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HomeMy WebLinkAboutNovember 8, 2007 Special Session BackupTown of Trophy Club Municipal Utility District No.1 Meeting Agenda 100 Municipal Drive Trophy Club, Texas 76262 Thursday, November 8, 2007 4:00 P.M. A.1 Call to Order and Announce a Quorum. A.2 Public Comments or Presentations. B.1 Discuss and take appropriate action on the Settlement Agreement between Trophy Club MUD 1 and Trophy Club MUD 2 regarding Centurion American funds. B.2 Discuss and take appropriate action relative to the Interlocal Agreement between Trophy Club MUD No. 1 and Trophy Club MUD No. 2 and the Town of Trophy Club to provide water supply and wastewater treatment services to the Town of Trophy Club (money contract). B.3 Discuss and take appropriate action relative to the Interlocal Agreement between Trophy Club MUDs (Trophy Club MUD 1, Trophy Club MUD 2, and Trophy Club Master District) and the Town of Trophy Club to provide water supply and wastewater treatment and operational services to the Town of Trophy Club (operations contract). B.4 Discuss and take appropriate action regarding a resolution to amend the Trophy Club Municipal Utility District No.1 budget for fiscal year October 1, 2006 through September 30, 2007. D.1 Set Next Meeting Date Next regularly scheduled meeting date: Tuesday, December 4, 2007, 6:00 p.m. F.1 Adjourn. MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 11-8-2007 Subject: Agenda Item No.A.1 Call to Order and Announce a Quorum. (mm) MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 11-8-2007 Subject: Agenda Item No.A.2 Public Comments or Presentations. (mm) MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 11-8-2007 Subject: Agenda Item No. B.1 Discuss and take appropriate action on the Settlement Agreement between Trophy Club MUD 1 and Trophy Club MUD 2 regarding Centurion American funds. EXPLANATION: RECOMMENDATION: ACTION BY MUD1: (pl) Attachments: 1. Settlement Agreement Settlement Agreement Between Trophy Club Municipal Utility District No. 1 and Trophy Club Municipal Utility District No. 2 Regarding Centurion American Funds The parties to the dispute, Trophy Club Municipal Utility District No. 1 (TCMUD1) and Trophy Club Municipal Utility District No. 2 (TCMUD2), entered into an intermediation on September 7, 2007 regarding the distribution of the funds received by the Town of Trophy Club payable to the Municipal Utility Districts for the right to access the MUDs’ water supply and wastewater treatment services and system. As a result of the intermediation, the parties agree as follows: I. The initial payment of $540,000 will be paid in its entirety to MUD2. II. All funds realized after the initial payment of $540,000 will be split 75/25 as payments are received. 75% of the funds realized will be paid to MUD 2, and 25% of the funds realized will be paid to MUD1. III. MUD2 current board members agree to not petition or participate in any effort by the Town of Trophy Club to take them over and dissolve them nor will they assist in any hostile takeover effort by the Town of Trophy Club to takeover and dissolve MUD 2. IV. It is understood by both MUDs that the wastewater treatment plant capacities are allocated 50/50 equally between the two MUDs. V. Both MUD1 and MUD2 agree that all past disputes between the two districts are mutually released, whatever those disputes might be. VI. William “Bill” Schweinle’s mediator/facilitator fees are to be paid one-hundred percent (100%) by MUD 2. VII. The terms of this agreement were approved by the boards of MUD1 and MUD2 in open session on September 7, 2007. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 By: ATTEST: By: Name: Title: TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 2 By: ATTEST: By: Name: Title: MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 11-8-2007 Subject: Agenda Item No.B.2 Discuss and take appropriate action relative to the Interlocal Agreement between Trophy Club MUD No. 1 and Trophy Club MUD No. 2 and the Town of Trophy Club to provide water supply and wastewater treatment services to the Town of Trophy Club (money contract). EXPLANATION: Attached is the most recent version of the “money” contract, containing language from the Town Attorney under 4.1 (B) Utility Fees. The Letter of Credit from Centurion American was not available at the time packets went out. Copies of the Letter will be forwarded when received and will be available at the meeting. RECOMMENDATION: ACTION BY MUD1: (wrf) Attachments: 1. Interlocal Agreement/Money Contract CONTRACT FOR WATER SUPPLY AND WASTEWATER TREATMENT, BETWEEN THE TOWN OF TROPHY CLUB, TEXAS, TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 AND TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 2 This WATER SUPPLY and WASTEWATER TREATMENT CONTRACT (“Contract”) is entered into between THE TOWN OF TROPHY CLUB, TEXAS, a home rule municipality located in Denton and Tarrant Counties (hereinafter “Town”), and TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. ONE 1 (hereinafter “MUD1”), and TROPHY CLUB MUNICIPAL UTILITY NO. TWO 2 (hereinafter “MUD2”), both Districts created pursuant to Section 59, Article XVI, Texas Constitution and the Texas Water Code, Chapter 54, AND TROPHY CLUB MASTER DISTRICT, a joint venture of Trophy Club Municipal Utility District No. 1 and Trophy Club Municipal Utility District No. 2, MUD1 and MUD2 and Trophy Club Master District are hereafter referred to collectively as “MUDs.” Recitals WHEREAS, prior to the execution of this Agreement, the MUDs entered into an agreement which established the Trophy Club Master District, an agency established for the purpose of collectively performing administrative and operational functions that were originally performed by MUD 1 and MUD 2 individually (hereinafter “Master District”); and WHEREAS, Master District is not a public utility agency organized and formed under the Texas Local Government Code; and WHEREAS, MUDs desire to have the Master District as a signatory on this Agreement; and, WHEREAS, Town agrees to allow Master District to sign this Agreement for the sole purpose specified in these recitals; and WHEREAS, by signing this Agreement, Master District hereby expressly acknowledges that it is aware of the existence of this Agreement, but that it has no standing to bring suit, file a claim under any term of this Agreement, or otherwise seek damages or specific performance of this Agreement separate and apart from or in addition to that of MUD 1 and MUD2, individually or collectively; and WHEREAS, MUDs currently supply water and wastewater treatment and distribution and collection services to those customers located within the boundaries of MUDs; and WHEREAS, Town is empowered under the Texas Constitution and laws of the State of Texas to provide Water and Wastewater Services to a certain portion of property located within the territorial boundaries of Town which property is not located within the boundaries of MUDs nor is provided water or wastewater services therefrom, hereinafter referred to as the “Property” and more fully described in Exhibit “A”; and WHEREAS, as a result of the development occurring on the Property, Town desires to receive access to water supply and wastewater treatment from MUDs to serve the Property, in accordance with the terms and provisions set forth herein; and WHEREAS, Town has created Trophy Club Public Improvement District No. 1 (hereinafter the “PID”) within the boundaries of the Property; and WHEREAS, in the process of creating the PID and the accompanying development agreement, the Developer(s) of the Property has agreed to make certain payments to Town for the right to access and receive water supply and wastewater treatment from the existing waster and wastewater facilities owned by MUDs, and Town has agreed to enter into this interlocal agreement with MUDs to secure the desired water supply and wastewater treatment facilities for the Property, and such services specifically set forth herein; and WHEREAS, in order to allow the Town and Developer(s) to proceed forward with the development of the Property, the Parties have agreed that the funds to be paid to the MUDs pursuant to this Contract will be deposited into an escrow account with a neutral escrow agent until such time as MUD1 and MUD2 reach agreement with each other as to how such funds should be distributed or used; and WHEREAS, MUDs understand and acknowledge that they are entering into this Contract to provide Water Supply Transmission Services and/or Wastewater Services for the purpose of allowing the Town to provide Water and Wastewater Services to Town Customers; and WHEREAS, the purpose of this Agreement is to outline the terms and conditions of payment for which MUDs will provide access to water supply and wastewater treatment and the payments that will be made for such access; and WHEREAS, the Interlocal Cooperation Act, Texas Government Code, Chapter 791, et seq., as amended (the “Act”) provides authority for governmental entities of the State of Texas to enter into Interlocal Agreements with each other regarding governmental functions and services as set forth in the Act; and WHEREAS, the provision of water and wastewater facilities is a valid governmental function necessary for the public health, safety and welfare as provided in the Intergovernmental Relations Section of the Texas Government Code at Chapter 791.026 which authorizes the Parties to contract to obtain or provide all or part of water supply and wastewater treatment facilities under a contract that extends for any period on which the parties agree; and WHEREAS, each Party hereto paying for the performance of governmental functions or services shall make such payments from current revenues legally available to the paying Party and each Party hereby finds and agrees that it is fairly compensated for the services or functions performed under the terms of this Contract. NOW, THEREFORE, Town and MUDs, for and in consideration of the recitals set forth above and terms and conditions below, agree as follows: ARTICLE I. INCORPORATION / DEFINITIONS / EXHIBITS 1.1 Incorporation of Recitals. The foregoing recitals are agreed upon and incorporated herein as a part of this Contract. 1.2 Definitions. Unless the content indicates others, the following words used in this Contract shall have the following meanings: Commission means the Texas Commission on Environmental Quality and any successor or successors exercising any of its duties and functions related to municipal utility districts. Developer(s) means the owner and additional owners of the Property as identified in the Highlands at Trophy Club Development and Public Improvement District Agreement executed by and between Town and record owners of the Property and shall also include subsequent Person(s) who purchase the Property or a portion thereof. Development Agreement means that separate agreement between Town and the Developer(s) of the Property, as amended from time to time, regulating the terms and conditions of the development of that Property and under which the Developer has agreed to make certain payments to Town in consideration for Town’s agreement to enter into a contract with MUDs to purchase water supply and wastewater treatment for the benefit of the Property. EPA means the federal Environmental Protection Agency and any successor or successors exercising any of its duties and functions related to municipal utility districts. Existing Infrastructure means Water System and Wastewater System and all components thereof existing and operational and owned and/or controlled by MUDs, whether individually or jointly, on the date of execution of this Contract. Fort Worth Water Contract means the Contract for Water Service between the City of Fort Worth, Texas, and Trophy Club Municipal Utility District No. 1, dated September 22, 1992, as amended. Interconnect Line means the water line(s) constructed by Town to connect to MUDs’ Water System of the size and at the location to be mutually agreed upon by Town and MUDs. Lift Station means any mechanical means of conveying wastewater by force. MUDs Escrow Account means the escrow account established by MUDs with a neutral third-party escrow agent such as TexPool, a bank, or other escrow business, where funds paid by Town under this Contract will be deposited and remain invested until MUD1 and MUD2 reach agreement with each other as to how such funds should be distributed or used. ALTERNATIVELY: remain invested until disposition of the funds is directed by agreement of MUD1 and MUD2, by court order, or by order of a binding arbitrator. Parties or Party shall mean either one or more of the MUDs or Town or both, as the context provides. Person(s) means an individual, corporation, partnership, association, joint venture or any other third party legal entity. Points of Connection of Wastewater means that point or points where Town Wastewater System connects to MUDs’ Wastewater System. Points of Connection of Water means that point or points where Town Water System connects to MUDs’ Water System. Property means that certain portion of property located within the territorial boundaries of Town of Trophy Club and to which Town is empowered under the Texas Constitution and laws of the state of Texas to provide Water and Wastewater Services and which property is not located within the boundaries of either of MUDs nor is provided Water or Wastewater services from either of MUDs. Town means Town of Trophy Club, Texas, a home rule municipality located in Denton and Tarrant Counties, Texas, and all land included within the territorial limits and extraterritorial jurisdiction of Town, at Town’s creation and thereafter annexed from time to time, excluding any and all land that is part of the Town but which lies outside of the service area as identified in the Fort Worth Water Contract. Town Customers means any Person(s) not in the MUD districts who has the right to receive, who contract to receive or who otherwise receive Water and/or Wastewater Services from Town Water Distribution System and/or Town Wastewater Collection System. Town Wastewater Collection System means the wastewater system that may be constructed, owned and operated by Town to serve Town for the collection of Wastewater received from customers within Town, ending at the Point of Connection of Wastewater, and will include any sewer force mains and Lift Stations that will be required to transport Wastewater to the Point of Connection of Wastewater. Town Water Distribution System means the water distribution system that may be constructed, owned and operated by Town for the distribution of potable water received from MUDs to Town Customers and beginning at the Points of Connection of Water. Town Water Tower means a minimum 500,000 gallon elevated storage tank to be constructed and owned by Town. Utility Fee means a payment of $2300 charged to each applicant for a residential building permit in need of a 1”(one inch)5/8” meter, which payment shall be to compensate MUDs for the right of such applicant to access and receive Water Supply Transmission Services and Wastewater Treatment from Existing Infrastructure; provided however, that such fee shall increase as meter size increases in accordance with applicable Town Ordinances and MUD Orders. means a payment of $2,300 to be paid at the time of issuance of each building permit in need of a 5/8” meter for such 5/8” meter, which payment shall be to compensate MUDs for the right to access and receive Water Supply Transmission Services and Wastewater Treatment from Existing Infrastructure. Should the needed meter be larger than 5/8”, then the charge above referred to shall be increased proportionally. Wastewater means the water-carried wastes, exclusive of ground, surface, and storm waters, normally discharged from the sanitary conveniences of dwellings, including apartment houses, hotels, offices buildings and institutions, of a domestic, not industrial, nature, meeting the requirements of the Commission (defined above) and EPA, including any successor agencies, set forth in and regulated by state and federal law, as may be amended or superseded from time to time. Wastewater Services means the services provided by MUDs in receiving, treating, testing, and disposing of Wastewater from Town Wastewater System in accordance with the Contract. Wastewater System means the wastewater collection lines, lift stations, pipes, valves, meters, pumps, motors, treatment plant, effluent discharge lines, and other facilities and equipment owned or controlled by MUD1, MUD2, or Trophy Club Master District and operated as part of the central wastewater collection and treatment system for MUD1 and MUD2 and their customers, and also including the existing PERMIT TO DISCHARGE WASTES, TPDES PERMIT NO. WQ0011593001, issued March 26, 2007, by the Commission to MUD1, as amended, or any other such governmental permit authorizing the treatment of wastewater by MUDs. Wastewater Trunk Facilities means the trunk line facilities that may be constructed by Town to connect Town Wastewater System to MUDs Wastewater System as provided in Article V of this Contract. Water or Water Supply means potable water that meets federal and state standards for consumption by humans. Water Supply Transmission Services means the services provided by MUDs in treating, pumping, transporting, and delivering Water from MUDs’ Water System to Town Water Distribution System for consumption by Town customers Customers in accordance with this Contract. Water System means the water wells, water transmission pipeline from the City of Fort Worth (or other wholesale water supplier), mixing and treatment facilities, pipes, valves, meters, ground storage tanks, elevated storage tank, pumps, motors, distribution lines and other facilities and equipment owned or controlled by MUD1, MUD2 or Trophy Club Master District and operated as part of the central treated water system for MUD1 and MUD2 and their customers, and also including the existing CONTRACT FOR WATER SERVICE BETWEEN THE CITY OF FORT WORTH, TEXAS, AND TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (as the owner of legal title and operator of common utility facilities in Trophy Club development at that time) dated September 22, 1992, as amended, or any other such wholesale water supply contract to MUDs. 1.3 Exhibits. The following Exhibits attached to this Contract are hereby made a part of the Contract as though fully incorporated herein: Exhibit “A” - Property Boundaries Exhibit “B” - Points of Connection of Water and Wastewater NOTE: NEED EXHIBITS. ARTICLE II. POINTS OF CONNECTION - WATER 2.1 Points of Connection of Water. MUDs shall deliver Water to Town Water Distribution System at the Points of Connection of Water. The location of the first Point of Connection of Water shall be at the point shown on Exhibit “B.” MUDs shall not be required to provide Water to Town, except for testing of line purposes, until the completion by Town and final approval of the Interconnect Line by MUDs, which final approval shall not be unreasonably withheld by MUDsS. Any subsequent Points of Connection of Water will be at a point(s) mutually agreed upon in writing by the Parties and shall be based upon design standards and industry standard engineering practices. ARTICLE III. POINTS OF CONNECTION - WASTEWATER 3.1 3.1 Points of Connection of Wastewater. MUDs shall receive Wastewater from Town Wastewater System at the Points of Connection of Wastewater. The location of the first Point of Connection of Wastewater shall be at the point shown on Exhibit “B,” MUDs shall not be required to commence Wastewater Service to Town until the completion by Town and final approval of the Wastewater Trunk Facilities by MUDs, which final approval shall not be unreasonably withheld by MUDsS. Any subsequent Points of Connection of Wastewater will be at a point(s) mutually agreed upon in writing by the Parties and shall be based upon design standards and industry standard engineering practices. ARTICLE IV. COMPENSATION TO MUDS FOR ACCESS TO EXISTING INFRASTRUCTURE 4. 1 Consideration. MUDs understand and acknowledge that Town has entered into a separate Development Agreement for the Property and that the terms of the Development Agreement require Town to obtain access to and provide water and wastewater treatment services for the Property. In consideration for the right to access and receive Water Supply Transmission Services and Wastewater Services from Existing Infrastructure and so that Town may fulfill its obligations under the Development Agreement, Town agrees to pass-through the following payments to MUDs in accordance with the terms of this section: A. Lump Sum Payment. Within fifteen (15) days of Town’s receipt of the $540,000 lump sum payment due from Developer pursuant to the Development Agreement for the right to access Water Supply and Wastewater Treatment, Town shall pay deposit such sum into to “MUDs. Escrow Account.” Such payment shall be in consideration for the right to access Water Supply in the Existing Infrastructure prior to any connection to the Existing Infrastructure. Town shall pass-through such payment to MUDs Escrow Account as directed by a majority of both MUD Boards, by order of a binding arbitrator, or as directed by court order. B. Utility Fees. Town’s fee schedule provides that an Utility Fee shall be paid to Town by the applicant for each residential building permit in need of a 5/8” meter, which fee shall be paid by Town to MUDs in accordance with the terms of this section in order to compensate MUDs for the right to access and receive Water Supply Transmission Services and Wastewater Services from Existing Infrastructure. Should applicant refuse to pay the Utility Fee, Water and Wastewater connection and services the application for the permit will be denied. Upon collection of one or more Utility Fees by Town, such Utility Fees shall, within ten (10) working days, be deposited by Town into an account designated by MUDs Escrow (hereinafter “MUDs Account”). Town shall continue to collect and to deposit such Utility Fees into MUDs Escrow Account in accordance with the existing agreement between the MUDs until such time as the total amount paid into that account equals $3,260,000. Town shall collect and deposit a minimum of one hundred fifty (150) Utility Fees each year, for a total of five (5) successive years commencing on May 7, 2008 (hereinafter “Collection Period”). In the event that more than 150 Utility Fees are collected by Town in any one or more years of the Collection Period, such Utility Fees in excess of the 150 Utility Fees required under this Section shall be carried over to the following year or years and shall be a credit toward the total Utility Fees due for such subsequent year or years. In the event that fewer than 150 Utility Fees are collected by Town during any one or more year(s) of the Collection Period, including those Utility Fees carried over from any given year in which more than 150 Utility Fees were collected by Town, Town shall within ten (10) working days of collection of such Utility Fees from Developer, pay into MUDs Escrow Account the difference between the amount that would have been paid had 150 Access Fees been paid at $2,300 each and the amount of Utility Fees actually collected by Town. On or after about May 7, 2013, Town shall calculate the total amount of Utility Fees paid to MUDs. Town shall provide MUDs written notice of any amount paid less than $3,260,000 (the "Utility Fee Remainder"). The Utility Fee Remainder shall either be paid in thirty (30) days of Town’s receipt of that payment from Developer pursuant to the Development Agreement, or within such thirty (30) day period, a letter of credit, or other financial security, which secures ten percent (10%) annual rate of interest of the Utility Fee Remainder, shall be obtained from Developer by Town pursuant to the Development Agreement., Annually thereafter, Town shall obtain from Developer pursuant to the Development Agreement, a letter of credit or other financial security, as approved by Town, for the benefit of the MUDs and securing the ten percent (10%) annual rate of interest of any remaining amount of Utility Fees paid less than $3,260,000, until the full $3,260,000 is paid. The parties understand that the Town is not required to obtain or to provide any additional security for the payments due hereunder; however, in the event that the Town obtains Aany and all letters of credit or other financial security obtained by Town in addition to those obtained pursuant to this Section, such letters of credit or security shall be obtained for the benefit of MUDs as security to ensure that payment of the $3,260,000 plus accrued interest, amount due to MUDs shall beis paid in full. Town shall pass-through such payment to MUDs Escrow Account as directed by a majority of both MUD Boards, by order of a binding arbitrator, or as directed by court order. C. Town Water Tower. Town intends to construct Town Water Tower. Upon the sale of the PID bonds, the process to design and construct the Town Water Tower will begin immediately.Town shall, as it determines in its sole discretion, construct and put into operation Town Water Tower at such time as Town determines it necessary and appropriate to construct such Town Water Tower. The Town agrees to provide and to maintain pressure to the entire water system as prescribed by Rules And Regulations For Public Water Systems; Texas Administrative Code Title 30, Chapter 290, Subchapter D, Rule §290.44. Water Distribution (d) Minimum pressure requirement. D. Impact Fees. Town understands that MUDs have a separate agreement for water services with the City of Fort Worth (hereinafter “Fort Worth Water Contract” as defined above) and that pursuant to that Fort Worth Water Contract, MUDs collect certain impact fees from their customers that are paid to Fort Worth. Town understands and agrees that as a water supply customer of MUDs, Town will be required to pay all impact fees due under the Fort Worth Water Contract. Therefore, Town agrees to take such actions necessary to collect or to allow for the collection from Town Customers an amount equal to the impact fee assessed by the City of Fort Worth pursuant to the Fort Worth Water Contract and to remit such sum to MUDs in the amount and in accordance with the terms set forth in the Fort Worth Water Contract. Upon receipt of such funds from Town, MUDs shall immediately remit that amount to the City of Fort Worth. Notwithstanding the foregoing, no amount shall be due and owing from Town to MUDs until such time as payment for impact fees is collected by Town from Town Customers. ARTICLE V. TERM 5.1 Term. This Contract shall become effective upon approval by each of the respective representative governing bodies of Town, MUD1 and MUD2 and upon execution by their respective authorized representatives, and shall remain in effect for a term of one (1) year until May 7th, 2013, or until the date on which the entire sum of Utility Fees {See Article IV, Section 4.1 (B) supra} shall reach $3,260,000, whichever shall come first, unless terminated for cause by any party as provided herein.and shall renew annually for succeeding additional terms of one (1) year each until the entire sum of Utility Fees shall reach $3,260,000 unless terminated by any Party as provided herein. 5.2 Termination for Default. Any Party to this Contract who believes that the other Party to this Contract has defaulted in the performance of any condition, term, or obligation owed to that Party under the this Contract other than the payment of monies owed hereunder shall give written notice of the default to the defaulting Party, specifying in detail the provision or provisions of the Contract that have been breached and specifying what action must be taken to cure or correct the default. Should the Party receiving the notice fail to correct the default within sixty (60) days following receipt of the written notice, and if such corrective action is within the power of the defaulting Party, the Party giving the notice of default may terminate this Contract by giving a written termination notice to the defaulting Party specifying the termination date. 5.3Termination without default. Any Party shall have the right to terminate this contract without cause upon written notice to the other Party, EXCEPTING those portions hereof which obligate the Town to collect and to pass-through when collected the Utility Fees above referred to until the total of Utility Fees paid reaches $3,260,000. Such notice of termination must be provided at least 180 days in advance of such termination date, but in no case shall termination be allowed earlier than one (1) year from the date of execution of this Contract. NOTE: Last paragraph appeared to be a hold over that was inconsistent with 5.1 and 5.2. 5.2 was revised to allow 60 day notice and cure for all defaults, including non payment of moneys. As previously written, the time frame for default for failure to pay was not specified. This change requires 60 day notice and cure period for all types of defaults. If separate periods are desired, the language will need to be revised to include that detail. ARTICLE VI. MISCELLANEOUS 6.1 Remedies Cumulative. The Parties specifically agree that the remedy of specific performance of this Contract is an appropriate and necessary remedy and agree that any Party may employ the remedy of specific performance in the event of a breach of this Contract. It is not intended hereby to specify (and this Contract shall not be considered as specifying) an exclusive remedy for any default, but all remedies, including specific performance and mandamus, may be availed of by any Party and shall be cumulative of any other remedy herein specified. 6.2 Immunity. The fact that Town and MUDs accept certain responsibilities relating to the access to and receipt of Water and Wastewater Services under this Contract as part of their responsibility for providing Water and Wastewater Services to their respective residents makes it imperative that the performance of these vital services be recognized as a governmental function and that the doctrine of governmental immunity shall be, and it is hereby, invoked to the extent possible under the law. Neither Town nor MUDs waive any immunity or defense against third party claims that would otherwise be available to it against claims arising from the exercise of governmental powers and functions. The Parties hereto agree that each respectively waives its sovereign immunity to suit for the limited purpose of adjudication of a claim for breach of this Contract. Notwithstanding the foregoing agreement, remedies in such action shall be limited to those provided by Chapter 271 of the Texas Local Government Code. 6.3 Force Majeure. If any Party is rendered unable, wholly or in part, by force majeure to carry out any of its obligations under this Contract, except the obligation to pay amounts owed or required to be paid pursuant to the terms of this Contract, then the obligations of such Party, to the extent affected by such force majeure and to the extent that due diligence is being used to resume performance at the earliest practicable time, shall be suspended during the continuance of any inability so caused to the extent provided but for no longer period. As soon as reasonably possible after the occurrence of the force majeure relied upon, the Party whose contractual obligations are affected thereby shall give notice and full particulars of such force majeure to the other Party. Such cause, as far as possible, shall be remedied with all reasonable diligence. The term "force majeure," as used herein, shall include without limitation of the generality thereof, acts of God, strikes, lockouts, or other industrial disturbances, acts of the public enemy, orders of any kind of the government of the United States or the State of Texas or any civil or military authority other than a Party to this Contract, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, restraint of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipelines or canals, partial or entire failure of water supply resulting in an inability to provide water necessary for operation of the water and sewer systems hereunder or in an inability of MUDs to provide Water or receive Wastewater, and any other inabilities of any Party, whether similar to those enumerated or otherwise, which are not within the control of the Party claiming such inability, which such Party could not have avoided by the exercise of due diligence and care. It is understood and agreed that the settlement of strikes and 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 and lockouts by acceding to the demands of the opposing Party when such settlement is unfavorable to it in the judgment of the Party experiencing such difficulty. 6.4 Applicable Law. This Contract shall be governed by the laws of the State of Texas and no lawsuit shall be prosecuted on this Contract except in a court of competent jurisdiction located in Denton County. 6.5 No Additional Waiver Implied. No waiver or waivers of any breach or default (or any beaches or defaults) by any Party hereto of any term, covenant, condition, or liability hereunder, or the performance by any Party of any duty or obligation hereunder, shall be deemed or construed to be a waiver of subsequent breaches or defaults of any kind, under any circumstances. 6.6 Addresses and Notice. Unless otherwise provided in this Contract, 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 the other (except bills), must be in writing and may be given or be serviced 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 such Party, 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 in this Contract, from and after the expiration of three (3) days after it is so deposited. Notice given in any such other manner shall be effective when received by the Party to be notified. For the purpose of notice, addresses of the Parties shall, until changed as hereinafter provided, be as follows: If to MUDs, to: If to Town, to: MUD Manager Town Manager, 100 Municipal Drive 100 Municipal Drive Trophy Club, Texas 76262 Trophy Club, Texas 76262 The Parties 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 any other address by at least fifteen (15) days' written notice to the other. 6.7 Merger and Modification. This Contract, including the exhibits that are attached hereto and incorporated herein for all purposes, embodies the entire agreement between the Parties relative to the subject matter hereof. This Contract shall be subject to change or modification only with the written mutual consent of all Parties affected by such change or modification. 6.8 Severability. The provisions of this Contract are severable, and if any part of this Contract or the application thereof to any person or circumstances shall ever be held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Contract and the application of part of this Contract to other persons or circumstances shall not be affected thereby. 6.9 Successors and Assigns. This Contract shall be binding upon and inure to the benefit of the Parties hereto and their successors. This Contract shall not be assigned without the written consent of the governing bodies of the respective entities. Notwithstanding the foregoing, this Contract is a non-exclusive Contract and all Parties hereto may, without consent or notice to the other Parties, contract with one or more third parties for the same or similar commodities or services provided under the terms of this Contract. 6.10 Benefits of Contract. This Contract shall not be construed to confer any benefit on any other Person or entity except as expressly provided for herein. 6.11 Non- Binding Mediation. The Parties agree that they shall first attempt to resolve disputes hereunder by the use of non-binding mediation. Therefore, in the event that any alleged default under this Contract cannot be resolved by agreement of the Parties or in the event that the Parties cannot resolve a conflict in or disagreement regarding interpretation of a specific provision(s) of this Contract, the dispute, conflict or disagreement shall be submitted to non-binding mediation as a condition precedent to (1) the filing of any lawsuit, and (2) the filing of any other type of legal or equitable action to resolve such default or dispute or to pursue available legal or equitable remedies. The costs of mediation shall be shared equally by all Parties participating in the mediation. 6.12 Consent and Approvals. Whenever this Contract provides for the approval or consent of one of the Parties, such consent or approval shall not be unreasonably withheld or delayed. TOWN OF TROPHY CLUB, TEXAS (TOWN SEAL) By: Name: Title: ATTEST: By: Name: Title: (MUD 1 SEAL) TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 By: ATTEST: By: Name: Title: (MUD 2 SEAL) TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 2 By: ATTEST: By: Name: Title: EXHIBIT “A” EXHIBIT “B” MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 11-8-2007 Subject: Agenda Item No. B.3 Discuss and take appropriate action relative to the Interlocal Agreement between Trophy Club MUDs (Trophy Club MUD 1, Trophy Club MUD 2, and Trophy Club Master District) and the Town of Trophy Club to provide water supply and wastewater treatment and operational services to the Town of Trophy Club (operations contract). EXPLANATION: RECOMMENDATION: ACTION BY MUD1: (Initials) Attachments: 1. Interlocal Agreement/Operations Contract CONTRACT FOR WATER AND WASTEWATER OPERATIONAL SERVICES BETWEEN THE TOWN OF TROPHY CLUB, TEXAS, TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 AND TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 2 This Contract for Water and Wastewater Operations Services (“Contract”) is entered into between THE TOWN OF TROPHY CLUB, TEXAS, a home rule municipality located in Denton and Tarrant Counties (hereinafter “Town”) and TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (hereinafter “MUD1”), AND TROPHY CLUB MUNICIPAL UTILITY NO. 2 (hereinafter “MUD2”), both Districts created pursuant to Section 59, Article XVI, Texas Constitution and the Texas Water Code, Chapter 54,AND and TROPHY CLUB MASTER DISTRICT, A JOINT VENTURE OFa joint venture of Trophy Club Municipal Utility District No. 1 and Trophy Club Municipal Utility District No. 2. MUD1 and MUD2 and TROPHY CLUB MASTER DISTRICT are hereafter referred to collectively as the “MUDs.” Recitals WHEREAS, MUDs currently supply water and wastewater treatment and distribution and collection services to those customers located within the boundaries of MUDs; and WHEREAS, Town is empowered under the Texas Constitution and laws of the State of Texas to provide Water and Wastewater Service to a certain portion of property located within the territorial boundaries of Town which property is not located within the boundaries of MUDs nor is provided water or wastewater services therefrom, hereinafter referred to as the “Property” and more fully described in Exhibit “A”; and WHEREAS, as a result of the development occurring on the Property, Town and MUDs have entered into a separate interlocal agreement for the right to access and receive water supply and wastewater treatment from the existing water and wastewater facilities owned by MUDs for the benefit of those residents of the Trophy Club Public Improvement District No. 1 (hereinafter the “PID”) and under this agreement Town desires to receive certain operational and administrative services from MUDs as more fully described herein; and WHEREAS, the purpose of this Agreement is to outline the terms and conditions under which MUDs will provide operational and administrative services related to the provision of Water Supply Transmission Services and Wastewater Services to Town for the benefit of Town Customers (defined below); and WHEREAS, the Interlocal Cooperation Act, Texas Government Code, Chapter 791, et seq., as amended (the “Act”) provides authority for governmental entities of the State of Texas to enter into Interlocal Agreements with each other regarding governmental functions and services as set forth in the Act; and WHEREAS, the provision of operational services necessary for and related to the operation of a Town Water Distribution System and Town Wastewater Collection System is a valid governmental function necessary for the public health, safety and welfare for which an interlocal agreement is allowed pursuant to the Act; and WHEREAS, each Party hereto paying for the performance of governmental functions or services shall make such payments from current revenues legally available to the paying Party and each Party hereby finds and agrees that it is fairly compensated for the services or functions performed under the terms of this Contract. NOW, THEREFORE, Town and MUDs, for and in consideration of the recitals set forth above and terms and conditions below, agree as follows: ARTICLE I. INCORPORATION / DEFINITIONS / EXHIBITS 1.1 Incorporation of Recitals. The foregoing recitals are agreed upon and incorporated herein as a part of this Contract. 1.3 Definitions. Unless the content indicates others, the following words used in this Contract shall have the following meanings: Commission means the Texas Commission on Environmental Quality and any successor or successors exercising any of its duties and functions related to municipal utility districts. Commission mandated means a requirement duly passed or enacted as part of a Commission rule, regulation, or permitting process. The term does not include a regulation or requirement that is merely proposed or being considered for passage, adoption or enactment by the Commission. EPA means the Environmental Protection Agency and any successor or successors exercising any of its duties and functions related to municipal utility districts. Existing Infrastructure means Water System and Wastewater System and all components thereof existing and operational and owned and/or controlled by MUDs, whether collectively or individually, on the date of execution of this Contract. Fort Worth Water Contract means the Contract for Water Service Between the City of Fort Worth, Texas, and Trophy Club Municipal Utility District NO. 1, dated September 22, 1992, as amended. Interconnect Line means the water line(s) constructed by Town to connect to MUDs Water System of the size and at the location to be mutually agreed upon by Town and MUDs. Lift Station means any mechanical means of conveying wastewater by force. MUD11 Adopted Rate Order shall mean the Rate Order adopted by Trophy Club Municipal Utility District No. 1 and numbered Order 20075-10131 effective November 1, 20075, and any amendments or revisions thereto. Operational Services means the operation, inspection, maintenance and repair of Town Water Distribution System and Town Wastewater Collection System, Town Water Tower and potable water wells connected to the Town Water Distribution System, and includes without limitation Water Supply Transmission Services and Wastewater Services, including related administrative services, as more fully set forth herein. Parties or Party shall mean either one or more of the MUDs or Town or both, as the context provides. Person(s) means an individual, corporation, partnership, association, joint venture or any other third party legal entity. Points of Connection of Wastewater means that point or points where Town Wastewater System connects to MUDs’ Wastewater System. Points of Connection of Water means that point or points where Town Water System connects to MUDs’ Water System. Town means Town of Trophy Club, Texas, a home- rule municipality located in Denton and Tarrant Counties, Texas, and all land included within the territorial limits and extraterritorial jurisdiction of Town, at Town’s creation and thereafter annexed from time to time. Town Customers means any Person(s) residing within the Property and who have the right to receive, who contract to receive or otherwise receiving Water and/or Wastewater Services from Town Water Distribution System and/or Town Wastewater Collection System. Town Wastewater Collection System means the Wastewater system that may be constructed, owned and operated by Town to serve Town for the collection of Wastewater received from Town Customers, ending at the Point of Connection of Wastewater, and will include any sewer force mains and Lift Stations that will be required to transport Wastewater to the Point of Connection of Wastewater. Town Water Distribution System means the water distribution system that may be constructed, owned and operated by Town for the distribution of potable water received from MUDs to Town Customers, beginning at the Points of Connection of Water. Town Water Tower means a minimum 500,000 gallon elevated storage tank owned and constructed by Town. Town Wastewater Collection System means the Wastewater system that may be constructed, owned and operated by Town to serve Town for the collection of Wastewater received from Town Customers, ending at the Point of Connection of Wastewater, and will include any sewer force mains and Lift Stations that will be required to transport Wastewater to the Point of Connection of Wastewater. Wastewater means the water-carried wastes, exclusive of ground, surface, and storm waters, normally discharged from the sanitary conveniences of dwellings, including apartment houses, hotels, offices buildings and institutions, of a domestic, not industrial, nature, meeting the requirements of the Commission and EPA set forth in and regulated by state and federal law, as may be amended or superseded from time to time. Wastewater Services means the services provided by MUDs in receiving, treating, testing, and disposing of Wastewater from Town Wastewater System in accordance with this Contract. Wastewater System means the wastewater collection lines, lift stations, pipes, valves, meters, pumps, motors, treatment plant, effluent discharge lines, and other facilities and equipment owned or controlled by MUD1, MUD2, or Trophy Club Master District and operated as part of the central wastewater collection and treatment system for MUD1 and MUD2 and their customers, and also including the existing PERMIT TO DISCHARGE WASTES, TPDES PERMIT NO. WQ0011593001, issued March 26, 2007, by the Commission to MUD1, as amended, or any other such governmental permit authorizing the treatment of wastewater by MUDs. Wastewater Trunk Facilities means the trunk line facilities that may be constructed by Town to connect Town Wastewater System to MUDs Wastewater System as provided in Article V of this Contract. Water or Water Supply means potable water that meets federal and state standards for consumption by humans. Water Supply Transmission Services means the services provided by MUDs in treating, pumping, transporting, and delivering Water from MUDs Water System to Town Water Distribution System for consumption by Town Customers in accordance with this Contract. Water System means the water wells, water transmission pipeline from the City of Fort Worth (or other wholesale water supplier), mixing and treatment facilities, pipes, valves, meters, ground storage tanks, elevated storage tank, pumps, motors, distribution lines and other facilities and equipment owned or controlled by MUD1, MUD2 or Trophy Club Master District and operated as part of the central treated water system for MUD1 and MUD2 and their customers, and also including the existing CONTRACT FOR WATER SERVICE BETWEEN THE CITY OF FORT WORTH, TEXAS, AND TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (as the owner of legal title and operator of common utility facilities in Trophy Club development at that time) dated September 22, 1992, as amended, or any other such wholesale water supply contract to MUDs. Wells means any and all potable water wells that may be constructed within the Property or for the benefit of the Property by Town or its designee and connected to the Town Water Distribution System. 1.3 Exhibits. The following Exhibits attached to this Contract are hereby made a part of the Contract as though fully incorporated herein: Exhibit “A” - The Property Exhibit “B” - Points of Connection of Water and Wastewater NOTE: Need Exhibits. ARTICLE II. WATER SUPPLY, WATER SUPPLY TRANSMISSION SERVICES AND WASTEWATER SERVICES PROVIDED BY MUDS 2.1 Water Supply. MUDs agree to provide to Town Water Supply sufficient to meet the needs of the Property, as defined herein and more fully described in Exhibit “A,” throughout” throughout the term of this Contract. Water shall be provided to Town for the benefit of the Property as more specifically provided herein and shall meet all quality standards required by the Commission, the Texas Water Code, as amended, the Texas Administrative Code, as amended, all applicable, federal, state, and local laws, rules and regulations, and in accordance with those written standard operating procedures utilized by MUDs for MUDs’ water customers and with those practices utilized by MUDs in providing water supply transmission services and wastewater services to customers of MUDs. 2.2. MUDs’ Obligation to Provide Water Supply Transmission Services and Wastewater Services. MUDs agree to provide Water Supply Transmission Services and Wastewater Services to Town for the benefit of the Property and in accordance with the terms and conditions of this Contract. MUDs agree to accept Wastewater from, and to provide Wastewater Services to, Town in accordance with the terms and conditions of this Contract, provided that all Wastewater discharged from Town Wastewater System and delivered to the Points of Connection of Wastewater complies at the Points of Connection of Wastewater with the restrictions established by the Commission. Immediately at the time of final approval of the Interconnect Line by MUDs, which final approval shall not be unreasonably withheld by MUDs, MUDs shall begin providing Water Supply Transmission Services to Town for the Property. Immediately at the time of final approval of the Wastewater Trunk Facilities by MUDs, which final approval shall not be unreasonably withheld by MUDs. MUDs shall begin providing Wastewater Services to Town. 2.3 Standard of Service – Water Supply Transmission Services and Wastewater Services. The Water Supply Transmission Services and Wastewater Services provided by MUDs to Town under this Contract shall be in accordance with all standards set forth by the Commission, the Texas Water Code, as amended, the Texas Administrative Code, as amended, all applicable, federal, state, and local laws, rules and regulations, and in accordance with those written standard operating procedures utilized by MUDs for MUDs’ water customers and with those practices utilized by MUDs in providing water supply transmission services and wastewater services to customers of MUDs. ARTICLE III. OPERATIONAL SERVICES RELATED TO WATER SUPPLY DISTRIBUTION SYSTEM, WASTEWATER COLLECTION SERVICES, AND TOWN WELLS 3.1 Town’s Obligation to Construct Town Water Distribution System and Town Wastewater Collection System. Town shall design and construct, at its sole cost and expense, a Town Water Distribution System and a Town Wastewater Collection System to serve Town Customers, including without limitation Wells and Town Water Tower. Town Water Distribution System shall include all facilities necessary to store Water and to convey Water from the Points of Connection of Water to Town Customers. Town Wastewater Collection System shall include all facilities necessary to transport Wastewater from Town Customers to the Points of Connection of Wastewater. Town intends to construct Town Water Tower. Upon the sale of the PID bonds, the process to design and construct the Town Water Tower will begin immediately. The Town agrees to provide and to maintain pressure to the entire water system as prescribed by Rules And Regulations For Public Water Systems; Texas Administrative Code Title 30, Chapter 290, Subchapter D, Rule §290.44. Water Distribution (d) Minimum pressure requirement. 3.2 MUDs’ Obligation to Provide Operational Services. MUDs agree to provide Operational Services related to Town Water Distribution System and Town Wastewater Collection System in accordance with the terms and conditions of this Contract in addition to providing Water Supply Transmission Services and Wastewater Services to Town hereunder. 3.3 Standard of Service – Town Wastewater Collection System and Town Water Distribution System. The Operational Services provided by MUDs to Town and Town Customers under this Contract shall be in accordance with all standards by the Commission, the Texas Water Code, as amended, the Texas Administrative Code, as amended, all applicable, federal, state, and local laws, rules and regulations, and in accordance with those written standard operating procedures utilized by MUDs for MUDs’ water customers and with those practices utilized by MUDs in providing Operational Services to customers of MUDs. 3.4 Wells. Town has sole discretion regarding the specifications for, number and location of Wells that may be constructed within Town, exclusive of the MUD Districts. Any and all Wells constructed by or at the direction of Town or dedicated to and accepted by Town shall be owned by Town. Pursuant to this Contract MUDs shall provide Operational Services for all such Town-owned Wells, as defined in Article I paragraph 1.2; provided however, that Town shall notify MUDs of the number and location of Wells that Town constructs or intends to construct. Such well specifications shall be approved by MUDs. MUDs shall not unduly withhold their approval and must do so only for just cause. ARTICLE IV. CHARGES TO TOWN AND EFFLUENT 4.1 Method of Calculation of Water Charges to Town. MUDs’ charge to Town for Water shall be calculated by adding the total charges for each month due from each of Town’s Customers, in the same amount as set forth in Sections 2.01(A) and 2.02(A) of MUD1 Adopted Rate Order.; which charges shall at all times be equal to the same charges assessed to residents of the MUDs. DISCUSSION POINT: Needs Clarification. 4.2 Charges for Wastewater Services. MUDs’ charge to Town for Wastewater Services shall be calculated by adding the total charges for each month due from each of Town’s Customers, in the same amount as set forth in Sections 2.01(A) and 2.02(A) of MUD1 Adopted Rate Order; which charges shall at all times be equal to the same charges assessed to residents of the MUDs. . 4.3 Effluent Produced. Town shall have the right to all treated effluent produced resulting from all Wastewater delivered to the wastewater treatment facilities from Town Customers at no additional charge for Town use within the Town and on property under ownership or control of the Town and as prescribed by the Texas Administrative Code, including without limitation, Section 210 of the Texas Administrative Code, as may be amended from time to time, and as prescribed by TCEQ. Transportation of said effluent from the Wastewater Treatment Plant to its point of storage and/or use shall be the responsibility of and at the expense of the Town. 4.4 Rate Changes – MUD 1 Adopted Rate Order. MUDs agree to provide Town with at least ninety (90) days written notice of its intent to change one or more rates or charges within MUD Adopted Rate Order so that the Parties may renegotiate this Contract based upon the proposed changes to MUD1 Adopted Rate Order. ARTICLE V. RATE ORDERS AND SERVICES TO TOWN CUSTOMERS 5.1 Town Rate Order. Town reserves the right at any time to adopt its own rate order, setting forth rates different from those of MUDs to be charged to Town Customers and which may be amended from time to time at the discretion of Town Council (hereinafter “Town Rate Order”). Upon adoption or amendment of a Town Rate Order, Town shall provide MUDs with a copy of the duly adopted Town Rate Order. Town Rate Order shall set all of the rates for utilities (i.e., water and sewer rates) provided to Town Customers and shall provide such rates to MUDs for MUDs’ use in sending utility bills to Town Customers. MUDs shall bill Town Customers in accordance with Town Rate Order. Town further agrees to take all actions, including without limitation, legislative and administrative actions, necessary to ensure that revenues and other income to Town shall at all times be sufficient to promptly pay to MUDs all such charges when and as the same become due and payable under this Contract. 5.2 Rate Changes - Town Rate Order. Town agrees to provide MUDs with at least sixty (60) days written notice of its intent to change one or more rates or charges within Town Rate Order. 5.3 Operational Services. MUDs and Town agree that MUDs shall provide Operational Services for Town Wastewater Collection System and Town Water Distribution System, including without limitation the following: reading the individual meters of Town Customers; billing, collecting from, and responding to service calls from Town Customers; marking water lines for contractors, monitoring of telemetric equipment, if any; dead-end water flushes; preparing and filing all operational and compliance reports required by law or requested by Town, including without limitation those that are Commission mandated and/or otherwise required by the EPA, or any successor agency; provide qualified representatives to present reports at Council meetings upon request; providing documentation of costs and expenses incurred by MUDs in providing Operational Services, provide documentation of all transactions made by MUDs on behalf of Town, whether directly with Town or with Town’s Customers. In furtherance of this, MUDs will provide to Town’s Customers the identical quality and quantity of services which it presently provides to all MUD customers. 5.4 Billing of Town Customers. MUDs shall read the individual meters of Town Customers on a monthly basis during the term of this Contract. Based on such meter readings, MUDs shall send statements to Town’s Customers in accordance with the then-current Town Rate Order. MUDs shall collect payments from Town Customers and deposit those payments in Town’s bank account on a daily basis. 5.5 Transfer of Collections to Town. Each month, MUDs shall prepare and deliver a collections report to Town which sets forth the total amount of monies due from Town’s Customers pursuant to Town’s Rate Order and the total amount of monies collected from Town’s Customers pursuant to Town Rate Order. Such report shall provide sufficient specificity for Town to track the source and amount of such income, usage of Town Customers and the basis for the charges assessed to Town Customers. MUDs shall not have the right to offset its charges to Town against the collections from Town Customers, but shall turn over one hundred percent of all collections and shall separately invoice Town for any and all charges that may be assessed against Town under the terms of this Contract. 5.6 Invoice to Town. Charges assessed by MUDs to Town shall be limited to the type and amount of charges set forth in Sections 2.01(A) and 2.02(A) of MUDs Adopted Rate Order. MUDs shall prepare an invoice showing the charges to Town and shall provide a detailed explanation of all such charges assessed by MUDs, including without limitation, backup documentation if requested by Town so that Town can identify the nature and type of charge and the basis upon which the charge was assessed to Town. If Town contests a charge, Town shall notify MUDs within ten (10) business days of the charge contested and the basis for the contest, and shall have the right to withhold payment until the dispute is resolved by the Parties. Payments made by Town shall be made payable to MUD1 and MUD2 and to the Trophy Club Master District jointly on or before the 20th day of each month.. 5.7 Late Charges and Interest on Late Payments The Town will remit to the MUDs the full amount of all charges, without deduction for unpaid and overdue bills. In turn, the MUDs will proceed to the collection of those bills and will remit to the Town the amounts collected, including the interest and late charges associated with those bills. 5.8 Water Emergency. Under Town’s ordinance(s), MUDs may declare a "water emergency period" if any condition or event occurs that interrupts the production, treatment, or transportation of Water in MUDs Water System and may impose conditions on consumption or use of Water. If MUDs declare a "water emergency period" and impose conditions on Water consumption for its customers in the existing MUDs under the then-current ordinance, Town agrees, upon timely notification by MUDs to impose and enforce restrictive conditions of consumption on Town Customers. Such restrictive conditions shall be equivalent to those imposed upon MUDs and/or MUDs customers pursuant to the Fort Worth Water Contract. Where it has become necessary to adopt a drought contingency plan, MUDs shall not apply their drought contingency plan to Town’s Customers in a manner that is more stringent than MUDs’ application of their drought contingency plan on residential customers within the MUDs. ARTICLE VI. TERM 6.1 Term. This Contract shall become effective upon approval by each of the respective governing bodies of Town and MUDs and upon execution by their respective authorized representatives, and shall remain in effect for an initial term of one (1) year from the date of approval by the last Party subject to this Contract (hereinafter “Initial Term”), and shall renew automatically annually for additional terms of one (1) year each unless terminated by either Party as provided herein. 6.2 Termination for Default. Any Party to this Contract who believes that the other Party to this Contract has defaulted in the performance of any condition, term, or obligation owed to that Party under the Contract other than the payment of monies owed hereunder shall give written notice of the default to the defaulting Party, specifying in detail the provision or provisions of the Contract that have been breached and specifying what action must be taken to cure or correct the default and notifying the defaulting Party that failure to correct the default within sixty (60) days following receipt of the written notice by such Party, shall result in termination on a date certain specified in the notice. 6.3 Termination without Default. Any Party shall have the right to terminate this Contract without cause upon written notice to any other Party. Such notice of termination must be provided at least 180 days in advance of such termination date, but in no case shall termination be allowed earlier than one (1) year from the date of execution of this Contract. ARTICLE VII. MISCELLANEOUS 7.1 Remedies Cumulative. The Parties specifically agree that the remedy of specific performance of this Contract is an appropriate and necessary remedy and agree that any Party may employ the remedy of specific performance in the event of a breach of this Contract. It is not intended hereby to specify (and this Contract shall not be considered as specifying) an exclusive remedy for any default, but all remedies, including specific performance and mandamus, may be availed of by any Party and shall be cumulative of any other remedy herein specified. 7.2 Immunity. The fact that Town and MUDs accept certain responsibilities relating to the provision of Operational Services under this Contract as part of their responsibility for providing Water and Wastewater Services to their respective residents makes it imperative that the performance of these vital services be recognized as a governmental function and that the doctrine of governmental immunity shall be, and it is hereby, invoked to the extent possible under the law. Neither Town nor MUDs waive any immunity or defense against third party claims that would otherwise be available to it against claims arising from the exercise of governmental powers and functions. The Parties hereto agree that each respectively waives its sovereign immunity to suit for the limited purpose of adjudication of a claim for breach of this Contract. Notwithstanding the foregoing agreement, remedies in such action shall be limited to those provided by Chapter 271 of the Texas Local Government Code. 7.3 Force Majeure. If any Party is rendered unable, wholly or in part, by force majeure to carry out any of its obligations under this Contract, except the obligation to pay amounts owed or required to be paid pursuant to the terms of this Contract, then the obligations of such Party, to the extent affected by such force majeure and to the extent that due diligence is being used to resume performance at the earliest practicable time, shall be suspended during the continuance of any inability so caused to the extent provided but for no longer period. As soon as reasonably possible after the occurrence of the force majeure relied upon, the Party whose contractual obligations are affected thereby shall give notice and full particulars of such force majeure to the other Party. Such cause, as far as possible, shall be remedied with all reasonable diligence. The term "force majeure," as used herein, shall include without limitation of the generality thereof, acts of God, strikes, lockouts, or other industrial disturbances, acts of the public enemy, orders of any kind of the government of the United States or the State of Texas or any civil or military authority other than a Party to this Contract, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, restraint of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipelines or canals, partial or entire failure of water supply resulting in an inability to provide water necessary for operation of the water and sewer systems hereunder or in an inability of MUDs to provide Water or receive Wastewater, and any other inabilities of any Party, whether similar to those enumerated or otherwise, which are not within the control of the Party claiming such inability, which such Party could not have avoided by the exercise of due diligence and care. It is understood and agreed that the settlement of strikes and 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 and lockouts by acceding to the demands of the opposing Party when such settlement is unfavorable to it in the judgment of the Party experiencing such difficulty. 7.4 Applicable Law. This Contract shall be governed by the laws of the State of Texas and no lawsuit shall be prosecuted on this Contract except in a court of competent jurisdiction located in Denton County. 7.5 No Additional Waiver Implied. No waiver or waivers of any breach or default (or any beaches or defaults) by any Party hereto of any term, covenant, condition, or liability hereunder, or the performance by any Party of any duty or obligation hereunder, shall be deemed or construed to be a waiver of subsequent breaches or defaults of any kind, under any circumstances. 7.6 Addresses and Notice. Unless otherwise provided in this Contract, 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 the other (except bills), must be in writing and may be given or be serviced 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 such Party, 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 in this Contract, from and after the expiration of three (3) days after it is so deposited. Notice given in any such other manner shall be effective when received by the Party to be notified. For the purpose of notice, addresses of the Parties shall, until changed as hereinafter provided, be as follows: If to MUDs, to: If to Town, to: MUD Manager Town Manager, 100 Municipal Drive 100 Municipal Drive Trophy Club, Texas 76262 Trophy Club, Texas 76262 The Parties 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 any other address by at least fifteen (15) days' written notice to the other. 7.7 Merger and Modification. This Contract, including the exhibits that are attached hereto and incorporated herein for all purposes, embodies the entire agreement between the Parties relative to the subject matter hereof. This Contract shall be subject to change or modification only with the written mutual consent of all Parties affected by such change or modification. 7.8 Severability. The provisions of this Contract are severable, and if any part of this Contract or the application thereof to any person or circumstances shall ever be held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Contract and the application of part of this Contract to other persons or circumstances shall not be affected thereby. 7.9 Successors and Assigns. This Contract shall be binding upon and inure to the benefit of the Parties hereto and their successors. This Contract shall not be assigned without the written consent of the governing bodies of the respective entities. Notwithstanding the foregoing, this Contract is a non-exclusive Contract and all parties hereto may, without consent or notice to the other Parties, contract with one or more third parties for the same or similar commodities or services provided under the terms of this Contract. 7.10 Benefits of Contract. This Contract is for the benefit of MUD1, MUD2, and Town and their successors and assigns and shall not be construed to confer any benefit on any other person or entity except as expressly provided for herein. 7.11 Non-Binding Mediation. The Parties agree that they shall first attempt to resolve disputes hereunder by the use of non-binding mediation. Therefore, in the event that any alleged default under this Contract cannot be resolved by agreement of the Parties or in the event that the Parties cannot resolve a conflict in or disagreement regarding interpretation of a specific provision(s) of this Contract, the dispute, conflict or disagreement shall be submitted to non-binding mediation as a condition precedent to (1) the filing of any lawsuit, and (2) the filing of any other type of legal or equitable action to resolve such default or dispute or to pursue available legal or equitable remedies. The costs of mediation shall be shared equally by all Parties participating in the mediation. 7.12 Consent and Approvals. Whenever this Contract provides for the approval or consent of one of the Parties, such consent or approval shall not be unreasonably withheld or delayed. TOWN OF TROPHY CLUB, TEXAS (TOWN SEAL) By: Name: Title: ATTEST: By: Name: Title: (MUD 1 SEAL) TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 By: ATTEST: By: Name: Title: (MUD 2 SEAL) TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 2 By: ATTEST: By: Name: Title: EXHIBIT “A” EXHIBIT “B” MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 11-8-2007 Subject: Agenda Item No.B.4 Discuss and take appropriate action regarding a resolution to amend the Trophy Club Municipal Utility District No.1 budget for fiscal year October 1, 2006 through September 30, 2007. EXPLANATION: The purpose of this budget amendment is to ensure that we are in compliance with budgetary guidelines. The practice of amending the budget generally occurs twice annually in March and October; however, for our purposes, we need only amend during the latter. RECOMMENDATION: Staff recommends approval of Resolution 2007-1107, to amend the MUD 1 budget for fiscal year October 1, 2006 through September 30, 2007. ACTION BY MUD1: (SMD) Attachments: 1. Resolution (Exhibit A will be sent prior to the meeting). RESOLUTION NO. 2007-1108 A RESOLUTION TO APPROVE FY2006-2007 BUDGET AMENDMENT FOR TROPHY CLUB MUD NO. 1 A RESOLUTION OF TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (TCMUD No. 1), OF DENTON AND TARRANT COUNTIES, TEXAS; AMENDING THE FISCAL YEAR OCTOBER 1, 2006 THROUGH SEPTEMBER 30, 2007 BUDGET; PROVIDING FOR AN AMENDMENT; PROVIDING A SEVERABILITY CLAUSE, AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the TCMUD No. 1 annual budget for the fiscal year beginning October 1, 2006 and ending September 30, 2007, was approved and adopted within the time and in accordance with Section 49.057(b) of the Texas Water Code; and WHEREAS, TCMUD No. 1 hereby finds and determines that it is prudent to amend the line items due to unforeseen situations that have occurred in the District; and WHEREAS, TCMUD No. 1 further finds that these amendments will serve in the public interest and are necessary to support District operations; and WHEREAS, TCMUD No. 1 finds and determines that the change in the Budget for the stated district purpose serves bests interests of the taxpayers, is necessary and warrants action at this time; NOW THEREFORE BE IT RESOLVED BY THE BOARD OF DIRECTORS OF TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1: Section 1. That the Fiscal Year 2006-2007 Budget is hereby amended to fund the line items as stated in Exhibit “A.” This Amendment No. 1 to the Original Budget of the Trophy Club Municipal Utility District No. 1, for the Fiscal Year 2006-2007, shall be attached to and made part of the Original Budget and said budget amendment shall be on file for public inspection in the office of the District. Furthermore, this Amendment No. 1 (Exhibit “A”) is attached, incorporated into and made a permanent portion of this Resolution. This Resolution is hereby approved and shall constitute the first budget amendment that has occurred since the October 1, 2006 effective date of the Trophy Club Municipal Utility District No.1 Budget. Section 2. That if any word, sentence, section, subsection, subdivision, paragraph, clause, phrase or provision of this Resolution shall be adjudged invalid or held unconstitutional, the same shall not affect the validity of this resolution as a whole or any part of the provision hereof other than the part so decided to be invalid or unconstitutional. Section 3. That all provisions of the resolutions of the District’s Board of Directors in conflict with the provisions of this resolution shall be and the same are hereby repealed and all other provisions of the resolutions of the TCMUD NO. 1 Board not in conflict with the provisions of this resolution shall remain in full force and effect. Section 4. That this resolution shall become effective immediately upon its passage. PASSED AND APPROVED by the Board of Directors of Trophy Club Municipal Utility District No. 1, this the 8th day of November, 2007. ___________________________ Dean Henry, President Trophy Club MUD No. 1 (SEAL) ATTEST: _____________________________ Constance S. White, Secretary Trophy Club MUD No. 1 CERTIFICATE OF RESOLUTION (2007-1108) THE STATE OF TEXAS } COUNTY OF DENTON } COUNTY OF TARRANT} I, the undersigned member of the Board of Directors of the Trophy Club Municipal Utility District No. 1 of Denton and Tarrant Counties, Texas (the "District"), hereby certify as follows: 1. That I am the duly qualified and acting Secretary of the Board of Directors of the District, and that, as such, I have custody of the minutes and records of the District. 2. That the Board of Directors of the District convened in Open Session at a Regular Meeting on November 8, 2007, at the regular meeting place thereof, and the roll was called of the duly constituted officers and members of the Board of Directors, to wit: Dean Henry President Gary Cantrell Vice President Connie White Secretary-Treasurer Jim Hase Asst. Secretary Neil Twomey Director and Directors Henry, Cantrell, White, Hase and Twomey were present, thus constituting a quorum, whereupon, among other business, the following was transacted at such meeting: a written RESOLUTION (2007-1108) APPROVING FY2006-2007 BUDGET AMENDMENT FOR TROPHY CLUB MUD NO. 1 was duly introduced for the consideration of the Board of Directors of the District. It was then duly moved and seconded that such Resolution be adopted and, after due discussion, such motion, carrying with it the adoption of such Resolution, prevailed and carried by the following vote: AYES: NOES: 3. That a true, full and correct copy of such Resolution adopted at such meeting is attached to and follows this certificate; that such resolution has been duly recorded in the minutes of the Board of Directors for such meeting; that the persons named in the above and foregoing Paragraph 2 were the duly chosen, qualified and acting officers and members of the Board of Directors as indicated therein, that each was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of such meeting, and that such Resolution would be introduced and considered for adoption at such meeting, and that each consented, in advance, to the holding of such meeting for such purpose; that the canvassing of the officers and members of the Board of Directors present at and absent from such meeting and of the votes of each on such motion, as set forth in the above and foregoing Paragraph 2, is true and correct; and that sufficient and timely notice of the hour, date, place and subject of such meeting was given and posted as required by Chapter 551, Texas Government Code, as amended. SIGNED AND SEALED the 8th day of November 2007. _________________________________ Constance S. White Secretary, Board of Directors (SEAL) Next regularly scheduled meeting date: Tuesday, December 4, 2007, 6:00 p.m. Set Next Meeting Date1D11-8-2007 MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 11-8-2007 Subject: Agenda Item No.F.1 Adjourn. (mm)