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
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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
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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:
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DALLAS COUNTY PARK CITIES
i1IUNICIPAL UTILITI' DISTRICT
TITLE:
ATTORNEY:
CITY OF GRAPEVINE, TEXAS
DATE: BY:
ATTEST:
ATTORNEY:
TITLE:
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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.
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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
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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
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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.
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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
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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
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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
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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:
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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
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