City Council

Agenda Request

Agenda Of:

11/6/07

Agenda Request No:

IV D

Initiated By:

Jessie Li, Assistant Utilities Director

Responsible Department:

Utilities

Presented By:

SuEllen Staggs, Director of Utilities

 

Department Head:

SuEllen Staggs

Director of Utilities

 

 

Additional Department. Head (s):

 

Subject / Proceeding:

Approve Nine Separate Ground water Participation Agreements  with Private well owners and Utility systems to Join the City’s Ground water Reduction Plan

Exhibits:

Private Well Participation Agreements

Groundwater Reduction Plan Participation Agreement

Clearances

Approval

Legal:

Meredith Wilganowski,

Assistant City Attorney

Executive Director:

N/A

Purchasing:

N/A

Asst. City Manager:

Karen H. Glynn

Budget:

n/a

City Manager:

Allen Bogard/for AB

Budget

Expenditure Required:  $

0

Amount Budgeted/Reallocation:  $

0

Additional Appropriation:  $

0

Recommended Action

Staff requests City Council approve Groundwater Participation Agreements between the City of Sugar Land and Plantation Municipal Utility District,  Sugar Lakes HOA, WSG Sweetwater, New Territory Residential Community Association, Texas Par Golf Association, Schlumberger, Avalon CAI, River Park HOA, River Point Golf Course.

Executive Summary

As part of the reduction in groundwater use mandated by the Fort Bend Subsidence District (FBSD), all permitted groundwater systems that produce more than 10 million gallons a year must file (or jointly file with a group) a Groundwater Reduction Plan (GRP).

 

The FBSD has required that all entities in a group GRP must have a contractual relationship with the GRP owner (the City). Previous City Council Policy held that Sugar Land would plan for itself and its ETJ in the groundwater reduction process. There are 14 entities in the City or our ETJ that have decided to join the City’s Groundwater Reduction Plan.  The attached agreement, which was used as the template for all participation agreements, was developed per the Council Policy adopted in May of 2007.  A summary of the contract terms along with the contract differences between Private Utility Systems, MUDs and Private well owners are outlined below.

 

Groundwater Reduction Plan Participation Agreement Summary

 

  • The City will include the Participant and their pumpage in our GRP.
  • The Participant will provide the GRP with estimated water demand projections through 2030.
  • The Participant will move their FBSD well(s) permit date to coincide with the City’s permit date
  • Once the Participant is converted they will adopt the City’s current water conservation plan.
  • The Participant must comply with the City’s ordinance for additional or replacement wells.
  • The participant can only use water from itself or another GRP Participant unless approved in advance by the GRP Administrator.

 

Mandatory Conversion:

§         The City, as the GRP Administrator, retains sole decision-making ability for all conversion decisions but will notify the participant 6 months prior to any conversion.

§         The GRP will receive all conversion credits for the benefit of all participants.

§         The Surface Water Fund will pay for all conversion infrastructures. 

§         If converted, the GRP will pay all costs associated with conversion and operations of the system.

§         The GRP will use its best efforts to supply sufficient volumes of water to maintain their lake levels.

 

Voluntary Conversion:

  • The participant may complete a voluntary conversion project at its expense but the GRP will receive all conversion credits for the benefit of all Participants.
  • Upon request of the Participant the GRP administrator may purchase the voluntary conversion project.

 

Fees:

Pumpage Fee

  • The Participant will pay a pumpage fee for all water unless it is received from another GRP Participant.
  • The Fee is established by ordinance and is currently $.25.
  • All out of City Participants will pay a 20% Out of City Service Charge.
  • Fees collected will be deposited into the City owned and managed Surface Water Fund.

 

Equalization Fee

  • All participants will pay an equalization fee. 
  • Private Utility Systems and MUDS will pay the fee for all water pumped beginning April 1, 2006.  All other Private Well Owners will pay the fee for pumpage beginning September 1, 2007.

 

 

Participation Fee

§         The ETJ MUDs and Private Utility Systems will pay a Participation Fee to reimburse the historical costs paid by City customers in the amount of $35 per ESFC.

 

Metering and Billing

  • The City will read GRP related meter on or about the 1st of each month and send the participant a bill by the 10th of each month.
  • The GRP Administrator and the Participants agree to test all meters yearly, correct any inaccuracies and if measuring equipment is inaccurate make any necessary billing adjustments to reflect the inaccuracy.

 

Term

  • The agreement is in effect for as long as the FBSD Regulatory Plan is in effect
  • The agreement may be terminated by written mutual agreement

 

The GRP Agreement with Plantation Municipal Utility District also includes a section about negotiating with the City in good faith to enter into a Strategic Partnership Agreement

 

There were three other potential participants that have decided not to join the City’s GRP.  They include Venetian Estates P.O.A., who has decided to abandon their wells and purchase water from the City from an adjacent lake.  We are working on a wholesale water contract with them to supply the necessary water.  Fort Bend Utilities and the Greatwood HOA have both determined they can reduce their usage below the 10 million gallon a year threshold for having a GRP.

 

Five of the participants were not able to obtain necessary signatures or approvals to meet our November 6, 2007 timeframe thus we are requesting approval at this meeting for nine GRP agreements as listed below and anticipate bringing the remaining three agreements to Council for approval on November 20, 2007. 

 

Staff is recommending City Council authorize the execution of individual Groundwater Participation Agreements between the City of Sugar Land and Plantation Municipal Utility District,  Sugar Lakes HOA, WSG Sweetwater, New Territory Residential Community Association, Texas Par Golf Association, Royal Valley Utilities, Schlumberger, Avalon CAI, River Park HOA, River Point Golf Course.

 

Exhibits

 

Private Well Participation Agreements

GRP Participant  Well Owners

Contract for Approval

 Contracts for Approval

Owner

November 6, 2007

 November 20, 2007

Private Utilities and MUDs

 

 

Plantation Municipal Utility District

Yes

 

HOA's

 

 

Avalon CAI

Yes

 

New Territory Res. Comm. Assoc.

Yes

 

Sugar Lakes Homeowners Assoc.

Yes

 

River Park HOA

Yes

 

WSG Sweetwater IV, LP

Yes

 

Private Businesses

 

 

Lopez, Marcos (River Point Golf Course)

Yes

 

Texas Par Golf Academy, Inc. (Greatwood)

Yes

 

Schlumberger Technology Corp.

Yes

 

Contracts For November 20 Approval

 

 

Royal Lake Estates HOA

 

Yes

Royal Valley Utilities, Inc. (Royal Lake Est.)

 

Yes

Texas Dept. Criminal Justice (TDCJ)

 

Yes

First Colony Comm. Serv. Assoc.

 

Yes

Sugar Mill Community Assoc.

 

Yes

Will no longer need to have a GRP

 

 

Venetian Estates P.O.A.

Plans to abandon wells; working with City on wholesale contract

Greatwood Comm. Assoc.

Will use less than the 10 million threshold

Fort Bend Utilities Co.

Will use less than the 10 million threshold

 

GroundWater Reduction Plan Participation Agreement

SUGAR LAKES HOME OWNERS ASSOCIATION

 

            This Groundwater Reduction Plan Participation Agreement (Agreement) is entered into effective as of the ___ day of ________, 2007 (Effective Date), between the City of Sugar Land, Texas (City), and Sugar Lakes Home Owners Association (Participant).

 

RECITALS

 

        The Ford Bend Subsidence District (Subsidence District) was created by the Texas Legislature in 1989. In 2003, the Subsidence District adopted its District Regulatory Plan (Regulatory Plan) to reduce subsidence by regulating the withdrawal of Groundwater within Fort Bend County.

 

        The Regulatory Plan requires Groundwater permit holders to limit their Groundwater withdrawals to seventy percent of their water consumption by 2013 and forty percent by 2025. A groundwater reduction plan showing how water conversion goals will be accomplished must be submitted by each Groundwater permit holder to the Subsidence District by January 1, 2008. The City is developing a regional Groundwater Reduction Plan (GRP) to meet the Regulatory Plan requirements.

 

        The Participant is a Groundwater permit holder who operates water well(s) to provide a water supply for itself and its customers. To comply with Subsidence District requirements, the Participant has determined that it is in the Participant’s best interests to contract with the City to participate in the GRP to meet the Subsidence District regulations.

 

AGREEMENT

 

            The Participant and the City agree as follows:

 

 

ARTICLE I.

Definitions

 

In this Agreement:

 

            City means the City of Sugar Land, Texas.

                                   

            Emergency means a mechanical or electrical, or other failure causing a loss of production or distribution capacity or water quality of Participant’s System.

 

            Equalization Fee means the one-time fee charged to the Participant in the amount of $0.25 per 1,000 gallons of Groundwater pumped by Participant between September 1, 2007, and the first day of the month following the effective date of this Agreement.

 

            Groundwater means water obtained from below the surface of the earth.

 

            GRP means the groundwater reduction plan submitted to the subsidence district by the city on behalf of the city and the GRP participants.

 

            GRP Administrator means the city acting in its role of implementing the GRP and managing the surface water fund.

 

            GRP Participant means an entity (including the city and the participant), operating or owning a permitted well, who is part of the GRP.

 

            Mandatory Conversion Project means any water conversion mandated by the GRP Administrator pursuant to this agreement.

 

             Measuring Equipment means equipment, including meters, totalizers and recording devices of a type approved by the GRP Administrator, for measuring and recording the amount of Water produced by, or supplied to, the Participant.

 

            Non-Groundwater means any source of Water other than Groundwater produced from Permitted Wells in Fort Bend County.

 

            Non-GRP Participant means an entity operating or owning a Permitted Well that is not part of the GRP.         

 

            Non-Potable Water means any Water source other than Potable Water, including Reuse Water, treated or untreated Surface Water, partially treated Surface Water, untreated or partially treated Groundwater, or untreated or partially treated captured rainwater.

 

            Non-Potable Water Fee means a fee established by City ordinance that is charged by the City per 1,000 gallons of Non-Potable Water supplied to the Participant by the City.

 

            Out-of-City Service Charge means a surcharge of 20% of total costs charged by the GRP Administrator to Participants located outside the City’s limits.

 

            Participant’s System means all Groundwater wells, pipelines, storage facilities and other facilities comprising the Participant’s treated Water supply and distribution system.

 

            Permitted Well means a Groundwater well that is operating under a permit issued by the Subsidence District.

 

            Point(s) of Delivery means the point or points on the Participant’s System where the City delivers Water to the Participant.

           

            Potable Water means treated drinking water that meets the requirements of all governmental agencies with jurisdiction and all applicable laws, regardless of its source of origin.

             

            Pumpage Fee means the fee established by City ordinance that is charged by the GRP Administrator per 1,000 gallons of: (i) Groundwater pumped by each GRP Participant from a Permitted Well or; (ii) Water supplied to each GRP Participant by the GRP Administrator. The Pumpage Fee shall be charged uniformly to all GRP Participants, with all paying the same per unit amount.  As of the Effective Date, the Pumpage Fee is $0.25 per 1,000 gallons of: (i) Groundwater pumped by each GRP Participant from a Permitted Well, or; (ii) Water supplied to each GRP Participant by the GRP Administrator. The GRP Administrator shall collect and hold Pumpage Fee payments in a segregated account.  The Pumpage Fee is expected to increase from time to time after the Effective Date at the City’s sole discretion. 

 

            Regulatory Plan means the plan developed by the Subsidence District to reduce subsidence by regulating the withdrawal of Groundwater.

 

            Reuse Water means treated wastewater effluent provided for Non-Potable Water needs.

 

            Subsidence District means the Fort Bend Subsidence District.

 

            Surface Water means Water obtained from the surface of the earth and treated to Potable Water.

           

            Surface Water Fund means the enterprise fund created by the City and managed by the GRP Administrator to receive revenues and credits generated under the GRP, and to be used to pay costs associated with the GRP and its implementation.

 

            Voluntary Conversion Project means any Non-Potable Water supply conversion project initiated and funded by a Participant that is not mandated by the GRP Administrator.

 

            Water includes potable water, untreated groundwater, untreated surface water, and reuse water.

 

ARTICLE II.
 Participant’s Permits And Water Demands

 

2.1       Subsidence District Permits and Applications.  All of the Participant’s current permits and pending applications with the Subsidence District are attached as Exhibit A. Participant will use reasonable efforts to change permitting dates so that Participant’s permits from the Subsidence District all expire on June 30.

 

2.2       Historical Use and Demand Projections.

 

        (a)                     The amounts of Groundwater that have been pumped annually in the past three years from the Participant’s Permitted Wells, as provided by the Participant, are listed in the table attached as Exhibit B.

 

(b)                 The Participant’s current projections of the total amount of Water needed annually to meet its Water demands through the year 2030 are listed in the table attached as Exhibit C.  By March 1 of each year, the Participant will provide the GRP Administrator updated estimated projections of total Water demands for the next year.

 

2.3.      Water Conservation and Drought Contingency Plan.  Participant will provide the City with copies of any existing Participant conservation or drought contingency plans. When the Participant receives Water from the City, Participant will adopt and follow the City’s Water Conservation and Drought Contingency Plan.  

 

ARTICLE III.

City Groundwater Reduction Plan

 

3.1.      GRP. The City is developing a GRP to be filed with the Subsidence District. The GRP will include details of all steps necessary for achieving the Groundwater reduction requirements outlined in the Regulatory Plan. 

 

3.2.  Participant Inclusion.  The City will include the Participant in the GRP and will include the pumpage from Permitted Well(s) owned by the Participant in the City’s request for the Subsidence District’s certification of the GRP.   The GRP Administrator and Participant will work together on any matters with the Subsidence District relating to a permit for a currently Permitted Well or a future Permitted Well. 

 

3.3       Water Supply. The Participant must use Water obtained from Participant’s System, the City or another GRP Participant unless an alternate Water source is approved in advance by the GRP Administrator.

 

3.4.      New or Replacement Wells.  Any new or replacement well must comply with the chapter 3 of the City’s Code of Ordinances.

 

ARTICLE IV.

Non-Groundwater Conversion

 

4.1.      Mandatory Conversion.

 

            (a)        To effectuate the GRP and to ensure compliance with the Regulatory Plan, the GRP Administrator will determine if and when Participant must convert to the use of a Non-Groundwater supply.

 

            (b)        If the GRP Administrator requires the Participant to convert to a Non-Groundwater supply, the City will:

 

(i) Contract for or acquire the Non-Groundwater supply to meet the Participant’s conversion amount mandated by the GRP Administrator and pay all costs related to same;

 

(ii) Pay all costs required to secure any necessary real property interests, and to acquire, design, and construct all facilities and improvements necessary to bring a Non-Groundwater supply line source to each Participant’s Point(s) of Delivery;

 

(iii)Pay all costs associated with the design, construction and modification of Participant’s system, and all costs required for the installation of Measuring Equipment and infrastructure at locations determined by the GRP Administrator, so that the Participant can receive Non-Groundwater from the City;

 

(iv) Own, operate, and maintain the Non-Groundwater infrastructure and Measuring Equipment;

 

(v)        Provide Participant with no less than six month’s advance written notice of the conversion date; and

 

(vi) Use its best efforts to supply a sufficient volume of Non-Groundwater to maintain lake levels to an acceptable level.

 

            (c)        The GRP Administrator will use the Surface Water Fund to pay the costs of a Mandatory Conversion Project.

 

            (d)    The GRP will receive any Subsidence District credits generated by a Mandatory Conversion Project and will apply the credits for the benefit of all GRP Participants.

 

4.2. Voluntary Conversion.

 

            (a)        The Participant may voluntarily convert to a Non-Potable Water supply any time.

 

            (b)        The Participant will construct and maintain all facilities and pay all costs incurred in a Voluntary Conversion Project. These costs include any necessary infrastructure, Measuring Equipment, and other costs specific to the Voluntary Conversion Project. When undertaking any Voluntary Conversion Project a Participant will:

 

(i) Request Voluntary Conversion Project approval from the GRP Administrator at least 60 days prior to initiating the Voluntary Conversion Project;

 

(ii) Submit projected changes in Water demand to the GRP Administrator; and

 

(iii) Install, maintain, and operate the appropriate Measuring Equipment needed to properly report volumes of Water used under the Voluntary Conversion Project.

 

            (c)  The GRP will receive any Subsidence District credits generated by a Voluntary Conversion Project and will apply the credits for the benefit of all GRP Participants.

 

            (d)        Upon request of the Participant and at the time the GRP Administrator deems the Voluntary Conversion Project economically beneficial relative to other potential Projects, and in accordance with the projected GRP implementation strategy, the City may reimburse the Participant for the design, construction and acquisition costs of the facilities and real property interests comprising the Voluntary Conversion Project.  Upon reimbursement, the Participant will convey the facilities and associated real property interests to the City. Thereafter, the City will own, maintain and operate the facilities. The GRP Administrator will use the Surface Water Fund to reimburse the Participant for the costs incurred with a Voluntary Conversion Project.

 

ARTICLE V.

Fees and Payment

 

5.1.      Pumpage Fee.

 

(a)        The Participant will pay the GRP Administrator the Pumpage Fee for all Water, except for Water received by the Participant from another GRP Participant.

 

            (b)        The GRP Administrator will deposit all Pumpage Fee payments into the Surface Water Fund.

 

5.2.      Out-of-City Service Charge. Participants outside the City limits will pay the Out-of-City Service Charge until the City annexes the area containing the Participant’s Groundwater wells. 

 

5.3.      Equalization Fee.  No later than 30 days after execution of this Agreement, the Participant will provide the City with Groundwater pumpage data to allow the City to calculate the Equalization Fee.  Upon receipt of Participant’s data, the City will notify the Participant as to the amount of the Equalization Fee and will provide documentation verifying its calculation.  Participant will pay the Equalization Fee to the City within 60 calendar days following the Participant’s receipt of such notice by the City.

           

5.4. Billing and Payment.

 

(a)        Each month, the GRP Administrator will read the Participant’s meter(s) and prepare a report of the Participant’s total Water use for the previous month, as metered from either Permitted Wells or Non-Groundwater sources. The GRP Administrator will send a statement of charges to the Participant showing the calculation of monthly charges.

 

            (b)     Payment must be delivered by the due date to the City’s Treasury Department, P.O. Box 5029, Sugar Land, Texas 77487-5029, or the department and address as specified by the City in writing from time-to-time.

           

5.5.      Past Due Payments. Interest will accrue as per the terms set forth in Chapter 5 of the City’s Code of Ordinances, as amended from time to time.

 

 

ARTICLE VI.

Performance by the Parties

 

6.1.      Delivery Limitations. The Participant is not guaranteed any specific quantity or pressure of treated Water whenever the City’s Water supply is limited or when the City’s equipment may become inoperative because of unforeseen breakdown or scheduled maintenance and repairs.  The City will not be liable for failure to furnish any specific amount of pressure or treated Water.

 

6.2.      Operation of the Participant’s System.  After the City commences supply of Water to the Participant, the Participant agrees to correct any practices or operating conditions of the Participant’s System that may damage the City’s system.  If Participant fails to repair or otherwise remedy any such practice or condition within 30 days of receiving written notice thereof, or if the City is required to make such repairs in an emergency situation, or if damage has occurred, the Participant will promptly reimburse the City for the actual cost of repairs or replacements necessary to repair the damage upon submission of evidence of same.

 

6.3       Operation of City’s System. After the City commences supply of Water to the Participant, the City agrees to correct any practice