City Council

Agenda Request

Agenda Of:

November 21, 2006

Agenda Request No:

III K

Initiated By:

SuEllen Staggs, Director of Utilities

Responsible Department:

Utilities

Presented By:

SuEllen Staggs, Director of Utilities

Department Head:

SuEllen Staggs, Director of Utilities

 

 

Additional Department. Head (s):

n/a

Subject / Proceeding:

Approve agreement to supply Lake Pointe Town Center Limited with Untreated Oyster Creek Water for Irrigation

Exhibits:

n/a

Clearances

Approval

Legal:

eugenia A. Cano

Assistant City Attorney

 

Executive Director:

n/a

Purchasing:

n/a

Asst. City Manager:

Karen H. Glynn

Budget:

 

City Manager:

Allen Bogard

Budget

Expenditure Required:  $

N/A

Amount Budgeted/Reallocation:  $

N/A

Additional Appropriation:  $

N/A

Recommended Action

The Utilities Department recommends City Council authorize the execution of a Water Supply Agreement between Lake Pointe Town Center, Limited and the City of Sugar Land for untreated water from Oyster Creek for irrigation purposes.

Executive Summary

During a workshop presentation in August the Utilities Department discussed additional opportunities for using Oyster Creek water for irrigation of common areas in the City. The first of these opportunities is presented today. Lake Pointe Town Center, Limited (Lake Pointe) asked the City if we would supply wholesale raw water from Oyster Creek to be used in irrigation of their new Lake Pointe development. After discussions an agreement was drafted to supply the development with an average of 80,000 gallons a day and a peak capacity of up to 500,000 gallons a day of Oyster Creek water.  Although the agreement is similar to the Telfair LID 17 agreement, with the advantages of early conversion credits from the Subsidence District, it is different in several ways. The city will only be providing Lake Pointe with wholesale water from Oyster creek since Oyster Creek traverses the site. Lake Pointe will construct and operate the pump station necessary to withdraw water from the creek and will install and maintain any distribution and irrigation systems that will be necessary. Consequently, there is no capital outlay from the City as the City is only acting as the wholesale water provider.

 

The City will supply the water requested from the City’s agreement with WCID #1. Based on the required 29,200,000 gallons per year the cost to the city will be approximately $3,300 per year.  WCID #1 retains 15% of this and the balance is transferred into the drainage fund.

 

The use of surface water allows the City to obtain credits from the Fort Bend Subsidence District that can be used toward meeting our regulatory requirements.    The water supply agreement with Lake Pointe Town Center, Limited will provide untreated surface water to the Lake Pointe development, in turn avoiding significant costs for the City under the mandated surface water conversion process. Depending on the actual volume of water that the Lake Pointe takes yearly, the potential yearly net savings or cost avoidance from reducing the amount of surface water we will have to produce in the future is estimated between $63,000 and $75,000 dollars every year.

 

The major deal points of the agreement include:

 

  • City agrees to provide up to 500,000 gallons a day of non-potable water to Lake Pointe Town Center Limited for use in the Lake Pointe development at no cost for five years.
  • After the initial five-year period the rate will be the actual water cost including administrative fees or the current ordinance rate if one is established.
  • The City will retain any Subsidence District credits generated by the use of the water.
  • Lake Pointe agrees to use at a minimum 29,200,000 gallons per year.
  • If they use less than the minimum amount the City may charge $.11 per 1,000 gallons or the ordinance rate is one is established for the water they did not take.
  • Lake Pointe agrees to use the water provided for irrigation of public rights of way and trail systems only.
  • Lake Pointe cannot sell or provide the water to other areas or private property without prior City approval.
  • The City does not guarantee the water will be of any specific quality and if additional treatment is necessary will be provided by Lake Pointe at their cost. 
  • Lake Pointe agrees to construct, own, manage and operate the pump station and transmission line needed to serve their development.
  • Lake Pointe will provide an easement and meter to measure the water taken by Lake Pointe at the take point. The City will read the meter monthly.   
  • Lake Pointe will work with the City to find suitable property for an additional pump station to irrigate the west side of Highway 6 and fill Hyde Lake.
  • Lake Pointe can transfer the agreement to FCCA without additional City action or approval.

 

Staff recommends City Council authorize approval of the Water Supply Agreement between Lake Pointe Town Center Limited and the City of Sugar Land.

 

 

Exhibits

 

 

 WATER SUPPLY AGREEMENT BETWEEN

 LAKE POINTE TOWN CENTER, LTD.

AND THE CITY OF SUGAR LAND

 

This Water Supply Agreement is entered into between LAKE POINTE TOWN CENTER, LTD, a Texas Limited Partnership, and the CITY OF SUGAR LAND, TEXAS, a municipal corporation of the State of Texas. In consideration of the covenants of each, the parties agree as follows:

 

1.  Definitions.  In this agreement:

 

            City means the City of Sugar Land, Texas.

 

Lake Pointe means Lake Pointe Town Center, LTD, a Texas Limited Partnership.

 

Point of Delivery means the withdrawal point for the Lake Pointe pump station as shown on Exhibit “A” or any other location as agreed upon by the parties. 

 

Property means the 189.842 acres of land, more or less, as described in the Development Agreement between Lake Pointe Town Center, Ltd., a Texas limited partnership and the City.

 

TCEQ means the Texas Commission on Environmental Quality or its successor agency.  

 

Water means the untreated surface water supplied by the City to Lake Pointe under this Agreement.

 

            2.  Water Quantities.  

 

(a) The City will supply Lake Pointe with up to 500,000 gallons of Water per day at the Point of Delivery.

 

(b) Lake Pointe will take at least 29,200,000 gallons of Water each year from the City at the Point of Delivery. 

 

            3.  Water Rates. 

 

(a) In consideration of Lake Pointe entering into this Agreement, the City will not charge Lake Pointe during the first five years of this Agreement for Water provided by the City to Lake Pointe under this Agreement if Lake Pointe takes the required Water quantities for each of the first five years of this Agreement.  If Lake Pointe fails to take the required Water quantities during any of the first five years of this Agreement, Lake Pointe will pay to the City $0.11 for every 1000 gallons of Water that Lake Pointe was required to take for that year, but failed to do so.

 

(b) Beginning with the sixth year of this Agreement Lake Pointe will pay the City for the City’s cost incurred in providing the Water to Lake Pointe including the City’s cost to purchase the raw water used to provide the water and administrative costs until the date the City adopts an ordinance establishing a price for providing untreated surface water  to City customers.  Lake Pointe may audit the financial information the City uses to determine the rate based on the City’s costs.

 

(c) If the City adopts an ordinance establishing a price for providing untreated surface water to City customers, Lake Pointe will pay that price for the Water beginning on the effective date of the ordinance.

 

(d) Beginning with the sixth year of this Agreement, if Lake Pointe fails to take the quantity of Water required for any time period specified in this Agreement, Lake Pointe will pay to the City for the Water not taken at the same price it was required to pay for the Water it did take during that same time period.

           

            4.  Billing, Payment, and Customer Rules. 

 

(a) During the first five years of this Agreement, the City will bill Lake Pointe for any Water Lake Pointe was required to take, but did not take, within 30 days of the end of each year during the first five years of this Agreement.  Lake Pointe will pay the billed amount to the City within 30 days of receipt of the City’s billing.      

 

            (b) Beginning with the sixth year of this Agreement, the City will bill and Lake Pointe will pay for Water each month in compliance with the procedures provided for in Chapter 5 of the City's Code of Ordinances, as amended from time-to-time, relating to the billing and payment of water services to all City customers.   

 

            (c) Chapter 5 of the City’s Code of Ordinances establishing procedures and rules for water service to all City customers applies to the Water provided for under this Agreement, unless this Agreement conflicts with a rule.

 

(d) The City shall give Lake Pointe 60 days notice of any proposed change to a rate or policy so Lake Pointe has a reasonable opportunity to appear at a public hearing or before City Council prior to adoption to present any requests or comments.

 

5.  Water Use and Quality.

 

(a) Lake Pointe may use the Water only for irrigating public rights of way and public easements, recreation reserves, and landscape reserves located within the Property and for such other uses as approved by the City in advance in writing.  Distributing water for private property use is prohibited unless the City specifically approves it in writing. Lake Pointe will not unreasonably waste the Water provided by the City.

 

(b) The City does not warrant to Lake Pointe that the Water the City supplies under this Agreement is of a particular quality or suitable for any specific purpose.  Any additional treatment to make the Water suitable for a particular purpose is Lake Pointe’s sole responsibility.   

 

(c) If the Water to be taken by Lake Pointe at the Point of Delivery exceeds the TCEQ’s then current standard for Type II reclaimed water for fecal coliform concentration at any time during the term of this Agreement,[1] Lake Pointe will treat the Water so as to meet the TCEQ’s standard before using the Water for irrigation.

 

            (d) To determine the Water’s quality, Lake Pointe will take samples of the Water at least once per month.  If monthly samples taken by Lake Pointe in two consecutive months show that the Water does not meet The TCEQ’s Limits For Fecal Coliform As Specified In The Preceding Paragraph, Lake Pointe will take ten additional Water samples over the next 30 days.  If the geometric mean of the ten samples taken shows the Water quality still does not meet the TCEQ’s limits for fecal coliform, Lake Pointe will cease using the Water for irrigation purposes until the Water is within the allowed limits. 

 

 (e) Any credit or benefit provided for or adopted under a groundwater reduction plan or program or under any other law or regulation relating to the production, supply, or use of the Water belongs to the City, unless a specific law or regulation provides otherwise.  

 

6.  Delivery.  Lake Pointe will construct, own, and operate all facilities necessary to deliver the Water from the Point of Delivery to all locations within the property where the Water will be used.  Lake Pointe will assist the City in identifying and attempting to secure the land for infrastructure needed to provide untreated surface water to the area at the Hwy 6/US 59 Interchange and on the west side of Hwy 6 and to fill Hyde Lake. 

 

7.  Metering. Lake Pointe will at its expense, install all equipment necessary to meter the Water provided by the City to Lake Pointe at or near the Point of Delivery.  The City will own and maintain the meter after installation. The meter will be located in a dedicated easement so the city may maintain the meter and read the meter monthly.  If necessary Lake Pointe will provide, maintain and read any sub meters necessary to determine usage.

 

8.  Effective Date and Term.  This Agreement is effective at the time the Water is delivered, and continues until January 1, 2015.  Thereafter, this Contract automatically continues for successive five-year terms unless terminated by either party as provided in this Agreement. 

 

9.  Termination. 

 

(a) Either party may terminate this Agreement at any time if any law or governmental entity regulation or decision prohibits or substantially interferes with the City providing Lake Pointe with Water as provided for in this Agreement for more than six months.     

 

(b) Either party may terminate this Agreement if the other party fails to comply with its terms.  The party alleging the default will give the other party notice of the default in writing citing the terms of the Agreement that have been breached and what action the defaulting party must take to cure the default.  If the party in default fails to cure the default as specified in the notice within 60 days of receiving the notice, the party giving the notice of default may terminate this Agreement by written notice to the other party, specifying the date of termination.

 

(c) After January 1, 2015 either party may terminate this Agreement by giving written notice of termination to the other party at least 180 days prior to the date of termination.  

 

10.  Assignment.  Lake Pointe may assign this Agreement to First Colony Community Services Association, Inc.  without further City action, but Lake Pointe may not assign this Agreement to any other entity without the prior written consent of the City.  Lake Pointe will notify the City in writing of an assignment to First Colony Community Services Association, Inc.

11.  Notices.  Any written notice required or permitted to be delivered under this Agreement may be given by personal delivery to the party entitled thereto, by: (i) facsimile transmission, if a facsimile number is provided; (ii) any courier service that provides same day service or overnight delivery, with delivery receipts; or (iii) depositing the notice in the United States certified mail, postage prepaid; in each case addressed to the party to be notified, at the address or facsimile number set forth below or at such other address or facsimile number for a party as that party may specify in writing to the other party from time to time:

 

                        For Lake Pointe Town Center, LTD:

                                                Lake Pointe Town Center, LTD

                                    15958 City Walk, #250

                                    Sugar Land, Texas 77479

                                    Attention:  Les A. Newton

                                    Facsimile number:  281-242-2718

 

      With a copy to:       Carl Favre, General Counsel

                                                Planned Community Developers, Ltd.

                                    15958 City Walk #250

                                    Sugar Land, Texas 77479

 

            For the City:     City of Sugar Land

                                    2700 Town Center Boulevard North

                                    Sugar Land, Texas 77478

                                    Attention: City Manager

                                    Facsimile number: 281-275-2721

 

Either party may change its address or facsimile number by giving written notice of the change to the other party at least 14 business days before the change becomes effective. Any notice given to the proper address or facsimile number will be deemed to have been received on the earlier of: (i) actual receipt; or (ii) the first business day following deposit with a same day or overnight courier service that guarantees receipted delivery; or (iii) three days after the notice is deposited in the mail in the manner set forth in this section.

 

            12.  Force Majeure.  Neither party is in default if performance of this Agreement is delayed, disrupted, or becomes impossible because of any act of God, war, earthquake, fire, strike, accident, civil commotion, epidemic, act of government, its agencies or offices, or any other cause beyond the control of the parties.     

 

            13.  Entire Contract.  This Agreement represents the entire agreement between the City and Lake Pointe and supersedes all prior negotiations, representations, or contracts, either written or oral.  This Agreement may be amended only by written instrument signed by both parties.

 

14.  Severability.  The provisions of this Agreement are severable, and if any provision or part of this Agreement is held by any court of competent jurisdiction to be invalid or unconstitutional, the remainder of this Agreement is not affected thereby.

 

15.  Compliance with Laws.  Lake Pointe will comply with all applicable Federal, state and local laws and ordinances and all lawful orders, rules and regulations or any constituted authority, including, but not limited to, environmental requirements, in distributing and using the Water provided by the City under this Agreement, including any requirement to notify the public of Lake Pointe’s use of Water. 

 

CITY OF SUGAR LAND                              LAKE POINTE TOWN CENTER, LTD.

                                                                        a Texas limited partnership

 

By: ____________________________          By:       PCD Lake Pointe, Ltd., a Texas

            Allen Bogard, City Manager                             limited partnership, its General

                                                                                    Partner (of Lake Pointe Town

Center, Ltd.)

Date: ___________________________        

By:       PCD Projects, L.L.C., a Texas                               limited liability company, its sole

                                                                                    General Partner (of PCD Lake Pointe, Ltd.)

 

                                                                        By:       ____________________________

                                                                                       Les A Newton, Manager

                                                                                       PCD Projects, LLC

 

                                                                        Date:    ____________________________

 

 

ATTEST/SEAL:

 

 

_____________________________

Glenda Gundermann, City Secretary

 

Reviewed for Legal Compliance:


[1]  The TCEQ standard for Type II reclaimed water for fecal coliform concentration on the effective date of this Agreement I is 200 colony forming units (CFU) per 100 milliliters (ml) geometric mean with a maximum of 800 CFU/100ml.