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HomeMy WebLinkAboutRes 00-04 Authorizing and Directing the Trinity River Authority and Denton Creek Regional Wastewater Treatment System Fifth Supplemental ContractTOWN OF NAITESTLAKE RESOLUT] ON NO, 00-04 A SOLJ� T TION () RM - F THE BOARD OF ALDEEN OF THE TON `N OF RL WESTLAKE, TEXAS, Al-TTIIORIZING AND bfftf--.CTING THE EXECUTION OF THE TRINITY RIVER AUTHORITY OF TEV -&S — DENTON CREEK REGIONAL WASTEWATER TREATMENT SYSTEM FIFTH SUIPPLEMENTAL CONTRACT WITH THE TOWN 01I ' 'WESTLAKE, AND A CONTINUING DISCLOSURE, AGREEMENT AND PROVIDING FOR THE EFFECT OF SAID RESOLUTION, CONTkkCT AND AG RE EMENT. WHEREAS, the Town of Westlake wishes to become a contracting party in the Denton Creek Regional WasteNvater Treatment System; and 'vVHEREAS. on February 1, 2000, the Denton Creek Regional Wastewater System Advisory Committee voted unanimously to add the Town of Westlake as a contracting party of the Denton Creek Regional Wastewater System. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF ALDERMEN OF THE TOWN OF WESTLAKE, TEXAS: SECTION 1: That the Board of Aldermen: of the Town of Westlake, Texas, hereby authorizes the Mayor to execute the Trinity River Authority of Texas — Denton Creek Regional Wastewater Treatment System fifth supplemental contract between the Town and TRA, and a continuing disclosure agreement and to provide for the effect of the resolution, contract and agreement. PASSED AND APPROVED ONT THIS 14t' DAY OF FEBRUARY, 2000 1-51 Scott Bradley, Mayor ATT�-ST: Treert 0, Pert�. To T ;',Ig C-OSSVY To-,�7,i ' cretaj v 9 1-Z TRINITY RIVER AUTHORITY OF TEXAS - DENTON CREEK REGIONAL WASTEWATER TREATMENT SYSTEM FIFTH SUPPLEMENTAL CONTRACT THE STATE OF TEXAS TRINITY RIVER AUTHORITY OF TEXAS THIS TRINITY RIVER AUTHORITY OF TEXAS - DENTON CREEK REGIONAL WASTEWATER TREATMENT SYSTEM FIFTH SUPPLEMENTAL CONTRACT (TOWN OF WESTI AKE, TEXAS) (the "Contract") made and entered into as of the I st day of March, 2000, by and between TRINITY RIVER AUTHORITY OF TEXAS (the "Authority"), an agency and political subdivision of the State of Texas, being a conservation and reclamation district created and functioning under Article 16, Section 59, of the Texas Constitution, pursuant to Chapter 518, Acts of the 54th Legislature of the State of Texas, Regular Session, 1955, as amended (the "Authority Act"), and the TOW14 OF WESTLAKE, in Tarrant and Denton Counties, Texas (the "Town" or the "Sixth Additional Contracting Party"). WITNESSETH: M AS, ITNESSETH: MREAS, the Town is a duly created town and political subdivision of the State of Texas operating under the Constitution and laws of the State of Texas; and WHEREAS, the Authority and the Sixth Additional Contracting Party are authorized to enter into this Contract pursuant to the Authority Act, Chapter 30, Texas Water Code, and other applicable laws; and WHEREAS, the Authority has acquired and constructed and is operating a regional Wastewater treatment system to serve various Contracting Parties within the watershed or drainage area of Denton Creek, a tributary of the Trinity River, located in Denton and Tarrant Counties, Texas (the "System"),- and 1 WHEREAS the System acquired and constructed is described in an engineering report of Rady & Associates, Fort Worth, Texas, entitled "Comprehensive Feasibility Study on Denton Creek Regional Wastewater System", dated August, 1987, and includes wastewater treatment facilities and capacities designed and currently sufficient to serve (within the watershed of Denton Creek) the Cities of Fort Worth, Haslet, and Roanoke (the "Initial Contracting Parties"), as well as the City of Southlake and Lake Turner Municipal Utility District No, I of Tarrant and Denton Counties, Texas, which district subsequently changed its name to "Circle T Municipal Utility District No. I" (the "First and Second Additional Contracting Parties", respectively), the City of Keller (the "Third Additional Contracting Party"), Lake Turner Municipal Utility District No. 3 of Tarrant and Denton Counties, Texas, which district subsequently changed its name to "Circle T Municipal Utility District No. 3" (the "Fourth Additional Contracting Party"), the Town of Flower Mound (the "Fifth Additional Contracting Party") and also the Town; and WTD REAS, such report, including all amendments and supplements thereto made prior to the execution of acquisition and construction contracts for the System and as changed by change orders entered after acquisition and construction contracts for the System were executed, is hereinafter called the "Engineering Report"; and WHEREAS, the Authority and the Initial Contracting Parties have entered into the "Trinity -River Authority of Texas - Denton Creek Regional Wastewater Treatment System Contract", dated as of October 28, 1987, with respect to the System (the "Base Contract"); and WHEREAS, pursuant to the Base Contract the Authority and the First and Second Additional Contracting Parties have entered into the Trinity River Authority of Texas - Denton Creek Regional Wastewater Treatment System Supplemental Contract (City of Southlake and Regional Lake Turner Municipal Utility District No. 1), dated as of April 27, 1988, hereafter called the "First Supplemental Contract"; and TE AS, pursuant to the Base Contract the Authority and the Third Additional Contracting Party have entered into the Trinity River Authority of Texas - Denton Creek Regional Wastewater Treatment System Second Supplemental Contract (City of Keller, Texas), dated as of April 22, 1992, hereinafter called the "Second Supplemental Contract"; and WHEREAS, pursuant to the Base Contract the Authority and the Fourth Additional Contracting Party have entered into the Trinity River Authority of Texas - Denton Creek Regional Wastewater Treatment System Third Supplemental Contract (Lake Turner Municipal Utility District No. 3), dated as of August 24, 1994, hereinafter called the "Third Supplemental Contract"; and WHEREAS, pursuant to the Base Contract the Authority and the Fifth Additional Contracting Party are, concurrently with the execution of this Fifth Supplemental Contract, entering into the Trinity River Authority of Texas - Denton Creek Regional Wastewater Treatment System Fourth Supplemental Contract (Town of Flower Mound, Texas), dated as of March 1, 2000, hereinafter called the "Fourth Supplemental Contract"; and WHEREAS, pursuant to the Base Contract and the First Supplemental Contract the Authority has issued and delivered the Trinity River Authority of Texas Denton Creek Wastewater Treatment System Revenue Bonds, Series 1988, dated as of December 1, 1988, in the principal amount of $6,500,000 (the "Series 1988 Bonds") to enable the Authority to acquire, construct, and complete the System; and WHEREAS, part of the Series 1988 Bonds were refunded by the Trinity River Authority of Texas Denton Creek Regional Wastewater System Revenue Refunding Bonds, Series 1993, dated July 1, 1993 (the "Series 1993 Bonds"); and 3 WHEREAS, pursuant to the Base Contract and the First, Second and Third Supplemental Contracts the Authority issued and delivered the Trinity River Authority of Texas Denton Creek Wastewater Treatment System Revenue Bonds, Series 1996, dated as of February 15, 1996, in the principal amount of $4,965,000 (the "Series 1996 Bonds") to enable the Authority to construct improvements and extensions to the System; and WHEREAS, the Base Contract and the First, Second, Third and Fourth Supplemental Contracts (the "Supplemental Contracts") make provision for Additional Contracting Parties to become Contracting Parties with substantially the same fights and obligations as each of the Initial Contracting Parties, upon the execution of a contract similar to the Base Contract; and WHEREAS, upon the execution of this Contract the Town will become such an Additional Contracting Party, and thus a Contracting Party, in accordance with the requirements of the Base Contract and the Supplemental Contracts, with all conditions prerequisite to such execution having been met; and WHEREAS, this Contract substantially restates the essential provisions of the Base Contract and the Supplemental Contracts, and is structured similar thereto to the fullest extent applicable and practicable, including the requirements with respect to "minimums", but with such additions and changes that are necessary to meet the actual circumstances, with the effect that the Town, being the Sixth Additional Contracting Party hereby adopts the provisions of the Base Contract and the Supplemental Contracts, as supplemented and necessarily changed by this Contract; and WHEREAS, the "minimums" set for the Town in Section 13(c) of this Contract are equitable and have been fixed by the Authority as required in the Base Contract and the Supplemental Contracts; and 10 WHEREAS, the Advisory Committee established pursuant to the Base Contract has approved the terms and conditions of this Contract and the inclusion of the Town as an NOW, THEREFORE, in consideration of the mutual covenants and agreements herein Town under this Contract, and to issue its Bonds from time to time, upon and subject to the this Contract, unless the context clearly shows otherwise, shall have the following meanings: Party with which the Authority makes a contract similar to this Contract for providing services of the System, provided that after execution of any such similar contract such party shall become one of the Contracting Parties for all purposes of this Contract, unless otherwise specifically peci ically provided herein. (b) "Adjusted Annual Payment" means the Annual Payment, as adjusted during or after each Annual Payment Period, as provided by this Contract. advise the Authority with respect to the System as provided in Section 10 of this Contract. (d) "Annual Payment" means the amount of money to be paid to the Authority by zqjp III Imp gipgpy 1111 WIN I I I I I MUMPMUMM �� a 0 1 , I I - (e) "Annual Payment Period" means the Authority's Fiscal Year, which currently begins on December I of each calendar year and ends on the last day of November of the next I (f) "Annual Requirement" means the total amount of money required for the Authority to pay all Operation and Maintenance Expenses of the System, to pay the debt service on its Bonds, to pay or restore any amounts required to be deposited in any special, contingency, or reserve funds required to be established and/or maintained by the provisions of the Bond -Resolutions, all as further described in Section 11 (a) of this Contract. (g) "B.O.D." (denoting Biochemical Oxygen Demand) means the quantity of oxygen utilized in the biochemical oxidation of organic matter under standard laboratory procedure in five days at 20 degrees C., expressed in milligrams per liter. "Bond Resolution" means any resolution of the Authority which authorizes any Bonds. (i) "Bonds" means the unrefunded Series 1988 Bonds, the Series 1993 Bonds and the Series 1.996 Bonds described in the preamble to this Contract, and the interest thereon, and all bonds hereafter issued by the Authority, and the interest thereon, to improve and/or extend the System, and any bonds issued to refund any Bonds or to refund any such refunding bonds. 0) "CFR" means the Code of Federal Regulations. (k) "Contracting Parties" means the Cities of Fort Worth, Haslet, Roanoke, Southlake and Keller, Texas, the Towns of Flower Mound and Westlake, Texas, and Circle T Municipal Utility Districts Nos. I and 3 of Tarrant and Denton Counties, Texas, together with any other party or parties which hereafter becomes one of the Contracting Parties by becoming an Additional Contracting Party. (1) "Contracting Party" means any one of the Contracting Parties. (m) "Engineering Report" means the "Engineering Report" as defined in the preamble to this Contract, (n) "Garbage" means solid wastes from the preparation, cooking, and dispensing of food, and from handling, storage, and sale of produce. at (o) "Grease" means fats, waxes, oils, and other similar nonvolatile materials in Wastewater, which are analyzed according to methods listed in 40 CFR Part 136. (p) "Industrial User (IU)" means any person, including but not limited to, any individual, firm, partnership, corporation, association, or any other group or combination acting as a unit, or any other legal entity, who discharges or desires to discharge industrial wastes into the System. (q) "Infiltration water" means the water which leaks into a sewer. (r) "Operation and Maintenance Expenses" means all costs and expenses of operation and maintenance of the System and the Wastewater Interceptor System, including (for greater certainty but without limiting the generality of the foregoing) repairs and replacements for which no special fund is created in the Bond Resolutions, operating personnel, the cost of utilities, the costs of supervision, engineering, accounting, auditing, legal services, supplies, services, administration of the System and the Wastewater Interceptor System, including the Authority's general overhead expenses attributable to the System and the Wastewater Interceptor System, insurance premiums, equipment necessary for proper operation and maintenance of the System and the Wastewater Interceptor System, and payments made by the Authority in satisfaction of judgments resulting from claims not covered by the Authority's insurance arising in connection with the operation and maintenance of the System and the Wastewater Interceptor System. The term does not include depreciation. (s) "pff' means the common logarithm of the reciprocal of the weight of hydrogen ions in grams per liter of solution. (t) "Point of Entry" means the point at which Wastewater enters Authority's System. (u) "POTW" means Publicly Owned Treatment Works as defined in 40 CFR 403, N (v) "Properly Shredded Garbage" means garbage that has been shredded to such degree that all particles will be carried freely under the flow conditions normally prevailing in Z:� public sewers, with no particle greater than 1/2 inch in any dimension. (w) "Significant Industrial User (SIU)" means, as defined in 40 CFR 4013(t), as amended from time to time: (1) all industrial users subject to "Categorical Pretreatment Standards" under 40 CFR 403.6 and CFR Chapter 1, Subchapter N; and (2) any other industrial user that: discharges an average of 25,000 gallons per day or more of process wastewater to the POTW (excluding sanitary, noncontact cooling and boiler blowdown wastewater); contributes a process waste stream which makes up 5 percent or more of the average dry weather hydraulic or organic capacity of the POTW treatment plant; or is designated as such by the Control Authority as defined in 40 CFR 403,12(a) on the basis that the industrial user has a reasonable potential for adversely affecting the POTW's operation or for violating any pretreatment standard or requirement (in accordance with 40 CFR 403.8(f)(6). (x) "Suspended Solids" means solids that either float on the surface or are in suspension in water, sewage, or other liquids, and which are removable by laboratory filtering, expressed in milligrams per liter. (y) "System" means the regional wastewater treatment system described in the preamble to this Contract and in the Engineering Report, and all improvements and additions to and extensions, enlargements, and replacements of such facilities which are deemed necessary and feasible by the Authority in order to receive, treat, and dispose of Wastewater from Contracting Parties and to comply with the requirements of the Wastewater regulatory 8 agencies of the State of Texas and the United States of America. Said term does not include any facilities acquired or constructed by the Authority with the proceeds from the issuance of "Special Facilities Bonds", which are hereby defined as being revenue obligations of the Authority which are not secured by or payable from Annual Payments made under the Base Contract, the Supplemental Contracts, this Contract, and similar contracts with Additional Contracting Parties, and which are payable solely from other sources, (z) "Total Toxic Organics" means the sum of all detected concentrations greater than 10 micrograms per liter for all organic compounds classified as priority pollutants by the United States Environmental Protection Agency. (aa) "Trunk Sewer" means any sewer in which sewage from collecting and lateral sewers is concentrated and conveyed to the System, (bb) "Wastewater" means Sewage, Industrial Waste, Municipal Waste, Recreational Waste, and Agricultural Waste, as defined in the Texas Water Code, together with Properly Shredded Garbage and such Infiltration Water that may be present. (cc) "Wastewater Interceptor System" means, collectively, each "Interceptor System" as defined in any contract heretofore or hereafter entered into between the Authority and a Contracting Party (collectively, the "Interceptor Contracts"), and being facilities intended to collect and transport Wastewater into the "System", as defined in this Contract, together with any other Wastewater collection and transportation facilities which are not part of the System as herein defined, and which are intended to collect and transport the Wastewater of any Contracting Party into the System as herein defined. Section 2. CONSULTING ENGINEERS; CONSTRUCTION OF SYSTEM. The Authority and the Town agree that the Authority will choose the Consulting Engineers for the System, provided that the Consulting Engineers may be changed at the option of the Authority. The Authority has issued and agrees to issue its Bonds, payable from and secured by Annual a Payments made under the Base Contract, the Supplemental Contracts, and this Contract, to acquire, construct, complete, improve, and extend the System in accordance with the Base Contract, the Supplemental Contracts and this Contract, and the Authority agrees to issue its Bonds for such purposes when required. The proceeds from the sale and delivery of such Bonds also will be sufficient to fund to the extent deemed advisable by the Authority a debt service reserve fund, a contingency fund, and interest on the Bonds during construction; and such proceeds also will be used for the payment of the Authority's expenses and costs in connection with the System (including all engineering and design costs and expenses, and the cost of the land and interests therein related to the System) and the Bonds, including, without limitation, all financing, legal, printing, and other expenses and costs related to the issuance of such Bonds and the System, Each Bond Resolution of the Authority shall specify the exact principal amount of the Bonds issued thereunder, which shall mature within the maximum period, and shall bear interest at not to exceed the maximum rates, then permitted by law, and each Bond Resolution shall create and provide for the maintenance of a revenue fund, an interest and sinking fund, a debt service reserve fund, and any other funds deemed advisable, all in the manner and amounts as provided in such Bond Resolution. The Town agrees that when any Bonds are actually issued and delivered to the purchaser thereof, either in connection with initially acquiring and constructing the System, or subsequently for improving and/or extending the System, the Bond Resolution authorizing the Bonds shall for all purposes be deemed to be in compliance with the Base Contract, the Supplemental Contracts, and this Contract in all respects, and the Bonds issued thereunder will constitute Bonds as defined in the Base Contract, the Supplemental Contracts, and this Contract for all purposes. Section 3, QUANTITY AND POINTS OF ENTRY. (a) In consideration of the payments to be made by each Contracting Party under the Base Contract, the Supplemental Conti -acts, and this Contract, each such Contracting Party is entitled, during each Annual 10 Payment Period while the System is in operation, to discharge into the System at its Point or Points of Entry hereinafter described, all of the Wastewater which is generated within its boundaries which are within the watershed or drainage area of Denton Creek, subject to the restrictions hereinafter stated-, and provided that each Contracting Party must transport such Wastewater to its Point or Points of Entry. Further, each Contracting Party shall be required and obligated to transport and discharge into the System at its Point or Points of Entry all Wastewater which is generated within its boundaries which are within the watershed or drainage area of Denton Creek, except for reasonably small fringe areas which could be more cost effectively served by other means, and which are approved by a majority vote of the Advisory Committee and approved by the Authority. The foregoing notwithstanding, the Town is entitled, during each Annual Payment Period while the System is in operation, to discharge into the System at its Point or Points of Entry hereinafter described, only such Wastewater as is generated within its current boundaries, excluding the area currently within the boundaries of the Second and Fourth Additional Contracting Parties, which are within the watershed or drainage area of Denton Creek (b) The combined maximum rate at which Wastewater is discharged by each Contracting Party at all of its Points of Entry shall not exceed a rate which, if continued for a period of twenty-four hours would equal 3.50 times such Contracting Party's estimated average daily contributing flow of Wastewater for the then current Annual Payment Period. The total quantity of Wastewater discharged into the System shall never exceed the amount which the System is capable of receiving, treating, and disposing, unless approved by a majority vote of the Advisory Committee and approved by the Authority, subject to terms and conditions to be established by the Authority. Notwithstanding the foregoing, no Contracting Party shall ever make any discharge into the System which would cause it to be overloaded or be in violation of its permits from the State of Texas and/or the United States of America. M (c) Wastewater meeting the quality requirements of Section 4 of this Contract will be received into the System at the Points of Entry, respectively, shown for each Contracting, Party, respectively, in the Engineering Report, and at the other and additional Points of Entry that are established by mutual agreement between the Authority and each other Contracting Party, and also at any other Point or Points of Entry for any Contracting Party in the future if such other or additional Points of Entry are determined by the Authority to be economical and beneficial to the System, and such Contracting Party pays any costs related thereto which the Authority determines should be paid by such Contracting Party. The Point or Points of Entry for the Town shall be at locations mutually agreeable to the Town and the Authority and specifically approved by the Authority. (d) It is and shall be the intention of the Contracting Parties and the Authority that the System shall be acquired, constructed, extended, and improved so that at all reasonable times it will be capable of receiving, transporting, treating, and disposing of all eligible Wastewater generated within the boundaries of each Contracting Party which are within the watershed or drainage area of Denton Creek and which such Contracting Party delivers to its Point or Points of Entry, and that the Authority will from time to time issue its Bonds in such amounts as are, within its judgment and discretion, sufficient to achieve such results. Section 4. QUALITY. The obligation of the Authority to receive into the System such Wastewater depends upon compliance by each Contracting Party with the provisions of this Section, & . I In order to permit the Authority to properly treat and dispose of each Contracting Party's Wastewater, to protect the public health; and to permit cooperation with other agencies which have requirements for the protection of the physical, chemical, and bacteriological M quality of public water and water courses, and to protect the properties of the System, each Contracting Party agrees: (a) Admissible Discharges into Authority's System. Discharges into the System shall consist only of Wastewater and other waste free from the prohibited constituents listed in Subsection (b) and limited in B.O.D., Suspended Solids, dissolved sulfides, and pH as hereinafter provided. (b) Wastes Not Admissible. Gasoline; diesel or petroleum distillates; cleaning solvents; non emulsified oils and greases; mineral oils; blood; ashes; cinders; sand, gravel; tar; asphalt-, wastewater sludge; ceramic wastes; plastics; other viscous substances; feathers; hair; rags" metal filings-, glass; wood shavings; sawdust; unshredded garbage; toxic, corrosive, explosive or malodorous gases; acetylene generation sludge; cyanides or cyanogen compounds capable of liberating hydrocyanic gas on acidification in excess of 2 mg/I by weight as CN, radioactive materials which will permit a transient concentration higher than 100 microcuries per liter; emulsified oil and grease, exclusive of soaps, exceeding on grab sample analysis of 100 mg/l, acids or alkalis having a pH value lower than 6.0 or higher than 10.0; and Wastewater containing specific pollutant concentrations in excess of any of the numerical limitations named hereunder be prohibited from discharge to the System: 13 Maximum Allowable Concentration (ug/1) Arsenic Barium Cadmium Chromium Copper Lead Manganese Mercury Nickel Selenium Silver Zinc UMMOM320= System, as determined by standard methods, shall not exceed 250 mg/l. (d) Total Suspended Solids. Total Suspended Solids delivered to the System, as determined by testing procedures as set forth in the latest approved edition of Standard System shall be not lower than 6,0 nor higher than 10.0. No acids shall be discharged into tic-, (0 Hydrogen Sulfide Concentration. Dissolved sulfides in Wastewater at the Point of Entry to the System shall not exceed 0. 1 mg/l. (g) Prohibited Discharge Limitations Subject to Change. Notwithstanding the foregoing provisions of this Section, the parties hereto agree and understand that Federal and State Regulatory Agencies periodically modify standards on prohibited discharges; therefore, revisions to, additions to, or deletions from the items listed in this Section may become necessary in the future to comply with these latest standards. It is the intention of this Contract that prohibited discharge requirements be reviewed periodically by the Authority and revised in accordance with the latest standards of any Federal or State Agency having W regulatory powers. Any required revisions shall be made and written notice thereof given to each Contracting Party. Each Contracting Party shall be responsible for integrating such changes into the local industrial waste ordinance and notifying all affected users of the change within ninety days following written notice to the Contracting Party of such changes. (h) To determine normal quality of Wastewater, the Authority will collect twenty- four hour composite samples of Wastewater at each Point of Entry and cause same to be analyzed in accordance with testing procedures as set forth in the latest edition of Standard Methods of Examination of Water and Wastewater, published by American Public Health Association, Inc. Composite samples will normally be taken once a month, or at more frequent intervals if necessary to determine Wastewater quality. As provided above, such Wastewater shall not exceed the limits of concentration specified for Normal Wastewater as follows - BOD 250 mg/1 TSS 250 mg/I pH, not less than 6 nor greater than 10 Hydrogen Sulfide 0.1 mg/1 ►hould the analysis disclose concentrations higher than those listed, the Authority immediately will inform the Contracting Party which made the discharges resulting in the violation of this Section, and such discharges shall cease immediately. However, with the approval of the Authority, Wastewater with concentrations of BOD and TSS greater than specified above may be discharged by a Contracting Party into the System on an emergency and temporary basis, subject to the payment of a surcharge (in addition to all other payments required by this Contract), which surcharge shall be determined by the Authority and shall be in an amount sufficient to cover and pay for all additional costs of transportation, treatment, and disposal related to such discharges. will furnish and install, at its cost, the necessary equipment and devices of standard tyla M subject to plan review and written approval by Authority, required for measuring properly all Wastewater discharged into the System by the Sixth Additional Contracting Party through its Point or Points of Entry, respectively. The Authority will operate and maintain such metering facilities. Upon completion of the installation thereof, title to, and ownership of, such meters and other equipment shall be assigned to the Authority, The Contracting Party shall, at its expense, provide land rights or easements sufficient, as approved by Authority, to allow ingress and egress to such metering facilities for the purposes of operating and maintaining same. Each Contracting Party shall have access to such metering equipment at all reasonable times for inspection and examination, but the reading, calibration, and adjustment thereof shall be done only by employees or agents of the Authority in the presence of a representative of the affected Contracting Party or Parties if requested by such Contracting Party or Parties. All readings of meters will be entered upon proper books of record maintained by the Authority. Upon written request any Contracting Party may have access to said record books during reasonable business hours. Not more than three times in each year of operation, the Authority shall calibrate its meters, if requested in writing by the affected Contracting Party or Parties to do so, in the presence of a representative of such Contracting Party or Parties, and such parties shall jointly observe any adjustments which are made to the meters in case any adjustment is found to be necessary. If, for any reason, any meters are out of service or out of repair, or if, upon any test, the percentage of inaccuracy of any meter is found to be in excess of five (5%) per cent, registration thereof shall be corrected for a period of time extending back to the time when such inaccuracy began, if such time is ascertainable, and if not ascertainable, then for a period extending back one-half (1/2) of the time elapsed since the date of the last calibration, but in no event further back than a period of six (6) months, Any Contracting Party may, at its option and its own expense, install and operate a check meter to check each meter installed by the Authority, but the measurement for the purpose of this agreement shall be solely by the M Authority's meters, except as in this Section specifically provided to the contrary. All such check meters shall be of standard make, shall be installed in a location approved by the Authority, and shall be subject at all reasonable times to inspection and examination by any employee or agent of the Authority, but the reading, calibration, and adjustment thereof shall be made only by the Contracting Party or Parties, except during any period when a check meter may be used under specific written consent by the Authority for measuring the amount of Wastewater delivered into the System, in which case the reading, calibration, and adjustment thereof shall be made by the Authority with like effect as if such check meter or meters had been furnished or installed by the Authority. Section 6. UNIT OF MEASUREMENT. The unit of measurement for Wastewater discharged into the System hereunder shall be 1,000 gallons, U. S. Standard Liquid Measure. Section 7. LIABILITY FOR DAMAGES AND RESPONSIBILITY FOR TREATMENT AND DISPOSAL OF WASTEWATER. Liability for damages arising from the transportation, delivery, reception, treatment, and/or disposal of all Wastewater discharged into the System hereunder shall remain in each Contracting Party to its Point or Points of Entry, respectively, and title to such Wastewater shall be in such Contracting Party to such Point or Points, and upon passing through Points of Entry liability for such damages, and title to such Wastewater, shall pass to the Authority. As between the Authority and each Contracting Party, each party agrees, to the full extent permitted by law, to indemnify and to save and hold the other party harmless from any and all claims, demands, causes of action, damages, losses, costs, fines, and expenses, including reasonable attorney's fees, which may arise or be asserted by anyone at any time on account of the transportation, delivery, reception, treatment, and/or disposal while title to the Wastewater is in such party, or on account of a prohibited discharge by a Contracting Party, The Authority has the responsibility as between the parties for the proper reception, transportation, treatment, and disposal of all Wastewater 17 discharged into the System, but not for prohibited discharges discharged by any party at any Point of Entry. Section 8. REPORTING REQUIREMENTS. (a) Approximately thirty days after the end of each Annual Payment Period each Contracting Party, respectively, shall furnish in writing to the Authority the following information with respect to such Contracting Party: (1) The number of active domestic sewer connections tributary to the System and which will be served by the System, (2) The number of commercial and business sewer connections to be served by the System; (3 )) The number of industrial connections to be served by the System, with name and location of each. The purpose of this provision is to permit the Authority to accumulate statistical data which will enable it to render better service and facilitate plans for betterment and future facilities expansion. (b) Industrial Waste, The effects of certain types of Industrial Waste upon sewers and sewage treatment processes are such as to require that careful consideration be made of each industrial connection. This is a matter of concern both to the Authority and to the Contracting Parties, Accordingly, each Contracting Party shall regulate the discharge of Industrial Waste generated by a SIU into its sewer system, and will authorize discharge of Industrial Waste into its sewers subject to the general provision that no harm will result from such discharge and subject to the filing by applicant industry of a statement, copy of which shall be forwarded to the Authority, containing the following information: (1) Name and address of applicant; (2) Type of industry; (3) Quantity of plant waste; M (4) Typical analysis of the waste-, (5) Type of pre-treatment proposed. To facilitate inspection and control of Industrial Waste, each Contracting Party will require industries to separate Industrial Waste from Sanitary Sewage until such Industrial Waste has passed through a monitoring portal which shall be located so as to be accessible at all times to inspectors of such Contracting Party. If inspection indicates that damage might result from the discharge the permit shall be revoked unless and until the industry promptly establishes acceptable remedial measures. At regular intervals the Authority will collect twenty-four hours composite samples of all Wastewater at each Point of Entry and cause same to be analyzed by American Public Health Association Standard Methods. Such Wastewater shall not exceed the limits of concentration specified in Section 4 of this Contract. Should the analysis disclose concentrations higher than those stipulated the Authority immediately will inform the affected Contracting Party of such disqualification. It shall be the obligation of such Contracting Party to require the offending originator of said highly concentrated materials to immediately initiate and undertake remedial pre-treatment or other legal means before discharge into such Contracting Party's sewers. (c) Ordinances and Resolutions. Each Contracting Party, respectively, agrees that it has enacted or will enact ordinances or adopt resolutions as necessary to include the following provisions: (1) For each existing and future SIU, the Contracting Party shall require said user to complete and submit a permit application containing that information specified in the sample application form which is attached hereto as Exhibit I immediately following this Section 8 (c). The Authority shall be provided a copy of the permit application within thirty days after receipt by the Contracting Party. The Authority shall provide comments on said application within M thirty days of receipt and return comments to the Contracting Party, Failure to comment shall MMWjEM1M= After approval of the Permit Application by both the Contracting Party and the Z: Authority, the Contracting Party shall issue a permit to discharge containing the requirements as shown on the form which is attached hereto as Exhibit 2 immediately following Exhibit I at the end of this Section 8 (c). Said permit to discharge shall be required of all Slus before said user will be allowed to discharge industrial wastes into the sewage system. A copy of the permit to discharge shall be forwarded to the Authority for approval prior to the issuance to the SIU. (21) The Contracting Party shall require significant industrial users to comply with applicable Federal Categorical Pretreatment Standards as well as any applicable state and local (3) The Contracting Party shall maintain certain information contained in permit (4) The Contracting • shall disallow • as a means of reducing •i concentrations in an SfUs waste stream. "5) The Contracting Party shall be authorized to enter SIU premises at any time for k independent monitoring, inspection, or review of applicable records to determine compliance. (6) The Contracting Party shall develop and require adherence to SIU compliance OMM M- UMM (7) The Contracting Party shall require self-monitoring and reporting at SfUs • (8) The Contracting Party shall choose or approve laboratory to analyze • i .•k .• I - - • (i) '• and testing to •,• compliance M (ii) disconnection/reconnection of service resulting from noncompliance (iii) abnormal strength wastes (iv) additional costs incurred by Contracting Party or POTW in transporting or treating wastes (v) filing, revision, or renewal of Permit Application. (1 Q) The Contracting Party shall provide public notification for instances of violation. (11) The Contracting Party shall deny/revoke permit, disallow/disconnect service, assess civil or criminal penalties, and seek other available legal and equitable remedies against Sru for: (i) discharge to sewerage system resulting in violation of POTWs discharge permit conditions (ii) hazard to health or life of POTW personnel or users of receiving waters (iii) violation of any applicable ordinance or regulation (iv) false information transmitted to approving authority through Permit Application, monitoring reports, etc. The Contracting Party shall furnish to the Authority all documents and records, in addition to those outlined herein, as necessary to demonstrate compliance by all industries. [The balance of this page is intentionally left blank.] M Section 9. OTHER CONTRACTS. (a) The Authority reserves the right, with the approval of a majority vote of the Advisory Conmittee, to enter into a contract to provide the Wastewater services of the System to any Additional Contracting Party under a contract similar to this Contract, subject to the requirements concerning "minimums" as hereinafter provided. Each contract with any Additional Contracting Party shall comply with the requirements of the Base Contract, the Supplemental Contracts, and this Contract, shall substantially restate the essential provisions of the Base Contract, the Supplemental Contracts, and this Contract, and shall be structured to be similar thereto to the fullest extent applicable and practicable, with such additions or changes as are necessary to meet the actual circumstances, with the effect that each Additional Contracting Party will substantially adopt the provisions of the Base Contract, the Supplemental Contracts, and this Contract, as supplemented and necessarily changed by its contract. However, the Authority shall not obligate itself to receive Wastewater into the System from any future Additional Contracting Party if, in the judgment and discretion of the Authority, such obligation would jeopardize the Authority's ability to meet its obligation to receive, transport, treat, and dispose of Wastewater discharged into the System by prior Contracting Parties. (b) It is further recognized and agreed that in the future the Authority may provide services of the System to any party which is not a Contracting Party, provided that all such services of the System to any party which is not a Contracting Party shall in all respects be subordinate to the prior rights of the Contracting Parties, and all contracts or other arrangements relating to such services shall recognize, and be made subordinate to, such prior rights. (c) Each Contracting Party shall have the right, with the approval of a majority vote of the Advisory Committee and the approval of the Authority, to negotiate and enter into sub- contracts with any other entity under which such other entity may discharge Wastewater 0 generated within the drainage area of Denton Creek, but outside the boundaries of such Contracting Party, into such Contracting Party's sewers, to be transported into the System at such Contracting Party's Point or Points of Entry along with such Contracting Party's Wastewater generated within the drainage area of Denton Creek. In such case such additional Wastewater shall be regarded as being the Wastewater of such Contracting Party for all purposes of this Contract. The consideration as between or among such cities or other entities may be determined by such parties, but no such transaction shall relieve the Contracting Party of its obligations to the Authority under the terms of this Contract. Section 10, ADVISORY COMMITTEE. (a) The governing body of each of the Contracting Parties annually shall appoint one of the members of its governing body or one of its employees as a voting member of the Advisory Committee for the System, which Advisory Committee has been created and established and is hereby confirmed; provided, however, that Town shall not appoint its members of the Advisory Committee until the effective date of this Contract. The Advisory Committee shall elect a Chairman, a Vice Chairman, and a Secretary. The Advisory Committee may establish bylaws governing the election of officers, meeting dates, and other matters pertinent to the functioning of the Advisory Committee. The Advisory Committee shall consult with and advise the Authority, through its General Manager or his designated representative, with regard to the following matters pertaining to the System: (i) The issuance of Bonds; (ii) The operation and maintenance of the System; (iii) Additional Contracting Parties and the terms and conditions of the contracts with such parties, consistent with the provisions of this Contract-, (iv) Contracts for services to entities which are not Additional Contracting Parties, and the prices, terms, and conditions of such contracts consistent with the provisions of this Contract; ME (v) The Authority's Annual Budget, prior to its submission by the Authority's General Manager to the Authority's Board, (vi) Review of the Authority's Annual Audit; (vii) All other pertinent matters relating to the management of the System-, and (viii) Improvements and extensions of the System. The Advisory Committee shall have access to and may inspect at any reasonable times all physical elements of the System and all records and accounts of the Authority pertaining to the System. A copy of the minutes of the meetings of the Advisory Committee and all other pertinent data, shall be provided to the members of the Advisory Committee. (b) The term of membership on the Advisory Committee shall be at the pleasure of each governing body represented, respectively, and each member shall serve until replaced by such governing body. All expenses of the Advisory Committee in discharging its duties under this Section shall be considered as an Operation and Maintenance Expense of the System. Section I I. FISCAL PROVISIONS, (a) Subject to the terms and provisions of this Contract, the Authority will provide and pay for the cost of the acquisition, construction, completion, improvement, and extension of the System and all System facilities, by issuing its Bonds in amounts which will be sufficient to accomplish such purposes, and the Authority will own and operate the System. It is acknowledged and agreed that payments to be made under the Base Contract, the Supplemental Contracts, and this Contract and similar contracts with each Additional Contracting Party, if any, will be the primary source available to the Authority to provide the Annual Requirement, and that, in compliance with the Authority's duty to fix and from time to time revise the rates of compensation or charges for services of the System rendered and made available by the Authority, the Annual Requirement will change from time to time, and that each such Annual Requirement shall be allocated among the Contracting Parties as hereinafter provided, and that the Annual Requirement for each Annual Payment 24 Period shall be provided for in each Annual Budget and shall at all times be not less than an amount sufficient to pay or provide for the payment of (A) An "Operation and Maintenance Component" equal to the amount paid or payable for all Operation and Maintenance Expenses of the System and the Wastewater Interceptor System. It is understood and agreed that although the Wastewater Interceptor System will not be a part of the System as defined in this Contract, it will consist of facilities which are ancillary to and integrated into the operation of the System, and therefore will be operated and maintained in effect as a part of the System under the provisions of the Base Contract, the Supplemental Contracts, and this Contract, consistent with the terms of the Interceptor Contracts and other similar contracts with respect to the Wastewater Interceptor System; and (B) A "Bond Service Component" equal to: (1) the principal of, redemption premium, if any, and interest on, the Bonds, as such principal, redemption premium, if any, and interest become due, less interest to be paid out of Bond proceeds or from other sources if permitted by any Bond Resolution, and all amounts required to redeem any Bonds prior to maturity when and as provided in any Bond Resolution, plus the fees, expenses, and charges of each Paying Agent/Registrar for paying the principal of and interest on the Bonds, and for authenticating, registering, and transferring Bonds on the registration books, and (2) the proportionate amount of any special, contingency, or reserve funds required to be accumulated and maintained by the provisions of any Bond Resolution; and NN (3) any amount in addition thereto sufficient to restore any deficiency in any of such funds required to be accumulated and maintained by the provisions of any Bond Resolution. Section 12. OPERATION AND MAINTENANCE; ANNUAL BUDGET. The Authority shall operate and maintain the System, and also the Wastewater Interceptor System in the same manner as if it were part of the System, and shall prepare an Annual Budget, including the operation and maintenance expenses of the Wastewater Interceptor System, for such purpose. With respect to each Annual Budget the term "System" shall be deemed to mean and include the Wastewater Interceptor System. Each Annual Budget for the System shall always provide for amounts sufficient to pay the Annual Requirement. The Annual Budget for the System for all or any part of the Annual Payment Period during which the System is first placed into operation shall be prepared by the Authority based on estimates made by the Authority after consultation with the Advisory Committee. On or before August 1 of each year after the System is first placed in operation, the Authority shall furnish to each Contracting Party a preliminary estimate of the Annual Payment required from each Contracting Party for the next following Annual Payment Period. Not less than forty days before the commencement of the Annual Payment Period after the System is first placed into operation, and not less than forty days before the commencement of each Annual Payment Period thereafter, the Authority shall cause to be prepared as herein provided its preliminary budget for the System for the next ensuing Annual Payment Period, which budget shall specifically include the Operation and Maintenance Component and the Bond Service Component. A copy of such preliminary budget shall be filed with each Contracting Party. The preliminary budget shall be subject to examination, at reasonable times during business hours, at the office of the City Secretary of each Contracting Party that is a city or town, and at the then current business office of each other Contracting Party. If no protest or request for W a hearing on such preliminary budget is presented to the Authority within ten days after such filing of the preliminary budget by one or more Contracting Parties or by the owners of a minimum of 25% in principal amount of the Bonds then outstanding, the preliminary budget for the System shall be considered for all purposes as the "Annual Budget" for the next ensuing Annual Payment Period. But if protest or request for a hearing is duly filed, it shall be the duty of the Authority to fix the date and time for a hearing on the preliminary budget, and to give not less than ten days notice thereof to the Contracting Parties. An appropriate Committee of the Authority shall consider the testimony and showings made in such hearing and shall report its findings to the Board of Directors of the Authority. The Board of Directors may adopt the preliminary budget or make such amendments thereof as to it may seem proper. The budget thus approved by the Board of Directors of the Authority shall be the Annual Budget for the next ensuing Annual Payment Period. The Annual Budget (including the first Annual Budget) may be amended by the Authority at any time to transfer from one division thereof to another funds which will not be needed by such division. The amount for any division, or the amount for any purpose, in the Annual Budget may be increased through formal action by the Board of Directors of the Authority even though such action might cause the total amount of the Annual Budget to be exceeded; provided that such action shall be taken only in the event of an emergency or special circumstances which shall be clearly stated in a resolution at the time such action is taken by the Board of Directors. Certified copies of the amended Annual Budget and resolution shall be filed immediately by the Authority with each Contracting Party. Section 13. PAYMENTS BY CONTRACTING PARTIES. (a) For the Wastewater services to be provided to the Contracting Parties under the Base Contract, the Supplemental Contracts, and this Contract, each of the Contracting Parties shall pay, at the time and in the manner hereinafter provided, its proportionate share of the Annual Requirement, which shall be determined as herein described and shall constitute a Contracting Party's Annual Payment. 27 Each of the Contracting Parties shall pay its part of the Annual Requirement for each Annual Payment Period directly to the Authority, in monthly installments, on or before the 10th day of each month, in accordance with the schedule of payments furnished by the Authority, as hereinafter provided. (b) For each Annual Payment Period each Contracting Party's proportionate share of the Annual Requirement shall be a percentage obtained by dividing the number of gallons of contributing flow of Wastewater estimated to be discharged into the System by such Contracting Party during such Annual Payment Period, as determined by the Authority after consultation with such Contracting Party, by the aggregate total number of gallons of contributing flow of Wastewater estimated to be discharged into the System by all Contracting Parties during such period, as determined by the Authority after consultation with all of the Contracting Parties, It is provided, however, that in estimating costs for services the Authority is specifically authorized, in its discretion, to estimate such costs based on an arbitrary assumption that the Annual Payment Period for which the calculation is being made will be an extremely dry year, rather than a normal or average year, and that accordingly the contributing flow of Wastewater discharged into the System will be less than expected normally or on an average, all with the result that the monthly payments made by the Contracting Parties may be higher than would have been required on the basis of a normal or average year, and with the further result that the total amount required to meet the then current Annual Budget for the System may be collected by the Authority before the end of the then current Annual Payment Period. This result is expressly approved by the Contracting Parties and is deemed by the parties hereto to be beneficial in the fiscal management of the System, and will assure the timely availability of funds even under unexpected circumstances. However, upon receipt during any Annual Payment Period of an amount sufficient to meet the then current Annual Budget of the System for the remainder of the then current Annual Payment Period, the 28 Authority immediately shall notify the Contracting Parties, and they shall not be obligated to make furilier payments under this Section for the remainder of that Annual Payment Period, unless otherwise specifically hereinafter provided in the event of unexpected or additional Annual Budget requirements. It is further provided that the Authority may revise its estimates of contributing flow either monthly or for any other period within an Annual Payment Period, as determined by the Authority, and such revised estimates may be made on the basis of actual metered contributing flow during the preceding month or other period, to the end that the Authority may use its best efforts to avoid to the extent practicable unnecessary final adjustments among the Contracting Parties for each Annual Payment Period. All such payments for each Annual Payment Period shall be made in accordance with a written schedule of payments for the appropriate Annual Payment Period which will be supplied to each of the Contracting Parties by the Authority. Such schedule of payments may be revised by the Authority periodically based on any changes in its estimates of contributing flow as provided above, and each revised schedule of payments shall be supplied to each Contracting Party before the beginning of the period to which it is applicable. At the close of each Annual Payment Period the Authority shall determine the actual metered number of gallons of contributing flow of Wastewater discharged into the System by each Contracting Party during said period and determine each Contracting Party's actual percentage of the Annual Requirement by dividing such Contracting Party's actual metered contributing flow by the actual metered contributing flow of all Contracting Parties. Each Contracting Party's Adjusted Annual Payment shall be calculated by multiplying each such Contracting Party's redetermined percentage times the actual Annual Requirement. The difference between the amounts which actually have been paid by each Contracting Party and the amounts actually due from such Contracting Party hereunder shall be applied as a credit or a debit to such Contracting Party's account with the Authority and shall be credited or debited to such Contracting Party's next M monthly payment, or as otherwise agreed between the Authority and the affected Contracting Party, provided that all such credits and debits shall be made in a timely manner not later than the end of the next following Annual Payment Period. (c)(i) Notwithstanding the provisions of (b), above, and as an exception thereto, it Is agreed that if, during any Annual Payment Period, the estimated and/or actual metered contributing flow of Wastewater into the System of any Contracting Party is, for any reason whatsoever, less than the minimum amount hereinafter prescribed and provided for it, such Conti -acting Party shall pay its share of each Annual Requirement as if its estimated and/or actual metered contributing flow of Wastewater into the System were such minimum amount. However, if such Contracting Party's estimated and/or actual metered contributing flow of Wastewater into the System is equal to or in excess of such minimum amount, its share of all of each Annual Requirement shall be calculated on the basis of estimated and actual contributing flow as provided in (b), above. All future contracts with each Additional Contracting Party shall provide for equitable minimums similar to those provided for below. Such minimums shall be fixed in amounts at least sufficient, as determined by the Authority, to assure an initial Annual Payment by such Additional Contracting Party for not less than the amount of its estimated contributing flow of Wastewater into the System during the first year of service 'under such contract. For the purpose of calculating the minimum percentage of each Annual Requirement for which each current Contracting Party is unconditionally liable, without offset or counterclaim (also see Section 16 hereof), the contributing flow of Wastewater into the System of each such Contracting Party, during each Annual Payment Period, shall be deemed to be not less than the minimum amount (regardless of whether or not such amount was actually discharged into the System) specified for such Contracting Party as follows: 30 City of Fort Worth: City of Haslet: City of Roanoke: City of Southlake: Circle T Municipal Utility District No. I of Tarrant and Denton Counties, Texas: City of Keller: Circle T Municipal Utility District No. 3 of Tarrant and Denton Counties, Texas: Town of Flower Mound (commencing with the effective date of the Fourth EMMMM the effective date of this Contract): � 365,00 �i 0 gallons "I'll 10,950.000 gallons 30,000 gallons per day for each remaining day of the Authority's then current Annual Payment Period, and 10,950,000 gallons for each entire Annual Payment Period thereafter. 30,000 gallons per day for each remaining day of the Authority's then current Annual Payment Period, and 10,950,000 gallons for each entire Annual Payment Period thereafter. provisions of (c)(i) above, and in consideration of (A) the admission of the Town as a Contracting Party to which the services and facilities of the existing System are being made 0 available and (B) the Annual Requirement payments made by Contracting Parties, prior to the Town becoming a Contracting Party, providing for the acquisition, construction and operation of the System, the Town shall be unconditionally liable, without offset or counterclaim (also see Section 16 hereof), to make a buy -in payment equal $141,980,00. The buy -in payment may be paid by the Town, at its option, as (A) a lump sum cash payment payable with the first monthly installment of its Annual Payment or (B) in five (5) annual installments, with each installment to be due on the anniversary date of the I' monthly installment of the Town's Annual Payment made hereunder, with each such annual installment of the buy -in to equal 1/5th of the total amount of the buy -in, plus interest accrued on the unpaid balance thereof at a rate for such annual period equal to six (6) percent per annum, based on a 360 day year composed of twelve (12) months and thirty (30) days per month. (d) Notwithstanding the foregoing, the Annual Requirement, and each Contracting Party's share thereof, shall be redetermined, after consultation with each of the Contracting Parties, at any time during any Annual Payment Period, to the extent deemed necessary or advisable by the Authority, if (i) The Authority commences furnishing services of the System to an Additional Contracting Party or Parties" (ii) Unusual, extraordinary, or unexpected expenditures for Operation and Maintenance Expenses are required which are not provided for in the Authority's Annual Budget for the System or in any Bond Resolution; (iii) Operation and Maintenance Expenses are substantially less than estimated-, (iv) The Authority issues Bonds which require an increase in the Bond Service Component of the Annual Payment; or (v) The Authority receives either significantly more or significantly less revenues or other amounts than those anticipated. 32 (e) During each Annual Payment Period all revenues received by the Authority from providing services of the System to parties which are not Contracting Parties, and all surcharges collected from any Contracting Party under Section 4, above, shall (i) first be credited to the Operation and Maintenance Component of the Annual Requirement, and (ii) then any remainder credited to the Bond Service Component of the Annual Requirement, with the result that such credits under (i) and (ii), respectively, shall reduce, to the extent of such credits., the amounts of such Components, respectively, which otherwise would be payable by the Contracting Parties pursuant to the method prescribed in (b) and (c), above. The Authority may estimate all such credits which it expects to make during each Annual Payment Period in calculating each Annual Payment. (f) Each Contracting Party shall make payments to the Authority required by this Section on or before the 10th day of each month of each Annual Payment Period. If any Contracting Party at any time disputes the amount to be paid by it to the Authority, such complaining party shall nevertheless promptly make such payment or payments, but if it is subsequently determined by agreement or court decision that such disputed payments made by such complaining party should have been less, or more, the Authority shall promptly revise and reallocate the charges among all Contracting Parties in such manner that such complaining party will recover its overpayment or the Authority will recover the amount due it. All amounts due and owing to the Authority by each Contracting Party or due and owing to any Contracting Party by the Authority shall, if not paid when due, bear interest at the rate of ten (10) percent per annum from the date when due until paid. The Authority shall, unless specifically prohibited by law, discontinue the services of the System to any Contracting Party which remains delinquent in any payments due hereunder for a period of sixty days, and shall not resume such services while such Contracting Party is so delinquent. It is further provided and agreed that if any Contracting Party should remain delinquent in any payments due ral hereunder for a period of one hundred twenty days, and if such delinquency continues during any period thereafter, such Contracting Party's minimum amount of gallons of Wastewater specified and described in (c), above, shall be deemed to have been zero gallons during all periods of'such delinquency, for the purpose of calculating and redetermining the percentage of each Annual Payment to be paid by the non-delinquent Contracting Parties, and the Authority shall redetermine such percentage on that basis in such event so that the non-delinquent Contracting Parties collectively shall be required to pay all of the Annual Requirement. However, the Authority shall pursue all legal remedies against any such delinquent Contracting Party to enforce and protect the rights of the Authority, the other Contracting Parties, and the holders of the Bonds, and such delinquent Contracting Party shall not be relieved of the liability to the Authority for the payment of all amounts which would have been due hereunder, in the absence of the next preceding sentence. It is understood that the foregoing provisions are for the benefit of the holders of the Bonds so as to insure that all of the Annual Requirement will be paid by the non-delinquent Contracting Parties during each Annual Payment Period regardless of the delinquency of a Contracting Party, If any amount due and owing by any Contracting Party to the Authority is placed with an attorney for collection, such Contracting Party shall pay to the Authority all attorneys fees, in addition to all other payments provided for herein, including interest. (g) If, during any Annual Payment Period, any Contracting Party's Annual Payment is redetermined in any manner as provided or required in this Section, the Authority will promptly furnish such Contracting Party with an updated schedule of monthly payments reflecting such redetermination. Section 14. SPECIAL PROVISIONS. (a) The Authority will continuously operate and maintain the System (which, for operation and maintenance purposes only, also includes 34 the Wastewater Interceptor System) in an efficient manner and in accordance with good business and engineering practices, and at reasonable cost and expense. (b) The Authority agrees to carry fire, casualty, public liability, and other insurance (including self-insurance to the extent deemed advisable by the Authority) on the System for purposes and in amounts which ordinarily would be carried by a privately owned utility company owning and operating such facilities, except that the Authority shall not be required to carry liability insurance except to insure itself against risk of loss due to claims for which it can, in the opinion of the Authority's legal counsel, be liable under the Texas Tort Claims Act or any similar law or judicial decision. Such insurance will provide, to the extent feasible and practicable, for the restoration of damaged or destroyed properties and equipment, to minimize the interruption of the services of such facilities. All premiums for such insurance shall constitute an Operation and Maintenance Expense of the System. (c) The System was initially placed in operation in 1989. It is expressly understood and agreed, however, that any obligations on the part of the Authority to improve and extend the System when necessary or advisable and to provide additional services of the System to Contracting Parties shall be conditioned (i) upon the Authority's ability to obtain all necessary permits, material, labor, and equipment, (ii) upon the ability of the Authority to finance the cost of the System through the actual sale of the Authority's Bonds, and (iii) 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. (d) The Town represents and covenants that all payments to be made by it under this Contract shall constitute reasonable and necessary "operating expenses" of its combined waterworks and sewer system, and that such payments will be made from revenues of its combined waterworks and sewer system. The Town represents and has determined that the services to be provided by the System are necessary and essential to the operation of its 35 aforesaid system, and that the System constitutes the best available and adequate method for discharging, receiving, treating, and disposing of its Wastewater from the Denton Creek drainage area, and, accordingly, all payments required by this Contract to be made by the Town shall constitute reasonable and necessary operating expenses of its system, as described above, with the effect that the obligation to make such payments from revenues of such system shall have priority over any obligation to make any payments from such revenues of principal, interest, or otherwise, with respect to all bonds or other obligations heretofore or hereafter issued by the Town. (e) The Town agrees to continuously operate and maintain its combined waterworks and sewer system, and to fix and collect such rates and charges for water services and/or sewer services to be supplied by its system as aforesaid as will produce revenues in an amount equal to at least (i) all of the expenses of operation and maintenance expenses of such system, including specifically its payments under this Contract, (ii) its payments from such revenues required under any other contracts, and (iii) all other amounts as required by law and the provisions of the ordinances or resolutions authorizing its revenue bonds or other obligations now or hereafter outstanding, including the amounts required to pay all principal of and interest on such bonds and other obligations. (f) The Authority covenants and agrees that neither the proceeds from the sale of the Bonds, nor the moneys paid to it pursuant to this Contract, nor any earnings from the investment of any of the foregoing, will be used for any purposes except those directly relating to the System, the Wastewater Interceptor System, and the Bonds as provided in this Contract-, provided that the Authority may rebate any excess arbitrage earnings from such investment earnings to the United States of America in order to prevent any Bonds from becoming "arbitrage bonds" within the meaning of the IRS Code of 1986 or any amendments thereto in effect on the date of issue of such Bonds. Each of the Contracting Parties has and/or hereby M, covenants and agrees that it will not use or permit the use of the System in any manner that would cause the interest on any of the Bonds to be or become subject to federal income taxation under the IRS Code of 1986 or any amendments thereto in effect on the date of issue of such Bonds. (g) The Town shall not assign its interest in this Contract or any of its rights or obligations hereunder without the written consent of the Authority. With the written consent of the Authority, the Town may assign its interest in this Contract to another party provided that the Town, under the terms of any such assignment, shall remain and be primarily responsible and liable for all of its obligations hereunder, including particularly the payment of its proportionate share of the Annual Requirement, as provided and determined by this Contract. Section 15. FORCE MAJEURE. If by reason of force majeure any party hereto shall be rendered unable wholly or in part to carry out its obligations under this Contract, other than the obligation of the Town to make the payments required under Section 13 of this Contract, then if such party shall give notice and full particulars of such force majeure in writing to the other party within a reasonable time after occurrence of the event or cause relied on, the obligation of the party giving such notice, so far as it is affected by such force majeure, shall be suspended during the continuance of the inability then claimed, but for no longer period, and any such party shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "Force Majeure" as employed herein shall mean acts of God, strikes, lockouts, or other industrial disturbances, acts of public enemy, orders of any kind of the Government of the United States or the State of Texas, or any Civil or military authority, insurrection, riots, epidemics, landslides, lightning, earthquake, fires, hurricanes, storms, floods, washouts, droughts, arrests, restraint of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipelines or canals, partial or entire failure of 37 water supply, or on account of any other causes not reasonably within the control of the party claiming such inability. Section 16. UNCONDITIONAL OBLIGATION TO MAKE PAYMENTS. Recognizing the fact that the Town urgently requires the facilities and services of the System, and that such facilities and services are essential and necessary for actual use and for standby purposes, and recognizing the fact that the Authority will use payments received from the Town under this Contract to pay and secure its Bonds, it is hereby agreed that the Town shall be unconditionally obligated to pay, without offset or counterclaim, its proportionate share of the Annual Requirement, as provided and determined by this Contract (including the obligations for paying for "minimums" as described in Section 13 hereof), regardless of whether or not the Authority actually acquires, constructs, completes, improves, or extends the System, or is actually operating or providing services of the System to the Town, or whether or not the Town actually uses the services of the System whether due to Force Majeure or any other reason whatsoever, regardless of any other provisions of this or any other contract or agreement between any of the parties hereto. This covenant by the Town shall be for the benefit of and enforceable by the holders of the Bonds and/or the Authority. Section 17, EFFECTIVE DATE AND TERM OF CONTRACT; MODIFICATION; NOTICES; STATE OR FEDERAL LAWS, RULES, ORDERS, OR REGULATIONS, TERMINATION. (a) Effective Date. The effective date of this Contract shall be March 1, 2000. Following its effective date, this Contract shall continue in force and effect during the entire usefil life of the System. (b) Modification. No change, amendment, or modification of this Contract shall be made or be effective which will affect adversely the prompt payment when due of all moneys required to be paid by the Town under the terms of this Contract and no such change, 38 amendment, or modification shall be made or be effective which would cause a violation of any provisions of any Bond Resolution. (c) Addresses and Notice. Unless otherwise provided herein, any notice, communication, request, reply, or advice (herein severally and collectively, for convenience, called "Notice") herein provided or permitted to be given, made, or accepted by any party to any other party must be in writing and may be given or be served by depositing the same in the United States mail postpaid and registered or certified and addressed to the party to be notified, with return receipt requested, or by delivering the same to an officer of such party, or by prepaid telegram when appropriate, addressed to the party to be notified. Notice deposited in the mail in the manner hereinabove described shall be conclusively deemed to be effective, unless otherwise stated herein, from and after the expiration of three 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, until changed as hereinafter provided, be as follows: If to the Authority, to: Trinity River Authority of Texas 5300 S. Collins Arlington, Texas 76018 If to the Town, to: Town of Westlake 93 Village Circle, #207 Solana Westlake, Texas 76262 The parties hereto shall have the right from time to time and at any time to change their respective addresses and each shall have the right to specify as its address any other address by at least fifteen (15) days' written notice to the other parties hereto. (d) State or Federal Laws, Rules, Orders or Regulations. This Contract is subject to all applicable Federal and State laws and any applicable permits, ordinances, rules, orders, and 39 regulations of any local, state, or federal governmental authority having or asserting jurisdiction, but nothing contained herein shall be construed as a waiver of any night to question or contest any such law, ordinance, order, rule, or regulation in any for -um having jurisdiction. Section 18, SEVERABILITY. The parties hereto specifically agree that in case any one or more of the sections, subsections, provisions, clauses, or words of this Contract or the application of such sections, subsections, provisions, clauses, or words to any situation or circumstance should be, or should be held to be, for any reason, invalid or unconstitutional, under the laws or constitutions of the State of Texas or the United States of America, or in contravention of any such laws or constitutions, such invalidity, unconstitutionality, or contravention shall not affect any other sections, subsections, provisions, clauses, or words of this Contract or the application of such sections, subsections, provisions, clauses., or words to any other situation or circumstance, and it is intended that this Contract shall be severable and shall be construed and applied as if any such invalid or unconstitutional section, subsection, provision, clause, or word had not been included herein, and the rights and obligations of the parties hereto shall be construed and remain in force accordingly. Section 19. REMEDIES UPON DEFAULT. It is not intended hereby to specify (and this Contract 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 the Authority's undertaking to provide and maintain the services of the System is an obligation, failure in the performance of which cannot be adequately compensated in money damages alone, the Authority agrees, in the event of any default on its part, that the Town 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 may also be available. Recognizing that M failure in the performance of the Town's obligations hereunder could not be adequately compensated in money damages alone, the Town agrees in the event of any default on its part that the Authority 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 may also be available to the Authority. Notwithstanding anything to the contrary contained in this Contract, any right or remedy or any default hereunder, except the right of the Authority to receive the Annual Payment which shall never be determined to be waived, shall be deemed to be conclusively waived unless asserted by a proper proceeding at law or in equity within two (2) years plus one (1) day after the occurrence of such default. No waiver or waivers of any breach or default (or any breaches or defaults) by any party hereto or of performance by any 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. Section 20. VENUE. All amounts due under this Contract, including, but not limited to, payments due under this Contract or damages for the breach of this Contract, shall be paid and be due in Tarrant County, Texas, which is the County in which the principal administrative offices of the Authority are located. It is specifically agreed among the parties to this Contract that Tarrant County, Texas, is the place of performance of this Contract; and in the event that any legal proceeding is brought to enforce this Contract or any provision hereof, the same shall be brought in Tarrant County, Texas. [The balance of this page is intentionally left blank.] 41 IN WITNESS WHEREOF, the parties hereto acting under authority of their respective governing bodies have caused this Contract to be duly executed in several counterparts, each of which shall constitute an original, all as of the day and year first above written, which is the date of this Contract, Kecretary. Board of DirectoW Z7 (AUTHORITY SEAL) ATTEST: Town Secretary (CITY SEAL) Town Manari LIM TOWN OF WESTLAKE, TEXAS m Mayor�e