HomeMy WebLinkAboutItem 29 - Untreated Waterl
MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: ROGER NELSON, CITY MANAGER 14V�l
MEETING DATE: JULY 18, 2000
SUBJECT: CONTRACT WITH CITY OF DALLAS FOR PURCHASE OF
UNTREATED WATER
RECOMMENDATION:
City Council to consider approval of a contract for the purchase of untreated water from
the City of Dallas and authorize the City Manager as signatory.
FUNDING SOURCE:
Funds are available for purchase of this water from the Utility Fund. The fund will be
reimbursed for water utilized by the following funds:
Lake Enterprise Fund: Grapevine Municipal Golf Course
Cowboy's Golf Course Contract
BACKGROUND:
Grapevine has provided irrigation water from Lake Grapevine for the Grapevine
Municipal Golf Course since it's inception in the early 1970s. This water was deemed by
City staff to be a municipal use granted by our water rights in Lake Grapevine. During a
contested hearing before the Texas Natural Resource Conservation Commission
(TNRCC), several months ago, Dallas County Park Cities Municipal Utilitiy District filed a
complaint that was based on a different interpretation of the law. That interpretation on
argument would preclude Grapevine from utilizing water for irrigation of our municipal
golf course. Additionally, it should be noted that the Cowboys Golf Course, which is
currently under construction, is dependent on Grapevine to provide water for irrigation.
The City of Dallas has agreed to sell Grapevine 2.6 million gallons per day (MGD) of
untreated water from Lake Grapevine for irrigation or municipal uses during the first year
of the agreement. During the remaining years of the agreement, Dallas would sell
Grapevine 1.8 MGD. The agreement is for a 30 -year term. The cost for the first year is
$0.41 per 1000 gallons as established by Dallas rate ordinance. Dallas has the right to
adjust the price by ordinance to cover all reasonable, actual and expected costs.
July 12, 2000 (4:43PM)
STATE OF TEXAS §
COUNTY OF DALLAS §
UNTREATED WATER PURCHASE CONTRACT
THIS CONTRACT made and entered into this the day of 2000,
by and between the City of Dallas, Texas, hereinafter called "Dallas", and the City of
Grapevine, hereinafter called "Grapevine."
WHEREAS, Grapevine is desirous of purchasing untreated water from Dallas,
and Dallas desires to sell untreated water to Grapevine as set forth herein under the
terms and conditions herein stated;
NOW, THEREFORE, Dallas and Grapevine in consideration of the terms,
covenants, and conditions herein contained, hereby agree as follows:
WITNESSETH:
1.0 WATER SALES
1.1 Dallas agrees to sell to Grapevine untreated water to meet requirements of
Grapevine, subject to the terms and conditions herein provided.
1.2 The sale of untreated water to meet the requirements of Grapevine may be
subject to and limited by available system supply. The determination of
availability rests with the Director of Dallas Water Utilities. However, such sale
shall not be unreasonably withheld and such limitation shall consider only
untreated water supply availability.
2.0 DEMAND: CHANGES IN DEMAND
2.1 "Demand" means the maximum average annual amount of untreated water,
expressed in millions of gallons per day (MGD), to be withdrawn by Grapevine
from Dallas' rights in Lake Grapevine within a Water Year. "Water Year" means
the year beginning June 1 and ending May 31. Exhibit A is Grapevine's projected
water usage and demand for untreated water on which this Contract is based.
2.2 Grapevine shall give annual notice to Dallas of Grapevine's demand for
untreated water for the coming Water Year by submitting a revised Exhibit A.
Such notice shall be given at least ninety days in advance of the commencement
of each Water Year. The Director of Water Utilities of Dallas may waive the
ninety day notice requirement for good cause shown.
2.3 In the event Grapevine withdraws more than the agreed demand for untreated
water from Dallas' rights in a Water Year as listed on the annually revised Exhibit
A, Grapevine agrees to pay for such additional water at the same rate per 1000
gallons as established in Provision 7.0 of this Contract.
Untreated Water Purchase Contract -City of Grapevine
2.4 Grapevine agrees that Dallas' capability to provide increases in demand is subject
to available supply of untreated water. The determination of availability rests
with the Director of Dallas Water Utilities. However, providing additional supply
shall not unreasonably withheld.
3.0 DIVERSION PONT, METERING, ETC.
3.1 Dallas agrees to sell untreated water contracted for by Grapevine at diversion
point(s) as delineated in Exhibit B attached hereto and at such additional points as
may be mutually agreed upon by both parties. The cost of all maintenance or
reconditioning of the metering facility and all future metering facilities, whether
delineated in Exhibit B hereof or mutually agreed upon at a later date, shall be
borne by Grapevine. Unless otherwise mutually agreed to by Dallas and
Grapevine, Grapevine shall be responsible for the design, contracting,
construction and financing of metering facilities. All designs, materials and
specifications shall be mutually agreed to by Dallas and Grapevine. Plans shall be
submitted to Dallas for review and comment. All metering and 'diversion
facilities shall be designed, constructed and operated in accordance with standard
industry practices. Meters shall conform to American Waterworks Association
Standards, where such standards exist. Grapevine agrees that Dallas has the right
to make periodic inspections during the construction phase of the metering
facilities. Final approval of completed metering facilities is subject to the mutual
agreement of Grapevine and Dallas.
3.2 Grapevine agrees to provide ingress and egress for Dallas employees and agents
to inspect and test metering facilities owned by Grapevine.
3.3 Grapevine will be responsible to insure each meter will be operated and
maintained so as to record with commercial accuracy. Grapevine shall employ a
professional meter testing firm, acceptable to Dallas, to test such meters annually
and shall invite representatives of Dallas to observe such tests. Dallas has the
right to request a meter to be tested. The cost of such requested test shall be
borne by Dallas if the test reveals the meter was operating within manufacturer's
specifications for accuracy.
4.0 BOOKS AND RECORDS
4.1 Dallas agrees that Grapevine or its agent may have access to the books and
records of Dallas Water Utilities at reasonable times. Grapevine agrees that
Dallas or its agent may have access to the books and records applicable to
Grapevine's Water Utilities at reasonable times.
5.0 ADDITIONAL WATER SUPPLIES
5.1 If Grapevine develops or acquires additional water supplies from any source
other than Dallas, resulting in reduced demand from Dallas, then Dallas is
released from the obligation to supply the demand amount determined
Untreated Water Purchase Contract -City of Grapevine
2
according to provision 2.0. In such event Dallas may adjust its supply obligation
to levels commensurate with Grapevine's reduced demand.
5.2 If, within the term of this Contract, Grapevine ceases to take water from Dallas
because such other water supplies have been developed or acquired, Grapevine
may, at the option of Dallas, for five years from date of notification by
Grapevine of intent to reduce or cease taking water or the balance of this
Contract, whichever is less, remain liable for charges at the most recent annual
billing level in effect at such cessation. Dallas shall consider whether a direct or
indirect liability has been incurred on Grapevine's behalf in determining whether
to hold Grapevine liable for charges.
5.3 If, during the term of this Contract, Grapevine's demand from Dallas in any
Water Year is diminished due to obtaining or development of other water
supplies, Grapevine's annual demand in years following the obtaining of
additional supplies shall not be less than the highest demand in any previous
Water Year occurring after Grapevine has obtained additional water supplies. In
that event, Grapevine shall owe and pay for, at a minimum, such highest
demand notwithstanding the fact that a lesser amount of water may actually be
taken. Payment of the minimum amount due shall be prorated on a monthly
basis.
6.0 RESALE
6.1 Grapevine agrees not to sell water purchased from Dallas to any person or entity
outside Grapevine's corporate boundaries except for areas for which the State of
Texas Public Utilities Commission has issued Grapevine a "Certificate of
Convenience and Necessity", as may be adjusted from time to time, unless
Grapevine has received prior written approval from the Director of Water
Utilities of Dallas.
In granting such authorization, Dallas may establish the terms and conditions of
the conveyance of such water including, but not restricted to, the setting of
monetary rates for sale of such water. Such control over terms, conditions and
rates by Dallas shall not be unreasonable and shall relate primarily to the
untreated water component of such sales. "Convey" means sell, trade, donate,
exchange, transfer title, or contract therefor. If Grapevine has existing customers
or immediate plans to provide water service to customers, in its current service
area, Dallas agrees not to sell treated or untreated water to such customers in
Grapevine's service area without approval from Grapevine.
7.0 RATES AND PAYMENT
7.1 Rates charges Grapevine shall be established by ordinance of Dallas.
7.2 Grapevine understands that Dallas City Council has the right by ordinance to
revise the rates charged, from time to time as needed, to cover all reasonable,
actual and expected costs. The Director of Water Utilities of Dallas will furnish
Untreated Water Purchase Contract - City of Grapevine
3
Grapevine a draft copy of the Cost of Service Study for proposed rates thirty (30)
days prior to submitting a rate increase request to the City Council of Dallas.
Any revision of rates shall be pursuant to principles set forth in Exhibit C,
attached hereto and made a part of this Contract. Any revision of Exhibit C,
according to its terms and not in conflict herewith, shall automatically be
incorporated and become a part of the Contract. Dallas shall give Grapevine a
minimum of six months notice of intent to revise rates.
7.3 Grapevine agrees to provide Dallas with comments, if any, in regard to the Cost
of Service Study within twenty (20) days after receipt.
7.4 Grapevine agrees to give Dallas a minimum of thirty (30) days notice of intent to
protest rates or any other condition of service. Provided, however, that
Grapevine is not required to give thirty (30) day notice of intent to appear before
Dallas City Council to protest cost of service studies.
7.5 Dallas agrees to render a statement of charges monthly. Payment is due upon
receipt of statement. Grapevine agrees to pay within fifteen (15) days of receipt
of statement.
7.6 In the event a meter is discovered malfunctioning, then the amount of water that
was passed through the meter will be estimated for each day the meter has not
functioned correctly. The last correctly measured monthly consumption will be
used as a basis for mutually calculating the amount of water delivered to
Grapevine during the time the meter has not been functioning correctly.
8.0 GRAPEVNE UNTREATED WATER INTAKE PUMPS
Grapevine shall use its existing water intake pumps at its water treatment plant
to draw water under this contract. Grapevine understands that water levels
during a critical drought may not be maintained such that water can be drawn
through these pumps.
9.0 CURTAILMENT
9.1 Grapevine agrees that if water supplies are curtailed within Dallas, Dallas may
impose a like curtailment on deliveries of water under this contract to Grapevine.
Such curtailments shall be limited to the extent that such supplies and service are
curtailed due to untreated water supply availability and giving recognition to the
fact that Grapevine diverts water from Lake Grapevine and supplies and
provides all of its own untreated water transportation. Grapevine will cooperate
by imposing like curtailment measures upon its sales.
9.2 Dallas and Grapevine agree to develop water conservation plans which
incorporate loss reduction measures and demand management practices
designed to insure that the available supply is used in an economically efficient
and environmentally sensitive manner. Upon request, Dallas or Grapevine will
furnish a copy of its conservation plan to each other.
Untreated Water Purchase Contract - City of Grapevine
4
9.3 To the extent Dallas imposes restrictions or grants privileges of general
applicability to itself and customer cities, including rules relating to the
curtailment of water delivery and availability, Dallas agrees to impose such
restrictions and grant such privileges equitably and in a non-discriminatory
fashion. Such restrictions or privileges shall take into consideration Grapevine's
ownership of untreated water diversion and transmission facilities.
10.0 FORCE MAJEURE; INDEMNITY; REMEDIES; NO WARRANTIES
10.1 If, for any reason, not reasonably within the control of the party so claiming,
either party hereto shall be rendered in whole or in part unable to carry out its
obligations under this Contract, then that party's obligation shall be suspended
during the continuance of the inability then claimed, but for no longer period.
Such party shall endeavor to remove or overcome such inability with all
reasonable dispatch.
10.2 Dallas makes no representation or warranty, express or implied, as to the
character, quality or availability of the water to be taken and Purchaser agrees to
assume all such risks, accepting said water, if available, in the same state as it is
pumped from the designated diversion points; nor does Dallas make any
representation that such water will be suitable for the purposes for which
Purchaser desires to use it. Dallas shall not be liable in any event for the
nonavailability of water hereunder, the unsuitability of such water of its quality,
or the inability of Dallas to perform any obligation under this Contract for
reasons beyond its control, including rules or regulations of other governmental
agencies.
10.3 Grapevine agrees to defend, indemnify and hold Dallas whole and harmless, to
the extent authorized by law, from any act or omission of any representative,
agent, customer, employee, or invitee of Grapevine, and to defend, indemnify
and hold Dallas whole and harmless, to the extent authorized by law, against any
and all claims for damages, costs, and expenses that may arise out of, or be
occasioned by Grapevine's performance and any of its activities under this
Contract, unless said damages result from the negligence of Dallas. Except for
those things described and disclaimed in paragraph 10.2, which are expressly
excluded from this indemnity, Dallas agrees, to the extent authorized by law, to
defend, indemnify and hold Grapevine whole and harmless from any and all
claims for damages, costs and expenses occasioned by any negligent act or
omission of any representative, agent or employee of Dallas arising solely out of
the operation of any facilities owned by Dallas and used under this Contract,
unless said damages result from the negligence of Grapevine. In the event of
joint and concurring negligence of Grapevine and Dallas, responsibility and
indemnity, if any, shall be apportioned in accordance with the law of the State of
Texas. This paragraph shall not be construed to waive any governmental
immunity, or other defenses available under Texas law, of Grapevine or Dallas;
this paragraph is for the sole benefit of Grapevine and Dallas and shall not be
construed to grant or create any rights, contractual or otherwise, to or in any
third person or entity.
Untreated Water Purchase Contract -City of Grapevine
5
10.4 Recognizing that Dallas' and Grapevine's undertaking as provided in this
Contract are obligations, the failure in the performance of which cannot be
adequately compensated in money damages, Dallas and Grapevine agree that, in
the event of any default, the other party shall have available to it the equitable
remedy of specific performance in addition to other legal or equitable remedies
which may be available to such party.
11.0 WATER WELLS
11.1 Nothing in this Contract shall be construed to impair or affect Grapevine's right
to use any existing water wells or any water wells it may drill in the future.
12.0 SEWAGE TREATMENT FACILITIES - EFFLUENT RETURN
12.1 Grapevine agrees to maintain adequate sewage treatment facilities to meet its
needs and provide for any increased quantity of wastewater flow.
12.2 Grapevine and Dallas recognize the existence of wastewater effluent return
flows. Grapevine acknowledges and agrees to support Dallas' claim to the right
to the use of all wastewater effluent return flows, except for those acknowledged
by Dallas to be rightfully claimed by the City of Grapevine. Grapevine is entitled
to all of the return flow from its wastewater treatment plant.
13.0 SPECIAL PROVISIONS
13.1 Special provisions applicable to this contract are attached hereto and styled
Exhibits A through C. These Exhibits are incorporated herein, as if copied word
for word.
Exhibit A is Grapevine's projected Untreated Water Usage on which the sales
portion of this Contract is based.
Exhibit B delineates Grapevine's diversion point.
Exhibit C is the Wholesale Untreated Water Rate Principles.
14.0 TERM
14.1 This contract shall remain in force and effect for a period of thirty (30) years from
the date of execution of the Contract.
15.0 VENUE
15.1 The parties herein agree that this Contract shall be performable in Dallas, Texas,
and if legal action is necessary to enforce it, exclusive venue shall lie in Dallas
County, Texas.
Untreated Water Purchase Contract - City of Grapevine
16.0 NO VERBAL AGREEMEN T
16.1 This Contract contains all commitments and agreements of the parties hereto
and no verbal or written commitments shall have any force or effect if not
contained herein.
17.0 APPLICABLE LAWS
17.1 This Contract is made subject to all applicable laws of the State of Texas and the
United States.
18.0 CONTRACT INTERPRETATION
18.1 In interpreting the various provisions of this Contract in a Court of Law, any
court having jurisdiction shall apply the laws of the State of Texas to interpret the
terms and provisions of this Contract.
19.0 CAPTIONS
19.1 The captions to the various clauses of this Contract are for informational
purposes only and shall not alter the substance of the terms and conditions of
this Contract.
20.0 NOTICES
20.1 Any notice required under this Contract may be given to the respective parties
at the following addresses by Certified Mail, postage prepaid:
Grapevine:
City of Grapevine, Texas
ATTN: City Manager
P. O. Box 95104
Grapevine, Texas 76099
Dallas:
City of Dallas, Texas
ATTN: City Manager
City Hall, 1500 Marilla
Dallas, Texas 75201
EXECUTED as of the day of . 2000, on behalf of the City of Dallas
by its City Manager, duly authorized by City Council Resolution No. 00- , adopted
on . 2000, and approved as to form by its City Attorney; and on behalf of
the City of Grapevine, by its duly authorized officials.
APPROVED AS TO FORM:
MADELEINE B. JOHNSON
City Attorney
BY
Assistant City Attorney
Submitted to.
City Att
Untreated Water Purchase Contract -Cit of GraPevie
OAF
CITY OF DALLAS
TEODORO J. BENAVIDES
City Manager
M.
Assistant City Manager
ATTEST:
City Secretary
APPROVED AS TO FORM:
Im
City Attorney
Untreated Water Purchase Contract - City of Grapevine
C�L�XFAQV►IF/IOI�i
City Manager
EXHIBIT A
GRAPEVINE'S PROJECTED WATER USE (MGD) AND DEMAND
I=
2000
2.6
2001
1.8
2002
1.8
2003
1.8
2004
1.8
2005
1.8
2006
1.8
2007
1.8
2008
1.8
2009
1.8
2010
1.8
2011
1.8
2012
1.8
2013
1.8
2014
1.8
2015
1.8
2016
1.8
2017
1.8
2018
1.8
2019
1.8
2020
1.8
2021
1.8
2022
1.8
2023
1.8
2024
1.8
2025
1.8
2026
1.8
2027
1.8
2028
1.8
2029
1.8
4-21-00 A-1
EXHIBIT B
DESCRIPTION OF DIVERSION POINT AND/OR METERING POINT
Diversion Point is located approximately 250 feet downstream of the Grapevine Dam
Outlet Structure Outfall.
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WHOLESALE UNTREATED WATER RATE PRINCIPLE
1. Key Rate Setting Principles
a. Revenue requirements are to be determined on the utility
basis, at original cost.
b. Rate of Return - Embedded rate of interest on water
obligations plus 1.5%.
C. Reservoirs - All existing and future reservoirs in a common
rate base with untreated water customers as a class paying their
proportionate share of costs for reservoir storage, including a
portion held for future use. Costs allocated to untreated water
customers shall be adjusted from time to time according to
changes in actual usage.
d. Untreated Water Transmission - Allocation of costs between
untreated water customers and treated water customers based on
test period usage.
e. Other Administration - Allocated on the basis of the above
allocations.
f. Rate Design - One -part rate (volume)_
2. Cost -of -Service Studies
Cost -of -Service studies to establish wholesale untreated water
rates shall be conducted by Dallas. Such studies will be conducted
in conformity With standard utility rate -making practices and
subject to review, but not approval of, a rate subcommittee composed
of designated members from the wholesale water customers of the City
of Dallas. At least one member of the subcommittee shall be from an
untreated water customer city.
C - 1
4-21-00