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HomeMy WebLinkAboutItem 03 - Water Supply ContractITEM 0 MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ROGER NELSON, CITY MANAGERP?/ MEETING DATE: SEPTEMBER 12, 2000 SUBJECT: SETTLEMENT AGREEMENT AND WATER SUPPLY CONTRACT WITH DALLAS COUNTY PARK CITIES MUNICIPAL UTILITY DISTRICT RECOMMENDATION: City Council consider approving a Settlement Agreement and Water Supply Contract with Dallas County Park Cities Municipal Utility District (PCMUD), authorize the Mayor to execute the necessary documents, and take any necessary action. FUNDING SOURCE: Funds will be programmed annually in Account # 200-44598-530-2. BACKGROUND: The PCMUD, the City of Dallas and the City of Grapevine have been engaged in a dispute regarding the water rights in Lake Grapevine for roughly 40 years. The Texas Natural Resource Conservation Commission (TNRCC) recently ruled in favor of the PCMUD. The ruling established that the PCMUD has first claim on all inflows to Lake Grapevine because they are the senior water right holder. This includes return flows of treated wastewater from Grapevine's wastewater treatment plant. Under this TNRCC decision, Grapevine's return flows do not belong to Grapevine once they have entered the lake. Following this ruling, Staff began discussions with PCMUD in an attempt to reach a resolution to this matter. This included a possible water supply contract. The result of these discussions is the settlement agreement and contract included in the packet. In the settlement, the City of Grapevine agrees to withdraw its appeal of the TNRCC ruling mentioned above, continue discharging its wastewater effluent into the lake, and to not request authorization of indirect reuse of return flows from the TNRCC during the 40 year term of this contract. The PCMUD agrees to withdraw its protest of the City's request for an irrigation permit. The second document is a water supply contract that addresses the City's existing and future water needs. The projected ultimate average -day demand for Grapevine is 16.1 million gallons per day (mgd). Grapevine's current sources of supply include the Trinity River Authority, the City's water rights in Lake Grapevine, and water purchased from September 7, 2000 (1:04PM) STATE OF TEXAS § COUNTY OF DALLAS § SETTLEMENT AGREEMENT BETWEEN DALLAS COUNTY PARI: CITIES MUNICIPAL UTILITY DISTRICT AND THE CITY OF GRAPEVINE This Settlement Agreement (the "Agreement") dated as of , 2000 is entered into by and between the Dallas County Park Cities Municipal Utility District (the "District") and the City of Grapevine (the "City"). RECITALS: WHEREAS, the District and the City (collectively, the "Parties") each own water rights in Lake Grapevine; WHEREAS, the nature, scope and exercise of those rights has been a source of conflict in the past; WHEREAS, the Parties desire to resolve existing disputes to allow the reasonable exercise of the rights of each Party without interference with the right and water supplies of the other Party; NNIHEREAS, the Parties are now in agreement as to certain principles under which Lake Grapevine should be operated and desire to enter into an agreement to memorialize them. NOW, THEREFORE, in consideration of the premises, mutual agreements, and covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, and in settlement of disputed claims, the Parties hereby agree as follows: The District and the City agree to enter into the water supply contract attached as Exhibit A. 2. The City agrees to dismiss its appeal of the Texas Natural Resource Conservation Commission (TNRCC) Order issued April 4, 2000 approving Application No. 08-2363A of Dallas County Part: Cities MUD for Amendment of Water Rights Certificate of Adjudication No. 05-2363 and Application No. 08-2363C of City of Dallas for Amendment to Water Rights Certificate of Adjudication No. OS -2458; TNRCC Docket Nos. 95 -1626 -%VR and 96 -1017 -%NR; SOAH Docket Nos. 552-96-1213 and 582-96-1214, which proceedings include the Commission's involuntary amendment of Dallas, District and City water rights to include an accounting plan. 3. The City and the District hereby release and forever discharge each other of and from any and all manner of action or actions and causes of action, controversies, claims, demands, obliaations, liabilities, suits, dama,es of every kind and character whatsoever and by tivhomsoever caused, solely, jointly or otherwise arising out of, as a result of, resulting from, or attributable to, the events, transactions, occurrences and circumstances involving TNRCC Order issued April 4, 2000 approving Application No. 0S -2363A of Dallas County Park Cities MUD for Amendment of 'ater Rights Certificate of Adjudication No. OS -2363 and Application No. OS -2363C of City of Dallas for Amendment to Water Rights Certificate of Adjudication No. OS -2458; TNRCC Docket Nos. 95- 1626 -`VR and 96-1017-%%R; SOAH Docket Nos. 582-96-1213 and 5582-96-1214, which proceedings include the Commission's involuntary amendment of Dallas, District and City �� ater rights to include -I)- an accounting plan. 4. The City agrees to continue discharging into Lake Grapevine all return flo,,vs (treated wastewater effluent) from its Peach Street Wastewater Treatment Plant, or any plant constructed in the future to treat wastewater from the same service area currently served by the Peach Street Wastewater Treatment Plant (hereinafter referred to as" Return Flows"), or any enlargement thereof, provided that the City is not prohibited from doing so by State or Federal regulatory action or a court of competent jurisdiction. The City further agrees to make every reasonable effort to retain the legal ability to continue discharging Return Flows during the term of this agreement. This agreement does not prevent City's c/o minirmis direct reuse of such Return Flows; however, no other direct reuse of Return Flows shall be undertaken except as provided in the water supply contract attached as Exhibit 0 5. The City agrees not to amend Certificate of Adjudication \o. OS -2362 to obtain authorization for reuse of Return Flows, or to otherwise seek authorization for direct or indirect reuse of Return Flows during the term of this agreement, except as provided in the water supply contract attached as Exhibit A. The City agrees to regularly and timely seek renewal of its wastewater discharge permit for the Peach Street `Vastewater Treatment Plant or any plant constructed in the future to treat wastewater from the same service area currently served by the Peach Street Wastewater Treatment Plant, or any enlargement thereof. 6. The City agrees to accept as a special condition to Application No. 08-2362A to amend Certificate of Adjudication No. 08-2362 an amendment stating that the City's irrigation right is junior to the District's irrigation right. 7. The District agrees to withdraw its conditional protest to the City's Application No. 08-2362A to amend Certificate of Adjudication No. 08-2362. 8. This agreement is contingent upon the Executive Director's approval of the water supply contract attached as Exhibit A. City and District agree to support approval of this settlement and the water supply contract before the Commission and in any contested proceeding that may result. 9. The term of this agreement is for a term of forty (40) years beginning on the date of this atrreement, and shall automatically extend for like terms upon each renewal of the Water Supply Contract for additional 40 year terms. 10. This agreement has been approved by the respective governing bodies and the undersigned are properly authorized to execute this agreement. ATTEST: -4- DALLAS COUNTY PARK CITIES i1IUNICIPAL UTILITI' DISTRICT TITLE: ATTORNEY: CITY OF GRAPEVINE, TEXAS DATE: BY: ATTEST: ATTORNEY: TITLE: -5- a �- WATER SUPPLY CONTRACT BETWEEN DALLAS COUNTY PARK CITIES MUNICIPAL UTILITY DISTRICT AND CITY OF GRAPEVINE This water supply contract (the "Contract") dated as of , 2000, is entered into by and between the Dallas County Park Cities Municipal Utility District (the "District") and the City of Grapevine (the "City") RECITALS WHEREAS, the District and the City (collectively, the "Parties") each own water rights in Lake Grapevine. WHEREAS, the exercise of those rights has been a source of conflict in the past. WHEREAS, the Parties desire to resolve existing disputes to allow the reasonable exercise of the rights of other Party without interference with the right and water supplies of the other Party, WHEREAS, the City wishes to purchase the City's Return Flows from the District for current and fixture water supply purposes, and the District wishes to sell to City, to the extent described below, Return Flows that would otherwise be accounted as inflows available to the District and to settle existing controversy and assure fiiture water supplies of the City and District; WHEREAS, this Contract is an integral part of the Settlement Agreement entered by City and District to resolve outstandin; disputes concerning uses of water from Lake Grapevine and the Parties to this Contract believe that mutual benefits accrue to each Party under this Contract; WHEREAS, water rights of the District and City have been amended to include a mandatory plan to account for water stored and used by each user of water from Lake Grapevine; WHEREAS, the District and City acknowledge that the City of Dallas' senior water right, Certificate of Adjudication No. 08-2457, as well as other more senior water rights may at times have a right to make priority calls on inflows into Lake Grapevine, including Return Flows; and WHEREAS, the District is selling only its senior right to store the City's Lake Grapevine Return Flows as provided in the Reservoir Accounting Plan for Lake Grapevine attached to Certificates of Adjudication 08-2363 and 08-2362, and only up to 4.0 million gallons per day (MGD). The District is not selling any other water to which it is entitled under Certificate of Adjudication 08- 2363; NOW, THEREFORE, in consideration of the premises, mutual agreements, and covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, and in settlement of disputed claims, the Parties hereby agree as follows: ARTICLE I DEFINITIONS Section I.I. Definitions. Unless the context clearly requires otherwise, the following terms and phrases have the meaning indicated for purposes of this Contract: "City's Lake Grapevine Return Flows" or "Return Flmti ,s" are discharges from City of Grapevine's Peach Street Wastewater Treatment Plant or any other wastewater treatment plant treating the wastewater from the same service area currently served by the Peach Street Wastewater Treatment Plant. "Party'' and ``Parties" means the parties to this Contract, identified in the Recitals. "TNRCC" and "Commission" mean the Texas Natural Resource Conservation Commission, or any predecessor or successor to that agency. "De minimus" equals 10 acre feet or less. ARTICLE II TERM OF CONTRACT Section 2.1. Term. The initial term of this Contract will commence on the date of execution by the Parties and will extend therefrom for a period of forty (40) years. Section 2.2. Renewal. Upon the expiration of the initial term, this Contract will automatically renew for another forty (40) year term, unless this Contract is terminated in writing by mutual agreement of the Parties not later than one hundred and eighty (180) days before the last day of the expiring term. The provisions contained in this Contract will apply to all renewals, except to the extent the Parties otherwise agree in writing and such agreement is approved by the Commission. ARTICLE III `NATER SUPPLY AND PRICE Section 3.1. Source of Supply. Water supplied under this Contract consists exclusively of City's Lake Grapevine Return Flows. Section 3.2. Quantity. City shall purchase all Return Flows discharged each month during the term of this Contract up to a maximum amount of 4.0 MGD. When the elevation of Lake Grapevine is at or below 516.0 mean sea level (msl), the District, at its own option, may use up to fifty percent (50%) of Lake Grapevine Return Flows discharged each month drlring the term of the contract. The City has no obligation to pay for Return Flows used by the District. Section 3.3. Continued Discharge. During the term of this Contract City shall discharge all of its Lake Grapevine Return Flows into Lake Grapevine or its tributaries; however, this contract does not prevent the City's direct reuse of such Return Flows in cite minimus amounts. Section 3.4. Measurement of Return Flows. Measurements and records maintained by City pursuant to its wastewater discharge permit from TNRCC, or a successor agency, shall be prima facecr evidence of volumes of Return Flows discharged and purchased by City. At the request of the District, the City's measurement device shall be verified up to once per year and the cost of verification shall be shared equally by City and District. The District shall have the right to observe any such verification of the measurement device. Any more frequent verification requested by the District shall be performed at the District's expense. The unit of measurement for water supplied shall be one thousand (1,000) gallons U.S. Standard Liquid Measure. City shall report to District the meter records of Return Flows discharged each month, on or before the fifth day of the following month. Section 3.5. Price. The City agrees to pay the District twenty (20) cents per one thousand (1000) gallons of effluent the City discharges into Lake Grapevine measured at the City's Return Flow discharge points up to a maximum of 4.0 MGD. The price for Return Flows shall be indexed to the Consumer Price Index for all urban consumers (Area -- U.S. city average; Item -- all items) published by the United States Department of Labor and may be adjusted by the District on or before 90 days prior to the beginning of City's fiscal year. N Section 3.6. Accounting for Return Flows. Under the Lake Grapevine Accounting methodology required by TNRCC, Return Flows purchased by City shall be accounted for as inflows directly into the City of Grapevine's storage account and shall be the first water used by the City each month, or each accounting period. Section 3.7. Payment. The District shall submit the monthly bills to the City on or before the 20" day of the month following the service. Payment shall be made monthly by the City to the District on or before the 20`' day of the following month. In the event that the City fails to make such monthly payment within the time specified, a penalty charge of six percent (6 '/'0) shall be levied on the total amount due and shall then be considered a part of the original amount due. City's payment shall be an operation and maintenance expense of its municipal water system and shall be paid from its municipal water supply operation and maintenance fund and from no other source. Section 3.8. Non-Pavment. If District determines that the City has not paid the ftill amount owed for any payment due under Section 3.7 "Payment," hereof within the time provided therefore, District shall give written notice to the City stating the amount District has determined is due and unpaid. If District gives notice as provided herein and the City fails to pay within thirty (30) days the amounts claimed in such notice to be due and unpaid, District may, at its sole option, upon giving ten (10) days written notice to the City, terminate this Contract without recourse. If the City should dispute their obligation to pay all or any part of the amount stated in any statement or notice, the City may, in addition to all other rights that the City may have under law, pay such amount under protest, in which case such amount shall be deposited by District in an interest bearing account mutually -5- acceptable to both District and the City pending final resolution of such dispute. District may not terminate this Contract for failure to pay the amount stated in any statement or notice if the City pays such amount under protest. Section 3.9. No Ri;hts or Title Acquired. The City agrees that under this Contract it acquires no rights or title for the use of the City's Lake Grapevine Return Flows other than those rights explicitly set forth in this Contract. Except pursuant to existing mutual aid water supply contracts with Coppell, Euless, Colleyville, and Southlake , the City shall not resell water taken under this Contract outside its city limits, without prior written approval of the District. Section 3.10. Quality and Availability of `Vater. The District makes no representation or warranty, express or implied as to the character, quality or availability of the City's Return Flows, and the City agrees to assume all such risks, accepting said water, if available, in the same state as it is primped from the discharge point designated herein. The City agrees that the District's ability to sell Return Flows to the City is limited by more senior water rights. If, in order to honor such senior water rights, the District is required to pass Return Flows and would be prevented from storing such Return Flows in its own storage capacity, then such Return Flows are not available for sale under this Contract and no payment is due from City. The District is under no obligation to make -tip those Return Flows with water from any other source. The City agrees that any variation in the quality or characteristics of the water fiirnished or available hereunder shall not reduce or abate the City's obligations to pay for such water. The District makes no representation that such water is or will be suitable for the purposes for which the City desires to use it. The District shall not be liable for the non-availability of water, the unsuitability of such water or its quality, or the inability of the District M to perform any obligation under this Contract for reasons beyond its control, including requirements of more senior water rights holdings and rules and regulations of other governmental agencies. ARTICLE IV REGULATORY MATTERS Section 4.1. TNRCC Submission and Approval. This Contract resolves outstanding disputed issues between the Parties concerning Lake Grapevine and use of the City's Return Flows. The Parties agree to submit this Contract to the Executive Director of the TNRCC for approval as consistent with the Lake Grapevine Accounting methodology. If TNRCC should fail to grant such approval within 90 days, this Contract shall become null and void. The City and District agree to support approval of this settlement and water supply contract before the Commission and agree to make best efforts to maintain this settlement and contract during the term of this agreement as originally approved by the Commission. Section 4.2. Regulatory Responsibilities. Each Party is responsible for reporting its own water use to the TNRCC and for complying with any other applicable regulatory requirements. ARTICLE V MISCELLANEOUS Section 5.1. Remedies Cumulative. The remedies provided herein are cumulative and do not preclude the assertion by any Party of any other rights or the seeking of any other remedies against the other Party. -7- Section 5.2. Headings. The section and paragraph headings contained in this Contract are for reference purposes only and do not affect in any way the meanings or interpretations of this Contract. Section 5.3. Governing Law. The provisions of this Contract shall be governed by and construed and enforced in accordance with the laws of the State of Texas. Section 5.4. Venue. Dallas County, Texas, shall be the place of performance as agreed to by the Parties to this Contract. In the event any legal proceeding is brought to enforce this Contract or any provision hereof, the same shall be brought in Dallas County, Texas. Section 5.5. Force Majeure. In case by reason offor•ce nrajeure either Party hereto shall be rendered unable wholly or in part to carry out its obligation under this Contract, then such Party shall give notice and full particulars of such force majeure in writing to the other Party within a reasonable time after occurrence of the event or cause relied on, the obligation of the Party giving such notice, so far as it is affected by such force mcyeure, shall be suspended during the continuance of the inability then claimed, but for no longer period, and any such Party shall endeavor to remove or overcome such inability with all reasonable dispatch. The term `force mcjew-e" as employed herein, shall mean acts of God, strikes, lockouts, on account of any other industrial disturbances, acts of public enemy, orders of any kind of Government of the United States or the State of Texas or any civil or military authority, insurrections, riots, epidemics, landslides, lightening, earthquake, fires, hurricanes, storms, floods, washouts, droughts, arrest, restraint of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipelines, or canals, partial or entire failure of water supply, and inability on part of the District to deliver water hereunder, or other causes not reasonably within the control of the Party -S- claiming such inability. It is understood and agreed that the settlement of strikes and lockouts shall be entirely within the discretion of the Party having the difficulty, and that the above requirement that any force majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes and lockouts by acceding to the demands of the opposing Party or Parties when such settlement is unfavorable to it in the judgment of the Party having the difficulty. Section 5.6. Dispute Resolution and Termination. Except as provided in Section 3.8, "Non -Payment," in the event that either the District or the City breaches or fails to perform, the aggrieved Party shall promptly notify the other Party of the alleged breach or failure to perform. Any alleged breach or failure to perform arising out of or relating to this Contract shall be submitted to the Parties' governing bodies for resolution within thirty (30) days after written notice of the alleged breach or failure to perform is mailed by the aggrieved Party to the other Party. The Parties' governing bodies shall be provided at least thirty (30) days from the date of the notice is received to settle the dispute. This deadline may be extended by agreement of both Parties. In the event a material breach or failure to perform is not cured by the Parties' governing bodies within the above specified time, the Party sending the notice, at its discretion, may notify the other Party of its intention to declare this Contract forfeited and null and void. Upon receipt of such notice the violating Party shall have thirty (30) days to cure such violation prior to final action by the other Party declaring this Contract forfeited and null and void. Any notice requirement under the terms of this section shall be in writing and shall be delivered by registered mail in accordance with Section 5.15 herein. No failure on the part of either Party to this Contract to require the performance by the other Party of any portion of this Contract shall in any way affect either Party's right to enforce such provision, nor shall any waiver by either Party be taken or held to be a waiver of any other provision. No rights under M this Contract may be waived and no modification or amendment to this Contract may be made except by written amendment executed by the Parties pursuant to Section 5.7. The remedies set forth in this Section shall not be considered exclusive, and the Parties retain all other rights and remedies at law and in equity in the event of any default by the other Party of the terms and conditions of this Contract. Section 5.7. Modification. Any amendment or modification of this Contract must be written and with the consent of both Parties. Section 5.8. Successors. This Contract shall apply to and be binding on the successors and assigns of the Parties hereto. Section 5.9. Indemnity. The City agrees to the extent permitted by law to protect, indemnify, and hold the District free and harmless from and against any and all claims, demands and causes of action of every kind and character arising in favor of governmental agencies or third parties on account of taxes, claims, debts, personal injuries, violations of laws or regulations, death or damages to property and without limitation by enumeration all other claims or demands of every character occurring or in anyway incident to, in connection Nvith, arising out of or in incident to the City's use of water or activities under this Contract. Section 5.10. Entire Contract, Amendments and Waivers. This Contract constitutes the entire agreement between the Parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties. leo amendment, modification or waiver of this Contract is binding unless executed in writing by the Party -10- to be bound thereby. No waiver of any of the provisions of this Contract shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver constitute a continuing waiver unless otherwise expressly provided. Section 5.11. Severability. If any one or more of the provisions contained in this Contract or in any other document delivered pursuant hereto is, for any reason, held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Contract. Section 5.12. No Third Party Beneficiate. It is specifically agreed between the Parties executing this Contract that it is not intended by any of the provisions of any part of the Contract to create the public or any member thereof a third party beneficiary hereunder, or to authorize anyone not a Party to this Contract to maintain a suit for personal injuries or property damage pursuant to the terms or provisions of this Contract. The duties, obligations and responsibilities of the Parties to this Contract with respect to third parties shall remain as imposed by law. Section 5.13. Assignability. No right or interest in this Contract shall be assigned by either Party without the written permission of the other Party, and no delegation of any duty or obligation owed by either Party shall be made without the written permission of the other Party. Any attempted assignment or delegation shall be wholly void and totally ineffective for all purposes. Section 5.14. Multiple Counterparts. This Contract may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 5.15. Notice. All notices, payments and communications required herein shall be sent by first-class mail to the Parties at the following addresses: Dallas County Park Cities Municipal Utility District 1811 Regal Row Dallas, Texas 75235-2398 ATTENTION: General Manager City of Grapevine 200 South Main Street P.O. Box 95104 Grapevine, Texas 76099-9704 ATTENTION: Director of Public `Yorks Section 5.16. Representation of Authoritv. This Contract has been approved by the respective governing bodies and the undersigned are properly authorized to execute this Contract. DATE: ATTEST: -12- DALLAS COUNTY PARK CITIES MUNICIPAL UTILITY DISTRICT TITLE: r ATTEST: CITY OF GRAPEVINE, TEXAS • TITLE: 0 • •TSI DATE: By: TITLE: Executive Director, Texas Natural Resource Conservation Commission -13-