes referred to as "OWNER ") and the City of La Porte, Texas, acting by and through its duly authorized. officers (hereinafter sometimes referred to as "OPERATOR "). For and in consideration of the mutual undertakings herein contained, Authority and City agree as follows: I. OPERATOR agrees to operate, maintain, repair, and manage OWNER'S property for a term of three (3) years commencing October 1, 2011 with an option to renew this agreement for an additional period of three (3) years, subject to the agreement of both parties. This agreement is subject to termination at any time without cause by either party giving ninety (90) day written notice to the other. II. operation shall consist of furnishing labor and administrative support services to provide efficient operation, maintenance, and management of OWNER'S transmission system, shown on record construction drawings on file at the La Porte City Hall, and to provide clerical and administrative support for the billing, accounting, and other support needed for efficient operation of OWNER'S transmission system, which includes, but not limited to the fallowing: I. Provide operating personnel at all times who hold valid water works licenses issued by the Texas Natural Resources Conservation Commission. 2. Provide operating personnel on. -call twenty -four (24) hours per day, seven (7) days per week with a twenty -four (24) hour telephone dispatching service and vehicles equipped with two -way radios. 3. Provide clerical and administrative support for balling, accounting, supervisory, and other support as needed for the efficient operation of OWNER'S transmission system. 4. Daily check, at all customer takepoints, (including weekends and holidays)- a. All control systems; b. Take ureter readings; and C. Check all electrical operations. 5. Collect, on a monthly basis, all necessary water samples as required by local, state, and federal regulations. 6. Run complete chemical analysis of water supply. 7. Prepare, submit, and furnish copy to OWNER all required reports to local, state, and federal agencies having regulatory powers over OWNER'S transmission system. 8. Furnish monthly operational, fiscal, and budgetary reports to OWNER. 9. Prepare operation line --item budget estimate for OWNER'S approval prior to the termination of this Agreement. 10. perform preventive maintenance as required by equipment manufacturers' operating manuals, provided by OWNER. 11. Maintain required records of water system operations. 12, Report to OWNER system improvements and /or major repairs needed. 13. Prepare, maid., and collect monthly bills for water consumed by all customers, in accordance with the Accounting Policy Statement attached hereto as Exhibit "A ". 14. Process invoices for materials, supplies, and services necessary to operate the water supply system. 15. Provide necessary office space in its facilities for a master control center needed for the control, historical recording, and reporting of the water transmission system. III. OPERATOR shall receive compensation for services (Annual Fee) enumerated in Section 11 above in the amount of $62,852, parable monthly, in a sum equal to 1/12 of the Annual Fee, on or before the 15 day of each month that this Agreement remains in effect. The Annual Fee shall be binding on the Operator and the Owner for the first year of the Agreement, that is from October 1, 2011 through September 31, 2012. Beginning October 1, 2012, and in subsequent years thereafter, there shall be an annual cost of living adjustment of the Annual Fee. The annual cost of living adjustment shall be calculated by multiplying the Annual Fee by a fraction, the denominator of which shall be the April 2011 Consumer Price Index for All Urban Consumers (CPIWU), all items, U.S. City Average, and the numerator shall be the CPI- -U for all items, U.S. City Average for April 2012, and subsequent~ dates of adjustment. IV. OPERATOR will procure, to OWNER'S account, supplies, materials, equipment, and services, utilizing funds allocated in OWNER'S approved budget, attached hereto as Exhibit "B ", for the routine operation of OWNER'S transmission system. OPERATOR shall conform to all applicable purchasing laws of the State of Texas in the procurement of all supplies and materials necessary for the operation of the transmission system. V. Repairs, adjustments, and operation of the system outside of the scope of services outlined in Section IT of this Agreement will be billed to OWNER on an actual cost basis. whenever possible, OPERATOR will obtain advance approval from OWNER prior to beginning non - routine work; however, OPERATOR is authorized to proceed, unless specifically directed otherwise, in those cases deemed necessary by the OPERATOR. VI. OPERATOR will exercise good judgement in the replacement of equipment under this Agreement. OWNER will not hold OPERATOR responsible for guarantees or warranties for such equipment. The OPERATOR will make responsible efforts to secure normal guarantees to OWNER- VII - OPERATOR is retained by OWNER only for the purpose and to the extent set forth in this Agreement, and his relation to OWNER, during the period of this Agreement, is that of an independent entity, and he shall be free to dispose of such portion of his entire time not required to satisfy the terms Of this Agreement in any manner he deems advisable. OPERATOR shall not be considered an employee of OWNER. VTIT. OPERATOR agrees that all Customers of OWNER will receive equal treatment under the terms of this Agreement. IX. OPERATOR shall be required to operate within the current guidelines of its governing body and shall notify-OWNER of any possible conflicts with such guidelines, as soon as practicable after the occurrence of said passible conflicts. X. OPERATOR hereby assumes entire responsibility and liability for any and all damage or injury of any kind or nature whatever (including death resulting therefrom) to all persons, whether employees of OPERATOR or otherwise, and to all property caused by, resulting from, arising out of, or occurring in connection with the maintenance and operation of OWNER'S transmission system provided for in this Agreement and if any person shall make a claim for any damage or injury (including death resulting therefrom) as hereinabove described, whether such claim may be based upon the OWNER'S alleged active or passive negligence or participation in the wrong or upon any alleged breach of any statutory duty or obligation on the part of the OWNER, the OPERATOR agrees to indemnify and save harmless the OWNER, its agents, servants, and employees from and against any and all loss, expense, damage, or injury that the OWNER may sustain as a result of any such claims and the OPERATOR agrees to assume, on behalf of the OWNER, the defense of any action at law or in equity, which may be brought against the OWNER upon such claim and to pay on behalf of the OWNER, upon its demand, the amount of any judgement that may be entered against the OWNER in any such action. XI. Before commencing the work, the OPERATOR shall procure and maintain liability insurance, at its own expense, and procure and maintain workers' compensation and employee liability insurance in accordance with the laws of the State of Texas. The OPERATOR agrees that nothing contained in this paragraph shall limit or release the OPERATOR from its obligations otherwise provided for in this Agreement, including assumption of liabilities and indemnifications to the OWNER. If the OPERATOR fails to procure and maintain at least the above insurance, the OWNER shall have the right to procure and maintain the said insurance for and in the name of the OPERATOR, and the OPERATOR shall pay the cost thereof and shall furnish all necessary information to make effective and maintain such insurance. XII. The OPERATOR for the Contract Price herein provided for, hereby agrees to pay and shall hold the OWNER harmless against the payment of all contributions, taxes, or premiums which may be payable under Federal, State, or Local laws arising out of the performance of the work. XIII. if either the OPERATOR or OWNER believes it has a claim of any nature whatsoever against the other party, it shall give the other written notice of the amount, whenever possible, and nature of such claim within forty --five (45) days (or such other time limits as may be expressly set forth in the Agreement) of the occurrence of the event upon which such claim is based. In default of such notice the claim is waived. XIV. All matters relating to the validity, performance, interpretation, or construction of this Agreement or the breach thereof shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the parties to these presents have hereunto set their hands and seals the day and year first above written. CITY OF LA PORTE Louis R. Rigby, Mayor ATTEST: Patrice Fogarty, City Secretary LA PORTE AREA WATER AUTHORITY By: David Janda, President ATTEST: Steve Valerious, Secretary Accounting Policy and Revenue Collection Procedure Statement Miscellaneous La Porte Area Water Authority Transactions The City of La Porte's Finance Department serves as the f=inance Department for the La Porte Area Water Authority (Authority) and accordingly all policies and procedures, whether expressed or implied, that apply to the treatment of the City of La Porte's transactions shall also apply to transactions of the Authority. The Accounting Division of the Finance Department shall be responsible for the Billing and Collection of Revenues of the Authority. The procedures listed on the following pages set forth the steps to be followed in billing and collecting revenues from the participating ontities. Policy RC »MC -01, Page 1 PROCEDURES BILLING The Authority will bill each Entity on a monthly basis fallowing the criteria set forth In the Contract (Section 7.01) with each entity. Attachment are samples of the format that will be used to invoice each entity each month. Public Works will provide the Information necessary to prepare Section A of the billing. The flat amounts for Sections B, C and D will be calculated once a year to be effective with the October billing, normally mailed in early November. The form shall be completed for each entity as follows: Section A - Public Works will provide the Volume of Water Delivered to the Entity and the Authority's Unit Expense. Calculate the amount due for Section A. The Production and Pumping Operation and Maintenance Expense is included in the Authority Unit Expense. Section B - The Operation and Maintenance Expense Amount is equal to the adopted budget of the Authority. This amount will be calculated each year for each entity by taking the total budget, dividing by 12 for the months in the year, and multiplying by the entity's share of the distribution system costs. This number will be hard coded into the billing. Section C -- The Minimum Monthly Charge (Debt Service) will be calculated once for each fiscal year and will be hard coded into the biliing form. Section D — This section represents the amount billed the entity for the Capital Recovery Fee, as authorized in Section 6.07 of the Contract. Section E — This section represents the amount billed the entity for the Capital Reserve Fee, as authorized In Section 7.01 of the Contract. Section F - This section represents the total amount due for each entity and is the summation of Sections A through E. After the invoice has been prepared for each entity, it will be billed through the City's Miscellaneous Accounts Receivable system. COLI_EGTIONS When you receive payment from an entity, record the payment through the Miscellaneous Accounts Receivable system. The above listed transactions will be recorded in the following revenue accounts: Water Sales (016- 0000408.05-02) � - billings for water delivered, operation and maintenance Debt Service Billings (0170000- 482.01 -00) — Monthly Minimum Charge Capital Recovery Fee (016 - 0000 - 482.02 - -M Capital Recovery Fee Policy RC- MC -01, Page 2 La Porte Area Water Authority INVOICE TO CITY OF La PORTE FOR SERVICES RENDERED This billing is for water received, service of debt, and any other services rendered June -11 by the La Porte Area Water Authority to your City for the month of The following amounts were calculated pursuant to Section 7.01 of the contract between the City and the Authority. A. VOLUME OF WATER DELIVERED 122,920.00 Times Authority Unit Cost 0.5486 Equals amount due for Section A 67,433.91 B. Total Monthly Operation and Maintenance Expense ($138005112) 11,500.42 Time City's Percentage Share 0.8566 Equals amount due for Section B 9,851.26 Total for Section A and B 77,285.17 C. Monthly Dent Service charge: Equals amount due for Section C 49,217.95 D. Capital Recovery: Equals amount due for Section D 7,254.47 E. Capital Reserve Fund Fee; Equals amount due for Section E 11,375.00 F'_ Total Due (sum of A through E) 145,132.59 La Porte Area Water Authority INVOICE TO CITY OF MORGAN'S POINT FOR SERVICES RENDERED This billing is for water received, service of debt, and any other services rendered June -11 by the La Porte Area Water Authority to your City for the month of The following amounts were calculated pursuant to Section 7.01 of the contract between the City and the Authority. A. VOLUME OF WATER DELIVERED 5,159.00 Times Authority Unit Cost 0.5450 Equals amount due for Section A 2,830.23 B. Total Monthly Operation and Maintenance Expense ($138005!12) 11,500.42 Time City's Percentage Share 0.0798 Equals amount due for Section B 917.73 Total for Section A and B 3,747.96 C. Monthly Debt Service charge: Equals amount due for Section C 4,585.12 D. Capital Recovery: Equals amount due for Section D 675 E. Capital Reserve Fund Fee: Equals amount due for Section E 483.33 F. Total Due (sum of A through E) 9,492.23 La Porte Area Water Authority INVOICE TO CITY OF SHOREACRES FOR SERVICES RENDERED This billing is for water received, service of debt, and any other services rendered by the La Porte Area Water Authority to your City for the month of June-11 The following amounts were calculated pursuant to Section 7.01 of the contract between the City and the Authority, A. VOLUME OF WATER DELIVERED 10,095.00 Times Authority Unit Cost 0.5486 Equals amount due for Section A 5,538 B. Total Monthly Operation and Maintenance Expense ($138005112) 11,500.42 Time City's Percentage Share 0.0636 Equals amount due for Section B 731.43 Total for Section A and B 6,269.55 C. Monthly Debt Service charge: Equals amount due for Section C 3,654.29 D. Capital Recovery: Equals amount due for Section D 538.62 E. Capital Reserve Fund Fee: Equals amount due for Section E 550.83 F. Total Due (sum of A through E) 11,013.29 Appendix B April 29, 2011 C I T Y of HOUSTON Public World and Engineering Department Mr. David Mick Director of Public Works La Porte Area Water Authority 2,963 North 23" St. LaPorte, Texas 77571 Annise ©. Parker Mayor Daniel W. Krueger, P.E., Director P.O. aox 1 BE32 "oustotijexas 77251 -1582 www.heustntK90V Subject: Annual O &M Budget per ContractNurnber• C52797 (Drdirlauce #2001 -0417 Dated May 16, 2001) Restate4 andAmended Cost Sharing Agreement (O� dir�ance #20Q7 -49 Dated OSI15I2007) Dear Mr. Mick: Please find attached the proposed 'water rate for the Fiscal Year• 2012, The rate of $0.61354/1400 gallons is calculated Lased on the FY2012 prelin3illu budge a a total p rojocftd production of 28,365.00 ass urnin Million Gallons ('77.5 MOD). please see attachment -p g es 1 2 fo in addition, the co- Parkiezpants will be, billed monthAy for the debt service fax C WA 96" Brae. Please see Attachment page 3. If you have arxy questitons, please contact Sophia. Clumg at (832) 395 -2580. Sincerely, Susan Baird# Deputy Director Resource Management Division r - Attaclunents Connell Meml,ars: & awes G tard i g g � is J s C. Co n el Cl See t aVell Melissa h3ar Adams C.Oe "brad" Bra (a d J land� a€�as �er Ro ald C'GmGn City Of Houston Department of Public Works and Engineering Financial Management Branch - Fiscal Servi FY 2012 SouthEast Wader Treatment Plan} O & M Expenses Allocation For The Period July 1, 2011 - June 30, 2012 FY 2412 SEVVPP - Summary B Total Treated Wafter Produced by the SouthEast Water Plant in Thousand Gallons 28,365,000 C Total O &M costs for th SouthEa Water Plant dollars $ 12,549,469 D All costs and expenses incurred by COH for O &M of Untreated Water Facilities dollars Incl uding CWA O& $ 34 =226,081 DI CWA O &M $ 27096,239 D2 ICWA Debi Services -All Others $ 7,129,842 03 CWA Debt Service - Pasadena $ 6,227,676 E Total arneunt of untreated surface water sold to Houston's water customers in Thousand Gallons 192,819,591 F Total to be allocated Debt Services of CWA 96" line 1345,753 Rate -All others Raw Water Rate O &M (D11 E) Per thousand gallons Raw Water Rate DS (D21 E) Per thousand gallons O &M Rate (C 118) per thousand gallons Subtotal Total Rate (including contingency 2.5 %) Rate - Pasadena Raw Water Rate O &M (D11 E) Per thousand gallons Raw Water Rate DS (D31 E) Per thousand gallons O &M Rate (C ! B) per thousand gallons Subtotal Total Rate (including contingency 2.5 %) $ 0.1405 $ 0.0370 $ 0A 4 $ 0.6'199 $ .- 0.6354 $ 0.1405 $ 0,0323 S 0.4424 $ 0.6163 $ 0.6 1 zoe Page 1 of 3 CITY OF HOUSTON DEPARTMERT OF PUBLIC WORKS & ENGINEERING RESOURCE MANAGEMENT DIVISIOM FINANCIAL MANAGEMENT BRANCH FISCAL SERVICES SECTION FY 2012 SEWPP - O &M Costs SOUTHEAST WATER PURIFICATION PLANT EXPENDITURES FOR THE PERIOD JULY 2011 -.DUNE 2012 ......Plant Operati Personnel Expenditures Supplies & Services Subtotal Plant Operation TOTAL 2,033,062.22 6,361,165.17 8,394,207.39 ' : . DWC ;�Uperatiora{�lj1Q;�V�fM,::ES Allocated Personel 1,119,384.61 Allocated Supplies & Services 1,312,301.38 Subtotal DWO Operation 2, 1 - : �P., UD. Mahegemect ' &`�UCS:St.tp'pcart.. Allocated Personel' . 878,102,74 Allocated Supplies & Services 198,178.33 Subtotal (ICS Support) 1,076,281AS Total Operation 11,9,02,174.36 Admih Costs: 647,294.16 Grand Total 1,549,468.51 *Adrnin cost is calculated at FY10 Admin Cost f % CPI for 2011, Page 2 of 3 CITY OF HOUSTON DEPARTMENT OF PUBLIC WORKS & ENGINEERING RESOURCE MAMAGEMENT DIVISION FINANCIAL MANAGEMENT BRANCH FISCAL SERVICES SECTION FY 2012 51=VI P - GWA 96" Fine CWA 96" line debt services allocation Total DIS Payment for 96" line in FY10:C` VA. Ser 1999A Allocated to the Plant Current Portion of the pipeline used Nei Capital Recovery Cost allocation Net Capital Recovery Cost allocation 1 = 738,350 93.11 % 52.50% 849,75328 Co- Participants DEMAND ALLOCATION FY10 ANNUAL FACTOR Flo) PRODUCTION SHARE ($) GULF COAST WATER AUTHORITY 13.75900% 116,841.08 CLEAR LAKE CITY WATER AUTHORITY 20.00000 %o 169,950.66 CLEAR BROOK 01 MUNICIPAL UTILITY DISTRICT 125000% 10,621.92' LAPORTE AREA WATER AUTHORITY 6.50000% 55,233.96 HARRIS COUNTY MUD #55 CITY OF PASADENA CITY CF SOUTH HOUSTON. CITY OF WEBSTER CITY OF FRIENDSWOOD BAYBROOK MUNICIPAL UTILITY DISTRICT # 1 CITY OF HOUSTON 2.88540% 24,518.78 19.58330 %n 1 56,409 3.12500% 26,551.79 3.37500% 28,679.17 5.00000% 42,487.66 1.60000% 12,746.30 23.03130% 195.70923 TOTAL SHARE 10D.000 ° lo 849,75328 Page 3 of 3 DEPARTLENT OF ?TMIC; WORKS & ENGINEFI:WG RESOnC=- MANAGF3MNT E)AU0R{F]NAP =L MANACZMMT MANCH FISCALSERVICES SECTION SSCLlt hsastlWer P7¢ificatiM Plitt CalcuWloo afAnnual Badgd Racal Year 2097 ATPACHNtF M item r- Totaiz=untCafttssandsct 2au=)o`mtsrpradacedhyth- -F12rS Item f" Total tC'lyOMmtstalt Plant Erpet7ditrrc S00 Pet'sam7�Sevic>?s 570 - Supplies 520 - O9rer Bervlces ar4 Charges 5 ^uon -C2pka: RTchases Coorm;lorik WeftrS2Ct6Sit, (10%allocatedto9'_PfPP) Plant maintanance (90?6 allapted'n SEVf?P} 3e=6f' AidtSetvi�a Wwallbwxd DITert Costcf Se V= Stb*t Avm rlls8 or. TOTAL 4F ITElI C_ Item D'. 1 TRAUebt,&LWOE 2 M Series bonds, (7933A, B. C A, a F, e, H. and 2004) (a=pt15qI & 18998 ) 3 CWADe5tService, SWRs 1sel (Times 17.526 4TRAA +CWA's M &O expe 0zes s Cttype4fServlce 7n�uppo:tofRawYVater Stotageand T=raissTaa pe =96es TOTAL OF LTA 1i 4 D Item TcWanovgWnthausarxlsn: gatl=t *7 Vmbersoldtothe:MM2gctg ParticipanYS'wzteratstamers th2tls cGveRedRoptthe Tdrv'�y River 040 Line A. ItM ]L^ CoREnperty+2ES ve_2; {C15�+ tera{171 Cotttingett�Castperttwu�ndsraIIcrs: (CIB)*y.5°�i.(OirCp2,ge1, b & M Cost perthousands sailors r Tat Costper ttldusacdsgalfans: Item F. Cep'ial R @dvery Ca3tfcrC4nIAS &" L rt@ {see 7tnaclled sched� e) Nate; I lonlctheesematedmstperlhacara dSai lan!s, tech paittc3gartwSADeC"5ed taonkhlyforih2irshara of ],Eat F, O4�fAdebtsexvice, series i39S [ietttnded sedts 7939A) lxased Ott Uy6if Cuif2rltLSpdCEI}' lt1 Lie pl2fit 6'wi .11 °h;$i,563=�2, fotatrr 2E,105,C8a 988„964 9;719,594 3.309,8$1 MAW 8 $ 912230 Hudge:ted SMAUa Coeper 11021,205 L 1..0.00 GaG_ . 28,895,868 1,915,404 2,106,602 . 3,081.1 in 48.775 7,149,892 $ 02474 EudgEtad 34$,750 Cos pet 597,:45 4 00 Gal 236,432 5,000 '189,580,075 S OAi;'0 � $ 8A928 $ O.d913 $ D.4813 195,40OX6 S 0.0934 S 0,01$4 DM52 � R.5W2 1,W4,98d,S FYTIl77 SedhctiPirit9nd�s 1,553,=32 11 6 - I 6,8:3,940 4,0285 8,475,785 0.0975 =MM 0.0144 2,583,411 14482 22,386„727 0.4181 2Z517AM 0.252 4,173,0,4 0.0482 I 1,396848 0.0072 '189,580,075 S OAi;'0 � $ 8A928 $ O.d913 $ D.4813 195,40OX6 S 0.0934 S 0,01$4 DM52 � R.5W2 1,W4,98d,S FYTIl77 SedhctiPirit9nd�s 1,553,=32 11 6 - Appendix C FY 201112012 LPAWA CUSTOMER COSTS I ,r't'%f t%= 1 A of"%DTr- • Ya• A. y• ° /o OF L4 PORTE AREA WATER AUTHORITY SYSTEM 855.66% B. TOTAL YEARLY DEBT SERVICE FOR LPAWA BONDS $693,150 C. LA PORTFS SHARE OF YEARLY DEBT SERVICE FOR LPAWA SYSTEM $593,762 (FORMULA: B x A = COST) D. TOTAL YEARLY LPAWA O & M EXPENSES $103,257 E. LA PORTE'S SHARE OF LPAWA O & M EXPENSES $88,450 FORMULA: D x A = COS F. ESTIMATED YEARLY PURCHASE OF WATER FROM LPAWA (GALLONS) 1,365,000,000 G. ESTIMATED YEARLY COST OF WATER PURCHASED FROM LPAWA $867,321 H. (FORMULA: (F11000) x $0.6364) ESTIMATED TOTAL CAPITAL RECOVERY COST FOR CWA LIFE $55,234 I. LA PORTES SHARE OF CAPITAL RECOVERY COST (FORMULA: H x A = CAPITAL RECOVERY COST) $47,313 J. CAPITAL. RESERVE FUND FEE FORMULA: ( F /1000) x $0.10 = CAPITAL RESERVE FEE $136,500 K. INTEREST COST OF BORROWING FUNDS FROM CLP UTILITY FUND INTEREST RATE OF 2% PER ANNUM (136500115270Ox 10,000 =SHARE OF INTEREST C $O M. TOTAL YEARLY COST TO LA PORTE IFORMULA: G + E + G+ I+ J + K= TOTAL COST) $1 ,733,337 1 REVISED 513/2011 FY 201012011 LPAWA C USTOMER COSTS CITY OF LA PORTE: A% OF LA PORTE AREA WATER AUTHORITY SYSTEM 85,66% B. TOTAL YEARLY DEBT SERVICE FOR LPAWA BONDS $689,488 C. LA PORTE'S SHARE OF YEARLY DEBT SERVICE FOR LPAWA SYSTEM (FORMULA: B x A = COST) $690,615 D. TOTAL YEARLY LPAWA O & M EXPENSES $188,005 E, LA PORTE'S SHARE OF LPAWA 0 M EXPENSES (FORMULA: D x A = COST) $118,215 F. ESTIMATED YEARLY PURCHASE OF WATER FROM LPAWA (GALLONS} 1,365,000,000 G. ESTIMATED YEARLY COST OF WATER PURCHASED FROM LPAWA (FORMULA: (F11000 )x $0,5486) $748,839 H. ESTI TOTAL CAPITAL RECOVERY COST FOR CWA LINE $101,627 I. LA PORTE'S SHARE OF CAPITAL RECOVERY COST (FORMULA: H x A = CAPITAL RECOVERY COST) $87,054 J. CAPITAL RESERVE FUND FEE (FORMULA: (1711000) x $0.10 = CAPITAL RESERVE FEE) $136,500 K. INTEREST COST OF BORROWING FUNDS FROM CLP UTILITY FUND (INTEREST RATE OF 2% PER ANNUM (1365001152700X 10,000 = SHARE OF INTEREST $0 M. TOTAL YEARLY COST TO LA PORTE (FORMULA: C { E + G+ I+ J + K= TOTAL. COST) $1,6181,223 REVISED 7/1512010 FY 201112012 LPAWA CUSTOMER COSTS CITY OF SHOREACMS: k °lo OF LA PORTE AREA WATER AUTHORITY SYSTEM B, TOTAL YEARLY DEBT SERVICE FOR LPAWA BONDS C. SHOREACRES' SHARE OF YEARLY DEBT SERVICE FOR LPAWA SYSTEM FORMULA: B x A = COST) D. TOTAL YEARLY LPAWA O & M EXPENSES E. SHOREACRES' SHARE OF LPAWA O & M EXPENSES (FORMULA D x A = COST) F. ESTIMATED YEARLY PURCHASE OF WATER FROM LPAWA (GALLONS) G. ESTIMATED YEARLY COST OF WATER PURCHASED FROM LPAWA. FORMULA: FI1000 x $0.6354) H. ESTIMATED TOTAL CAPITAL RECOVERY COST FOR CWA LIFE I. SHOREACREV SHARE OF CAPITAL RECOVERY COST (FORMULA. H x A = CAPITAL RECOVERY COS J. CAPITAL RESERVE FUND FEE (FORMULA F11000) x$0-06 =CAPITAL RESERVE FEIN K. INTEREST COST OF BORROWING FUNDS FROM CLP UTILITY FUND (INTEREST RATE OF 2% PER ANNUM 4380188577 x 10,000 =SHARE OF INTEREST M_ TOTAL YEARLY COST TO SHOREACRES !FORMULA: C { E + G + I + J t_K = TOTAL COST $693,150 $44,084 $163,257 $6,567 $9,600 $124,762 REVISED 51512011 FY 2010 LPAWA CUSTOMER COSTS CITY OF SHOREACRES: A. % OF LA PORTE AREA WATER AUTHORITY SYSTEM 11 6.36% B. TOTAL YEARLY DEBT SERVICE FOR LPAWA BONDS $669,488 C. SHOREACRES` SHARE OF YEARLY DEBT SERVICE FOR LPAWA SYSTEM $43,851 (FORMULA: B x A = COST) D, TOTAL YEARLY LPAWA O & M EXPENSES i zs,+�'o E. SHOREACRE& SHAPE OF LPAWA 0 & M EXPENSES $8,77'7 FORMULA: D x A = COS F. ESTIMATED YEARLY PURCHASE OF WATER FROM LPAWA (GALLONS) 36,100,.700 G. ESTIMATED YEARLY COST OF WATER PURCHASED FROM LPAWA $36,262 H. FORMULA: 1 x $0.5486 ESTIMATED TOTAL CAPITAL RECOVERY COST FOR CWA LINE $101,627 I. SHOREACRES SHARE OF CAPITAL RECOVERY COST FORM ULA: H x A = CAPITAL RECOVERY COST $6,463 J. CAPITAL RESERVE FUND FEE (FORMULA: Fl1000) x $0.06 = GAPITAL RESERVE FEE I . INTEREST COST OF I30RROWING FUNDS FROM GLP UTILITY FUND (INTEREST RATE OF 2% PER ANNUM 4380/88577 x 10,000 = SHARE OF INTEREST COS $6,610 �0 M. TOTAL YEARLY COST TO SHO REACRES (FORMULA: G + E + G + I + i + K = TOTAL COST) 101, REVISED 712312010 FY 20//12012 LPAWA CUSTOMER COSTS CITY OF MORGAWS POINT: A. % OF LA PORTE AREA WATER AUTHORITY SYSTEM 7 ° la B. TOTAL YEARLY DEBT SERVICE FOR LPAWA BONDS $ 693,150 C. MORGAN'S POINTS SHARE OF YEARLY DEBT SERVICE FOR LPAWA SYSTEM $x5,313 (FORMULA: B x A = COST) D. TOTAL YEARLY LPAWA O & M EXPENSES $ E. MORGAN'S POiNT'S SHARE OF LPAWA O & M EXPENSES (FORMULA. D x A = COST) F. ESTIMATED YEARLY PU RCHASE OF WATER, FROM LPAWA G. ESTIMATED YEARLY COST OF WATER PURCHASED FROM LPAWA $33,676 (FORMULA. (FI1000) X $0,6354 H. ESTIMATED TOTAL CAPITAL RECOVERY COST FOR CWA LINE $55,23 I. MORGAN'S POINTS SHARE OF CAPITAL RECOVERY COST FO RMULA: (H x A = CAPITAL RECOVERY COST) $4,408 J. CAPITAL RESERVE FUND FEE (FORMULA: (FI10a0 ) x $0.10 ) = CAPITAL. RESERVE FEE $ 5 , 300 K. INTEREST COST OF BORROWING FUNDS FROM CL.P UTILITY FUND (INTEREST RATE OF 2% PER ANNUM (90001162700 x 14,000 = SHARE OF INTEREST CD $0 M. TOTAL YEARLY COST TO MORGAN'S POINT (FORMULA: C + E + G + I +J + K = TOTAL COST) REVISED 516/201/ FY 201012011 LPAWA CUSTOMER COSTS CITY OF MORGAWS POINT: A. % OF LA PORTE AREA WATER AUTHORITY SYSTEM!! 11 7.98% B. TOTAL YEARLY DEBT SERVICE. FOR LPAWA BONDS $359,4$5 G. MORGAl`S PO €NT'S SHARE OF YEARLY DEBT SERVICE FOR LPAWA SYSTEM FORMULA: B x A = COS I D. TOTAL YEARLY LPAWA O & M EXPENSES $138,005 E. MORGAN`S POINTS SHARE OF LPAWA 0 & M EXPENSES FORMULA: D x A = COS`f $11,013 F. ESTIMATED YEARLY PURCHASE OF WATER FROM LPAWA (GALLON$) 58,000,000 G. ESTIMATED YEARLY COST OF WATER PURCHASED FROM LPAWA (FORMULA: F11000) x $0.5485 $31,819 H. ESTIMATED TOT CAPITAL RECOVE COST FOR CWA LIME 1. MORGAN'S POINT'S SHARE OF CAPITAL. RECOVERY COST FORMULA: H x A=CAPITAL RECOVERY 00§a $8, J. CAPITAL RESERVE FUND FEE , , FORMULA; Fit ©00; x $O,l = CAPITA RESERVE FEE $5,800 K INTEREST COST OF BORROWING FUNDS FROM CLP UTILITY FUND INTEREST RATE OF 2% PER ANNUM 90001162700 x'10,000 = SHARE OF INTEREST COS $tl r m-(FORMULA-. TOTAL YEARLY COST TO MORGANTS POINT C + E+ G + I +J + K = TOTAL COST) $111,76 REVISED 7123120/0 La Porte Area Water Authority Fund rX 11 -12 M101011 Statement: To provide essential public services to the Citizens of La forte in the most efficient, cost - effective manner possible by utilizing creative and inllovative techniques of public works services and facilities. Orgauizatrottal chart. CitylVIisnager Assistant City Manager Public Works Department La forte Area Water Authority 2011 -12 Projected Revenues: IISALES E30r11ERFINANCING SOURCE'S OINHREST INCOI B 1iolti Year Comparison of— EvImises; 1,200,000 1,000,000 800,000 600,000 400000 200,000 0 IOACPUAL 09 -10 IaBuDGSr 10 -11 nES't•IMATRID 11 -12 IRREQUES'I13D 11 -12 5 -8 City of La Porte La Porte Area Water Authority Fund (016) Summary Worlring Capital 9130110 Plus Estimated 10 -11 Revenues Less Estimated t0- i I Expenses and Commitments Egrrrrls Estimated Worldrtg Cxrpital 9130111 Plus 11 -12 Revenues: Water Revenue Billing for Capital Reserve Interest Total Revenues Erlrrrds Total Resources Less 11 -12 Expenses: Operations Total Expenses EgrraIxEstimated fVotlriug Capittal9130112 $ 1,980,043 1,106,925 979,933 2,107,035 1,065,252 55,234 7,500 1,127,986 3,235,021 1,119,844 1,119,844 $ 2,115,177 Tstimated Projected 2010 -11 2011 -12 Revenues $ 1,106,925 $ 1,127,986 Expenses 979,933 1,119,844 Revenues over Expenses $ 126,992 $ 8,142 77rrgeted swrhing copitrxl - 60 to 90 dribs Estirrxrled working crrplurl - 689 rlrrj�s Goal: $276,126 1 Day = $3,068 5 -9 City of La Porte Water Authority (016) Statement nfItevenves Object Dmription Water Revenuc: 408.05 -02 Sales WaterRevenuc Subtotal Other Financing Sources 482.02 -00 Billing for Capital Reserve other Financing,Sources Subtotal Interest: 483.01 -00 Interest lncutue - Operations Interest Subtotal Actual Budget Revised Requested 2009 -10 2010 -11 2010 -11 2011 -12 $ 929,497 $ 1,1 03,835 $ 9 97,199 $ 1,065, 929,197 1,103,835 997,199 1,065,252 101,77 101,676 101,676 55,234 101,772 101,676 101,676 55,234 25,186 13,5 8,050 7, 500 25,186 13,500 8,050 7,500 Total Water Authority $ I,056,455 $ 1,219,011 $ 1,106,925 $ 1,I27,986 5 -10 La Porte Area Water Authority Fund FY 11 -12 La Porte Area Water Authority Coals: • Continue. to Monitor operations of Southeast Watar Purification Plant (SEWIT) to ensure efficient cost effective operations • Continue to monitor use by customers entities to ensure adherence to contractual obligations Objectives: s Monitol - ing of SEWPP operation and maintenance operations expenditures to keep cost of water as low as possible • Informing ally customer ontity tivithdratving more than its contractual share of water from the Authority and inforni them of their contractual obligations PCP forll tall ce h1 dicatol S: LaPorte ilsage 1,219.0 . :`..I,263.80 Morgan'sPoint>Isage 45..80..: ..52.10 Shoreacres Usage ti8.80 ::. 81 .30 (- Amounts expressed in millions) 1.,3GS.t)0 5 -11 La Porte Area Water A €Etbority Fund Fiscal Year 2011 -12 La Porte Area Water Autbority Mvision Expenditure sttrt matt' Actual Budget Estlnmted Re9imsled Percent 2009-10 2010 -11 2010 -11 2011 -12 Change supplies $ 14,761 $ 8,700 $ 4,826 $ 5,200 -40,23% ,Services & Charges 899,040 1,012,845 955,732 1,114,644 10.05% Capital Outlay - 19,375 19,375 - - 100.00% Divislon Total $ 913,801 $1,040,920 $ 979,933 $1,I19,844 7.58% SCON OfServlces sartimaly The La Porte Area Water Authority is a separate entity that was created by the State Legislature in 1981. It is currently providing treated surface water to the Cities of La Paste, Morgaan's Point and Shoreacres. The City of La Porte oversees the operation and is its largest customer, utilizing 90% of its output. 5 -12 City of La Porte, Texas La Porte Area Water Autliority 016 -7075 -533 Detail of Expenditures Actual llirdget Estimated Requrstetl 200940 2010 -11 2010 -11 2011 -12 Supplies: 2001 Office Supplies $ 36 $ 100 $ 66 $ 100 2015 Other Supplies 29 100 I00 100 2090 Machine& Toots & Equip 14,446 8,000 4,660 4,500 2093 Computer Equipment 250 500 - 500 Supplies Subtotat 14,761 8,700 4,326 5,200 Services & Charges: 4002 Machineryll'oolslEquipmcni 2,598 4,000 4,000 4,000 4012 WaterLine Maiutcnance 2,500 5,800 5,000 4060 Computer Lease Fees 2,280 1,008 1,008 1,053 4065 Computer Mkifi tennnce Fees 10,883 - - 5001 Accounting 6,000 6,500 6,500 6,500 5003 Legal 145 - - - 5007 Other Professional Services 1,480 1,650 1,650 1,700 7003 Telephone 673 716 716 - 7004 Water 813,405 918,547 873,134 1,017,229 9050 Coiititigeney - 15,000 - 15,000 9014 Admin Trans to Puna 014 1,305 I,305 1,305 1,305 9072 Operalo?s Agreement 60,271 61,619 61,619 62,852 Services & Charges Subtotal 399,040 1,012,845 955,732 1,114,644 Capital Outlay: 8021 Machinei}I Tools &Equip - 19,375 19,375 - Capital OutlaySubtotitl 19,375 19,375 - DIAsion Total 5 913,801 S 1,040,920 $ 979,933 $ 1,119,844 5 -13 PR3Pj%RZD 07/21/11, 16:23:49 BUDGET PREPARATICN WORKSHEET PAGE 542 RESULTS OF DEPARTMENT REVIEW WITH CITY MANAGER LAST YEARS BUDGET ESTIMATE REQUESTED CITY MANAGER CITY N:ANAGER ACCOUNT NUMBER ACCOUNT DESCRIPTION ACTUALS 2010 -11 2010 -11 2011-12 ADIUSTKENTS REVIFTI FUND 016 LA PORTE AREA WATER P_UTH DEPT 70 PUBLIC WORKS DIV 75 LPATnA 036 - 7075 - 533.10 -57 PARS - RETIREMENT 0 0 0 0 0 0 076- 7475 - 533.20 -43 OFFICE 36 100 66 100 0 100 LEVEL TEXT TEXT AMT ilES BINDERS, FILE FOLDERS, DOCUMENT CONTROL 66 66 LEVEL TEXT TEXT AMT 12D: BINDERS r FILE FOLDERS, DOCUMENT CONTROL 10D 10G LEVEL TEXT TEXT AMT 12CM BINDERS FILE FOLDERS, DOCUMENT CONTROL 100 100 016 - 7075- 533.20.02 POSTAGE 0 0 0 0 0 D LEVEL TEXT TEXT AMT 12DI 1, FUNDS REQUESTED LEVEL TEXT TEXT AMT 12024 NO FUNDS REQUESTED 016 -7075- 593.20 -15 OTHER SUP ?LIES 29 100 IDO 100 0 100 LEVEL TEXT TEXT XMT I1ES ITEM CHARGE $600.00 IN ERROR - JOURNAL ENTRY 100 CONSUMABLE 'STEMS NOT SPECIFIC TO MAINTENANCW AND REPAIR - LIGHT BULBS, ELECTRICAL TAPE, BATS=115 100 LEVEL TEXT TEXT AMT 12DI COSUMABLE ITEMS NOT SPECIFIC TO MAINTENANCE AND 100 REPAIRS I GO LE'V'EL TEXT TEXT AMT 12CM COSAMABLE ITEMS NOT SPECIFIC TO MAINTENANCE AND 100 PREPARED 07/21/11, 16 :23:45 ACCOUNT NUMBER ACCOUNT DESCRIPTION FUND 016 LA PORTE AREA 1 9ATk'R P_UTE DEPT 70 PUBLIC WORKS DIV 75 I,PASiA REPAIRS 016- 7075^ - 533.20 -90 MACRINERY /TOOLS /EQUIPMENT LEVEL TEXT IIES ALL MATtRIAL PURCHASED BUDGET PREPARATION nORKSHEET PAGE 543 RESULTS OF DEPAPT?&SNT RF,VIE4S i81TH CITY MANAGER LAST YEARS BUDG3T ESTIMATE REQUESTED CITY MANAGER CITY MAXAGRR ACTUALS 2010 ^11 2010 -I1 2011 -12 ADJUSTMENTS P,EVIEW 14,446 LEVEL TEXT 12DZ 2 EA PRESSURE TRANSDUCERS - $700 EA 2�EA * UPS x SYSTEMS - $1500 ER LEVEL TEXT 12CM 2 EA PRESSURE TRANSDUCERS - $700 EP_ :w *xx wxvrxax 2 rA UPS SY5TEM5 ^ $1500 EA 016 -7075- 533.20 -92 COMPUTER EQUIPMENT 250 LEVEL TEXT 11ES NO ANTICIPATED PGRCASES LEVEL TEXT 12DI PRINTER CARTRIDGES- MONITORS- PERIPHERAL EQUIPMENT LEVEL TEXT 12 C14 PRINTER CARTRIDGES- N:ONITOAS^ PE RI? =ERP.L EQUIPMENT C16•- 7075 533.3D - 20 TRAINING /S MINARS 0 LEVEL TEXT 12D2 NO FUNDS REQUESTED LEVEL TEXT 1Q0 8,000 4,660 TEXT P_MT 4,6£0 4, 660 TEXT AHT 1,500 3,ODO 4,500 TEXT AMT 1, 500 3,D00 9,500 500 0 TEXT AMT TEXT AMT 500 Soo TEXT AMT 500 500 0 Q TEXT AMT TEXT AMT 4,500 500 O D 0 0 11.500 5DO D 85O'T 0 850'1 800 600'1 06z'Z 5333 as5darf 'a2zadW0O O9- Ob'8ES -5LOL -910 000'5 000'5 su:7 NOISSIWSHTE1 WaZT 1XV LX31 1X3L 'Y3Aa'I 000'5 a0a's sxsTdaax ?Nx"I DIOISSU5NWail Tazi zWa LxaL 1X51 71sAa¢ 00s's 008's 5 1XV7a aA"IKA a11VO Nyt aaaIIda'd saT: LX Lx3,t LxaL I3AaI 000'5 0 0005 008'5 00s'Z 0 93NTZ �aL¢h. ZT-66'fEG -SLCL -910 coo 1 6 NOILFiL9taWlixx SKI OTNOLOa I3 000'6 aRV SMA'IVA 20 21x'dd32i aNH SOMMILKI'dW WOZT LWFI Lx3.i. SX�L Ian ^c I 00C'6 .*l0I L dLNaldn�LSNI O I1SCZiLO3T3 000 QN'd s3AI'dA gOULKOO 30 3IFida". ONEi aaN'dN3LNTL'W xQZT 4Wd 4xsa, Lxaz inns I 000'b SBOTS- 5zI zlea �;Zvas�i aAIdA 'IOZiz:QOO ZaZT5- LNTOd SN7O30W SUIVEau `IkfOIiF103 T8 -E 20 Stf C3150d SON 5ZSZ%fHO LN3nald ZW05 NOxa,�LNaWk�LSNI OINO23LOa23 OD 0'6 axa 93ATVA tOxLNgO IO LiTdaah aNY s3xvx2lmrvx S3TL lo`d LXSL X2 : 'IaAa'I 000 0 000'6 000'6 OCO'b 865'Z 2IA�3 /S:g0LiT4atIHO�iW ZO Ob'EES - SLIIL - 910 0 0 0 O 0 0 SNaR61aOS 3X 330 10- 0b'EES- SLOL - 9TO aaLSaa�aa SQNn3 ON xoO j vxva I 5L Ala s2vo -14 nx'±aaa OL zaaa H31IFi 7Eavva dwhv aLxga va, 9To aNna X%lAa8 s- N3WL9Lf4av ZT - TTOZ ii - OIOZ TT - 4TOZ s'I'anzzx NOISdxSOSad zNnooau NZUKON INaCOOV 83OVNVN ALIT XLTa aazsanOEai 3L'erAx.IS3 Lawns sxyax Lsx'I 'd''ZVVX X xLIO HZIM MaIAM3 LN3WIHIVESa 30 Sl7nSS`E 6bS aJfd L3aHSA L3oanq 66'EZ-8T 'TT /1Z /LO =EUVE -add PREPARED 07/21/11, 16:23:49 ACCOUNT NUMBER ACCOUNT DESCRIPTIOR FUND 016 LA PORTE AREA WATER AUTH DEPT 70 PUBLIC WORxS DIV 75 LPAWA. 016 -707$- 533.40 - 101.1?UTrP MAINTENANCE ^ESS 016-7a75-553.50-01 ACCOUNTING LEVEL TEXT IIES ANNUAL ACCOUNTING AUDIT - AUDIT CHARGES NOT YET POSTED &ODGET PREPARATION WORKS^EET PAGE 545 RESULTS OF DEPARTMENT REVIEW WITH CITY MANAGER LAST YEARS BUDGET ESTIMATE REQUESTED CITY MANAGER CITY MANAGER ACTUALS 2010 -11 2010 -ii 2011 -12 ADJUSTMENTS REVIEW LEVEL TEXT 12DZ ANNUAL ACCOUNTING AUDIT LEVEL TEXT 1207 ANNUAL ACCOUNTING AUDIT 016 - 7075 - 533.50 - 03 LEGAL 016 - 7075- 533.50 -06 FISCAL SERVICES 016 - 7075 - 533.50 -07 OTHER PROc855I0NRL SERVIC LEVEL, TEXT 11£S METER TESTING SCEEDULED FOR JULY 2011 LEVEL TEXT 121)I ANNUAL METER ACCURACY TESTS L�ViL TEXT 12CIS ANNUAL I4ETMR ACCURACY TESTS 016- 7075 - 533.50-22 TREATMZNT PLANT CONSTRUCT 016- 7075- 533.50 -23 LPAWA PHASE I LEGAL 10,803 0 0 0 0 0 5,000 6,500 6,500 6,500 0 6,500 TEXT AMT 6,500 6,sac TEXT AMT 6, SOD 6,500 TEXT AMT 6, 500 6,500 145 0 0 D 4 0 0 0 0 0 0 0 1„460 1,650 1,65D 1,7DO 0 x,700 TEXT AMT 1,650 1 TEXT AMT 1,700 11700 TEXT AMT 1,700 1,700 a a a a o 0 0 0 D 0 0 0 PREPARED 07/21111, 15:23;49 BUDGET 2REPARA710N WORKSHEET PAGE 546 RESULTS OF DEPARTMENT REVIEW WITH CITY MANAGER LAST YEARS BUDGET ESTIMATE REQUESTED CITY NrANAGER CITY MANAGER ACCOUNT NUMBER ACCOUNT DESCRIPTION ACTUALS 2010 -11 2010 -11 2011 -12 ADJUSTMENTS REVIEW FUND 016 LA PORTE AREA WATER AUTH DEPT 70 PUBLIC WORKS DIV 75 LPAWA 016 -7075- 533.50 -24 LPAWA PHASE II LEGAL 0 016- 7075 - 533.60 -07 INSURANCE 0 016- 7075- 533.70 -03 TELEPHONE 673 LEVEL TEXT IIES NE'XTEL CHARGES / All CARD FOR LAPTOP LEVEL _EXT L2DI NEXTEL CHARGES / AIR CARD FOR 9CADA LAPTOP LEVEL TEXT 12CM ,N XTEL CHARGES / AIR CARD FOR SCADA LAPTOP CMA - MOVE TO IT BIIDG^T 016 - 7075- 533.70 ^04 WATER 613,405 LEVEL TEXT 11ES ANTICIPATE MORE USAGE DURING SUMMER MONTHS LEVEL TEXT 12 WATER CHARGES FIND COASTAL WATER AUTHORITY RECOVERY COSTS LA ?ORTE 1365.5 MGL 0.6354/ 1000 GAL MCRGANS POINT 53.0 MGL 4�.63541 1000 GAL SHOREACRES 96.0 MGL @.63541 1000 GAL CWA RECOVERY COSTS LEVEL TEXT 12CM WATER CHARGES AND COASTAL STATER AUTHORITY RECOVERY COSTS LA PORTE 1365.0 NGL 0.6354/ 1002 GAL 0 0 0 0 716 716 TEXT AMT 716 716 TEXT AMT 742 742 TEXT AMT 742 742- 918,547 873,134 TEXT AMT 873,134 873,134 TEXT AZT 567,921 33, 676 60,998 55,234 1,017,229 TEXT AMT 667,32I D D 742 1,017,229 0 0 o a 742- 0 0 1,017,229 PREPARED 07/21/11, 16:23.49 BUDGET PREPARATION WORKSHEET PACE 547 RESULTS 05 DEPARTMSNT REVIEW WITH CITY MANAGER LAST YEARS BUDGET ESTIMATE REQUESTED CITY MANAGER CITY XANAGER ACCOUNT NUN5ER ACCOUNT DESCRIPTION ACTUAL$ 2010 -11 2010 - 11 2011 - 12 ADJUSTMENTS REVIEW FUYI) 016 LA PORTE AREA WATER AUTE DEPT 70 PUBLIC WORKS ! 75 1 PA9TA KO ROANS POINT 53.0 MGL 8.6359/ 2000 GhL 33,576 S"r_4REACRES 96.0 MGL @.6359/ 1000 G;,L 60,996 CWA RECOVERY COSTS 55,235 1,011,229 018- 7075 - 533.$4 -11 0V' EQUIP /FURNITURE 0 0 0 0 0 0 018 ^7075 - 533.60 - WATER PURCHASE AGRU MENT 0 0 0 0 0 0 016- 7075 - 533.90 -21 MACH /TOOLS & EQU_PMENT 0 19,375 19,373 D 0 0 LEVEL, TEXT TEXT P_MT 11ES ACCOUNT TO BE USED TO UPGRADE CQNMONZrAT,ON 1 °.,375 19,373 016 - 7075- 533.BO -23 COMPUTER HARDWRE /SOFTHARE 0 0 0 0 0 0 016 - 7075 - 553.60 -80 EXPENSE REC :�ASSIFICATION 0 0 0 0 0 0 Q16 ^7075 - 533.5065 CAPITAL - IMPROVEMENTS 0 4 0 0 0 0 07,6- 7075 - 533.90 -95 DEPR CHARG TO CONTRT - CAP 561,171 0 0 0 0 0 016 -7075- 533.90 -50 CCNTINGEtCY 0 15,000 0 15,000 0 15,000 2,4'VEL TEXT TEXT AMT 11ES NO ANTICIPATED USAGE OF CONTINGENCY TUNDS LEVEL TEXT TZXT A?4T 12DZ EMERGENCY REPAIRS THAT EXCEED MikINTENANCE ACCOUNTS 15,000 15,000 LEVEL TEXT TEXT AMT 12CM EMERGENCY REPAIRS THAT EXCEED NAZ),TENANCB ACCOUNTS 15,000 15,000 416- 7075 - 533.90 -70 DEBT SERVICE PRINCIPAL 0 0 0 0 0 0 016 -7075- 533.90 -71 DE3T SERVICE INTEREST 0 0 0 0 0 0 016 7075 - 533.30 - REBATE TC 1✓$MSSER CITIES 0 0 0 a 0 D PRwPARED 07121/11, 16:23.99 ACCOUNT NUMBER ACCOUNT DESCRIPTION FUND 116 LA PORTE AREA WATER AUTH DEPT 70 PUBLIC WOR {S DIV 75 LPP_TdA 016 -7075- 533.99 -97 REQ FOR SPECIAL PROGRAMS 016 - 7075 - 570.90 -73 UNDERWRITERS DISCOUNT 015 - 7075 - 680.90 -01 ADMN TRANS TO FUND D01 016- 7075 - 690.90 -14 AAMN TRANS TO FUND 014 LEVEL TEXT 11 , 25 INSURANCE LEVEL TEXT 121)1 INSURANCE LEVEL TEX': BUDGET PREPARATION WORKSHEET PAGE 548 RESULTS OF DEPARTMENT REVIEW WITH CITY MANAGER 1,305 LAST YEARS BUDGET ESTIMATE REQUESTED CITY MANAGER CITY MANAGER ACTUALS 2010 -11 2010 -11 2011 -12 ADJUSTMENTS REVIEW 0 0 0 0 0 0 0 0 0 0 0 D D 0 D 0 0 0 1,305 ;,305 11305 1,305 0 1,309 TEXT AMT 61,619 LEVEL TEXT 1,305 TEXT AMT 12D= LPAKA RGREEMENT 1 305 62,852 TEXT AMT 62,552 LEVEL TEXT 1,305 TEXT AMT 12CM LEAWA AGREEMENT 1,305 62,652 LEVEL TEX': TEXT AMT 12014 INSURANCE 1,305 1,9a5 016- 7075- 680.90 -38 ADMN TRANS TO FUND 038 D 0 0 016 - 7075 - 680.90 -39 ADM TRANS TO FUND 39 0 0 a 016 -7075- 680.90 -72 OPERATORS AGREEMENT 60,271 51,619 61,619 LEVEL TEXT TEXT AMT 11ES :,PArvA AGREEMENT WITH THE CITY O? LA FORTE 61,619 61,619 LEVEL TEXT TEXT AMT 12D= LPAKA RGREEMENT WITH CITY OF LA PORTE 62,852 62,552 LEVEL TEXT TEXT AMT 12CM LEAWA AGREEMENT WITH CITY OF LA FORTE 62,652 52,852 0 1 0 a a D 62,852 0 62,852 PREPARED 07/21/11, 16:23:49 ACCOUNT NUMBER ACCOUNT DESCRIPTION FUND 016 LA PORTE AREA WATER AUT� DEPT 70 PUBLIC WORHS DIV 75 LPA%TA * LPAWA E=GET PREPARATION 77ORKSRSET RESCLTS OF DEPARTyENT REVIEW WITH CITY MANAGER LAST YEARS BVDGET ESTIMATE R'aQQESTED ACTUALS 2010 -11 20iD -11 2011 ^12 1,374,972 1,040,920 979,933 1,120,586 PAGE 549 CITY MANAGER CITY MANAGER ADJUSTMENTS REVIEW 742- 1,119,944 Appendix D ARTICLE 4 4.1 bLQS=d E 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 anal fees for its customers sufficient to pay the O&M Expenses. 4.2.1 Each Participant shall pay O &M Expenses in arrears monthly at the rate per thousand gallons established in the then - current 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 Dill each Participant on or about the tenth (I 0th) 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 MEW010975.1LV1 L.D. Flis No. $049146 -01 Febtuny 9, 2GOO r . ,I 27 0 0 Participant shall engage its then - current independent certified public accounting firm to audit the accounting of costs. As soon as the llrm has completed the audit, the Managing Participant shall submit the audited accounting to the Participants. The Managing Participant and Participants agree to "true -up" the previous payments made for services during the fiscal year such that each Participant who has underpaid will make utnely payment of all O&M Expenses owed in the next monthly billing following the audit, and the Managing Participant agrees to give credit to each Participant who has overpaid O &M Expense for the fiscal year, such credit to be given in the monthly billing following the audit. 4.2.4 The Managing Participant agrees to provide the independent auditor all expense, meter readings and cost data required for the audit, including any documents or records available to Participants under this Agreement. 4.2.5 The audit must include an itemization for each Participant of all costs and meter recordings used to compute the O &M Expenses. 4.3 O &M &12ensa Calculations For the purposes of this Agreement the yearly O &M Expense for each Participant, except the City of Pasadena and the LaPorte Area 'Water Authority, is computed according to the following formula. below. (Pasadena's O &M Expense is the same as below replace Exhibit "E" with Exhibit "E Pasadena" and eliminate factor "G" in the formlula; LaPorte'$ r O &iVi Expense is the same as below except replace Exhibit "E" with Exhibit "E LaPorte Area Water Authority" and eliminate factor "0" in the formula.) tf1WPFiLPMONTRACMW LO. Re Nu, W991 -01 Ravined 28 E other evidences of indebtedness issued to finance the capital cost of the transmission lines. I'H" Is .025 or such smaller number as necessary to fund the Contingency Reserve. 'T' is the P'articipant's Demand Allocation Factor, s 4.4 Congu encv 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 tern percent (10 %) per annum from the date due until paid. UAwpmLgslcoNTRACT%EwBlt99MwB 11)473,RV 1 t-0, File No. 8049135 -11 Revisal 30 Appendix IU: April 13, 2011 CIT)(o)v HouSTON- PUbJ10, WOTkS and Engineering Dttpartril6nt Mr. David Mick Niector-cif Publlaftrks La Port6 Area Water Authority -2963 Nor1h 2e ist La Poae, Texas 71571 ke: Fiscal Year. 2009 AudiffrueLPO Dear Mr, Mick, Aq"'Isd. Q. Parker mayor banWI.W. KruegK P,E, 1E)IFUlor . .PA, Box 1662 H0►3100, TeXA5 712 'Enclosed is the AUditbd ROPOA:for -.thp, Soqth Wittet Purffiqatfbn - 01W 11POrPtiOr0 t Mai*na.11oe expenditures, an defined in the contract, for,th6 fiscal yosrehtled Juno 10, 2009, A10 0 losdd is-the invoke for' tWaRIN110uO to O h Of' HOo ' On . O'Agod qP"fi.0'000(ve -Up, if you have 6ny questlons,. P1086 f041 RP-e tO contact Sbpola 6haing at (w) 405-26 Deputy Director DepartMent of PL011r, Works and FnOlnobffnq, SC. sc - MI .- ke - oul0on Altloarig Oliver pejinfligion r=dward:'. onzUU '. 0004 b site Wall M01149 N0460,0.0;. 40F C . 11 r - ' - . INVOICE City of Houston bate. 4/13/2011 Public Works & trigjneering :Department Resource Management - Division Invoice 2:01 Financial ManagRMerit Branch. 611 Walker, 24th 0aor Houston TX 777(102 pot l=ast ! South �st Wow Purification Plant to Porte Nwk Water Authority Wvid Mick, 01 of Public Works City. of La Porte 2963 North - 23' 0 St'; [a Porte, TO) n 77511 IjLjE DATE.. 'AMOUNT Year End True Op for risdal Yoar prided 6{3b/0009 -z14,017,63 f the s East -Water Plant (See attatheci True Upsche Please rerstit payment to'. City of 1-166ston Public. Works & Engineering Dept ROS,O"rce N13hAgament Division Financial Management Branch 611 Walker, 24th Floor Houston, TX 77002 Attention: Jennifer Ngo J T ptal.Amount: -3 Approved By. Date, AWsfant Diro.tor Clty.ofAGt*toft Oepmtrr=t 7',n2mia: MmuNement Sranch -T=s Senecas pya9 sozs hwst witer Plant Water ?rodsim GaVCPk-in 1.605' SDWP TOWW.-tff pr*dUCed 23,1546.700 Trm&-up, a rue -up. C= , GULF-COASTWAI wiih . 9 Supp, withrXec.sooN 0,6742 S - 4,9553 . 54M S .21S;286, :S -?,IM63724 10.000 S ISZ7,M9S S '54232V.25 VVtr Qlty, " I WtrQlty,Vttr ' 0WAIMIng- TotafTmekip, Demand 1Casts' I I I -24i=0 C41rom L12M penam§qc malat Alfoftgon- aal=rlty AnjountBited DueltotbOH 369.M.71 I-S.MO S 272, *722 S 37 WL89 LA7ORTBAEk, WA:MR AUTHOPJTY 5,111 s SDWP TOWW.-tff pr*dUCed 23,1546.700 inow, GULF-COASTWAI zqbmm :s 0,6742 S - 4,9553 . 54M S .21S;286, :S -?,IM63724 10.000 S ISZ7,M9S S '54232V.25 cLvAR wmcmv��k�Atjtw:>R 13.844% $ 0£742• S 2.673.528:13 S'. 113�'144.24 S -24i=0 S 2,244,40-03 S -742=24 ,CLEARRROOK.CITYMUNlCPAL-VMTY CrIMMT 'SIS 1-812% -S 0.6742 S: 349.955,19 S jl ,M;52 369.M.71 I-S.MO S 272, *722 S 37 WL89 LA7ORTBAEk, WA:MR AUTHOPJTY 5,111 s 0,4742 3 - 587.058.80 S 101 ,771.8Z S -4 $Z T,�DW -. � $ 814,813 05 -274�017.63 #55 "m 1 94V .6 �0-6742 S; 307,86307,8613:01' 1§ 4Str-SS 353.097.59' 353.097.59' 3.4625 S 21k7,574,94 S 86�88,4&265 cr.ry. dF souni AOUZTGH 480;1117 1,678 S 0,6742: S' 323,6651]3 S' 43,928;79 $ 572.593.87 3.7500 a.76 -r, 282.'736.-0.1 S 89-,W,4r. Cl y Or WESSTF 668.668 azwk 0.67'42 S. 4613,1QW $, 54843M S SW.Sn.12 4.050o s 378,a6 A.03 s l25.125p cmylo;? moor) 't 5M4 S 96742 s:- - 1,4471.07 , Ur- 6.00M S 850.369. 5 S 296.704'.72 BAYBROOKVJD��NFOAL- VMM( DISTRIC SUM 0.184% 3S.1609.7a. S 23,465,$2 S 59,905.61 1.8006 S . 492IS-21 -S S,WBAD CfTY- OF PAWD� ao.o 0 .6521 S 3,837267.74 S 306,SMA0 5 4,1-43;'SWL14- 23.5000 - S 1,083.57 17924,239 SZVV. S S 1,2QS-,TtS7o4 .5 13;794.977.56' -92,8625 mS 9.848'075,102 S J-346.98258 - 14J.722,461. 37.430V. 27.8375 Tftt�-MA�UCO �10=00�1/. .:$:.I 'r . y P'M= MCC ONNELL &.JONES LLP CFRVj1tL 1 VkAB11C ACCOUNTARYS 't of A zle INDEPENDENT ACCOUNTANTS' REPORT OIL APPLYING AGREEMPON PROCEDURES 3044 Post 04 Stine 1600 ticustonjX 77056 Phone: 713,968.1600 Fax: 713.968.1601 To the City of Houston's Department of Public Works & Engineering and the Participants in tiro Cost Snaring Agreement of the Southeast Water Purification Plante McConnell & Yones t-r.P t;M &3) was engaged by, the City of Houston ((.OH) Department of Public Woxl:s & Rigineering (PW &l3) to perform agreed -upon procedures on the operations and maintenance (O &M) expenses billed by PW &B to cost shacirlg participants for the year ended June 30, 2009 under the Cost Sharing Agreement of tite Southeast Water Purification Plant (Restated and Amended), contract No, 52797 (the Agreement), between the COH, as the Managing Participant, and the following ten entities Cron Participants); The Gulf Coast Water Authority (City of Galveston, City of League City) y Tho Clear Jake City Water Authority (The City of Nassau Bay) The clear Brook City Munieipal Utility District >- The LaPorte Area Water Authority p Harris C o unty Municipal Utility Distr No. 55 > Tile City of Pasadena D The City of South Houston D The City of Webster >- The City ofFriendswood 9 Baybrook Municipal Distrlet No. I We have performed the procedures enumerated in Exhibit 1, which were agreed to by 1'W&E in accordance with the provisions of the Agreement. This agreed -upon procedures etigagemont was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants, The sufficiency of these procedures is solely the responsibility of those parties specified in the report. Consequently, Nve make no representation regarding the. sufficiency of the procedures described in Exhibit I, either for tiro purpose for which this report has been requested or for any other purpose. Wo were riot engaged to, and did not conduct an audit, the objective of which would be the expression of an opinion on the accounting reoords. Accordingly, %ve do not express such an opinion, ]'clad we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the COH and the Ten Participants and is not intended to be And should not be used by anyone other than these specified parties. �axA k�mws 11-0� Houston, Texas February 9, 2011 Stlklt'� SCCCMN'UtI41FS.coM K . . . . . . . . . . of City Estflblished 1892 L. Porte P ?LA'a tday 16, 2011 KIs. Susan Bandy Deput r Director city of'Housion Department of'1 Works & litlginecririg 611 Walker Street. 24' Floor I lousion, 'l'exns 77002 Re: Southeast Water Purification Plant 2009 "I'me -Up" Invoice No. 2011005 Deal MS, Bandy: Ws letter reSllonds Ill your Iellerol`Allril f 3, 201 1, regarding tte Smaheast Water I) tlrifit`1ltitin Nnnt. Your letter states that an "Audited Report lilt the Southeast Walter I)urillealialll Plant oporalion mid 11111intent1lice expemlims ... lilr Me 11.4ad ywr witled Awe 0, 2009 is 0110losed." Youl' letter MAI ene[tiscs in invoice (Invoice No. 20110051 l r the purlioricd WO yelp• 2MW you chin! INO the 1,11 I Area Water Aulhority owes. you am nwam 111111 Me Participants believe that Ilouston has fililell it) comply With SwWn 413 o1 the collti'aet governing operation of the SIVI)I'. That section conteniplatt.'s that a final 1'aii -end accoulttilly or 111e will imms nwwnd by I Ioil um %ON he they emnNeted [within 180 days alley any 1lsl't11 year end, [halt the accounting will lie audited by Flouston's independent auditor, aim a copy or the independelitl!` audited accounting report will lle provided to the I)articilianits, and that the Participants and I lou%ttill will true -up lite previous payments, Miring (fie next Illonthly billing lollowing the Elullit, The contract docs not conteniplitle ally true -ally not% lilt Fiscal Year 2009. In addition, although your April 1.1, 201 I letter clllillls Ill €it an "Audited Report li)r the SoUthensl Watet' Pull ficatioll l)Ianl opemoon atnd mahHentince expenditures loo (lie ilseall Veal' elided ,I111W 30, AWQ is ene14)setl." (lie report lmovided II' mi your al:l:oull(ing 111 - 11, cloarly slltt s tllat I11e1' " Were not engaged to, and dill not conduet an audit, the ltnl'l me ill` [which would be ill) exl)res14011 tit' an opinion oil the accouliting recor(ls." For that reason lllolle, Houston has still Shown lit) basis 011' S1lbnlilting an iliWiVe 141' (VUe -Lill CUSts, Again, please unllers(111111 that lloliston has not ccanll HmL and e€ mot dimply, !with tae Contract to be in It lloshhn to 3tlbniii all invoice For tl'lle -up costs fol' f 1seal yell!' 2009. 1 herclilre. we are returning 60LI W. Pafrinollt I >kwy, o Lin forte, "texats 77,571 R (2.81) 471 -5020 To 2003 " "34me Up" invoiee to you as the Lo Porte Area Haler Authority caves tit) pad of [lie invoi L'lC 111€1it7Ik1*r-, Ron Bmtonls Geneml Manager LA 1 AREA WA 1 UA Alt 1 !' OR11 ' e: Dave Midi, l'uhlie 11Varl:s Director F110 CITY Off' HOUSTON Department of Public Works and Engineering Annise D. Parker Mayor panlet W. Krueger. P.E„ Director P= 0. Box 1502 Houston, Texas 77254 -1662 T. 832 395 -2500 F. 832 805 -2430 www.houstontx.gov June 13, 2011 Mr. David Mick Director of Public Works La Porte Area Water Authority 2963 North 23' St, La Porte, TX 77571 Via Certified Mail, Return Receipt Requester! RE: Cost Sharing Agreement for the Southeast Water Purification Plant (Restated and Amended) and Amendment to Cost Sharing Agreement Southeast Water Purification Plant (Restated and Amended) Accounting O & M True -up for.Fiscal Year 2009 Dear Mr. Mick: On April 13, 2011, the City of Houston, as the Managing Participant, invoiced the Participants for the true -tap amounts related to the operation of the Southeast Water Purification Plant ( "SEWPP ") for Fiscal Year 2009. Payment has not been made timely. The City of Houston provides this notice of default and demands that payment be made within thirty (30) days of receipt of this letter. In accordance with Article 2 of the Cost Sharing Agreement for the Southeast Water Purification Plant (Restated and Amended) (the "Agreement"), each Participant has an equity interest in the SEWPP and, is responsible for its share of the cost of operation of the SEWPP. Pursuant to section 4.3 of the Agreement, the O &M expense calculations include the following definitions: e C: "t 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 a6 well as costs of fire and liability insurance);" a D: "the total Managing Participant expenditures for the operation, maintenance and debt service for the Raw Water Storage and Transmission Facilities during the year; " F: "the CWA Debt Service expense (allocated 93.11% to the Plant) for the 96 -Inch raw water pipeline leading to the Plant;" and, m G: "pro rata share of the total Managing Participant expenditure for the repair of water transmission lines leading from the Plant to the Points of Delivery." Council t+lemt7ars: Brenda ames a RodrIguoz Jarvis Oliver St ph s a rieg an C. C tello Sve Lovell Mells N a C.O. Brad" adford otnda "le Jones Cnt Controller. O r. Rona d C. Green Mr, David Mick June 13, 2011 Continued Page 2... The true-up amounts pres ex l endtu es foreport he SEWI'P� calculations and under above C are total #obe operation and maintenance p addressed separately. in accordance with section 5.15.2 of the Agreement, the City of Houston provides this notice of default for failure to pay your share of the cost of operations in the amount of $274,01 a. Under the terms of the Agreement you will avaiit thirty f (30) days to cure the Of all legal remdios the terms tof that the default, the City Agreement and the will Amendment. : if you have any questions, please telephone me at (832) 395.2464. Sincerely, JunChang, RE, D.WRE Deputy Director Department of Public Works & Engineering cc: Daniel W. Krueger, P.E., City of Houston Susan Handy, City of Houston Bertrand L. Pourteau, ill, City of Houston Yvonne Forrest, City of Houston Malinda York Crouch, City of Houston Augustus Campbell, City of Houston .Daly 5, 2011 Parts Area Mr. Tun Chang, PR, D.WRE Deputy Director City of HoustollDopartxmnt of Works & Engineering 611: Walker Street. 2e Floor Houston, Texas 77002 Re: COH Jtine 13, 2011 Follow -up to LPAWA 2009 "True Up" Response Authority La PofjTr, Tsxns 77,571 Dear Mr. Chang: h, response to your Tune 13, 2011 letter (attached), the La forte Area Wator Authority (LPAWA) simply wishes to affirm ft's position stated in our May 16 response {also attached). The 2009 ` { T7Clke Up" forwarded by the City of Houston was not timely submitted and the amount claimed is not based on an audit as req*cd by the contract governing operation of the SEWPP. The City of ROUSton leas not complied with the provisions of the contract, and the LPAWA owes no part of the invoice. sincerely, LA PORTE AREA WATER AUTHORITY RON BOTTOMS, GFNBRAL MANAGER David S. Mick Public Works Director City of Laporte, Texas On Behalf of Ron Bottoms, City Manager, City of La Porte, Texas General manager, LPAWA c: Ron Bottoms LPAWA Board Appendix F CI 'T'E' OF HOUSTON Annise D. Parker Public Works and Engineering Mayor Department tDanle[ W. Krueger, RE. Director P.O. Box 1562 Houston, Texas 77251 -9582 www.houstontx.gov May 27, 2011 Mr. David Mice Director of Public Works La Porte Area Mater Authority 2963 North 23 St, La Porto, Texas 77571 Re FisGa1 Year 2010 Audit: True -Up Dear Mr. Mick: Eiiolosed is the Audited Repoit: for the Southeast Water Pu i-ficatlon Plant operations & maintenance expendiiure as defined in the contract, for the fiscal year ended June 30, 2010. Also enclosed is the invoice for the amount due to City of Houston based on the cost true up. if - you have any questions, please feel free to cos ?tact Sophia Chang at (832) 395 -2580. �inGei'ely Susan f3atldy Deputy Direotor Resouyce Management Division SB: so Council Members: Janes G. Rodriguez i sJohnson Stephen G. Costello Sue Lo oll Mollssa Mprlaga C Os "Bra Bra& d Jolanda "Jo" Jo€nes �ar l : Ronald Greon � SF'Jrj � i' �"`�Iria�lJilll City of Houston Public Works & Engineering Department Resource Management Division Financial Management Branch 611 Walker, 24th Floor Houston, TX 77002 To: Mr, David Mick Director of public Works 2963 North 28 :a St. La Porte, Texas 77571 Date: invoice No.: INVOICE 6J1.3pol1 2011015 For: south East Water Purification Plant LaPorte Area Water Authority . V N. Year End True Up for Fiscal Year Ended 6/30/2010 L 7 $ 138,898,58 for the South East Water Plant (See attached True Up schedule) Please remit payment to: City of Houston Public Works & Engineering Dept Resource Management 171vision Financial Management Branch' 611 Walker, 24th Fioar Houston, TX 77002 Attention: Jennifer Ngo (832) - 395 -2586 Total Amount: $ 73$,89$.58 Approved By: f� Date: Assistant Director MCCQNN[t..I. &. JONes LLP' _ L'(111 MILD NTULIV Ad :'01 "N'S 2 ^ 1 0 IND]gpL, NinNT ACCOUNTANTS' REPORT UU ON APPLYING AGREED -UPON VROCEDURES To the City of Houston's Department of Public Works and Engineeii - ng and the .Participants in the Cost Sharing Agreement of the Southeast Water Purification Plant: McConnell & Jones 7LLp (M.) was engaged by the City of Houston's (COH) Department of Public Works and Engineming (PW &E) to perfocln agreed -upon procedures on the operations wed. rnainfenince (O &I+/I) costs billed by PW &E to the cost sharing participants for the year aided June 30, 2010 under the Restated and Amended Cost Sharing Agreement of the Southeast Water Purification Placit (SEWPP), Contract No. 52797 (Agreemnent), between. CON, as the Managing Participant, and the following ton entities (Ten Pallicipants): • The Gulf Coast Water Authority (City Of Galveston, City of League City) • The Clear Lake City Water Authority (The City of Nassau Bay) • The 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 R"Ston • Tire City of Webster • Tile City of Priendswood • BaybrookMt1nicipal DishictNo.l we have performed the agreed -upon procedures enumerated in Exhibit I, which was agreed to by PW &B in accordance with the provisions of the Agreement. This agreed- upon procedures engagement was conducted in accordance with attestation standards established by tho American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in the report. .io Jima Oak ulvcl.,%u11e 1 6 00 Consequently, we malce no representatioji regarding the sufficiency of the procedures 1 10"51 o,, - rx 77a5c= described in Exhibit I, either for the purpose for which this report has been requested or 1 71:1.968-1 600 Fax: 71 968. for any ot her purpose, �4litl +.MC'c:c )NNT.L0.1t 1tSfS.c'c)hs We were not engaged to, and did not conduct an audit, the object ive of which would be the expression of all opinion on the accounting records. Accordingly, we do not express such at) opinion. Had we performed additional procedures, other matters Inight have come to our attention that would have been reported to ynu. , mis report is intended solely for the information and use of the COIF and the Tan Pa►ticipants and is not in tended to be and should not be used by anyone other than these specified parties. Cr�, Q ►1 � gi2 t� L Iiouston, Texas May 31, 2011 AX ority La Poxto :P N 0 L A 'P_�Wffg, J' ,�As 77571 i4ow 004 FMfIMO JU.10. �Ofl M Bastin Stin)3andy Deputy J)keotbii! & Work ---EfigiilUffllA 611 -Walker Street. _20 k F160 116 Texas 7'1Q 'Re. S4.UtIloot Woof rprkfwO n ue 'TJtit s 0 Invole-.6,No. 20.1, (0 ))w Ms. Ban0y. This: lottor iewllos " your jpj elated May .17, 201:1 thk'*A 0006446141 1 y an attached a 46P Lo' Porto, MA) 1:0s W YQIW Y the: Mqy 16, 2 Water AuthofltY (LPA - Aa Q�Ittined -in our 2609 -i TYQ6 Up" invoice.. The. LPAW.Als pogi'tion xegardhig, 64 .1010 1s tyre sawo - UP" WA§:nOt or .,20092, tune 13 iook ror the 2010 7r 'w M 16 -I.egpojjsc� to the Invoice f is pof%sed- on --an, audit hs. V*WN(i -by timely sllbioltw& and tile, -ampat claitimecl o r-thi�'SAWPP. The City-offiW VOVeQ e.ontr40,ana the %AQqY0yi � LA PORTH AREA WATER AUTTIOMTY 'RON B 0TT0W,5FNERAI, MANAGER David. • wk Works Dirodor Ci . ty, of Texas` On Bolialf -of BOU City Ymatlagdfl Cit (3op Manager, LPAW.A 'Roil B0ttollls LPAWA.B.Oftril Appendix G AGRLi EMENT FOIL DEFENSE AND /OR ASSERTION OF CLAIMS This "Agreement for Defense and/or Assertion, of Claims" (the "Agreement ") is made and entered into by and among the City of Pasadena, a body corporate and politic under the laws of the State of Texas, hereinafter called "Pasadena" and the Co- Participants signing below relating to certain claims by the City of Bouston against Pasadena and the Co- Participants and by Pasadena and the Co- Participants against the City of Houston "Houston" relating to certain actions by Houston as "Managing Participant" as defined in that certain "Cost Sharing Agreement Southeast Water Purification Plant (Restated and Amended)" dated on or about February 9, 2000 between the City of Houston and other parties, as amended by that certain "Amendment to Cost Sharing Agreement Southeast Water Purification Plant (Restated and Amended)" dated on or about August 21, 2007, by and among the same parties {collectively, the "Cost Sharing Agrecment'� affecting Pasadena and the Co- Participants, hereinafter called the "Claims," Collectively, Pasadena and the Co- Participants are referred to herein as the "Participants." The Claims include rights asserted by the Participants that they do n ot owe certain alleged "title -up" amounts submitted, or to be submitted, by Houston to the Co- Participants for payments due 2008 for Fiscal Years 2007, , 2009 and 2010 under the Cost Sharing Agreement and efforts by the Participants to replace Houston as the operator of the Southeast Water Purification Plant (the "Plant") which is the subject of the Cost Sharing Agreement. RECITALS It is to the mutual benefit Pasa Co-Participants azd otasser defend he claims iaga against Houston asserted by Houston against Pasadena All costs attributable to the defense and /or assertion of the Claims, including expenses of attorneys, engineers, accountants, financial advisors and other professionals retained to represent the Co- Participants will sometimes be called the "Claims Expenses." The Parties agree to pay their proportionate share of the Claims Expenses based upon their respective percentages of the FY 2009 True Up amount as set forth in Exhibit A hereto, and subject to the limitations set forth in, this Agreement, NOW, THEREFORE, for and in consideration of the mutual covenants, agreements and benefits to the parties herein named, it is agreed as follows: TERMS After execution of this Agreement, Pasadena may endeavor to engage attorneys, financial advisors, accountants and engineers to defend and /or assert the Claims on behalf of the Participants. Pasadena will submit to the Co -Participants its recommendations of attorneys, financial advisors, accountants and engineers to represent the Participants in asserting the Claiins, along with any proposed engagement agreements, if a majority of the Participants notify Pasadena in writing of their refusal to accept the recommended attorneys, financial advisors, accountants or engineers within ten {IO) days thereafter, then Pasadena shall seek other attorneys, financial advisors, accountants and engineers as appropriate under the same time frames. If a majority of the Participants do not file such objections, Pasadena shall be authorized to retain the attorneys, financial advisors, accountants and engineers to represent the participants in defending and /or asserting the Claims. Thereafter, Pasadena shall coordinate the attorneys, financial advisors, accountants and engineers in defending and /or asserting the Claims. Pasadena will: a. transmit to the Co- Participants copies of any invoices received from the attorneys, financial advisors, accountants and engineers after receipt along with a breakdown of how much of such invoice(s) each Participant owes; b. transmit reports received fiom attorneys, financial advisors, accountants and engineers to the Co- Participants after receipt copies of relevant documents provided by the attorneys, financial advisors, accountants and engineers in defending and/or asserting the Claims; and c, transmit to the Co- Participants status reports of the defense and/or assertion of the Claims as received. Co- Participants will: a. transmit to Pasadena within thirty (30) days of receipt of copies of any invoices received from the attorneys, financial advisors, accountants and engineers along with the breakdown of how inuch each Participant owes, a cheek made payable to "City of Pasadena" in an amount equal to the Co- Participant's share of such invoices based on the percentages shown in Exhibit A; and b> otherwise cooperate with Pasadena, the other Co- Participants and the attorneys, financial advisors, accountants and engineers in defending and /or asserting the Claims. Payments by the Co- Participants to Pasadena hereunder shall not be used by Pasadena for any purpose other than paying Claims related Expenses. The Co- Participants hereby appoint Clear Lake City Water Authority, Gulf Coast Water Authority and City of Friendswood as an advisory committee to consult regularly with Pasadena to advise and assist Pasadena in performing its obligations hereunder. The make -up of the appointees maybe changed by the majority vote of the Co- Participants. Pasadena agrees to solicit such advice and assistance ferom such advisory committee. Either Pasadena or a Co- Participant may withdraw as a party to this Agreement for any reason by written notice to the other parties. After such withdrawal, Pasadena shall return to each withdrawing Co- Participant any funds which the Co- Participant has paid to Pasadena hereunder unless the same are needed to pay such Co-Participant's share of any Claims Expenses incurred prior to such withdrawal; provided, however, if a Co-Participant has not yet paid its obligations to Pasadena hereunder for such previously incurred Claims Expenses, Pasadena shall notify the Co- Participant of the amount of Claims Expenses incurred prior to such withdrawal, and the Co- Participant shall deliver its cheek to Pasadena in an amount equal to the co- Participant's share of such Claims Expenses incurred prior to withdrawal within thirty days after notice of same. The proportionate shares of each of the remaining Co- Participants shall be redivided without the withdrawn Co- Participant as demonstrated in the example included in Exhibit A. Pasadena and the remaining Co- Participants may continue with the defense and /or assertion of the Claims on behalf of such remaining parties. If the withdrawn Co- Participant is Pasadena, a new managing Participant shall be appointed by the advisory committee, and any withdrawn advisory committee member shall be replaced by the remaining advisory committee members. No party hereto shall make, in whole or in part, any assignment of this agreement or any obligation hereunder without the prior written consent of the other parties hereto. All notices required or permitted hereunder shall be in writing and shall be deemed delivered when actually received or, if earlier, on the third day following deposit in a United States Postal Service post office or receptacle with proper postage affixed (certified mail, return receipt requested) addressed to the respective other party at the address prescribed herein below or at such other address as the other party may have theretofore prescribed by notice to the sending party, Address for notice shall be as follows: CITY City of Pasadena P.O. Box 672 .Pasadena, Texas 77501 This instrument contains the entire agreement between the parties relating to the rights herein granted and the obligations herein assumed. Any modifications concerning this instrument shall be of no force and effect excepting a subsequent modification in writing, approved by the governing bodies and sighed by all parties hereto. IN TESTIMONY OF WHICH, this agreement, in duplicate counterparts, each having equal force and effect of an original, has been executed on behalf of the parties hereto as follows, to -wit: CITY OF PASADENA LIM Mayor City Secretary