City Council
	Agenda Request
Agenda Of:	04/01/2008	Agenda Request No:		VI A
Initiated By:	SuEllen Staggs	Responsible Department:		utilities
Presented By:	SuEllen Staggs, Director of Utilities	Department Head:		suellen staggs, director of utilities
		Additional Department. Head (s):
Subject / Proceeding:	approve emergency water supply contract between Fort Bend MUD No. 25 and the City of Sugar Land
Exhibits:	Agreement District and interconnect location Map
Clearances			Approval
Legal:	Eugenia cano, asst City Attorney		City Engineer:
Purchasing:	N/A		Asst. City Manager:	Karen Daly
Budget:	N/A		City Manager:	Allen Bogard for AB
Budget
Expenditure Required: $			n/a
Amount Budgeted/Reallocation: $			N/a
Additional Appropriation: $			N/A
Recommended Action
The Utilities Department staff is requesting that City Council authorize the execution of an Emergency Water Supply Agreement between Fort Bend Municipal Utility District No. 25 and the City of Sugar Land.
Executive Summary
The Fort Bend Municipal Utility District Number 25 (District) sent a letter requesting permission to install an emergency interconnect with the City. The interconnect would only be opened to provide the District with water in the event of an emergency that resulted in their inability to supply their customers with water for consumption or fire fighting purposes. It is common for utilities to have interconnects with other public water supplies as a backup mechanism to manage the effects of emergency situations. The City currently has several other emergency interconnects including one with First Colony MUD No. 9, WCID #2, and Fort Bend Utilities (Imperial Sugar). A map of the interconnects along with the location of the District and their proposed interconnect is attached. The agreement terms include: The District will design, construct, own and operate the interconnect facilities at its sole cost. The connection will include appropriate backflow prevention and a meter. The City will review and approve the construction plans for the interconnect which will follow all City design standards. The District will provide record drawings electronically. The interconnect will remain closed during normal operating conditions. An emergency is defined as a mechanical or electrical failure causing a loss of fifty percent (50%) or more of the production capacity of the District System which results in either the District being unable to supply its customers with a minimal supply of Water, or a fire requiring immediate use of the other party’s water system for fire fighting purposes. During an emergency the district can open the interconnect after providing the City with notice. The Interconnect can only remain open for up to 30 days, the temporary period, but they can request an extension. The City is not obligated to supply water if we are unable due to our own emergency. The District will pay the City’s current residential rate including any surface water fees for the water provided. The Contract is subject to our Drought Contingency plan. The initial Contract term is 20 years, after 20 years it automatically renews for 10 year terms but either party may terminate by giving a 90 day notice. Fort Bend MUD 25 has been a good neighbor. Several years ago the septic systems at the Airport were not working properly. During expansion of the Airport, wastewater treatment alternatives were being considered since the City did not have any wastewater collection lines in the area and the cost to serve the Airport would have been excessive. The City and Fort Bend MUD 25 reached an agreement whereby the District treats the wastewater from the Airport. The current wastewater services contract expires in 2014 but in consideration of the interconnect agreement they have agreed to serve the Airport for an additional ten years. This partnership has saved the Airport and Utility Fund significant capital costs. We have planned for and intend to reroute the Airport wastewater to the City’s North Plant during the development of Tract Three. The Utilities Department staff is recommending that City Council authorize the execution of an Emergency Water Supply Agreement between Fort Bend Municipal Utility District No. 25 and the City of Sugar Land.

EMERGENCY WATER SUPPLY CONTRACT BETWEEN

FORT BEND COUNTY MUNICIPAL UTILITY DISTRICT NO. 25

AND CITY OF SUGAR LAND, TEXAS

This Emergency Water Supply Contract (this “Contract”) is made and entered into as of this _____ day of _________, 2008, by and between FORT BEND COUNTY MUNICIPAL UTILITY DISTRICT NO. 25, OF FORT BEND COUNTY, TEXAS (the “District”), a conservation and reclamation district created pursuant to the authority of Article XVI, Section 59, of the Constitution of Texas, and operating under the provisions of Chapter 49 and Chapter 54, Texas Water Code, as amended, and the CITY OF SUGAR LAND, TEXAS (the “City”).

WHEREAS, the City has constructed, owns and operates a water production and supply system (the “City System”) and the District has constructed, owns and operates a water production and supply system (the “District System”); and

WHEREAS, the Board of Directors of the District has determined that an additional emergency source of water supply is needed in the event of a failure or mechanical breakdown of the District System and the City has agreed to provide such emergency water supply; and

WHEREAS, the Board of Directors of the District and the City Council of the City each has determined that it is authorized to enter into this Contract pursuant to the Constitution and laws of Texas, including, specifically Section 49.213, Texas Water Code, as amended, and Section 402.001 of the Texas Local Government Code.

NOW, THEREFORE, for and in consideration of the mutual promises, obligations and benefits hereinafter set forth, the City and the District contract and agree as follows:

1)

DEFINITIONS

a). Definitions. In addition to terms defined elsewhere herein, the following terms have the following meanings:

i) "Emergency" means a mechanical or electrical failure causing a loss of fifty percent (50%) or more of the productive capacity of the District System which results in either the District being unable to supply its customers with a minimal supply of Water, or a fire requiring immediate use of the other Party’s Water system for fire-fighting purposes and activities related thereto.

B “Operator” means any of the City’s utility department managers who are notified of an emergency by means of the City’s 24-hour emergency telephone number.

C. “Party” or “Parties” means either the District or the City, or both, as the context requires.

D. “Record Drawings” means “as built” drawings provided to the City as required by Section 2.03 of this Contract.

E. "Temporary Period" means a period not to exceed thirty (30) days, unless otherwise agreed in writing by the parties hereto.

F. “Water” means potable water meeting the minimum drinking water standards established by the Texas Commission on Environmental Quality, any successor agency thereto, and any other regulatory agency with jurisdiction over the Parties’ Water systems.

2)

CONSTRUCTION OF INTERCONNECTION

a). Construction, Ownership and Maintenance of Interconnect Facilities. The District will construct, in accordance with good and sound engineering practices, entirely at its expense, a water line(s) from the District System to the City System at the point(s) of interconnect as shown as Exhibit “A” attached hereto (the “Point of Interconnect”), all as determined appropriate by the engineers for the City and the District (the “Interconnect Line”). The District shall be responsible for maintaining the Interconnect Line to the Point of Interconnect throughout the term of this Contract.

b). Cut-off Valve and Title to Water. The District shall install, at its sole cost and expense, a cut-off valve and compound meter at the Point of Interconnect within a valve box with a locking mechanism (the “Meter Facilities”). The City will have title to and possession and control of all Water on the City’s side of the Meter Facilities and the District will have title to and possession and control of all Water on the District’s side of the Meter Facilities.

c). Plans and Specifications and Final Inspection. The Interconnect Line and Meter Facilities (collectively, the “Interconnect Facilities”) shall be constructed in accordance with the plans and specifications prepared by the engineer for the District, which must comply with the City’s Design Standards. The plans and specifications shall be subject to the review and approval of the engineer for the City, which approval shall not be unreasonably withheld. The engineers for the District and the City shall have the right to inspect and approve the Interconnect Facilities during construction, upon completion, and prior to the initial use and operation thereof, which approval shall not be unreasonably withheld. Upon completion of the Interconnect Facilities, the District shall provide the City with one set of “Record Drawings” in an electronic format that is compatible with the City’s GIS data base and a certification by the engineer for the District that such Interconnect Facilities were built in accordance with the approved plans and specifications as indicated in the “Record Drawings”.

d). Maintenance. Each Party shall consistently maintain its Water distribution system in good condition and shall promptly repair any leaks or breaks in such system, at their sole cost and expense.

3)

EMERGENCY DELIVERY OF WATER

a). Normal Operations. It is agreed that during normal operating conditions of the Parties’ Water systems, Water will be prevented from flowing through the Interconnect Facilities. In the event the District wishes to draw Water through the Interconnect Facilities during a non-Emergency, it may do so only with the prior written consent of the City.

b). Emergency Supply. During an Emergency, the District may open the valve at the Point of Interconnect and be supplied Water, but only after providing verbal notice of the Emergency to the operator for the City (provided, however, that when the Emergency is a fire, the valve may be opened prior to such notice, but notice must be given to the City’s operator at the earliest practicable time). The City may be reached on its 24-hour emergency line at 281-275-2450. If this emergency telephone number is changed, the City will promptly notify the District of the new number. Such notice shall include a description of the cause of the Emergency and the expected duration thereof. The District will provide the City with the names, addresses, and telephone numbers of its operator, engineer and members of its governing body for the purpose of giving notice hereunder. Utilization of the Interconnect Facilities shall be confirmed in writing by the City within the next business day after the valve is opened. The District may continue to receive Water during the continuation of the Emergency without prior approval of the City; provided, however, that the City shall not be obligated to supply Water hereunder for longer than a Temporary Period without its prior written consent. Should the duration of the Emergency extend beyond the Temporary Period, the District shall request consent from City’s Director of Utilities or his/her designee to extend the Temporary Period. Such request shall be made in writing prior to the expiration of the initial Temporary Period. Any additional extensions shall likewise be requested in writing by the District prior to the end of the then approved period. Further, the City shall not be obligated to supply Water hereunder in such amounts or under such circumstances as will impair the City’s ability to serve its own customers (including customers to whom the City is supplying Water on an emergency basis). The obligation of the City to deliver Water to the District shall run only to the District and shall in no event create any obligation to or duty toward any other party or any customer of the District.

c). City Emergency. The City shall not be obligated to supply Water pursuant to this Contract if an Emergency exists for it, but may do so.

d). Other Water Supply Contracts. The District recognizes that the City has entered into Water supply contracts with other entities prior to the date of this Contract and recognizes that during any period of time that the City is obligated to supply Water to such other entities, it shall be obligated to supply Water pursuant to this Contract only to the extent that doing so does not prejudice its ability to fulfill its obligations to such entities and does not prejudice the ability to serve its own in-city customers. The Parties agree that the City may enter into additional Water supply contracts with other persons, corporations, partnerships or political subdivisions of the State of Texas or any other entity; provided, however, the City covenants and agrees that it will not so agree with others to such an extent as to impair its ability to perform fully and punctually its obligations under this Contract.

e). Payment. Except as hereinafter set forth, the price to be paid for Water delivered pursuant to this Contract during an Emergency shall be billed to and paid for by the District at a rate equal to the retail water service rate for residential customers as provided in Section 5-246 of the City’s Code of Ordinances, as amended per 1,000 gallons of water supplied (as registered by the Meter Facilities), plus the amount of any fees, surcharges, fines or penalties incurred by the City for providing such Water, including any fees based on Water pumpage for surface water conversion purposes.

District will read the Meter Facilities prior to opening the cut off valve to allow Water into its Water distribution system from the City’s System. Said meter reading shall be provided to the City with the notice of Emergency required in Section 3.02. When the valve is closed following an Emergency, the Meter Facilities again shall be read by the District and the City shall be promptly notified of said reading.

In the event the Parties agree, in writing, to supply/receive Water on a non-Emergency basis, the rate for such Water shall be negotiated at the time such agreement is prepared.

If the District fails or refuses to (1) supply the information concerning the Water usage required herein, or (2) pay for Water delivered hereunder, and such failure to supply said information and/or make payment shall extend for a period in excess of sixty (60) days from the notice and/or demand for payment, the City may, at its sole option, (i) refuse to supply additional Water until payment has been made in full or the requested information is received, or (ii) notify the District of its intention to declare this Contract null and void if such information has not been delivered or payment has not been made within thirty (30) days of the date of said notice.

The City shall render bills to the District, on or before the fifteenth (15^th) day of each month for Water supplied during the preceding calendar month and such bills shall be due and payable thirty (30) days after the effective date of deposit said bill into the United States mail as set out in Section 4.05 herein. If the District fails to pay for Water delivered hereunder within thirty (30) days of the date such payment is due, the District shall pay interest on its past due obligation, accruing from the due date, at the lower of the rate of ten percent (10%) per annum or the highest nonusurious rate, and shall in addition pay reasonable attorney’s fees incurred in the collection thereof. If the District fails to pay any bills on or before their due date, the City may give notice of such delinquent bills to the District in writing, and if all such bills due are not paid within fifteen (15) days after the effective date of deposit of such notice in the United States mail, then the City shall be authorized to execute legal proceedings for the collection thereof and to pursue any other available legal remedy which may be appropriate, in addition to the right to refuse to supply additional Water until such payment is made in full.

f). Books and Records. Each Party shall preserve for a period of at least two (2) years from the date of their respective origins, all books, records, test data, charts and other records pertaining to this Contract. Each Party shall have the right, during normal business hours, to inspect such records of the other Party to the extent necessary to verify the accuracy of any statement, charge or computation made pursuant to any provision of this Contract; provided, however, that any billing statement rendered pursuant to this Contract and paid without protest shall be incontestable following two years from the date of billing.

4)

TERM AND GENERAL PROVISIONS

a). Approvals by Parties. Whenever this Contract requires or permits approval or consent to be hereafter given by any Party, such approval or consent shall be effective without regard to whether such approval or consent is given before or after the time required herein. Such approval or consent shall be evidenced by a resolution or ordinance adopted by the governing body of the Party or by an appropriate certificate executed by a person, firm or entity authorized to determine and give approval or consent on behalf of said Party.

b). Regulatory Agencies; Drought Contingency Plan; Water Analysis. This Contract shall be subject to all present and future valid laws, orders, rules and regulations of the United States of America, the State of Texas, and any regulatory body having jurisdiction over the District System or the City System and the Parties agree to cooperate to obtain compliance therewith. In the event that either Party is required by any regulatory authority to pay any fee (including any fee imposed by a regional water authority, subsidence district or similar entity), service charge, penalty, or fine because of, or as a condition to, providing service to the other Party pursuant to this Contract, said fee, service charge, penalty, or fine may be billed to the other Party as an expense of providing service pursuant hereto, in addition to all amounts due pursuant to this Contract. It is further provided that when receiving Water pursuant to this Contract and supplying such Water to its own residents and other Water users, the District acts in the capacity of owner and operator of a “public water system”, as that term is used in the federal Safe Drinking Water Act, and, in that regard, is solely responsible for complying with all governmental rules, regulations, and laws relating to the protection of the health and welfare of its users including, but not limited to, keeping all necessary records and performing all necessary testing, monitoring and treatment, and the City will have no responsibility with respect thereto; provided, however, that the City shall provide to the District the information required for preparation of the District’s “Consumer Confidence Report” under applicable regulations of the United States Environmental Protection Agency on or before May 1 of each year.

Further, this Contract shall be subject to the terms and conditions of any drought contingency or water conservation plan now or hereinafter adopted by either Party (the “Drought Contingency Plan”).

If requested by the other Party, a Party will obtain a bacteriological Water analysis on a sample of Water taken from its Water distribution system at least once per month and shall submit the results of said analysis to the other Party.

c). Term and Termination. Unless otherwise terminated pursuant to the provisions hereof, this Contract shall be in force and effect from the date of its execution for a period of twenty (20) years and shall automatically renew thereafter for ten (10) year periods.

After twenty (20) years, either party may terminate this Contract at any time upon ninety (90) days’ written notice to the other party.

d). No Additional Waiver Implied. No waiver or waivers of any breach or default by any Party of any term, covenant, condition, or liability hereunder, or of performance by the other Party of any duty or obligation hereunder, shall be deemed a waiver thereof in the future; nor shall any such waiver or waivers be deemed or construed to be a waiver of subsequent breaches or defaults of any kind, character or description, under any circumstances.

e). Address and Notice. Unless otherwise provided in this Contract, any notice herein provided or permitted to be given, made, or accepted by any Party must be in writing and may be given by depositing the same in the United States mail, postage prepaid and properly stamped and addressed, or by delivering the same to an officer of the other Party. Notice deposited in the mail in the manner described above shall be conclusively deemed to be effective from and after the expiration of three (3) days after it is so deposited. Notice given in any other manner shall be effective only if and when received by the Party to be notified. For the purposes of notice, the addresses of the Parties shall be as follows:

Fort Bend County Municipal Utility District No. 25

18230 Old Richmond Road

Sugar Land, Texas 77478

ATTENTION: General Manager

With a copy to:

McDonald & Sechrist LLP

770 South Post Oak Lane, Suite 410

Houston, Texas 77056

City of Sugar Land

2700 Town Center Blvd. North

Sugar Land, Texas 77479

ATTENTION: City Manager

With a copy to:

City of Sugar Land

P.O. Box 110

Sugar Land, Texas 77487-0110

ATTENTION: Director of Utilities

The Parties may from time to time and at any time change their respective addresses and each shall have the right to specify as its address any other address in the State of Texas by at least fifteen (15) days written notice to the other Party.

f). Modification. This Contract shall be subject to change or modification at any time, but only with the mutual written consent of the parties hereto.

g). Assignability and Annexation. This Contract shall be binding upon and inure to the benefit of the Parties hereto and their successors, but this Contract shall not, except as otherwise provided, be assignable by any Party without the prior written consent of the other Party. This provision against assignment except by written consent shall not apply if a city or cities annex the District in its entirety and such annexing city or cities is/are to assume the obligations of the District, in which case this Contract shall remain in full force and effect and such annexing city shall be entitled to the benefits and required to assume the obligations hereunder of the District.

h). Parties in Interest. This Contract is for the sole and exclusive benefit of the District and the City and shall not be construed to confer any benefit or right upon any other party.

i). Provisions Severable. The provisions of this Contract are severable, and if any provision or part of this Contract or the application thereof to any person or circumstance shall ever be held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Contract and the application of such provision or part of this Contract to other persons or circumstances shall not be affected thereby.

j). Merger. This Contract embodies the entire understanding among the Parties regarding the subject matter set forth herein and there are no prior effective representations, warranties or contracts regarding same.

k). Force Majeure. If any Party should be prevented, wholly or in part, from furnishing Water as specified under this Contract by reason of any force majeure, including without limitation, acts of God, unavoidable accident, acts of the public enemy, strikes, riots, floods, fires, government restraint or regulations, breaks in a Party’s Water lines, power failure, or for any other cause beyond the Party’s control, then the obligation of that Party to deliver Water hereunder shall be suspended during the continuance of such force majeure.

[EXECUTION PAGES FOLLOW]

IN WITNESS WHEREOF, this Contract has been executed in multiple counterparts, each of equal dignity, as of the date and year first above written.

FORT BEND COUNTY MUNICIPAL

UTILITY DISTRICT NO. 25, OF FORT BEND COUNTY, TEXAS

By:

Name:

Title: President

Board of Directors

THE STATE OF TEXAS §

§

COUNTY OF FORT BEND §

This instrument was acknowledged before me on this ______ day of ______________, 2008, by ______________________, President of the Board of Directors of Fort Bend County Municipal Utility District No. 25, of Fort Bend County, Texas, on behalf of said entity.

Notary Public in and for

the State of TEXAS

(NOTARY SEAL)

CITY OF SUGAR LAND, TEXAS

By:

David G. Wallace, Mayor

ATTEST

By: ________________________

Glenda Gundermann, City Secretary

STATE OF TEXAS §

§

COUNTY OF FORT BEND §

This instrument was acknowledged before me on this ______ day of ______________, 2008 by ______________________, _______________ of the City of Sugar Land, Texas, on behalf of said entity.

Notary Public in and for

The State of TEXAS

(SEAL)

EXHIBIT “A”

DESCRIPTION OF POINT(S) OF INTERCONNECT