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HomeMy WebLinkAboutOctober 31, 2007 Regular Session Backup Town of Trophy Club Municipal Utility District No.1 Meeting Agenda 100 Municipal Drive Trophy Club, Texas 76262 Wednesday, October 31, 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 regarding Order 2007-1031, approving the 2007-2008 MUD 1 Rate Order. 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 to consider the advisability and method of financing for the new/improved fire station. C.1 Receive District Manager's Report a. Items to be placed on future agendas C.2 Receive Finance Director's Report a. Action Item: Use of water revenue for fire operations. D.1 Review and Approve Minutes a. October 9, 2007 - Regular Session minutes D.2 Review and Approve Disbursements and Variance Report a. August 2007 Financials b. September 2007 Financials (Unaudited) & Variance Report D.3 Review Monthly Tax Collection Report a. September 2007 D.4 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: 10-31-2007 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: 10-31-2007 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: 10-31-2007 Subject: Agenda Item No.B.1 Discuss and take appropriate action regarding Order 2007-1031, approving the 2007-2008 MUD 1 Rate Order. EXPLANATION: There are only two minor changes, both of which are under Article III – Service Policy. The first change is to Paragraph B –security deposits for residential owners have increased from $40.00 to $50.00. The second change is to Paragraph C – security deposits for residential lessees have increased from $100 to $150.00. RECOMMENDATION: Staff recommends approval so that the rate orders for both MUDs remain the same. ACTION BY MUD1: (mm) Attachments: 1. Ordinance 2007-2008 RATE ORDER TROPHY CLUB MUNICIPAL UTILITY DISTRICT No. 1 ORDER No. 2007-103109 AN ORDER ESTABLISHING POLICIES, PROCEDURES, AND RATES FOR WATER AND SEWER SERVICE; PROVIDING FEES FOR CONNECTION, RECONNECTION, INSPECTION, ACCURACY READINGS, AND RETURNED CHECKS; REQUIRING DEPOSITS FOR SERVICE; PROVIDING A PENALTY FOR DELINQUENT PAYMENTS; AND CONTAINING OTHER PROVISIONS RELATING TO THE SUBJECT. WHEREAS, Trophy Club Municipal Utility District No. 1 (the “District”) is the owner and/or operator of a water and sewer system designed to serve present and future inhabitants within the District and the Trophy Club development; and WHEREAS, the District’s most recent Rate Order was adopted on October 1309, 20075 (the “20075-2006 Rate Order”), several additional modifications are needed at this time and the District desires to establish all of its rate policies in a single new Rate Order; and WHEREAS, the Board of Directors of the District has carefully considered the terms of this 2007-2008 Rate Order and is of the opinion that the following conditions and provisions should be established as the policies, procedures, and rates for obtaining service from the District’s water and sewer system; THEREFORE, IT IS ORDERED BY THE BOARD OF DIRECTORS OF TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 THAT: ARTICLE I TAP FEES AND CONNECTION POLICY Section 1.01. Initiation of Water and Sanitary Sewer Connections. Each person desiring a water and sanitary sewer service connection to the District’s System shall be required to pay such fees as set forth in this Order. No service shall be established or re-established until such fees are paid. All service connections are subject to all other rules, regulations, and policies of the District. Section 1.02. Policies Governing Initial Connections. A. Certification of System. Connections shall not be made to the District’s System or portions of the System until the District’s engineer or Water/Wastewater Superintendent has certified that the System or applicable portion thereof is operable. B. Backflow Prevention. No water connections from any public drinking water supply system shall be allowed to any commercial establishment where an actual or potential contamination hazard exists unless the public water facilities are protected from contamination. At any commercial establishment where an actual or potential contamination hazard exists, protection shall be required at the meter in the form of a backflow prevention assembly. The type of assembly required shall be the one known as “Reduced Pressure Zone” (RPZ) unless otherwise specified by the District through its Superintendent. The existence of potential contamination hazards without installation having been made of the means of control and prevention as set out in the preceding paragraph, or, the same having been installed, there is a failure to properly maintain the same, shall be considered sufficient grounds for immediate termination of water service. Service can be restored only when the health hazard no longer exists, or when the health hazard has been isolated from the public water system in accordance with the foregoing requirements. All backflow prevention assemblies that are required according to this section shall be tested upon installation by a recognized backflow prevention assembly tester and certified to be operating within specifications. Backflow prevention assemblies that are installed to provide protection against health hazards must also be tested and certified to be operating within specifications at least annually by a recognized backflow prevention assembly tester. The Customer shall, at his expense, properly install, test, and maintain any backflow prevention device required by this Rate Order. Copies of all testing and maintenance records shall be provided to the MUD not later than a date to be fixed by the MUD. If the Customer fails to comply with the terms of this Order, the MUD shall, at its option, either terminate service or properly install, test, and maintain an appropriate backflow prevention device at the service connection. Any expenses associated with the enforcement of this agreement shall be billed to the Customer. C. Availability of Access/Obstructions. By application for connection to the District’s System, the customer shall be deemed to be granting to the District and its representatives a right of ingress and egress to and from the meter or point of service for such installation, maintenance and repair as the District, in its judgment, may deem reasonably necessary. The customer shall also be deemed to be granting to the District and its representatives a right of ingress and egress to the customer’s property, including the exterior of the customer’s premises, for the purpose of performing the inspections and completing the customer‘s Service Inspection Certifications required by the District’s rules and regulations. Taps and connections will not be made when, in the opinion of the District, building materials or other debris obstructs the work area or the work area is not completed or finished to grade. When sidewalks, driveways or other improvements have been constructed prior to application for service, such application shall be construed and accepted as the customer’s waiver of a claim for any damages to such improvements resulting from the reasonable actions of the District in installation of the connection. Section 1.03. Connections by District. All connections to the District’s sewer system shall be made in accordance with the District’s Plumbing Code and its rules and regulations. No person except the District Manager or his/her authorized agent shall be permitted to tap or make any connection to the mains or distribution piping of the District’s water system, except for emergency firefighting purposes, or make any repairs or additions to or alterations in any meter, box, tap, pipe, cock or other fixture connected with the water service or any manhole, main, trunk or appurtenance of the District’s sanitary sewer system, unless otherwise specified by the Board of Directors of the District. No sewer connection shall be covered in the ground before a representative of the District has inspected the sewer connection. No house lead shall be covered in the ground before the water connection has been inspected and approved by a licensed plumbing inspector with jurisdiction of the site. Section 1.04. Inspections and Fees. Fees for permits and for plumbing inspections (other than for sewer and backflow inspections referred to below in subparagraphs A and B) should be paid to the city or town in which the property is located or to the District if the property is not located within a city or town. A. Sewer Inspection and Fees. Sewer connections and house service lines shall be inspected by the District. An inspection fee of $150.00 shall be paid to the District for each connection to the District sanitary sewer system. Installations that fail to conform at any time to the rules and regulations shall be disconnected. Any customer whose connection is disconnected for such failure shall be notified as to the basis for such disconnection. After noted deficiencies have been corrected, a re-inspection shall be made upon payment to the District of a re-inspection fee of $25.00, plus payment by the customer of all outstanding charges. If subsequent re-inspections are required before the sewer connection and service lines are in compliance with the rules and regulations, a re-inspection fee of $25.00 shall be paid to the District for each subsequent re-inspection. Re- inspections by the District requested after regular business hours will be charged at a minimum of $100.00. B. Backflow Inspections. For all backflow installations (residential and commercial) inspected by the personnel of the District, an inspection fee of $50.00 shall be paid to the District. Inspections that fail to conform at any time to the rules and regulations shall be disconnected. Any customer whose connection is disconnected for such failure shall be notified as to the basis for such disconnection. After noted deficiencies have been corrected, a re- inspection shall be made upon payment to the District of a re-inspection fee of $25.00, plus payment by the customer of all outstanding charges. If subsequent re-inspections are required, a re-inspection fee of $25.00 shall be paid to the District for each subsequent re-inspection. Re-inspections by the District requested after regular business hours will be charged at a minimum of $100.00. Section 1.05. Builder’s Deposit. A. Residence, Commercial Building or Other Structure. Each builder of a residence, commercial building or other structure shall, at the time a request for a water tap is made, pay a deposit of $75.00 for the first lot for which a water tap has been requested, and $75.00 for each additional lot thereafter. The deposit shall be refunded within ninety (90) days after the builder certifies the sale of its last residence, commercial building or other structure within the District, less any amounts forfeited as provided herein. The District shall deduct from the deposit the cost to repair any damage caused to the District’s property by the builder or the builder’s employees, contractors, subcontractors or agents and shall deduct any delinquent water and sewer service bills of the builder. In the event any amounts are so deducted from the builder’s deposit, it will be incumbent on the builder to reinstate the original amount of the deposit, and failure to do so will result in the suspension of any additional water taps for the builder. B. Swimming Pool Discharge into Sanitary Sewer System. Any backwash or drainage from a swimming pool shall discharge into the sanitary sewer system. An indirect connection shall be made by means of an air break, discharging into a tailpiece installed a minimum of 6” (or 152 mm) above adjacent grade. The tailpiece shall be connected to a minimum 3” (or 76 mm) p-trap not less than 12” (304 mm) below grade which discharges into the yard cleanout riser. Backwash systems shall not flow onto neighboring properties or into the storm sewer. The tie-in and inspection fee shall be $75.00 to be paid at the time of issuance of the pool permit. Section 1.06. Temporary Water Service. A. Temporary Connections. The District shall be authorized to make a temporary connection to any fire hydrant or flushing valve upon request for temporary water service. All temporary service shall be metered and billed to the temporary customer as provided herein. All unauthorized withdrawal of water from flushing valves, fire hydrants, or other appurtenances of the District’s System without prior approval of the District, except for emergency fire-fighting purposes, is prohibited. B. Application and Deposit. Each temporary customer desiring temporary water service shall be required to execute an application for such temporary service and shall provide a minimum security deposit of $1,875.00, but not more than $3,000.00 with such determination to be made by the District depending on the length of time temporary service is required and estimated amount of water to be used. The deposit shall be made by cashier’s check or money order payable to the District. The deposit shall be used by the District to secure the payment for temporary water supplied by the District, the installation fee, and the cost of repair of any damages caused by the temporary customer. The balance of the security deposit, if any, shall be refunded after disconnection from the District’s System. C. Fees and Rates. A fee of $100.00 for costs of installation, plus the cost of the metered water, shall be charged for temporary water service. The following rate for the sale of water for each temporary water service connection shall be in effect from the effective date hereof until such time as the Board amends said rate: Gallons Used Rate Any amount $2.94 per each 1,000 gallons Section 1.07. Service Outside the District. The rates and charges stated in this Rate Order are for service to customers and property located within the boundaries of the District. Any service to a customer or property located outside the boundaries of the District shall be granted only upon special approval by the Board of Directors of the District. Unless other provisions are established by a special contract approved by the Board of Directors of the District, any service to customers or property outside the boundaries of the District shall be at the same rates and terms as specified in this Rate Order, except that regular charges for water, sewer, and tap charges shall be doubled. Service to Marshall Creek Park is specifically exempted from the doubling provision of the preceding paragraph. Section 1.08. Water Tap Fees. A fee of $1,000.00 must be received by the District before any residential connection is initially made to the District’s water system, which tap fee will include a 3/4 inch (District side) by 5/8 inch (customer side) meter. Any request by a customer for service from an oversized connection line or from a meter larger than a 5/8 inch (customer side) standard meter shall be granted by the District only if the customer agrees and makes suitable arrangements to pay the increased costs for such larger line and/or meter, which increased costs shall be the actual cost to the District of the larger line and/or meter plus twenty percent (20%). The fee for making any fire line tap shall be $30.00 per inch of diameter of the fire line. Each customer requesting an initial connection to the District’s water system shall also pay to the District the cost required to be paid by the District to the City of Fort Worth as a “water impact fee” or “water access fee” for the additional customer connection to the Fort Worth water system. Section 1.09. Sewer Tap Fees. The charge for all taps of sewer lines within the District shall be equal to the cost to the District for making such connections. Section 1.10. Title to Facilities. Title to all water meters, water and sewer taps, and all other appurtenances, including meter boxes, shall lie in the District. ARTICLE II SERVICE RATES Section 2.01. Water Service. The following monthly rates for the sale of water shall be in effect for each Separate Connection within the District from the effective date hereof until such time as the Board of Directors amends said rates: A. Chemically Treated Water. Water from the District’s facilities which has been mixed, chlorinated, or otherwise treated so that it is suitable for human use and consumption shall be at the following rates: (1) Single-Family Homes. Each single family home shall be billed as follows: Administrative Fee (Does not include water usage) $11.50 0-5999 gallons per month $2.19/1,000 gal 6,000 to 11,999 gallons per month $2.64/1,000 gal 12,000 to 24,999 gallons per month $2.84/1,000 gal 25,000-plus gallons per month $2.94/1,000 gal (2) Commercial. Each business service connection shall be deemed to be a single-family home for purposes of water service. (3) Clubs. Each club shall be deemed to be a single-family home for purposes of water service. (4) Golf Course. Each meter shall be deemed to be a single- family home for the purposes of water service. (5) Multi-Family Buildings. (i) Single Meter. Each multi-family building or complex of buildings which is served by a single meter shall be billed for water at the same rate as a single-family home, with an administrative fee of $11.50 times the number of units in the building or complex. (ii) Multiple Meters. If a multi-family building or complex of buildings is served by more than one meter, then water delivered through each meter shall be billed at the same rate as a single family home, with an administrative fee of $11.50 times the number of units served by the meter. (6) Public Access Parks. Any water or sewer services utilized by the Town of Trophy Club in public access parks for the operation and maintenance of such parks will be billed at the in-district rate. Such water and sewer services shall be for the benefit of the residents of the Town of Trophy Club. Use for any other purpose shall require the services to be billed at double the rate. B. Golf Course Irrigation Water to the Lakes. In addition to water usage charges, when the customer requests fresh water on the day that established the District’s peak draw from the City of Fort Worth, the customer shall be required to pay its respective portion of any demand rate and/or minimal payment rate as specified in the District’s wholesale water supply contract with the City of Fort Worth. However, if the customer’s demand is absorbed by the District with no additional charges from Fort Worth, the District may in its discretion waive the demand and/or minimal payment charges to the customer. Section 2.02. Sewer Service Rates. The following monthly rates for the collection and disposal of sewage shall be in effect for each Separate Connection within the District from the effective date hereof until such time as the Board of Directors amends said rates: A. Single-Family Homes and Cottages. Each single-family home and cottage shall be billed based upon the treated water used by such unit that month, as follows: Administrative Fee (Does not include sewer usage) $11.50 0-5,999, gallons per month $2.19/1,000 gal 6,000-11,999 gallons per month $2.64/1,000 gal 12,000 gallons maximum per month for residential B. Commercial Buildings (including Clubs). Each commercial building shall be billed for sewer service at the same rate as single-family homes, based on the treated water used by such unit that month as follows: Administrative Fee (Does not include sewer usage) $11.50 0-5,999 gallons per month $2.19/1,000 gal 6,000-11,999, gallons per month $2.64/1,000 gal 12,000-plus gallons per month $2.64/1,000 gal C. Multi-Family Buildings. Each unit in a multi-family building or complex of buildings shall be billed at the same rate as a single-family home, with an administrative fee of $11.50 times the number of units in the building or complex. Section 2.03. Effluent Charge. The effluent from the District’s wastewater treatment plant will be sold pursuant to separate contracts entered into with the District and approved by its Board of Directors. At this time of the passage of this Rate Order, the District has contracted to sell effluent to the Trophy Club Country Club and discharged into golf course lakes at a charge of $.30 per thousand gallons for the year 2004-2005; $.40 per thousand gallons for the year 2005-2006; $.45 per thousand gallons for the year 2006-2007; and $.50 per thousand gallons for the year 2007-2008. Section 2.04. Stand-by Charge. For those lots subject to recorded restrictive covenants that require or authorize the District to charge a stand-by fee for water and sewer service where the lot has water and sewer service available but the lot is not yet connected to the District’s system, the stand-by fee shall be $6.00 per month. Unless otherwise provided by the terms of the recorded restrictive covenant applicable to a particular lot, the stand-by charge shall commence on the first day of the month following the date upon which water and sewer service is available at the property line of the lot and the charge shall cease on the first day of the month preceding the date upon which water and sewer use charges become due and payable to the District for water and sewer service supplied to the lot. Section 2.05. Master Meter (Cooling Tower Calculation). The water usage from the master meter reading less the reading from the “Blow Down” meter equals the “evaporation.” Water usage less “evaporation” equals sewer usage for billing purposes. Section 2.06. Regulatory Assessment. Pursuant to Section 5.235, Texas Water Code, and 30 TAC291.76, the District shall pay a regulatory assessment to the Texas Commission on Environmental Quality (“TCEQ”) annually in the amount required by law on the total charges for retail water and sewer service billed to its customers annually. At the end of each year, the District shall prepare a written statement indicating (i) the total charges for retail water and sewer service for the year and (ii) the regulatory assessment due and payable to the TCEQ. Section 2.07. No Reduced Rates or Free Service. All customers receiving water and/or sewer service from the District shall be subject to the provisions of this Order and shall be charged the rates established in this Order, and no reduced rate or free service shall be furnished to any customer whether such user be a charitable or eleemosynary institution, a political subdivision, or municipal corporation; provided, however, this provision shall not prohibit the District from establishing reasonable classifications of customers for which rates differing from the rates stated herein may be adopted. ARTICLE III SERVICE POLICY Section 3.01. Security Deposits. Security deposits shall be required as follows: A. Builders. A $75.00 security deposit shall be required of builders for each tap made by the District for such service connection, payable at or prior to the time that such tap is made, and the security deposit is refundable to the builder when the account is later transferred to an owner if that account and all other accounts of the builder are current at the time of the transfer; but, if that account or any other account of the same builder is not current at the time of such transfer to an owner, then the security deposit shall be applied against the outstanding balance of the builder’s account(s) at the time of such transfer. B. Residential Owners. A security deposit of $4050.00 shall be required from each residential owner customer for a single-family home connected to the District’s system. The security deposit is refundable to the customer when the account is later closed if that account is current at the time it is closed. However, if the account is not current at the time it is closed, then the security deposit shall be applied against the outstanding balance of the customer’s account at that time. C. Residential Lessees. A security deposit of $100150.00 shall be required from each residential lessee customer for a single-family home. D. Construction Meters. A security deposit of $1,875.00 shall be required from customers desiring to use a construction meter. E. Other customers. A security deposit equal to two months’ estimated average monthly water and sewer bill shall be required of all other customers. Currently, the MUD/District does not pay interest on deposits. The interest drawn by the MUD/District on customer deposits is returned into the operating budget of the water/sewer fund to help in providing the lowest possible water and sewer rates for our citizens. Section 3.02. Billing Procedures. All accounts shall be billed in accordance with the following: A. Due Date and Delinquency. Charges for water service, sewer service, and standby fees shall be billed monthly. Payment shall be due on or before the twentieth (20th) day of the month in the month in which the bill was received. Unless payment is received on or before the twentieth (20th) day of the month, such account shall be considered delinquent. If the due date falls on a holiday or weekend, the due date for payment purposes shall be the next working day after the due date. The District shall charge a penalty on past due accounts calculated at the rate of ten percent (10%) per month on water, sewer and standby charges. The rates for water and sewer service shall depend upon the type of user and upon whether the water used has been chemically treated, as provided in this Rate Order. All accounts not paid by the due date shall be deemed delinquent and failure to make payment thereafter may result in the termination of water and sewer service. B. Notice and Appeal. Prior to termination of service, a customer who is delinquent in payment shall be sent a notice that service will be discontinued on the fifteenth (15th) day after the date of such notice unless payment in full is received by such day. Notice shall be sent by first class United States mail and will provide the customer with an opportunity to appear in person or by written correspondence at a scheduled meeting of the Board of the District to contest, explain, or correct the charges, services, or disconnection. The notice shall inform the customer of the amount of the delinquent bill, the date service will be disconnected if payment is not made, and of the right to contest, explain, or correct the charges, services, or disconnection. Service shall not be disconnected where a customer has informed the District of his or her desire to contest or explain his bill. If the customer appears before the Board, in person or by written correspondence, the Board shall hear and consider the matter and inform the customer of the Board’s determination by sending written notice to the customer by first class United States mail stating whether service will be disconnected. If service is disconnected, it shall be reconnected only upon payment in full of all amounts due, including any late charges, the security deposit set out in Section 3.01, and a reconnection charge of $25.00, if the reconnection is made during the District’s normal business hours. Reconnections made outside of the District’s normal business hours at the customer’s request will be charged at a reconnection fee of $25.00, plus an additional charge of $100.00. C. Business Hours. For purposes of assessing the foregoing charges, “normal” or ”regular” business hours shall mean only the hours between 8 a.m. and 5 p.m., Monday through Friday, and between 7 a.m. and 9 a.m. Saturdays, Sundays, and Holidays. All other times are outside of the District’s normal business hours and will result in the higher charge. D. Returned Checks. A $25.00 charge will be charged to the customer’s account for any check returned by the bank. Any amounts due on an account which have been paid with a check that has been returned by the bank must be paid in full by cash, cashier’s check or money order, including all late charges and returned check charges, within five (5) days from the day the District hangs a notice on the customer’s door or otherwise notified the customer that the check has been returned by the bank. E. Confidentiality Request. A one-time charge of $5.00 shall be made on each confidentiality request as set forth in H.B. 859. F. Same-Day Service. An additional charge of $25.00 shall be made on customer requested same-day service. As an example, this charge will be implemented upon request by a customer for same-day service to start or terminate water and sewer service or to do re-reads the same day as requested. G. Accuracy Reading Fee. A meter accuracy reading fee in the amount of $10.00 shall be charged to a customer by the District for each meter accuracy reading made by the District for such customer when the original reading appears to be accurate. If the original meter reading appears to be in error, no fee will be charged. Each customer will be allowed one accuracy meter reading per calendar year at no charge. Should a customer request that the meter accuracy reading be made by an outside source, then a fee of $35.00 will be charged to the customer. If the original meter reading is found to be in error, then the customer will be given a credit offsetting the amount of the charge. Section 3.03. Entitlement. Customers are not guaranteed a specific quantity or pressure of water or specific capacity in sewer facilities for any purpose whatsoever; furthermore, in no instance shall the District be liable for failure or refusal to furnish water or any particular amount or pressure of water or to provide capacity in sewer facilities. Section 3.04. Unauthorized and Extraordinary Waste. The rates established herein are applicable for Domestic Waste as defined herein. Customers proposing to generate other types of waste will be assessed additional charges as established by the District. Section 3.05. Damage to District Facilities. A. Damage to Meter and Appurtenances. No person other than a duly authorized agent of the District shall open a meter box, tamper with or in any way interfere with a meter, meter box, service line or other water and/or sewer system appurtenance. The District reserves the right, immediately and without notice, to remove the meter or disconnect water service to any customer whose meter has been tampered with and to assess repair charges to the customer, plus a damage fee not to exceed $5,000.00, plus any applicable charge for same day service. B. Repair. It shall be the responsibility of each customer to maintain the water and sewer lines from the point of connection to the District’s water and sewer system to the building served. The District reserves the right to repair any damage to the District’s System and appurtenances without prior notice and to assess against any customer such penalties as are provided by law and such penalties provided for in this Rate Order in addition to those charges necessary to repair the portion of the System so damaged. C. Video. If at any time a resident/customer wishes to have the District video their sewer line to help the resident determine the condition of their sewer line, the fee will be $150.00 payable to the District assessed on the next month’s bill. Section 3.06. Requested Temporary Disconnection. If service is temporarily disconnected at the customer’s request, the charge for such voluntary disconnection shall be $10.00, and the charge for subsequently reconnecting the service shall also be $10.00. These charges apply to connects and disconnects that are completed during normal business hours. Section 3.07. Easements. Before service is begun to any customer, or once begun before reconnection is made, the person requesting such service shall grant an easement of ingress and egress to and from the meter(s) for such maintenance and repair as the District, in its judgment, may deem necessary. Section 3.08. Required Service. No service will be given from the District’s water and sewer system unless the customer agrees to take both water and sewer service, except that permanent irrigation only services may receive water only, and projects under construction may, if they wish, receive water service only during the period of such construction. Section 3.09. Additional Charges. In all cases where services are performed for and equipment or supplies are furnished to a party or entity not within MUD 1, the charge to said party or entity shall be the MUD’s cost of providing such services, equipment and/or supplies, plus 15%. This shall not apply to services; equipment and/or supplies furnished by MUD 1 under an existing Interlocal Agreement nor to the rates MUD 1 charges for out-of-district water and sewer service. ARTICLE IV INDUSTRIAL WASTE 4.01. Policy. The following policy regarding industrial waste shall be effective: A. Definition. “Industrial waste” shall mean the water-borne solids, liquids, and/or gaseous wastes (including Cooling Water), resulting from any industrial, manufacturing, trade, business, commercial, or food processing operation or process, or from the development of any natural resource, or any mixture of such solids, liquids, or wastes with water or domestic sewage. The Clean Water Act of 1977, as amended, and the General Pretreatment Regulations contained in 40 C.F.R. §403 contain the requirements for user’s discharge of industrial waste into wastewater facilities. B. Industrial Waste Discharge-Charges and Rates. If any customer of the District’s sanitary sewer system proposes to discharge industrial waste into such system, the Board of Directors of the District shall request the recommendation of the District Engineer and shall establish rates and charges to provide for an equitable assessment of costs whereby such rates and charges for discharges of industrial waste correspond to the cost of waste treatment, taking into account the volume and strength of the industrial, domestic, commercial waste, and all other waste discharges treated and techniques of the treatment required. Such rates shall be an equitable system of cost recovery which is sufficient to produce revenues, in proportion to the percentage of industrial wastes proportionately relative to the total waste load to be treated by the District for the operation and maintenance of the treatment works, for the amortization of the District’s indebtedness for the cost as may be necessary to assure adequate waste treatment on a continuing basis. C. Pretreatment. The Board of Directors of the District shall rely upon the recommendation of the District Engineer and shall require pretreatment of any industrial waste that would otherwise be detrimental to the treatment works or to its proper and efficient operation and maintenance or will otherwise prevent the entry of such industrial waste into the treatment plant. ARTICLE V ENFORCEMENT/CIVIL PENALTIES Section 5.01. Enforcement. A. Civil Penalties. The Board hereby imposes the following civil penalties for breach of any rule of the District: The violator shall pay the District twice the costs the District has sustained due to the violation up to $5,000.00. A penalty under this Section is in addition to any other penalty provided by the laws of this State and may be enforced by complaints filed in the appropriate court of jurisdiction in the county in which the District’s principal office or meeting place is located. If the District prevails in any suit to enforce its rules, it may, in the same action, recover any reasonable fees for attorneys, expert witnesses, and other costs incurred by the District before the court. The court shall fix the amount of the attorneys’ fees. B. Liability for Costs. Any person violating any of the provisions of this Order and/or the rules and regulations governing water and sanitary sewer facilities, service lines, and connections shall become liable to the District for any expense, loss or damage occasioned by the District by reason of such violation, and enforcement thereof shall be in accordance with Paragraph A of Section 5.01 of this Order. Section 5.02. Non-waiver. The failure on the part of the District to enforce any section, clause, sentence, or provision of this Order shall not constitute a waiver of the right of the District later to enforce any section, clause, sentence, or provision of this Order. Section 5.03. Appeal. Any determination by the District of any dispute regarding the terms and provisions of this order may be appealed to the Board of the District, which shall conduct a hearing on the matter. The District shall provide the customer with information regarding appeals and hearing procedures upon the customer’s request. ARTICLE VI MISCELLANEOUS Section 6.01. Amendments. The Board of the District has and specifically reserves the right to change, alter or amend any rate or provision of this Order at any time. Section 6.02. Severability. The provisions of this Order are severable, and if any provision or part of this Order or the application thereof to any person or circumstance shall ever be held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Order and application of such provision or part of this Order shall not be affected thereby. Section 6.03. Headings. The section and paragraph headings used herein are for reference only and are not to be construed as part of the text of the section or paragraph. ARTICLE VII REPEAL OF PREVIOUS ORDERS This Rate Order shall be known as the “2007-2008 Rate Order” (Order 2007- 103109) of the District. All previous Orders adopted by the Board of Directors pertaining to the subject matter hereof are each hereby repealed in their entirety as of the effective date hereof. ARTICLE VIII EFFECTIVE DATE This Order shall be effective as of November 1st, 2007. ARTICLE IX PUBLIC MEETING It is hereby found that the meeting at which this Order is adopted is open to the public as required by law, and that public notice of the time, place, and subject matter of said meeting and of the proposed adoption of this Order was given as required by law. PASSED, ADOPTED, ORDERED, AND APPROVED this 31st 9th day of October 2007. __________________________ DEAN HENRY, President Board of Directors, Trophy Club Municipal Utility District No. 1 (Seal) ATTEST: _____________________________ CONSTANCE S. WHITE, Secretary Board of Directors, Trophy Club Municipal Utility District No. 1 MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 10-31-2007 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: RECOMMENDATION: ACTION BY MUD1: (Initials) 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, 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. Any and all letters of credit or other financial security obtained by Town pursuant to this Section 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: 10-31-2007 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: 10-31-2007 Subject: Agenda Item No.C.1 Receive District Manager's Report a. Items to be placed on future agendas (mm) MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 10-31-2007 Subject: Agenda Item No.C.2 Receive Finance Director's Report a. Action Item: Use of water revenue for fire operations. EXPLANATION: Director Henry posed the question of whether water revenues could be utilized towards Fire operations. Finance inquired with our Bond Attorney’s office (Pete Tart), and then he in turn recommended that we follow-up with both of our MUD attorneys for further clarification. RECOMMENDATION: ACTION BY MUD1: (smd) Attachments: 1. Email Correspondence -----Pete Tart Office EMail----- From: Leroy Grawunder [mailto:LGrawunder@mphlegal.com] Sent: Monday, October 08, 2007 5:33 PM To: Sakura Dedrick Cc: Pete Tart; Dan Almon (dalmon@swst.com) Subject: Use of Revenues for Fire Operations In reviewing the bond orders for Mud No. 1 and MUD No. 2 outstanding bonds, the only provisions relating to restrictions on the use of water and sewer system revenues were set forth in the bond order for MUD No. 1 Waterworks and Sewer system Combination Unlimited Tax and Revenue Refunding Bonds, Series 1997. Section 9 (copy attached) of the 1997 Bond Order provides that all revenues of the District's waterworks and sewer system shall be deposited into the Operating Fund and used (1) to pay operation and maintenance expenses, (2) to pay debt service on the 1997 Bonds , and (iii) to the extent the balance in the interest and sinking fund is sufficient to pay debt service, to pay other proper expenses of the District. Please call if you have any questions, or if we may be of further assistance. Leroy Grawunder, Jr. McCall, Parkhurst & Horton L.L.P. 717 North Harwood, 9th Floor Dallas, Texas 75201 Direct: (214) 754-9201 Fax: (214) 754-9250 E-mail: lgrawunder@mphlegal.com -----Sakura Moten-Dedrick Email----- From: Sakura Dedrick Sent: Monday, October 08, 2007 7:03 PM To: Pam Liston; Bob West Cc: Walter Fitzpatrick Subject: FW: Use of Revenues for Fire Operations Pam & Bob, The email below was generated in response to my question to Pete Tart. He is out of the office, and another attorney in his office replied. Question asked by Dean Henry was whether or not water revenues could be used towards Fire operations. We know that revenue bonds cannot be issued for Fire purposes. In speaking with Mr. Grawunder, he said that as long as No's 1, 2, and 3 were satisfied, any net revenues remaining afterwards could be used to pay for "proper expenses" of the District. He said that I should seek further input from both of you as far as what "proper expenses" entailed. Would appreciate any help on this...I'm stuck. Thanks, SMD -----Bob West Email----- Sakura: I understand that MUD1 President Dean Henry has inquired whether water revenues may be used toward fire-fighting services. The TEXAS WATER CODE contains the following provision, which I believe allows a MUD to generally adopt charges and fees to support district services including fire-fighting services: Section 49.212. FEES AND CHARGES. (a) A district may adopt and enforce all necessary charges, mandatory fees, or rentals, in addition to taxes, for providing or making available any district facility or service, including fire-fighting activities provided under Section 49.351. Also, MUD1 received specific state commission approval and MUD1 voter approval in 1983 to operate a fire department, including express approval to use a portion of the annual maintenace and operations tax for funding of fire department expenses. Therefore, MUD1 could use either fees or part of the M&O taxes, or a combination of the two, to pay for fire-fighting services, as the MUD1 Board may determine in its broad policy-making discretion. I am not specifically commenting on MUD2 because that is not my client and I am not as familiar with its documents relating to fire-fighting services, but it would seem to me that the same analysis probably would also apply to MUD2. I will defer to Pam Liston as attorney for MUD2 to offer any other comments that she may have. Bob West (as attorney for TCMUD1) Whitaker, Chalk, Swindle & Sawyer, LLP 301 Commerce Street, Suite 3500 Fort Worth, TX 76102 Direct Dial: (817) 878-0511 Fax: (817) 878-0501 RWest@WhitakerChalk.com -----Pam Liston Email----- Thank you, Bob, for providing that provision. On behalf of MUD2, I agree that water revenues can be used toward fire-fighting services. Pam Liston (as attorney for MUD2) Pamela Harrell Liston The Liston Law Firm P.O. Box 1882 Rowlett, Texas 75030 Tel: 972.475.2794 Fax: 972.463.4158 pamela.liston@listonlaw.net MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 10-31-2007 Subject: Agenda Item No. D.1 Review and Approve Minutes a. October 9, 2007 - Regular Session minutes (mm) Attachments: 1. Minutes MINUTES OF REGULAR SESSION TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 October 9, 2007 The Board of Directors of the Trophy Club Municipal Utility District No. 1 of Denton and Tarrant Counties met in Regular Session on Tuesday, October 9, 2007, at 6:00 p.m., in the Boardroom of the Trophy Club Administration Building, 100 Municipal Drive, Trophy Club, Texas 76262. DIRECTORS PRESENT: Dean Henry President Connie White Secretary/Treasurer Jim Hase Asst. Secretary/Treasurer Neil Twomey Director DIRECTORS ABSENT: Gary Cantrell Vice President STAFF AND GUESTS PRESENT: Walter Fitzpatrick District Manager Sakura Dedrick Finance Director Mary Moore Recording Secretary Melinda Watts-Smith Attorney Brandon Emmons Town Manager Nick Sanders Town Mayor Danny Thomas Fire Chief REGULAR SESSION A.1 Call Meeting to Order. President Henry announced a quorum and called the meeting to order at 6:04 p.m. A.2 Public Comments or Presentations. No public comments. B.1 Discuss and take appropriate action to amend Cingular's (AT&T) cell tower lease agreement. (Sakura Dedrick) Director Hase moved to approve the amendment of the Cingular/AT&T cell tower lease agreement. Director White seconded the motion. Motion carried unanimously. B.2 Discuss and take appropriate action to enable the Master District to collect and retain interest on customer deposits. Finance Director Sakura Dedrick advised that, if approved, the MUD 1 Rate Order would be modified to reflect this change. Director Hase moved to enable the Master District to collect and retain interest on customer deposits. Director Henry seconded the motion. Floor was opened for discussion. Motion carried unanimously. B.3 Discuss and take appropriate action regarding Order 2007-1009, approving the 2007 MUD 1 Rate Order. Recording Secretary Mary Moore went over amendments to the Rate Order, which included adding a fee for backflow inspections, and an increase of three percent (3%) equal to four cents ($.04) to the water and sewer rates as agreed upon at Board’s September meeting to cover Ft. Worth’s water rate increase and an increase in operational costs. Director White questioned if the low deposit fee of $40.00 homeowners pay when opening an account for utility service is still considered adequate. District Manager Fitzpatrick stated that with the recent change requiring bills to be paid by an earlier date than in the past has resulted in more bills being paid in a timely manner. Finance Director Dedrick offered to review the amount of the accounts that go to collection to see if there is an “average” amount and provide feedback to the Board with her findings. Director Hase moved to approve Order 2007-1009, the 2007 Rate Order. Director Twomey seconded the motion. Motion carried unanimously. B.4 Discuss and take appropriate action regarding the PowerPoint presentation prepared by the Town. Town Manager Emmons addressed the Board, explaining the purpose of this presentation was to bring this before Council to see if they wanted to proceed with investigating the options available to the Town, to go forward with improving the delivery of services and to bring in a consultant to look at the various options, which could be: 1. consolidation with MUD 2; 2. stay with status quo; or 3. negotiate a buy-out with Solana. These are not fixed Town objectives, but rather an attempt to find out what the Town should be looking into. Town Manager Emmons is still developing the RFP (Request for Proposals) to solicit consultant services. Director White stated that the long-range goal should be to provide the most cost- effective utility services to our citizens. Director Hase recommended having the Board assist in funding fifty percent (50%) of this study. Mayor Sanders addressed the Board, stating that most of the PowerPoint presentation he put together and that some slides came from the start of the PID. Mayor Sanders stated he agrees with both Director Hase that the study should be done, and with Director White that our goal should be to provide the most cost-effective utility service to our citizens. He believes the Town and the MUDs have really done well trying to work together and can continue to do so with this effort; that we owe it to the citizens to look at all alternative methods to reduce their taxes, and that this study will help establish the facts. One concept was whether the MUDs should exist for taxation only and operational services be exclusively the province of the Master District. There may be efficiencies that could be realized; however an unresolved question is whether we could restructure so that the Town would in effect carry out the functions of what is now the Master District with the MUDs still providing taxation. The Mayor stated that he is favor of establishing a task force committee with citizens, if so desired. Director Hase asked the Board for a consensus regarding having the Master District fund part of the Town’s study. Director Twomey stated he supports funding the study. Director White agrees as long as the Board is equally involved in developing the objectives. President Henry agrees with funding the study. Director Hase states that the next step, if approved by the Master District, is to see if Council would be in agreement with allowing the MUDs to participate in the study, not only in sharing the funding but also with regard to objectives and input. Discussion only; no action taken. B.5 Discuss and take appropriate action concerning proposed contract(s) with Town of Trophy Club for the providing of water and sewer services to the proposed new development by Centurion American. Copies of both the money and the operational contracts were distributed to the Board at the beginning of the meeting. The Board went over the money contract with special attention to the section regarding Utility Fees. The Board agreed to include the following change indicated by underline: Article IV 4.1 (B) - Utility Fees - The second sentence is to be amended to read, “Upon collection of one or more Utility Fees by the Town, such Utility Fees shall, within ten (10) working days, be deposited……..” And the last sentence was amended so that the final words after “…$3,260,000” will read “…plus accrued interest, due to the MUDs, shall be paid in full.” Director White would like to see verbiage included in the contract allowing use of water tower by the MUDs. Town Manager Emmons addressed the Board, offering a recommendation for a separate agreement for use of the Town-owned water tank with approval, of course, by the Town Council. The Board discussed the pending time schedule. Town Manager Emmons stated he is not concerned so much about the money contract; he is more concerned by the operations contract; however, he understands that one does not get signed without the other. Discussion was held regarding the operations contract. Director White asked where it states in the contract when the Town’s bill is due. Director Hase stated he remembered conversations that the Town bill, rendered around the 1st to the 5th of the each month, with the bill becoming due around the 20th, with a ten-day grace period, so the bill would be due by the end of the month. Ten business days from the date the bill is received. Director Hase stated that the penalty business is good business the MUDs make money on late charges. The Board agreed to include the following change to the Operations Contract, change indicated by underline: Article 5.6 – The last sentence of this paragraph was modified to read as follows: 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. Discussion held; no action taken. C.1 Receive District Manager's Report Items to be placed on future agendas: a. Discuss and take appropriate action concerning the contract between the MUDs and the Town of Trophy Club for the operation of the Fire Department. District Manager Fitzpatrick had nothing to report, stating he will provide a full report at the Master District meeting. D.1 Review and Approve Minutes a. September 7, 2007 - Special Joint Session minutes b. September 11, 2007 - Regular Session minutes President Henry moved to approve the minutes for September 7, 2007 and September 11, 2007. Director White seconded the motion. Motion carried unanimously. D.2 Review and Approve Disbursements and Variance Report a. August 2007 Director Twomey moved to approve the variance report for August 2007, as presented. Director Hase seconded the motion. Motion carried unanimously. (August disbursements were not available by meeting date and will be reviewed at the November MUD 1 meeting.) D.3 Review Monthly Tax Collection Report a. August 2007 The Board reviewed the August Tax Collection Report with no action taken. D.4 Set Next Meeting Date Next regularly scheduled meeting date: Tuesday, November 13, 2007, 6:00 p.m. The Board agreed to meet on Tuesday, November 6, 2007 at 6:00 p.m. F.1 Adjourn. Meeting adjourned at 8:07 p.m. _________________________________ Dean Henry, President (SEAL) ____________________________________ Constance S. White, Secretary/Treasurer ____________________________ Mary Moore, Recording Secretary MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 10-31-2007 Subject: Agenda Item No.D.2 Review and Approve Disbursements and Variance Report a. August 2007 Financials b. September 2007 Financials (Unaudited) & Variance Report EXPLANATION: RECOMMENDATION: ACTION BY MUD1: (smd) Attachments: 1. September Variance Report MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 10-31-2007 Subject: Agenda Item No.D.3 Review Monthly Tax Collection Report a. September 2007 (mm) Attachments: 1. September Tax Collection Report MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 10-31-2007 Subject: Agenda Item No.F.1 Adjourn. (mm)