HomeMy WebLinkAboutPR 18555: LOWER NECHES VALLEY AUTHORITY WATER SUPPLY CONTRACT P. R. NO. 18555
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RESOLUTION NO.
A RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A
MUNICIPAL WATER SUPPLY CONTRACT WITH THE LOWER NECHES
VALLEY AUTHORITY
WHEREAS, per Resolution No. 04-424, the City Manager was
authorized to execute a water supply contract with the Lower Neches
Valley Authority (LNVA) ; and
WHEREAS, the current contract is a Standard LNVA Agreement
which will expire on December 15, 2014 and it does not have
provisions regarding the sale of water for industrial purposes; and
WHEREAS, due to the fact that the City wishes to buy larger
quantities of water from the LNVA for industrial use, the City is
not in a position to enter into a standard LNVA agreement at this
time; and
WHEREAS, the LNVA is willing to enter an interim agreement
with the City for a period of three (3) years, which will allow for
water purchases until such time as the industrial demand for the
City' s water can be determined, leveled out and accurately
allocated, at which time the City will be able to predict amounts
with greater accuracy to enter into a Standard LNVA Municipal
Contract; and
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WHEREAS, the City deems it in the public interest to enter
into a Municipal Water Supply Contract with the LNVA, which will
also allow for the sale of water for both municipal and industrial
purposes, in substantially the same form as attached hereto as
Exhibit "A" .
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF PORT ARTHUR:
Section 1. That the facts and opinions in the preamble are
true and correct.
Section 2 . That the City Manager is hereby authorized to
enter into a Municipal Water Supply Contract with the LNVA, in
substantially the same form as attached hereto as Exhibit "A" .
Section 3. That a copy of the caption of this Resolution
shall be spread upon the Minutes of the City Council .
READ, ADOPTED, AND APPROVED, this day of
2014 AD, at a Regular Meeting of the City Council of the City of
Port Arthur, Texas by the following vote: AYES:
Mayor: ;
Councilmembers :
NOES:
Mayor
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ATTEST:
Sherri Bellard, City Secretary
APPROVED AS TO FORM:
V761J- I . /
Valecia Tizeno00'City Attorney
APPROVED FOR ADMINISTRATION:
John A. Comeaux, P. E.
Interim City Manager
-4,--, 4
ohn A. T.4 plait
As ' stant Director Utility Operations
5.41,_41i Plit _,2, ------ ,
. .n Polka, P. E.
Public Works Director/City Engineer
APPROVED AS TO AVAILABILITY OF FUNDS:
OSititZted(1/62-
Deborah Echols, Director of Finance
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EXHIBIT "A"
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LOWER NECHES VALLEY AUTHORITY
MUNICIPAL WATER SUPPLY CONTRACT
WITH PERMISSION TO SELL INDUSTRIAL TREATED WATER
CITY OF PORT ARTHUR, TEXAS
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
THIS CONTRACT AND AGREEMENT made and entered into this the day of
September, 2014, and effective as of the 1st day of October, 2014 (hereinafter referred to as the
"effective date") by and between LOWER NECHES VALLEY AUTHORITY, a political
subdivision of the State of Texas,having an office in Beaumont,Jefferson County,Texas hereinafter
referred to for convenience as"LNVA",and the City of Port Arthur,Texas, a municipal corporation
authorized to do business in the State of Texas, acting herein by and through the City Manager of
said corporation who is hereunto duly authorized by a Resolution of the City Council of said City,
hereinafter called"CITY".
Whereas the Water Supply Agreement between the Parties will expire in December 2014; and
Whereas the CITY would like to buy additional water from the LNVA for sale to an industrial client
(client) in large quantities but City is not in a position to enter into a LNVA Standard Agreement
regarding the total amount of water needed or allocating the annual quantity of water at this time;and
Whereas the LNVA has agreed to an interim agreement so that CITY will be able to determine the
annual quantity of water it will use and allocate monthly, the annual quantity of water it will use
under a Standard LNVA Water Purchase Agreement; and
Whereas the LNVA desires to assist the CITY in allowing CITY to sell to this industrial client; and
Whereas the amount of municipal water purchased by the CITY can be determined by taking the
CITY's total quantity of water that goes through the LNVA meter and subtracting from it the amount
of water billed by the CITY to the industrial client. The total volume of water passing through the
LNVA meter shall be portioned as either Municipal or Industrial water and billed to the City at the
appropriate rate as established from time to time by the LNVA Board of Directors; and
Whereas the LNVA is willing to enter into a municipal and industrial three year agreement for water
purchases until such time as this industrial demand for the CITY's water can be determined, leveled
out and accurately allocated, at which time the CITY will be able to predict amounts with greater
accuracy to enter into a Standard LNVA Municipal Contract; with additions being made for
industrial sales of treated water by the CITY.
WITNESSETH :
fFINAL OCT 10 2014 Port Arthur Municipal Contract with Permission to Sell Industrial Treated Water Page 1
DRAFT
October 14,2014October 10,2014
In consideration of the mutual agreements herein contained,LNVA,agrees to sell and CITY agrees
to buy water upon the terms and conditions and for the consideration hereinafter set forth:
1. Requirements Contract: Subject to the other provisions of this Contract,LNVA agrees
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to sell and deliver raw water to the CITY,and the CITY agrees to purchase all of its requirements for
raw water at the delivery point hereinafter specified by the CITY.
2. Quality: The water to be delivered by LNVA and received by CITY hereunder shall be
raw water, and LNVA shall not be obligated to treat such water in any manner,provided,however,
that CITY shall not be obligated to receive water and pay for same for any period during which it
shall contain per gallon,at the delivery point,hereinafter specified, in excess of: Ten(10)grains of
sodium chloride; and Fifteen (15) grains of encrusting solids in carbonates of magnesium and
calcium. And there shall be no liability,whatsoever,on the part of LNVA for failure to furnish and
deliver the quality of water specified in this Section 2. It is expressly understood and agreed that
there is and shall be no warranty or covenant expressed or implied upon the part of LNVA that said
water shall be suitable for use by CITY, and it is understood that CITY is to filter and/or otherwise
treat said water in order to render it suitable for its use.
• 3. Delivery Point: The delivery point for water sold and purchased hereunder for CITY'S
operations shall be at a point on LNVA'S canal heretofore selected and designated by CITY,
adjacent to or in the vicinity of CITY'S plant. CITY has constructed and agrees to operate,maintain
and reconstruct,at CITY's own cost and expense,all facilities necessary to take the water purchased
hereunder from the canal of LNVA. The equipment and facilities so constructed, operated,
maintained and reconstructed by CITY shall be and remain the property of CITY.
4. Measuring Equipment: LNVA has heretofore furnished and installed and in the future
will operate and maintain at its expense, at the delivery point of water for CITY'S operations, the
necessary meter of standard type to measure properly the water delivered under this agreement. The
meter or meters and other equipment so installed shall be and remain the property of LNVA,and the
same shall be used in determining the quantity of water delivered to CITY under this contract and the
following provisions in reference thereto shall apply:
CITY shall have access to said metering equipment at all reasonable times, but the reading
and calibrating and adjustment thereof shall be done only by the employees or agents of LNVA. For
the purpose of this contract the original record of readings of the meter or meters shall be the journal
or other record book of LNVA in its office into which the records of the employees or agents of
LNVA who takes meter readings is or may be transcribed and LNVA will,upon request,give CITY
a copy of such journal or record book or permit CITY to have access to same at the office of LNVA
during business hours. LNVA agrees to include the Daily Water Use Reports to the CITY with the
monthly bills.
Not more than once each calendar quarter, on a date as near the last day of the month as
practicable, LNVA must calibrate its meters if requested by CITY to do so, in the presence of
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representatives of CITY,and the parties shall jointly observe any adjustments which are made to the
meters,should such adjustments be necessary,and if the check meters hereinafter provided for have
been installed,the same shall also be calibrated by CITY in the presence of representatives of LNVA
and the parties shall jointly observe any adjustments,should such adjustments be necessary. If CITY
shall request LNVA to calibrate its meters and LNVA shall have given CITY notice of the time when
any such calibration is to be made a sufficient length of time in advance to enable CITY to have its
representatives present, and if representatives are not present at the time set, LNVA may proceed
with said calibration and adjustments in the absence of CITY'S representatives.
If either party at any time observes a variation between the delivery meter or meters and the
check meter or meters,if any such check meter or meter is or are installed,it will promptly notify the
other party and the parties will then cooperate to secure an immediate calibration test and joint
observation of any adjustment and the meter or meters shall then be adjusted to accuracy. Each party
shall give to the other party forty-eight(48)hours notice of the time of all tests of meters so that the
other party may conveniently have its representatives present.
If,upon any test,the percentage of inaccuracy of any metering equipment is found to be in
excess of two percent(2%),registrations thereof shall be corrected for a period extending back to the
time such inaccuracy occurred,if such time is ascertainable,and if not ascertainable,then back one-
half(%)of the time elapsed since the last date of calibration. If,for any reason,any meters are out of
service and/or out of repair so that the amount of water delivered cannot be ascertained or computed
from the readings thereof, the water delivered through the period such meters are out of service
and/or out of repair shall be estimated and agreed upon by the parties hereto upon the basis of the
best data available, using the first of the following methods which is feasible:
A. By using the registration of any check meter or meters if installed and accurately
registering;
B. By correcting the error if the percentage of error is ascertainable by calibration test of
mathematical calculation; or
•
C. By estimating the quantity of delivery by deliveries during preceding periods under
similar conditions when the meter or meters was or were registering accurately.
CITY may, at its option and expense, install and operate check meters to check each meter
installed by LNVA but measurement of water for the purpose of this agreement shall be by LNVA'S
meters only,except in case hereinabove specifically provided to the contrary. Check meters shall be
of the orifice or venturi type and of standard make, and shall be subject at all reasonable times to
inspection and examination of LNVA,but the reading,calibration and adjustment shall be done only
by CITY,except during any period where a check meter may be used under the provisions hereof for
measuring the water delivered when the reading,calibration and adjustment hereof shall be made by
LNVA with like effect,as if such check meter or meters has or have been furnished and installed by
it.
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5. Unit of Measure: The unit of measure for water delivered hereunder shall be One
Thousand (1,000) Gallons of water U.S. Standard Liquid Measure.
6. Price and Payment for Water: For the purpose of billing and accounting,the day shall
begin at 10:00 a.m. on a day and extend to 10:00 a.m. the next day, and the billing month as used
under this contract shall begin at 10:00 a.m.on the first day of each calendar month and end at 10:00
a.m. on the first day of the succeeding calendar month.
The bill for any month shall be paid by CITY at LNVA'S office in Jefferson County,Texas
. on or before the 15th day of the calendar month during which the bill is received by CITY. Should
CITY fail to pay any amount due LNVA hereunder,when same is due,and should such failure to pay
continue for sixty (60) days, LNVA may suspend deliveries of water hereunder.
LNVA has established and charges for all municipal customers for municipal use the
standard rates for water which are set out in Exhibit"A"which is attached hereto and made a part
hereof as fully and to the same extent as if copies hereto in full.
LNVA also establishes and charges all industrial customers the standard rates for water
which are set out in Exhibit"A"which is attached hereto and made a part hereof as fully and to the
same extent as if copies hereto in full.
It is expressly understood and agreed that LNVA shall have the right at any time during the
period of this contract to change the above set forth standard scheduled rates charged its customers
for water, and in the event, such rates are lowered, CITY shall have the advantage of same
immediately when they become effective, and if said rates are made higher or different,the CITY
hereby agrees to pay for water under such higher or different rates,if taken. LNVA retains the right
to Audit City's Billing to Industrial Clients.
CITY agrees to take and pay for water under the rates set out in said Exhibit "A" or such
amended rate as may hereafter be adopted by the Board of Directors of LNVA.
For this contract the CITY will pay to the LNVA for its Municipal Water the total amount of
water going through LNVA's meter minus the certified volume the CITY shall bill to the industrial
client times the Municipal Rate plus the certified amount that the CITY sells to the Industrial Client
times the industrial rate. The sum of these numbers shall be for the amount of water billed to
the CITY.
Cost of water = (LNVA meter volume — certified volume billed to industrial customer) X
(Municipal Rate) + certified volume billed to industrial customer X industrial rate = Total owed
LNVA from CITY
7. Limitation on Quantity: Anything in this contract to the contrary notwithstanding, it is
understood and agreed by the parties hereto that in no event shall LNVA be obligated to deliver to
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CITY more water than LNVA shall have available through its present plant facilities and equipment,
and LNVA shall not be obligated to extend nor enlarge its plant facilities or equipment for the
purpose of supplying demands to CITY under this contract. Should LNVA at any time,by reason
of a shortage resulting from any of the causes mentioned in Section 11.039 of the Texas Water
Code or by reason of any of the happenings or conditions mentioned in Paragraph 8,below,
not have available sufficient water to furnish to all parties having contracts with LNVA the
water to which they are otherwise entitled under the terms of such contracts,then and in that
event the water available will be distributed and divided as required by said Section 11.039 of
the Texas Water Code.
8. Force Majeure: In the event of either party being rendered unable,wholly or in part,by
. force majeure to carry out its obligations under this contract, other than the obligations to make
payments of amounts accrued and due hereunder at the time thereof, it is agreed that on such party
giving notice and full particulars of such force majeure in writing or by telefacsimile to the other
party within a reasonable time after the occurrence of the cause relied on,then the obligations of the
party giving such notice,so far as they are affected by such force majeure shall be suspended during
the continuance of any liability so caused but for no longer period, and such cause shall so far as
possible be remedied with all reasonable dispatch. The term "force majeure" as employed herein
shall mean and include, without limitation, acts of God, strikes, lockouts, or other industrial
disturbances, acts of the public enemy,wars,blockades,insurrections,riots, epidemics,landslides,
lightening,earthquakes,fires,hurricanes,storms,floods,washouts,droughts,arrests,and restraint of
Government and people, civil disturbances, explosions, breakage or accident to machinery and/or
canals, partial drought or entire failure of the supply of water, or inability on the part of LNVA to
deliver water hereunder or all of the water contracted for hereunder on account of contractual rights
of others or on account of the prior rights to other users to the supply of water at the source of the
supply arising by operation of law, or any other causes, whether of the kind herein enumerated or
otherwise not reasonably within the control of the party claiming suspension. It is understood and
agreed that the settlement of strikes or 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 or lockouts be acceding to the
demands of opposing party when such course is inadvisable in the discretion of the party having the
difficulty.
9. Other Purchases: It is expressly understood and agreed that during any period that
LNVA fails to deliver to CITY water meeting contract specifications or is unable to perform its
obligations hereunder, CITY shall have the right during the continuance of such failure, or such
inability,to obtain water from other sources.
10. Non-Waiver: The failure of either party hereto to insist, in any one or more instances,
upon performance of any of the terms,covenants,or conditions of this contract shall not be construed
as a waiver or a relinquishment of the future performance of any such term,covenant,or condition of
the other party hereto,but the obligation of such party with respect to such future performance shall
continue in full force and effect.
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No officer or agent of LNVA or CITY is authorized to waive or modify any provision of this
Agreement. No modifications to or rescission of this Agreement may be made except by a written
document signed by LNVA's and CITY's authorized representatives.
11. Term: This contract shall be for a term commencing at 12:01 a.m. on the effective date
of this contract and ending three years from such time and date. CITY has the option to enter into a
new contract for three successive five (5) year periods, upon the terms and conditions out of the
LNVA Standard Municipal Contract,as modified with permission to sell Industrial Treated Water,
executed prior to the expiration of the term of this contract or any renewal term by the persons then
authorized to enter into contracts on behalf of LNVA and CITY.
12. Resale by CITY: CITY represents and warrants to LNVA that it is purchasing the raw
water in this Contract for its own use and consumption for municipal purposes and to sell treated
water for industrial purposes. CITY will inform the LNVA and provide a copy of any contract to sell
industrial water to any third party to the LNVA.Failure to comply with this provision shall constitute
a breach of this Contract. For the purpose of this Contract,municipal purposes shall mean water sold
to a municipality for domestic and municipal uses by the CITY to include traditional residential,
commercial, sanitary, landscape irrigation and fireflow uses that is not industrial or agricultural as
defined in Texas Water Code §11.024.
13. Assignment: This agreement shall enure to the benefit of, and be binding upon the
parties hereto and their respective successors and assigns.
14. Notice: Any notice required or authorized to be given under the terms and provisions of
this contract will be in writing and will be delivered in person at the office address or in the
alternative will be delivered by registered mail addressed to the post office address which is set out
below following the name of the party to whom notice is being given. Said offices and mailing
addresses will be considered as remaining in effect until such time as notice of a change of address is
. given by one party to the other in writing as herein provided in this paragraph.
15. Place of Performance: This contract is made and entered into in Beaumont, Jefferson
County, Texas,is performable in all particulars in said Jefferson County,Texas, shall be construed
and enforced in accordance with the laws of the State of Texas and any cause of action hereunder
shall be filed and maintained in a court of competent jurisdiction in Jefferson County, Texas.
16. Dispute Regarding Payment. If CITY at any time disputes the amount to be paid by it
to LNVA, CITY shall nevertheless promptly make the disputed payment or payments; but, if it is
subsequently determined by agreement or court decision that the disputed amount paid by CITY
should have been less or more, LNVA shall promptly revise and reallocate CITY'S payments in a
manner that CITY or LNVA will recover the amount due.
If a court, the Texas Commission on Environmental Quality, or any federal or state regulatory
authority finds that LNVA's rates or policies for delivering water to CITY under this Agreement are
unreasonable or otherwise unenforceable,LNVA has the option to terminate this Agreement without
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liability to CITY. By signing this Agreement, CITY stipulates and agrees that LNVA and its other
Municipal Customers will be prejudiced if CITY avoids the obligation to pay the rates for water
specified in this Agreement while accepting the benefits of obtaining water from the LNVA.
Nothing in this Agreement shall be construed as constituting an undertaking by LNVA to furnish
water to CITY except pursuant to the terms of this Agreement. If CITY initiates or participates in any
proceeding regarding LNVA's rates and policies under this Agreement and advocates a position that
is adverse to LNVA and LNVA prevails,CITY shall pay LNVA for its expenses,including attorneys'
• fees, in the proceeding within fifteen(15)days after LNVA's demand for payment. CITY stipulates
and agrees that the rates and policies specified in this Agreement are just, reasonable, and without
discrimination.
17.Responsibility For Water. Once the water supplied hereunder to CITY passes through
the Point of Delivery, CITY hereby agrees to save and hold LNVA harmless from all claims,
demands, and causes of action which may be asserted by anyone on account of the quality,
transportation and delivery of said water. Further, in consideration for receiving the water, CITY
releases,waives,discharges and covenants not to sue the LNVA,The State of Texas,their officers,
agents,servants,or employees(hereinafter referred to as Releasees)from any and all liability,claims,
demands, actions and causes of action whatsoever arising out of or related to any loss, damage, or
injury, including death, that may be sustained by CITY or its employees, or any of the property
belonging to CITY, whether caused by any sole or comparative negligence of the Releasees, or
otherwise, for supplying and/or not supplying the water or for any other cause.
• 18. Commission Rules. The effectiveness of this Agreement is dependent upon LNVA and
CITY complying with the rules of the Texas Commission of Environmental Quality(Commission),
specifically including the rules codified as Texas Administrative Code, Title 30, §§ 295.101 and
297.101-.108 as of the effective date of this Agreement. CITY shall submit to LNVA written reports
each month indicating the total amount of water diverted under this Agreement each week and each
month.
19.Regulatory Requirements.This Agreement is subject to all applicable federal,state,and
local laws and any applicable ordinances, orders,and valid rules and regulations of any local,state,
or federal governmental authority having jurisdiction.However,nothing contained in this Agreement
shall be construed as a waiver of any right to question or contest any law, ordinance, order,rule, or
regulation in any forum having jurisdiction, and LNVA and CITY each agree to make a good faith
effort to support proposed laws and regulations which would be consistent with the performance of
this Agreement in accordance with its terms.
20.Water Conservation Plans. Drought Contingency Plan: This Contract is subject to
the LNVA Drought Contingency Plan, on file in the LNVA's Office, in Beaumont, Texas, and
which provides that in case of a shortage of water, resulting from drought, the water to be
distributed shall be divided in accordance with Texas Water Code§11.039 and also provides
for procedures for granting variances to the plan and procedures,and for the enforcement of
any mandatory water use restrictions including specification of penalties (e.g., liquidated
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damages,water rate surcharges,discontinuation of service)for violations of such restrictions.
CITY shall cooperate with and assist LNVA in its efforts to develop and implement plans,
programs, and rules to develop water resources and to promote practices, techniques, and
technologies that will reduce the consumption of water, reduce the loss or waste of water, improve
the efficiency in use of water, or increase the recycling and reuse of water. LNVA's obligations
under this Agreement shall be subject to CITY preparing and implementing a water conservation
plan or water conservation measures, as well as implementing any water conservation plans and
drought contingency plans adopted by LNVA and required or approved by the Commission, the
Texas Water Development Board,or any other federal,state,or local regulatory authority with power
to require or approve water conservation and drought contingency plans. Upon execution of this
Agreement, CITY shall submit its' water conservation plan and/or water conservation measures to
LNVA for its review and approval.
CITY is granted the right to treat and to resell LNVA's water to industrial clients. CITY shall
require through a contract condition that any successive user of LNVA's water must implement water
conservation measures that comply with the State's,the LNVA's,and CITY'S water conservation plans,
programs, and rules.
LNVA has adopted a Water Conservation and Drought Contingency Plan. If CITY fails to
implement LNVA's and its own Drought Contingency Plan when trigger conditions occur, LNVA's
General Manager is authorized to institute rationing pursuant to any applicable wholesale water
contracts, including this Agreement, as well as to enforce any contractual, statutory,or common law
remedies available to LNVA necessary to protect the public welfare. LNVA's water made available to
CITY when CITY is not in compliance with LNVA's Water Conservation and Drought Contingency
Plan will be reduced to the amount of water that the LNVA's General Manager estimates would be
necessary to satisfy CITY'demand if CITY was operating in compliance with both LNVA's and CITY'
Drought Contingency Plans.
21. Source and Adequacy Of Supply. Water supplied by LNVA to CITY under this
Agreement shall be from the LNVA System and from no other source, unless LNVA, at its sole
discretion, decides to supply water from another source available to LNVA. LNVA and CITY
• hereby agree that CITY shall have no right or entitlement to any portion of LNVA's water in the
LNVA System after the expiration of the term of this Agreement. LNVA will use its best efforts to
remain in a position to furnish raw water sufficient for the reasonable demands of CITY. LNVA's
agreement to provide water to CITY shall not be deemed a guarantee on LNVA's part that any
particular quantity of water will be available, and the quantity of water taken shall at all times be
subject to the right of LNVA to reduce said quantity of water as the LNVA,in its sole judgment,may
deem necessary in order to meet the LNVA's commitments under its existing contracts,comply with
. any order of any court or administrative body having appropriate jurisdiction, reduce flooding, or
prevent injury.
LNVA's rights to maintain and operate the reservoirs owned or used by LNVA and its water
transportation facilities and at any and all times in the future to impound and release waters thereby in
any lawful manner and to any lawful extent LNVA may see fit is recognized by CITY, and, except as
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otherwise provided herein, there shall be no obligation hereunder upon LNVA to release or not to
release any impounded waters at any time or to maintain any waters at any specified level. Further,if
the permitted yield of the LNVA System is reduced by the Commission, LNVA reserves the right to
• decrease the Annual Quantity by a like percentage.
22. Raw Water Quality. THE WATER WHICH THE LNVA OFFERS TO SELL TO
CITY IS NON-POTABLE, RAW, AND UNTREATED. CITY HAS SATISFIED ITSELF
THAT SUCH WATER IS SUITABLE FOR ITS NEEDS. THE LNVA EXPRESSLY
DISCLAIMS ANY WARRANTY AS TO THE QUALITY OF THE RAW WATER OR
SUITABILITY OF THE RAW WATER FOR ITS INTENDED PURPOSE. THE LNVA
. EXPRESSLY DISCLAIMS THE WARRANTIES OF MERCHANTABILITY AND FITNESS.
CITY AGREES THAT ANY VARIATION IN THE QUALITY OR CHARACTERISTICS
OF THE RAW WATER OFFERED FOR SALE AS PROVIDED BY THIS AGREEMENT
SHALL NOT ENTITLE CITY TO AVOID OR LIMIT ITS OBLIGATION TO MAKE
PAYMENTS PROVIDED FOR BY THIS AGREEMENT. THERE ARE NO WARRANTIES
WHICH EXTEND BEYOND THE DESCRIPTION CONTAINED IN THIS AGREEMENT.
CITY ASSUMES FULL RESPONSIBILITY WITH RESPECT TO THE TREATMENT OF
THE WATER PRIOR TO ITS DISTRIBUTION FOR HUMAN CONSUMPTION OR ANY
OTHER USES.
23. Return Flows. CITY acknowledges that some of the water supplied to it by LNVA may
be returned to watercourses in the Neches River Basin,adjacent coastal basins,or associated bay and
estuary systems as return flows. LNVA and CITY believe that the most economical means for
meeting some of the future demands of the LNVA's CITYs may involve the use of return flows to
extend or enhance the yield of LNVA's water supplies. CITY agrees that it will provide LNVA with
a monthly report on the return flows resluting from CITY's use of Water under this Agreement and
that LNVA has the right, subsequent to CITY's use of water purchased from LNVA, to make
whatever reuse of the water LNVA deems desirable. CITY will receive no compensation,credit,or
off-set for making return flows available to LNVA.
24. Other Charges. In the event that any sales or use taxes,or taxes,assessments, storage
fees, storage assessments or charges of any similar nature are imposed on diverting, storing,
delivering,gathering,impounding,taking,selling,using,or consuming the water received by CITY
from the LNVA System, the amount of the tax, assessment, or charge shall be borne by CITY, in
addition to all other charges,and whenever LNVA shall be required to pay,collect,or remit any tax,
assessment, or charge on water received by CITY, then CITY shall promptly pay or reimburse
LNVA for the tax, assessment, or charge in the manner directed by LNVA.
25. Default In Payments. All amounts due and owing to LNVA by CITY shall,if not paid
. when due, bear interest at the Texas post judgment interest rate set out in TEX. FIN. CODE ANN. §
304.003 (Vernon Supp. 1998),or any successor statute,from the date when due until paid,provided
that such rate shall never be usurious or exceed the maximum rate permitted by law. If any amount
due and owing by CITY to LNVA is placed with an attorney for collection, CITY shall pay to
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LNVA,in addition to all other payments provided for by this Agreement,including interest,LNVA's
collection expenses, including court costs and attorneys'fees. LNVA shall,to the extent permitted
by law, suspend delivery of water from the LNVA System to CITY if CITY remains delinquent in
any payments due hereunder for a period of sixty(60) days and shall not resume delivery of water
while CITY is so delinquent and may,at its option,terminate this Agreement without further liability
to CITY. LNVA shall pursue all legal remedies against CITY to enforce and protect the rights of
LNVA,,and the holders of LNVA's bonds. It is understood that the foregoing provisions are for the
benefit of the holders of the LNVA's bonds.
26. Termination. If LNVA decides to terminate this Agreement, as provided by this
Agreement, LNVA shall deliver written notice of the decision to CITY. CITY shall discontinue
taking water from LNVA under this Agreement within one hundred eighty(180) days after LNVA
delivers written notice to CITY.
27. Remedies. It is not intended hereby to specify (and this Agreement shall not be
considered as specifying)an exclusive remedy for any default,but all such other remedies(other than
termination) existing at law or in equity may be availed of by any party hereto and shall be
cumulative. Recognizing, however, that failure in the performance of any party's obligations
hereunder could not be adequately compensated in money damages alone, each party agrees in the
event of any default on its part that each party shall have available to it the equitable remedy of
mandamus and specific performance,in addition to any other legal or equitable remedies(other than
termination)which also may be available to LNVA. Nothing in the agreement should be construed
as a waiver or relinquishment of LNVA's statutory of governmental immunities.
28. Non-Assignability. CITY understands and agrees that any assignment of rights or
delegation of duties under this Agreement is void without the prior written consent of LNVA.
29. No Third-Party Beneficiaries. This Agreement shall inure only to the benefit of the
parties hereto and third persons not privy hereto shall not, in any form or manner, be considered a
third-party beneficiary of this Agreement. Each party hereto shall be solely responsible for the
fulfillment of its CITY contracts or commitments, and LNVA shall not be construed to be
responsible for CITY's contracts or commitments by virtue of this Agreement or any provision
contained herein.
30. Relationship Of The Parties.This Agreement is by and between LNVA and CITY and
is not intended, and shall not be construed to create, the relationship of agent, servant, employee,
partnership,joint venture,or association as between LNVA and CITY nor between LNVA and any
officer, employee, contractor, or representative of LNVA. No joint employment is intended or
created by this Agreement for any purpose. CITY agrees to so inform its employees, agents,
contractors,and subcontractors who are involved in the implementation of or construction under this
Agreement.
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31. Sole Agreement. This Agreement constitutes the sole and only agreement of CITY and
LNVA and supersedes any prior understanding or oral or written agreements between LNVA and
CITY respecting the subject matter of this Agreement,including any oral or written agreement with
LNVA that CITY obtained by assignment.
32. Severability. The provisions of this Agreement are severable,and if,for any reason,any
• one or more of the provisions contained in this Agreement shall be held to be invalid, illegal, or
unenforceable in any respect,the invalidity,illegality,or unenforceability shall not affect any other
provision of this Agreement, and this Agreement shall remain in effect and be construed as if the
invalid, illegal, or unenforceable provision had never been contained in the Agreement.
33. Notices. All notices,payments,and communications(collectively"notices")required or
allowed by this Agreement shall be in writing and be given by hand-delivery or by depositing the
notice in the United States mail, postage prepaid, registered or certified, with return receipt
requested, and addressed to the party to be notified. Notice deposited in the mail in the previously
described manner shall be conclusively deemed to be effective from and after the expiration of three
(3) days after the notice is deposited in the mail. For purposes of notice, the addresses of and the
designated representative for receipt of notice for each of the parties shall be shown above the
signatures of the individuals who signed this Agreement on behalf of LNVA and CITY. Either party
may change its address by giving written notice of the change to the other party at least fifteen(15)
days before the change becomes effective.
34. Duplicate Originals. CITY and LNVA, acting under the authority of their respective
governing bodies, shall authorize the execution of this Agreement in several counterparts, each of
which shall be an original. CITY shall submit written evidence in the form of bylaws, charters,
resolutions,or other written documentation specifying the authority of CITY's representative to sign
this Agreement, which evidence shall be attached to this Agreement as Exhibit 4.
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35. Pledge of Revenue. CITY represents and covenants that all payments to be made by it
under this Agreement shall constitute reasonable and necessary operating expenses of its system as
defined in Tex. Gov't. Code Ann. §§ 1502.056-.058(Vernon 2001),and that all such payments will
be made from the revenues of its water system. CITY represents and has determined that the water
supply to be obtained from the LNVA System is absolutely necessary and essential to the present and
future operation of its facility and is the only available and adequate source of supply of water
therefore, and, accordingly, all payments required by this Agreement to be made by CITY shall
constitute reasonable and necessary operating expenses of CITY's plant and system or systems as
• described above with the effect that the obligation to make such payments from revenues of such
system or systems shall have priority over any obligation to make any payments from such revenues,
whether of principal, interest, or both, with respect to all bonds heretofore or hereafter issued by
CITY.
CITY agrees throughout the term of this Agreement to continuously operate and maintain its
water system and to fix and collect such rates and charges for water services to be supplied by its water
system as will produce revenues in an amount equal to at least (i) all of its payments under this
• Agreement and (ii) all other amounts as required by the provisions of the ordinances or resolutions
authorizing its revenue bonds or other obligations now or hereafter outstanding.
Unless otherwise specifically provided in writing by subsequent agreement between LNVA and
CITY, LNVA shall never have the right to demand payment by CITY of any obligation assumed or
imposed on it under this Agreement from funds raised or to be raised by taxation, it being expressly
understood by LNVA and CITY that all payments due by CITY are to be made from the revenues and
income received by CITY from the ownership and operation of its plant or facility.
IN WITNESS WHEREOF,the LNVA and CITY have caused this Contract and Agreement to
be executed by their respective duly authorized officers and have caused their respective seals to be
hereunto affixed as of the effective date above stated.
. ATTEST LOWER NECHES VALLEY AUTHORITY, LNVA
Office Address: Mailing Address:
7850 Eastex Frwy. P. O. Box 5117
Beaumont, TX 77708 Beaumont, TX 77726-5117
Secretary President
CITY OF PORT ARTHUR, TEXAS, CITY
Mailing Address:
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P.O. Box 1089
Port Arthur, Texas 77641
By
ATTEST:
Secretary
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Lower Neches Valley Authority
Water Rates Schedule
Raw Water Rate Schedule 2013 Rate 2014 Rate Rate %
with water supply project 1,000 gallons Acre Foot 1,000 gallons Acre Foot Change Change
Contracted
Mining-Reservoir $0.53 $172.70 $0.58 $188.99 $0.05 9%
Spot Purchase/Excess Rate $0.40 $130.34 $0.44 $143.37 $0.04 10%
Industrial-Contracted(1) $0.28 $91.24 $0.31 $101.01 $0.03 11%
Municipal-Contracted{1) $0.22 $71.69 $0.24 $78.20 $0.02 9%
Agriculture Water
Biofuel Crop Irrigation $0.27 $86.35 $0.30 $97.76 $11.41 13%
Rice Irrigation Rate(2) $0.07 $22.00 $0.07 $24.00 $2.00 9%
Crawfish Water $0.07 $22.00 $0.07 $24.00 $2.00 9%
Ag-Rice Crop $0.07 $22.00 $0.07 $24.00 $2.00 9%
Ag-Turf/Hay/Leveling/Livestock, othe $0.07 $22.00 $0.07 $24.00 $2.00 9%
Other
Reservation Rate-Industry $0.14 $45.62 $0.16 $50.51 $0.02 14%
Reservation Rate-Municipality $0.11 $35.84 $0.12 $39.10 $0.01 9%
Duck Water(Recreation) $75/acre $750 min $75/Acre $750 min 0 0%
Potable Water(Bolivar SUD) $37,700 /Month $40,786 /Month $ 3,086 9%
$0.73 /1,000 gal. $0.77 /1,000 gal. $0.04 6%
North Regional Water Treatment 100%Cost Reimbursement 100%Cost Reimbursement
Plus: Management Fee $7,500 /Month $7,500 /Month $0 0%
30%of Operating Labor(Est.) $34,904 /Month $36,249 /Month $1,345 4%
Allocation of Overhead $21,000 /Month $21,000 /Month $0 0%
(1)$150 per month minimum;Plus Fuel Surcharge when Natural Gas rate exceeds$5.00 per MMBTU
(2)consumption of 3.50 acre-feet per acre farmed on unmetered fields.
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