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Res 11-02 Authorizing a Contract with the Cities of Fort Worth, Keller, and Southlake for the Billing for Treated Water TOWN OF WESTLAKE RESOLUTION NO. I1-02 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, AUTHORIZING THE TOWN MANAGER TO EXECUTE A CONTRACT BETWEEN THE TOWN OF WESTLAKE AND THE CITIES OF FORT WORTH, KELLER, SOUTHLAKE, AND THE TOWN OF WESTLAKE, RELATED TO THE BILLING FOR TREATED WATER THROUGH THE FUTURE SOUTHLAKE 30" WATERLINE ALONG FM 1938. WHEREAS, the provision of water service throughout the Town of Westlake is of vital importance to the health, safety, and welfare of the citizens of Westlake; and WHEREAS, Westlake desires to secure and maintain an adequate potable water source for the health, safety, and welfare of the citizens of Westlake; and WHEREAS, Westlake desires to provide water services for its citizens; and WHEREAS, the Town Council find that securing an additional metered water connection provides sound infrastructure planning consistent with goals and objectives within the adopted strategic plan; and WHEREAS,the Town of Westlake's future metered connection to the water supply line owned by the Cities of Keller and Southiake, and desires to be billed separately by the City of Fort Worth; and WHEREAS, the City of Fort Worth is willing to contract with all three (3) municipalities to furnish separate billing services, in accordance with the terms and conditions set forth in said contract between the Cities of Fort Worth, Keller, Southiake, and the Town of Westlake, attached hereto as Attachment 1. WHEREAS, the Town Council finds that the passage of this Resolution is in the best interest of the public. NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS: SECTION 1. All matters stated in the Recitals above are found to be true and correct and are incorporated herein by reference as if copied in their entirety. Resolution l 1-02 Page 1 of 2 SECTION 2. The Town Council of the Town of Westlake hereby approves the contract between the Town of Westlake, and the Cities of Keller, Southlake, and Fort Worth, Texas relating to billing for treated water through the future Southlake 30" waterline along FM 1938, attached as Attachment 1, and further authorizes the Town Manager to execute the agreement on behalf of the Town of Westlake, Texas. SECTION 3: If any portion of this Resolution shall, for any reason, be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions hereof and the Council hereby determines that it would have adopted this Resolution without the invalid provision. SECTION 4: That this resolution shall become effective from and after its date of passage. PASSED AND APPROVED ON THIS 24'" DAY OF JANUARY, 2011. r Laura Wheat, Mayor ATTEST: rL X P"5 Kell �—Edwai , Town Secretary Tom ym , T wn anager APPROVEDL.AS TO F Atanton n Attorney Resolution 11-02 Page 2 of 2 `AI TY S,ECS Rg E TA R Y _ CONTAa NO.�ti� CONTRACT BETWEEN THE CITIES OF FORT WORTH, FELLER, SOUTHLAKE AND WESTLAKE RELATED TO THE BILLING FOR TREATED WATER WHEREAS, on or about the 16th day November, 2010,the cities of Fort Worth and Keller entered into a contract for the provision by Fort Worth of treated water to Keller, such contract being City of Fort Worth City Secretary Contact No.C-41100; and WHEREAS, on or about the 16th day November, 2010,the cities of Fort Worth and Southlake entered into a contract for the provision by Fort Worth of treated water to Southlake, such contract being City of Fort Worth City Secretary Contact No. C-41110; and WHEREAS, on or about the 16th day November, 2010,the cities of Fort Worth and Westlake entered into a contract for the provision by Fort Worth of treated water to Westlake, such contract being City of Fort Worth City Secretary Contact No. C-41112; and WHEREAS,the cities of Keller and Southlake entered into a contract between themselves related to the provision of treated water by Southlake to Keller, such treated water being provided to Southlake by Fort Worth; and WHEREAS,the City of Fort Worth authorized the resale of treated water by Southlake to the City of Keller; such contract being City of Fort Worth City Secretary Contract No. 17683; and WHEREAS,the City of Fort Worth hereby authorizes Westlake's additional point of connection and the joint use of the T.W. King Water Supply Line with Southlake; and WHEREAS, Keller, Southlake and Westlake desire to enter into a contract with Fort Worth related to the billing for treated water delivered to Keller by Southlake and Southlake to Westlake including provisions related to billing for lost water according to the methodology described in the memo issued by Freese and Nichols, dated April 25, 2010 which shall be included in the contract; and WHEREAS, the City of Fort Worth is agreeable to provide billing services related to the treated water provided by Keller, Southlake and Westlake subject to and solely pursuant to the terms and conditions stated below. NOW, THEREFORE, THE CITIES OF KELLER, SOUTHLAKE, WESTLAKE AND FORT WORTH AGREE AS FOLLOWS: 03-0?--'l I f 1. TERM The Agreement shall be effective upon the date the last parry fully executes the contract and shall terminate on September 30, 2031,unless terminated earlier as provided herein. It may be renewed on terms mutually agreeable to the parties. 2. RATES FOR WATER TAKEN The rates to be charged for treated water delivered by Fort Worth to the Cities of Keller, Southlake and Westlake (hereinafter referred to as "the Cities") shall be equal to the volume rates and rate of use charges currently in effect and as they may change from time to time, all in accordance with City of Fort Worth City Secretary Contracts C-41100, C-41110 and C-41112, such contracts being hereinafter referred to collectively as the "Contracts." 3. DETERMINATION OF UNACCOUNTED WATER LOSSES; ALLOCATION TO EACH PARTY FOR BILLING PURPOSES A. Two factors shall be used to determine unaccounted water loss: 1)the interior surface area of the water supply pipeline required to deliver flow to each city's delivery point as determined in Section 4; and 2)the recorded actual water usage, as described in Section 5. B. A city which does not take any flow during the monthly billing period shall not be assessed an unaccounted water loss;however, if flow is not taken by any city during any monthly billing period,then the unaccounted water loss of the Delivery System in that monthly billing period shall be allocated proportionately to each city based on the surface area of the water supply pipeline required to deliver flow to each city's delivery point. 4. SURFACE AREA OF THE WATER SUPPLY PIPELINE The surface area of the water supply pipeline used by each city based on the now paths available to convey flow to each City's delivery point are as follows: • Southlake Pearson Delivery Point: the Cities agree that the resulting average interior surface area of pipeline that can deliver flow through both the Fort Worth Northside II Caylor Tank through the 42-inch line and the Fort Worth North Beach Tank through the 36-inch/30-inch line equals 240,151 square feet. • Keller Pearson Delivery Point: the Cities agree that the resulting average interior surface area of pipeline that can deliver flow equals 240,151 square feet. BILLING AGREEMENT KELLER—SOUTHLAKE-WESTLAKE-EXECUTION COPY Page 2 of 11 • Westlake Delivery Point: the Cities agree that the resulting average interior surface area of pipeline that can deliver flow to the future anticipated Westlake Delivery Point is 380,494 square feet. • T.W. King Delivery Point: the Cities agree that the resulting average interior surface area of pipeline that can deliver flow to the future anticipated Southlake T.W. King Delivery Point is 453,405 square feet. 5. Recorded Actual Water Usage The total actual water delivered from all of the Fort Worth meters as shown on Exhibit "A" shall be measured on a monthly basis. The recorded actual water usage by each city at meters numbered 3, 4, 5 or 6 shall also be measured from each delivery point on a monthly basis by Fort Worth pursuant to the Contracts. The sum of the water delivered from the Fort Worth meters numbered 1 and 2 shall then be compared to the sum of the water usage by the Cities at meters numbered 3, 4, 5 and 6. The difference shall equal and be the total unaccounted water loss volume. As an example only: Table A Total Unaccounted Water Loss Calculation Total Fort Worth Meters Total Sum of the Actual Total Unaccounted Measured Water Used at the Cities Water Loss Volume Delivery Points 44 MG per Month 42 MG per Month 2 MG per MonthTA Each city's percentage of allocated unaccounted water loss shall then be determined on a monthly basis by: 1. Multiplying the surface area designated for each citya in Section 4A by each city's recorded actual water usageb to determine the product of the two factors°;then 2. Adding up the products,T for all of the Cities;then 3. Dividing the product of each city'by the total sum product�T for total Cities' to determine each city's percentage of unaccounted water lossd; then 4. The unaccounted water loss assessed to each citye shall be determined by multiplying the percentage allocated to each city'by the total unaccounted water loss volumeTa BILLING AGREEMENT KELLER—SOUTHLAKE-WESTLAKE-EXECUTION COPY Page 3 of 11 i t As an example only: Table B Allocation of Unaccounted Water Losses Between Southlake,Keller and Westlake Delivery Average Interior Record Actual Product of %of Actual Point Surface Area of Water Usage at Two Variables Allocation Unaccounted Pipeline to Each Each Cities Affecting Loss of Total Water Loss Cities Delivery Meterb Allocation` Water Lossd Allocation' Point' Southlake 240,151 20 MG per 4,803,200 39.78% 0.79 MG per Pearson Month Month Keller 240,151 12 MG per 2,881,812 23.87% 0.48 MG per Pearson Month Month Westlake 380,494 2 MG per 760,988 6.30% 0.13 MG per Month Month Southlake 453,405 8 MG per 3,627,240 30.05% 0.60 MG per T.W.King Month Month Total 42 MG per 12,073,240° 100.00% 2.0 MG per Month Month' Keller and Westlake agree that the treated water delivered to meters numbered 3, 4, 5 and 6 under this Agreement will not be added to the treated water taken by each of them pursuant to City of Fort Worth City Secretary Contact No.0-41100 and No.C- 41112. Keller and Westlake will continue to receive separate monthly bills and a separate annual bill under Fort Worth City Secretary Contract No. C-41100 and C-41112, as well as monthly bills and an annual bill under this Agreement. 6. MAXIMUM HOUR, MAXIMUM DAY CHARGES The assessment of the maximum hour and the maximum day charges incurred at meters numbered 1 and 2 shall be based on the volume at each city's meter numbered 3, 4, 5 or 6 during the same maximum hour and maximum day time period and shall be determined as follows: A. First, to determine each city's allocated percentage of maximum day and maximum hour charges take each city's recorded actual water usage for the actual maximum hour and maximum day and divide by the total volume of meters 3 and 4 on Exhibit "A"; and meters 5 and 6 once the meters have been connected to the system; then B. Each city's allocated percentage as calculated above shall be multiplied by the total maximum day and maximum hour charge incurred from meters 1 and 2 per the Contracts. C. The total annual payment for water delivered to each city shall be based on the annual and peak volumes delivered to each city during the Fiscal Year, as determined by meters, flow recording devices or other approved methods, and as BILLING AGREEMENT KELLER—SOUTHLAKE-WESTLAKE-EXECUTION COPY Page 4 of 11 provided in this Agreement. The October monthly payment for September's usage shall contain any adjustments necessary to update the calculations as necessary to recover the annual payment for the Customer's actual withdrawals from the Fort Worth System (including Rate of Use Charges as defined in the Contracts for Maximum Hour and Maximum Day Demands) for the Fiscal Year just ended, during which the water usage occurred. Each city will be responsible for its own portion of the settle-up amount. D. This information shall not be used for annual billings made under City of Fort Worth City Secretary Contracts No.C-41100,No. C-41110 and No. C-41112. E. If any of the cities did not take water during prior year to the current billing year, then the monthly maximum day and maximum hour charges for the current billing year will be based on the readings from the most recent year with reading. F. For historical information and comparison, and solely for use under this Agreement, Fort Worth and the Cities agree that the maximum day and maximum hour volumes shall be: Maximum Day Maximum Hour Keller 4.97 MGD 5.95 MGD Southlake 18.29 MGD 20.26 MGD Westlake To be determined at the design stage of the future meter. This information shall not be used for annual billings made under City of Fort Worth City Secretary Contract No.0-41100 and No. C-41112. 7. MONTHLY CALCULATION A. The methodology as described in Section 3 and 4 have been derived from the consultant's memorandum to Southlake, Keller and Westlake dated April 25, 2010 and attached as Exhibit "B". By executing this Agreement,the Cities acknowledge that they have had their respective utility personnel or consultants review Exhibit `B" and that they fully understand the methodology and agree to the calculations demonstrated therein for the purpose of billing treated water delivered to Keller, Southlake and Westlake. B. Except as provided in Section 5, monthly billing for water volume will be based on meter readings for total volume from meters numbered 3, 4, 5 and 6. C. Furthermore, attached hereto as Exhibit"C" is an example of a calculation for billing the total water, including the maximum day and the maximum hour charges,to each city on a monthly basis under this Agreement. BILLING AGREEMENT KELLER—SOUTHLAKE-WESTLAKE-EXECUTION COPY Page 5 of 11 8. METER UPGRADES The meters, together with the meter vaults, designated as Meter 3 and Meter 4 on Exhibit"A" attached hereto shall each be upgraded. The plans and design for the meters and the meter vaults are subject to the written approval of Fort Worth. The existing meters shall be replaced with transit time meters and provision shall be made for back-up power to the meters. Further, fire hydrants will be installed on the downstream side of the meters. Keller and Southlake entered into a contract dated January 20, 2004 detailing the division of costs associated with the required meter installation and vault construction, a copy of which is attached hereto as Exhibit "D", same being Southlake City Contract No. 04-15. Exhibit "D" is solely attached for the purpose of cost sharing related to the upgraded meters between the Cities and for no other purpose. 9. FUTURE ANTICIPATED METERS It is anticipated that Southlake will construct a new meter shown on Exhibit "A" as meter number 5 and that Westlake will construct a new meter shown on Exhibit "A" as meter number 6. Prior to construction, each city shall submit plans and design for the meters to Fort Worth for review and written approval of Fort Worth. Each meter shall comply with Fort Worth standards as then in effect. Prior to delivery of water to either meter, each meter must be inspected and approved by Fort Worth and such inspection fees shall be the sole responsibility of the owner city. The inspection fee shall be the same as the fee charged to Fort Worth developers. 10. OPERATION AND MAINTENANCE OF METERS Fort Worth shall be responsible for operating and maintaining meters numbered 3, 4, 5 and 6. In that regard, Fort Worth may either contract for any necessary repairs or perform the work with Fort Worth employees. The Cities agree to reimburse Fort Worth for the total cost of any required maintenance or repair. Repair and maintenance of each meter numbered 3, 4, 5 or 6 will be paid by the owner city. The Cities shall pay for the costs of meter calibration, meter maintenance, power to operate the meters, any upgrades to the remote telemetry unit or meters and station, and any additional expenses for meter reading, testing and calibrations of the meters with the costs being divided as stated immediately above. Calibration of meters 1 and 2 only, shall be performed as described in Section 4 of the Contracts. BILLING AGREEMENT KELLER—SOUTHLAKE-WESTLAKE-EXECUTION COPY Page 6 of 11 11. OPERATION OF DELIVERY SYSTEM "Delivery System" shall mean the system of water mains that delivers treated water to the Cities, as represented by lines A, B, C, D, E, and F on Exhibit "A". Fort Worth shall never have any duty to operate and maintain the Delivery System. The Cities in accordance with whatever contracts exist between them shall be responsible to operate and maintain the Delivery System. 12. PROHIBITION OF EXTENSIONS The Cities shall not permit any extensions or connections to the Delivery System without a written amendment to this Agreement. 13. MEDIATION OF DISPUTES If any dispute arises hereunder between the parties, such dispute shall be resolved in accordance with Section 22.6 of the Contracts. 14. EASEMENTS/All-WEATHER ACCESS Each city, as appropriate, shall dedicate an easement to Fort Worth in order for Fort Worth to have access to the meters numbered 3, 4, 5 and 6, as well as the meter vaults. In addition,the Cities shall provide an all-weather access to the meter vaults. 15. CONTRACTS CONTROLLING To the extent that this Agreement modifies either City of Fort Worth City Secretary Contacts No. C-41100,No. C-41110 and/or No. C-41112, this Agreement shall control. In all other matters,the provisions of City of Fort Worth City Secretary Contacts No. C-41100, C-41110 and C-41112 shall take precedence. 16. TERMINATION This Agreement may be terminated by Fort Worth at any time in its sole discretion by giving written notice to the Cities at least sixty (60) days prior to the date of termination. The Cities may terminate this Agreement only by mutual agreement between the three of the cities and then by the Cities giving written notice to Fort Worth at least sixty (60) days prior to the date of termination. BILLING AGREEMENT KELLER—SOUTHLAKE-WESTLAKE-EXECUTION COPY Page 7 of 11 17. EFFECT OF TERMINATION If this Agreement is terminated,the Cities shall revert to the status and contractual relations they were in effect prior to the execution of this Agreement. 18. THIRD PARTY BENEFICIARIES The provisions and conditions of this Agreement are solely for the benefit of the parties hereto, and any of their lawful assigns or successors and are not intended to create any rights, contractual or otherwise,to any other person or entity. 19. NOTICES All written notices called for or required by this Agreement shall be sufficient if forwarded to the parties below, or such other parry or address as either parry designates in writing, by certified mail,postage prepaid, or by hand delivery: City of Fort Worth: City of Fort Worth with a copy to: City of Fort Worth Attn: City Manager Attn: Water Director 1000 Throckmorton P. O. Box 870 Fort Worth, TX 76102 Fort Worth, Texas 76102 City of Keller City of Keller with a copy to: City of Keller Attn: City Manager Public Works Director P.O. Box 770 P.O. Box 770 Keller, Texas 76244 Keller, Texas 76244 Hand Delivery: 1100 Bear Creek Parkway, Keller, Texas 76248 City of Southlake City of Southlake with a copy to: City of Southlake Attn: City Manager Attn: Public Works Director 1400 Main Street, Suite 460 1400 Main Street, Suite 230 Southlake, Texas 76092 Southlake, Texas 76092 BILLING AGREEMENT KELLER—SOUTBLAKE-WESTLAKE-EXECUTION COPY Page 8 of I1 Town of Westlake Town of Westlake with a copy to: Town of Westlake Attn: Town Manager Attn: Public Works Director 3 Village Circle Ste. 202 3 Village Circle Ste. 202 Westlake, Texas 76262 Westlake, Texas 76262 20. FORCE MAJEURE If, by reason of Force Majeure as hereinafter defined, any parry hereto shall be rendered wholly or partially unable to carry out its obligations under this Agreement,then such party shall give written notice of the particulars of such Force Majeure to the other parties within a reasonable time after the occurrence thereof. The obligations of the party giving such notice, to the extent affected by such Force Majeure, shall be suspended during the continuance of the inability claimed and for no longer period, and any such parry shall be in good faith exercise its best efforts to remove and overcome such inability. The term "Force Majeure" as utilized herein shall mean and refer to acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the government of the United States, the State of Texas, or any other civil or military authority; insurrections; riots; epidemics; landslides; earthquakes; lightning; fires; hurricanes; storms; floods; washouts; or other natural disasters; arrest; restraint of government and people; civil disturbances; explosions; breakage or accidents to machinery, pipelines or canals; or other causes not reasonably within the control of the parry claiming such inability. Force Majeure shall not excuse the obligation of and party hereto to pay for treated water service provided under this Agreement. 21. NO JOINT VENTURE, PARTNERSHIP, AGENCY This Agreement will not be construed in any form or manner to establish a partnership,joint venture or agency, express or implied, nor any employer-employee, borrowed servant or joint enterprise relationship by and among the parties. Each party shall be an independent contractor and shall be responsible at all times for directing its employees in the course of their duties. Each party shall be responsible at all times for directing its employees in the course of their duties. BILLING AGREEMENT KELLER—SOUTHLAKE-WESTLAKE-EXECUTION COPY Page 9 of 11 f 22. CONTRACT CONSTRUCTION The parties acknowledge that each party and, if it so chooses, its counsel have reviewed and revised this Agreement and that the normal rules of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments or exhibits hereto. 23. GOVERNMENTAL POWERS It is understood that by execution of this Agreement, none of the parties hereto waive or surrender any of it governmental powers. 24. FIRST BILLING DATE The first billing date under the terms and conditions of this Agreement shall be sixty (60) days from the effective date of this contract. APPROVAL RECOMMENDED: CITY OF FONT WORTH S. Frank Crumb,P. E. Fernando Costa Water Department Director Assistant City Manager Approved as to Form and Legality: Attest b, 'lei VR-Wilacc Christa . Reynolds Marty Hendrix Sr. Assistant City Attorney City Secretary Date: 3 1 poo Z , b l 4 FoRr �► p 0 � �—ntract Authorization p.�oo° �Q��� 41 �_..F � � vg owl d 00 ° d ° 00000 BILLING AGREEMENT KELLER—SOUTBLAKE-WESTLAKE-EXECUTION COPY Page 10 of 11 APPROVAL RECOMMENDED: CITY OF KELLER i By: Greg,Dyck ns.P. Dan O'Leary Pub c Wor s Di ector City Manager Appro s t orm an lity: Attest: ttorne City S cretary Date:,z5,-Qn14,2r�4,-� D// APPROVAL RECOMMENDED: CITY OF SOUTHLAKE Z _ B . _ Robert H. Price, P.E., FNSPE Sh elverto Public Works Director City Manager V • O • Ap ove s t gality: Attest: • ° City Attorney Jn[.0 M City Secretary Date: /-X-11 APPROVAL RECOMMENDED: TOWN OF WESTLAKE velB � y' J' rod Greenwood, Public Works Director Tom Biyr, own Manager Approv s t an egality: Attest: To Attorn Towrl Secr ary S1�OF Date: 07--IC- 11 ® . BILLING AGREEMENT KELLER—SOUTHLAKE-WESTLAKE-EXECUTION COPY Page 11 of 11 r E�X AS CD 0 Lu r c� LL YLO Z LU co U)C. IS7� '� ,r+��:�,r r ,, •'�t s ( Z�. T ash$ •o a2W W co M, m �a y � � L `� E Opp .� - Y j.•. _ •_ J .f-. - aaw a E u.1 Y a Z/ - W 05 N Z d J ,.9E i w v� c Wl ® p N Pi i C9 � Y Y i—� a 0 CD 0 IAN' 04 X b N - W . Q W ow LLdNV Q Q ca ■ w U °—N' ` eco U c LLI F' 0£ X W 3G o z ..z � a M f MEMORANDUM FREESE 1 :. . 4055 International Plaza,Suits 200 fart radh,Texas 762109 • 8177-735-7304 - fax 817-735-7431 TO: Bob Price, Director of Public Works, City of Southlake; Chuck Kendrick, Deputy Director of Public Works,City of Southlake; Greg Dickens, Director of Public Works, City of Keller; Jarrod Greenwood, Director of Public Works, City of Westlake CC: Ron King, Freese and Nichols FROM. Thomas Haster,Freese and Nichols SUBJECT Allocation of Unaccounted Water Losses and Maximum DayMaximum Hour Peaking Charges for Southlake/Keller/Westlake Water Supply System DATE; April 25th,2010 A. Allocation of Unaccounted Water Losses We have reviewed various options to allocate the unaccounted water losses in the Southlake/Keller and future Westlake Water Supply System. The water loss allocation needs to be flexible enough to facilitate the addition of a future Westlake Delivery Point as well as being as equitable as possible to allow the losses to be shared between the participating cities. The looping of the water supply lines between the City of Fort Worth Caylor Northside II Water Supply and the City of Fort Worth North Beach Eastside 11 Water Supply adds an additional level of complexity in the water loss allocation to ensure that each wholesale customer equitably share in the future unaccounted water losses. The two variables that should be reflected in the water losses allocation are A)flow used by each wholesale customer and B) surface area of water supply pipeline required to deliver flow to each wholesale customer delivery point. If a wholesale customer is not taking any flow during the monthly billing period they should not have to participate in paying the unaccounted water losses. If a wholesale customer delivery point is located closer to Fort Worth's billing meters than other wholesale customers take points than it is expected that their opportunity for experiencing water losses will be less than others at more remote locations. Therefore, it is with these two variables that Freese and Nichols has developed the following draft methodology to allocate the unaccounted water losses as shown below. The first step in this methodology is to calculate the surface area (pipeline length multiplied by the pipeline parameter) of each pipeline section. These various pipeline sections are shown in the attached Figure 1 as: Line"A"=36"/30" water transmission line from North Beach (Meter 42)to the Southiake Pearson Delivery Point (Meter#3), Line "B" =30-inch water transmission line from Southlake Pearson Delivery Point (Meter#3)to Keller Pearson Delivery Point(Meter#4), Line „C„ 42-inch water transmission line from Caylor (Meter#1)to the split of the 30-inch water lines at Pearson Road, Line"D" =30-inch water transmission line from Keller Pearson Delivery Point (Meter #4)to the 30-inch water transmission line on Florence Road, Line "E" = 30-inch water transmission line from Pearson Road to the future Westlake Delivery Point(Meter#6) and Line"F" =30-inch water Allocation of Unaccounted Water Losses and Peaking Charges April 25th, 2010 ; Page 2 of 4 transmission line from the future Westlake Delivery Point (Meter#6)to the Southlake T.W. King Delivery Point (Meter 45). The following surface area for each pipeline section identified above is; Line "A" = 158,282 square feet, Line "B" is 11,437 square feet, Line "C" = 278,949 square feet, Line "D" =31,635 square feet, Line "E" _ 140,342 square feet and Line "F" =72,911 square feet. The next step in the analysis is to estimate the average pipeline surface area used by each entity based on the various flow paths available to convey flow to each delivery point. For the Southlake Pearson Delivery Point there are two options to receive flow, Fort Worth Northside II Caylor Tank through the 42-inch line and Fort Worth North Beach Tank through the 36-inchj30-inch line. The average pipeline surface area used to deliver flow to the Southlake Pearson Delivery Point is therefore the average of the surface area of Line "A" plus the surface area of Line "B", Line "C" and Line "D" added together. The resulting average surface area of pipeline that can deliver flow to the Southlake Pearson Delivery Point is 240,151 square feet. Using this similar process,the resulting average surface area of pipeline that can deliver flow to the Keller Pearson Delivery Point is also 240,151 square feet. The resulting average surface area of pipeline that can deliver flow to the future anticipated Westlake Delivery Point is 380,494 square feet. The resulting average surface area of pipeline to can deliver flow the Southlake T.W. King Delivery Point is 453,405 square feet. Once the average surface area to each delivery point is calculated, the next step is to record the water usage taken by each delivery point. For the purpose of this calculation let's assume the following average delivery rates are measured at each delivery point; Southlake Pearson uses 20 MGD, Keller Pearson uses 12 MGD, Westlake uses 2 MGD and Southlake T.W. King uses 8 MGD. The actual usage will be measured on a monthly basis to allow these water loss calculation to be represented of the actual usage of the water supply system by each entity participating. Based on these projected delivery rates the product of these two water loss variables would be the following: Southlake Pearson Site Delivery Rate(20 MGD) multiplied by Average Surface Area of Facilities (240,151 square feet) Used to Deliver this flow yielding in a product of 4,803,020. If the sum of the Wholesale Customer Meters read 42 MGD as shown in the above example and the combined Fort Worth billing meters of Caylor and North Beach read 44 MGD,then the unaccounted water loss allocation would be 2 MGD as shown in Table 1 below. Allocation of Unaccounted Water Losses and Peaking Charges April 25th, 2010 Page 3 of 4 Table 1 Total Unaccounted Water Loss Calculation for SouthlakelKeller and Westlake Total Fort Worth Billing Meters Total Sum of the Flow Measured Total Unaccounted Water Losses Flow Measured at the Wholesale Delivery Points Between Billing Meters and Wholesale Customer Meters 44 MGD 42 MGD 2 MGD Once the total unaccounted water loss is calculated, it can be allocated to each wholesale customer delivery point using the average surface area of pipeline facilities used to convey flow to each wholesale customer delivery point and the average delivery rate during the billing period as shown below in Table 2. Table 2 Allocation of Unaccounted Water Losses Between Southlake, Keller and Westlake Delivery Average Surface Average Product of Two %of Actual Point Area of Pipeline to Delivery Rate to Variables Allocation of Unaccounted Each Customer Each Customer Affecting Loss Total Water Water Loss Delivery Point Delivery Point Allocation Loss Allocation Southlake 240,151 20 MGD 4,803,200 39.78% 0.79 MGD Pearson Keller 240,151 12 MGD 2,881,812 23.87% 0.48 MGD Pearson Westlake 380,494 2 MGD 760,988 6.30% : 0.13 MGD Southlake 453,405 8 MGD 3,627,240 30.05% 0.60 MGD T.W. King Total 42 MGD i 12,073,240 f 100.00% 2.0 MGD B. Allocation of Maximum Day and Maximum Hour Peaking Charges Unlike the allocation of unaccounted water losses, the relative location of various wholesale delivery paints for Keller, Southlake and Westlake from Fort Worth has no impact on how much maximum day and maximum hour peaking occurs with each customer city. Therefore, it is not recommended that this same procedure be applied for these peaking charges. Historically the maximum day and maximum hour peaking charges of the combined Caylor and North Beach meter readings has been distributed equally between customer cities based on the respective Allocation of Unaccounted Water Losses and Peaking Charges _ April 25th, 2010 Page 4 of 4 volume of water used by each customer city. It is recommended that this same procedure be maintained going forward as a fair and equitable methodology for allocating these peaking charges as the T.W. King Water Supply Line is put into service and additional delivery points for Southlake and Westlake are added. Please let me know if you agree with this amended methodology and if the allocation is acceptable to each of the wholesale customer cities. If this approach is acceptable, we will add signature blocks for each wholesale customer city to sign and then forward to the City of Fort Worth for amendment to your existing wholesale contracts. Q'^ r m a 3 r O Q 6 m I w r V O�� 7 y m c t N °i n u< o H C > oi a v K nn Nof x u N V p a C1 z n� S a. o � oo N6 OJ Y 'a f0 N Y> a £6 Y V 00 O6 O s 7 O � > a � a`j v >� ar um a ma 3 amo n Y to 16 y LLxJ O O m N•n o m �ma C a�-I 90 LO O L rri Y:a o O$ o.moi. N E CL Y �2+ o m D y 1 Q O �� Q C K E bo oQ3s` v Q r a E v x M O. 0 3y a0 0 u � I O m .�, >t7 ms v Kcoaa fl o or mh z z x O G O Cil m m M1 g0€ t 3 flg Q� Q v H a > tr Y- P =iiai-- Q = F[ 3 y E4 a w Z CLl j H 2l Y Y F iai�Y 3 F G a• s s Exhibit OFF IC I Al. F ^ AGREEMENT FOR FUNDING, CONSTRUCTION AND MAINTENANCE OF WATER TRANSMISSION LINES BETWEEN THE CITY OF SOUTHLAKE, TEXAS AND THE CITY OF KELLER, TEXAS Dated as of Ja K u a rte 2-0 , 2004. INTERLOCAL AGREEMENT FOR FUNDING, CONSTRUCTION AND MAINTENANCE OF WATER TRANSMISSION LINES STATE OF TEXAS § COUNTY OFTARRANT § This Interlocal Agreement for the Funding, Construction and Maintenance of Water Transmission Lines (this "Agreement`) is entered into as of the '` day of ,aru. a-1- , 2004, between the City of Southlake, Texas ("Southlake") and the City of Keller, exas ("Keller"). RECITALS 1. On May 14, 1984, Southlake and Keller entered into a contract for the financing, construction, and maintenance of a water transmission line from the City of Fort Worth to the Pearson Pump Station and for the sale of treated water to Keller (the "1984 Contract"); and 2. Both Keller and Southlake own, operate and maintain a water distribution system, and each furnishes water service to the customers within its respective boundaries, and 3. Southlake and Keller each have a contract with the City of Fort Worth, Texas to purchase wholesale treated water; and 4. Southlake and Keller desire to adopt a new contract to provide for the construction of new water supply facilities to meet demand, to provide for the operation and maintenance of existing and new water supply facilities, and to incorporate changes as a result of amendment to the Cities' contracts with the City of Fort Worth, including an amendment whereby Keller shall purchase water directly from Fort Worth; and 5. Southlake and Keller have determined it to be in the best interest of their citizens in their respective cities to fund and construct new water supply facilities, including a portion of the 48 inch water line Fort Worth intends to construct from the Harmon Road tank in Fort Worth to the Westport Parkway site; and 6. Southlake intends to construct and maintain a 42" water line from the Caylor Water Tank in the City of Fort Worth to Pearson Lane, and a 30" water line from Pearson Lane and Florence Road intersection to the Keller Pearson Lane Pump Station and the Southlake Pearson Lane Pump Station, the costs of which, under the terms of this Agreement, shall be funded in part by Keller and shall be jointly used for the transmission of water to both Southlake and Keller; and 7. Sections 402.001 and 402.075 of the Texas Local Government Code, and Chapter 791 of the Texas Government Code authorize Southlake and Keller to enter into this Agreement; NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained herein. Southlake and Keller agree as follows: 1. PURPOSE. 1.1 The purpose of this Agreement is to provide for the joint ownership, construction, operation and maintenance of water supply facilities, 2. DEFINITIONS. 2.1 Capital Improvements means any of the following facilities which provide utility services and benefits common to all customers and that have a life expectancy of three or more years, whether such capital improvements are located within the jurisdictional limits of Southlake or Keller: water treatment facilities, metering facilities, control systems and appurtenances, storage facilities, pumping facilities and all water transmission mains sixteen inches (16") and greater in diameter. 2.2 Construction Costs means the costs of design, legal, consulting and engineering fees, permitting, land and easement acquisition and construction costs for any General Benefit Facility or Facility Expansion, including water treatment facilities, metering facilities, control systems, and appurtenances, pumping facilities and water transmission mains, and the cost of capital. 2.3 Cost of Capital means all costs and expenses, debt service, principal, interest and other common debt service costs, included like fees, closing costs, engineering fees, bond costs and legal expenses, and lender or bank fees associated with each such financing. 2.4 Director is the Director of Public Works for the City of Southlake or his or her designated representative. 2.5 Existing General Benefit Facilities are the 36 inch and 30 inch water pipelines constructed pursuant to the 1984 Contract which have a total capacity of 20 MGD. 2.6 Facility Expansion is the expansion of the capacity of an existing facility that serves the same function as an otherwise necessary new capital improvement, in order that the existing facility may serve new development. The term does not include the repair, maintenance, modernization, or an expansion of an existing facility to better serve existing development. 2.7 Fiscal Year is the fiscal year of Southlake from October 1 through September 30. 2.8 Fort Worth General Benefit Facilities are general benefit facilities constructed by Fort Worth under the Fort Worth Contract. 2.9 General Benefit Facilities are water facilities shared by Southlake and Keller (other than Fort Worth General Benefit Facilities) which provide utility services and benefits common to customers of both cities which include water treatment facilities, metering facilities, control systems and appurtenances, storage facilities, pumping facilities and all water transmission mains that are sixteen inches (16") and greater in diameter. 2.10 Keller System is the Keller water treatment and distribution system. 2.11 MOD is million gallons per day.. 2.12 Operation and Maintenance Costs are the costs incurred to operate and maintain the Existing General Benefit Facilities, the Caylor/Pearson Line and the Pearson Pump Station Line, and related Capital Improvements including, but not limited to, direct expenses, personnel and personnel related expenditures, utilities, and all other costs required to operate and maintain the foregoing facilities. 2.13 Southlake System is the Southlake water treatment and distribution system. 2.14 System Cost is the operating expense and capital related cost incurred by Southlake pursuant to the provision of water treatment and transmission to Keller's and Southlake's water customers. 3. CONSTRUCTION OF GENERAL BENEFIT FACILITIES. 3.1 Facilities to be Constructed. Keller agrees to pay Southlake the Construction Costs for the following General Benefit Facilities as detailed below: A. 42-inch pipeline from the Caylor Water Tank on Caylor Lane to the intersection of Florence and Pearson Lane (the "Caylor/Pearson Line"), as depicted on Exhibit "A" attached hereto. The pipeline is designed for a capacity of 29 MGD, with Southlake to bear 75% of the cost of the line and Keller to bear 25%. B. 30-inch pipeline from the intersection of Pearson Lane and Florence Lane to the Pearson Lane Pump Station (the "Pearson Pump Station Line"), as depicted on Exhibit "A" attached hereto. The pipeline is designed for a capacity of 16.5 MGD, with Southlake to bear 58% of the cost of the line and Keller to bear 42%; and C. 48-inch pipeline from the Harmon Road Elevated Tank to Westport Parkway (the "Northside 2-11 Line"), as depicted on Exhibit "B" attached hereto. The pipeline, to be constructed by Fort Worth, is designed for a capacity of 90 MGD. Southlake's and Keller's collective share of the capacity in said line is 29 MGD, with Southlake's share being 22 MGD, or 75% and Keller's share being seven (7) MGD, or 25%, as billed by Fort Worth. 3.2 Construction Costs. A. The estimated cost to construct the Caylor/Pearson Line (3.1.A) and the Pearson Pump Station Line (3.1.13) is $7,225,000. B. -he estimated cost of Southlake's and Keller's collective share to construct the Northside 2-11 Line (3.1.C.) is estimated to be $1,800,000. C. Keller shall pay Southlake for its estimated proportionate share of the Construction Costs of the Caylor/Pearson Line, the Pearson Pump Station Line, and the Northside 2-11 Line (as outlined in Section 3 above) within 30 days of the date of publication of the Notice to Bidders for the construction contracts for the Caylor/Pearson Line and the Pearson Pump Station Line. Southlake agrees to give Keller notice 90 days before the date of publication of the Notice to Bidders for the construction contract. Prior to any and all notices and payments referred to in this Section, Keller and Southlake shall review all project construction cost estimates to ensure general compliance with the estimated costs in Subsections 3.1. A. and 3.1. B. above. D. Upon completion of the construction of lines 3.1.A, 3A.B. and 3.1.C., Keller's costs shall be recalculated using the actual costs Southlake incurred for construction of the Caylor/Pearson Line (3.1.A.) and the Pearson Pump Station Line (3.1.B.), and the actual costs billed by Fort Worth for the Northside 2-11 Line (3.1.C), with Keller's obligation limited to all prorated actual cost up to the Keller Pearson Lane Pump Station with Keller's participation in the review of all construction costs and change orders after the award of the original contract. E. Management Fee — Keller shall pay Southlake a construction management fee of one percent of the Construction Cost of these facilities. The fee shall be adjusted upon the completion of construction to reflect actual construction costs, and shall be payable upon execution of the construction contract for the new General Benefit Facilities. F. Should Southlake ever terminate this Agreement or refuse to enter into a Contract in the future for the transmission of water through the General Benefit Facilities (Lines), Southlake shall pay Keller for the depreciated value of the pipelines. It is agreed that the General Benefit Facilities lines will be fully depreciated after 30 years. 4. OPERATION AND MAINTENANCE COSTS OF GENERAL BENEFIT FACILITIES. 4.1 Southlake and Keller agree to share the Operation and Maintenance costs of the General Benefit Facilities as follows: Southlake shall pay 75 percent of the operation and maintenance costs of the Caylor/Pearson Line (3.1.A.), and the Pearson Pump Station Line (3.1.B.) and 50 percent of the operation and maintenance costs of the Existing General Benefit Facilities. Keller agrees to pay 25 percent of the operation and maintenance costs of the Caylor/Pearson Line (3.1.A.) and the Pearson Pump Station Line (3.1.B.), and 50 percent of the Operation and Maintenance costs of the Existing General Benefit Facilities. Based upon the foregoing, Keller agrees to pay Southlake for 17/49ths of the costs of annual operation and maintenance of the foregoing General Benefit Facilities. The 17/49th's is based upon a maximum capacity of 49 MGD with 10 MGD capacity allocated to Keller for existing General Benefit Facilities and 7 MGD capacity allocated to Keller on the Caylor/Pearson Line and the Pearson Pump Station Line. System water losses shall be borne by the parties according to their respective reserved capacities. System water losses shall be determined by calculating the difference between the amount of water measured from the meter readings at the Beach Street and Caylor Lane meters and the amount of water measured from the meter readings at the Keller Pearson Lane and the Southlake Pearson meters. 4.2 Southlake shall bili Keller monthly an estimated amount as set forth in Section 4.1 for the costs for operation and maintenance of the Existing ueneral Benefit Facilities and the Caylor/Pearson Line and the Pearson Pump Station Line. Each October, Southlake shall calculate the annual System Costs of the General Benefit Facilities and use these costs to calculate Keller's proportionate share of the costs. Southlake shall bill Keller for the difference in the actual costs and the amount Keller has paid for its share of Operating and Maintenance Costs for the previous 12 months. If the actual cost of Keller's proportionate share is less than the amount that Keller has paid over the previous 12 months, Keller shall be entitled to a credit on its next monthly payment. The monthly charges for Operation and Maintenance Costs for the General Benefit Facilities for the next 12 months shall be determined by the annual costs divided by 12. The October bill for September usage shall reflect any necessary annual adjustments due to actual costs. 4.3 Keller shall pay for its obligations hereunder as follows: All such bills shall be due and payable by Keller within 20 calendar days from the billing date; provide however, in the event that Keller submits to Southlake within 20 calendar days a legitimate written dispute of the amount billed detailing the reason for the dispute, the bill shall not be considered late until 45 days from the billing date. The undisputed portion of the bill shall be due within 20 calendar days from the billing date. The bills will show current charges, as well as past-due charges, if any. Past-due charges shall be the total amount unpaid from all prior billings as of the current billing date. A late fee of five percent of the total billing shall be added to payments made after the due date. Payments received by Southlake shall first be applied to the past-due charges, if any, and thereafter to the current charges. 4.4 The parties hereto agree that services obtained pursuant to this Agreement are essential and necessary to the operation of Keller's and Southlake's waterworks facilities and that all payments made by Keller and Southlake hereunder shall constitute reasonable and necessary operating expenses of Keller's and Southlake's waterworks and wastewater systems within the meaning of Chapter 1502, Texas Government Code, and the provisions of any and all ordinances of Keller and Southlake authorizing the issuance of any long term debt of Keller and Southlake which are payable from its waterworks and wastewater systems. 4.5 Keller agrees, throughout the term of this Agreement, to fix utility rates and collect such fees and charges for water service to be supplied to its customers as will produce revenues in an amount equal to at least: (i) all of operation and maintenance expenses of its water system, including specifically its payments under this Agreement; and (ii) all other amounts as required by law and the provisions of the ordinances or resolutions authorizing its long term debt or other obligations now or hereafter outstanding, including the amounts required to pay all principal of and interest on such bonds and other obligations. 4.6 Keller understands that Southlake may annually revise the utility rates, fees and charges charged to cover all reasonable, actual, and expected operation and maintenance costs_ Any allocable operation and maintenance cost adjustment rate increase shall be based upon a rate study performed or obtained by Southlake during October 1 and December 30 of the preceding year, with adjustments due as of January 1 of the following year. 4.7 If Keller disputes a bill and is unable to resolve the difference informally, Keller shall notify the Director in writing. If the Director and Keller are unable to resolve the disputed bill, agreement on the bill will be determined by third party mediation, as hereinafter provided. Dispute of a bill shall not be grounds for non- payment. In the event a payment is not paid as specified in this Agreement, the late fee provided in Section 4. 6 shall be imposed. In the event that a billing adjustment is agreed upon or established by mediation the amount found to be incorrect will be adjusted in accordance therewith to Keller's account. 4.8 The parties agree that one-half of the balance of funds, if any, in the joint maintenance account established pursuant to the 1884 Contract shall be credited towards Keller's obligations under this Section. 5. EFFECTIVE DATE AND TERM. 5.1 The effective date of this Agreement is the date the Agreement is entered into as set forth in the introductory paragraph. 6. METERING AND BILLING SERVICES 6.1 Keller and Southlake are constructing meter stations at their respective metering points that meet the operational specifications of the City of Ft. Worth that will accomplish metering for wholesale water consumptions. These metering stations shall be turned over to the City of Ft. Worth for ownership, maintenance, and operation. The City of Ft. Worth shall read the meters monthly and submit a water bill to the City of Keller and Southlake representing their respective water consumptions. Both cities agree that payment terms for water loss will be similar for both cities and shall be included in the revised water purchase agreement with the City of Ft. Worth. 7. RIGHTS-OF-WAY. 7.1 Each party shall grant, without charge to the other party, such easements and rights-of-way along public highways or other property owned by such party, as requested by the other party, in order to construct or maintain water transmission mains or facilities within the service area of either party to provide water to Keller and to Southlake. Keller agrees to assist Southlake in acquiring any additional easements or rights-of-way necessary for the construction or maintenance of these facilities, including exercising Keller's power of eminent domain, if necessary. Southlake agrees to assist Keller in acquiring any additional easements or rights-of-way necessary for the construction or maintenance of these facilities, including exercising Southlake's power of eminent domain, if necessary. 7.2 All work done by or on behalf of Southlake under this Section will be performed in accordance with specifications equal to those applying to work of a similar nature performed within Southlake, but neither party hereto will be required to restore the other's property to a condition equal to its original condition, unless otherwise mutually agreed in writing. 7.3 Southlake and Keller agree to coordinate the location of the mains and/or facilities in the others easements and rights-of-way in order to prevent further conflicts insofar as it is reasonably practicable. 8. TERMINATION 8.1 This Agreement may be terminated in whole or in part by the mutual consent of Keller and Southlake. Notwithstanding anything contained herein to the contrary, any breach by either party hereto to perform any of the duties or the obligations assumed by such party hereunder or to faithfully keep and perform any of the terms, conditions and provisions hereof shall be cause for termination of this Agreement by either party in the manner set forth in this Section. Either party desiring to terminate this agreement shall deliver to the other party 90 days prior written notice, except that in the event of nonpayment, Southlake shall be required to give 30 days prior notice, or the number of days notice which Southlake is required to give pursuant to its contract with Fort Worth of its intention to so terminate this Agreement if Keller fails to cure or adjust such breach, including in such notice a reasonable description of the breach. If, within said notice period, Keller shall fail or refuse to cure such material breach to the satisfaction of Southlake, then and in such event, Southlake shall have the right without any liability whatsoever on the part of Southlake, to declare this Agreement terminated. In the event of termination of this Agreement, all rights, powers, and privileges of Keller hereunder shall cease and terminate and Keller shall make no claim of any kind whatsoever against Southlake, its agents or representatives, by reason of such termination or any action incident thereto. Southlake shall advise Keller in writing immediately upon acceptance of the cure of any breach. 8.2 Upon termination of this Agreement, Keller shall pay to Southlake all amounts owed or accrued for the operation and maintenance of the General Benefit Facilities through the date of termination. 9. LIABILITY FOR DAMAGES. 9.1 Liabilities for damages arising from the treatment, transportation and delivery of water provided hereunder shall be borne by and remain with each city according to its proportionate share of the costs as provided in Section 4.1. In the event of a claim for capacity in the Existing General Benefit Facilities, Keller and Southlake shall share equally in the responsibility for defending the claim, and for the costs of any settlement or judgment resulting from the claim. 9.2 Each party hereto agrees to save and hold the other party harmless from all claims, demands, and causes of action that may be asserted by anyone on account of the quality, transportation and delivery while water is in the control of such party. This covenant is not made for the benefit of any third party. 9.3 Contracts made and entered into by either Keller or Southlake for the construction, reconstruction or repair of any Delivery Facility shall include the requirement that the independent contractor(s) must provide adequate insurance protecting both Keller and Southlake as co-insureds. Such contract must also provide that the independent contractor(s) agree to indemnify, hold harmless and defend both Keller and Southlake against any and all suits or claims for damages of any nature arising out of the performance of such contract. 10. FORCE MAJEURE. 10.1 If by any reason of force majeure, either party hereto shall be rendered unable, wholly or in party, to carry out its obligations under this Agreement, other than the obligation of the Keller to make payments required under the terms hereof, then if such parties shall give notice and full particulars of such force majeure in writing to the other party within a reasonable time after the occurrence of the event or cause relied on, the obligation of the party giving such notice, so far as it is affected by such force majeure, shall be suspended during the continuance of the inability then claimed, but for no longer period, and such party shall endeavor to remove or overcome such inability with all reasonable dispatch. 10.2 The term "force majeure", as employed herein, shall mean acts of God, strikes, lockouts or other industrial disturbances, acts of public enemy, orders of any kind of the government of the United States or the State of Texas, or any civil or military authority, insurrection, riots, epidemics, landslides, lightning, earthquake, fires, hurricanes, storms, floods, washouts, arrests, restraints of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipelines or canals, partial or entire failure of water supply, and inability on the part of Southlake to deliver water hereunder or Keller to receive water hereunder on account of any other cause not reasonably in the control of the party claiming such inability. 11. NOTICE. 11.1 All notices, requests and communications under this Agreement shall be given in writing, addressed to Southlake or Keller at their respective addresses set forth below and either (i) hand delivered, (ii) sent by telecopy or a nationally recognized overnight courier service, or (iii) mailed by registered or certified mail, return receipt requested, postage prepaid. To Keller: City of Keller, Texas To Southlake:City of Southlake P.O. Box 770 1400 Main Street, Suite 460 Keller, TX 76244 Southlake, TX 76092 Attn: City Manager Attn: City Manager Any notice under or pursuant to this Agreement and given in accordance with this Section shall he deemed received upon the earlier of; (1) actual receipt, (2) if mailed, three (3) days after deposit in an official depository of the United States Postal Service, and (4) if sent by a nationally recognized overnight courier service, the day following the mailing. Any party may change its address for notice purposes by sending the other party a notice of the new address. 12. MEDIATION. 12.1 Whenever any disputed matter is specifically authorized by this Agreement to be determined by the use of an mediator, the following procedure is to be followed. The party requesting that the dispute be settled by mediation shall serve on the other party a request in writing that such matter be submitted to mediation. Keller and Southlake shall mutually agree in writing on the selection of any mediator. Such agreement shall be made within 10 days from the date that the request for mediation is received. If an agreement is not reached on the selection of the impartial mediator on or before the 10th day after the date that notice is received, the Director shall immediately request a list of seven qualified neutral mediators from the Federal Mediation and Conciliation Service, or either's successor in function. Keller and the Director may mutually agree on one of the seven mediators on the list to mediate the dispute. If they do not agree within five working days after the receipt of the list, Keller and the Director shall alternate striking a name from the list and the name remaining shall be the mediator. Keller and the Director shall mutually agree on a date for the mediation hearing. The decision of the mediator shall not be final, but shall be a condition precedent to filing suit. All costs of mediation shall be considered an Operation and Maintenance Cost. Mediation shall take place in Tarrant County, Texas. 13. INSPECTION AND AUDIT. 13.1 Each party hereto shall keep complete records and accounts pertaining to this Agreement in accordance with State Law or for a minimum period of five years. Each party shall at all times, upon notice, have the right at reasonable times to examine and inspect said records and accounts during normal business hours; and further, if required by any law, rule or regulation, make said records and accounts available to federal and/or state auditors. 14. MISCELLANEOUS. 14.1 This Agreement is subject to all applicable federal and state laws and any applicable permits, amendments, orders, or regulations of any state or federal governmental authority having or asserting jurisdiction, but nothing contained herein shall be construed as a waiver of any right to question or contest any such law, order, rule or regulation in any forum having jurisdiction. 14.2 Keller agrees to abide by any changes in this Agreement made necessary by any new, amended, or revised state or federal regulation. 14.3 Upon prior notice by either party, any authorized employee or representative of such party bearing identification shall notify the other party of need for access to any premises located within the other party's service area or served by the other party as may be necessary for the purpose of inspections and observation, measurements, sampling and testing and/or auditing, in accordance with the provisions of this Agreement. The other party may elect to accompany the requesting party's representative. To the extent permitted by law, the requesting party agrees to indemnify the other party for any damage or injury to person or property caused by the negligence of such duly authorized employee while such employee is in the course and scope of his employment. 14.4 In addition to any other remedy as may be provided by law, this agreement shall be specifically enforceable by the parties hereto. Venue for any action shall be in Tarrant County, Texas. 14.5 It is agreed that, in the event any term or provision herein contained is held to be invalid by any court of competent jurisdiction, the invalidity of such term or provision shall in no way affect any other term or provision contained herein; further, this Agreement shall then continue as if such invalid term or provision had not been contained herein. 14.6 Keller may not assign this Agreement without the prior written consent of Southlake. Southlake may not assign this Agreement without the prior written consent of Keller. 15. INDEMNIFICATION. 15.1 To the extent permitted by law, Keller agrees to indemnify and save and hold Southlake harmless from all claims, liabilities, demands, attorneys' fees and causes of action arising from any negligent act or omission of Keller. This covenant is not made for the benefit and shall not inure to the benefit of any third party. 15.2 To the extent permitted by law, Southlake agrees to indemnify and save and hold Keller harmless from all claims, liabilities, demands, attorneys' fees and causes of action arising from any negligent act or omission of Southlake. This covenant is not made for the benefit and shall not inure to the benefit of any third party. 16. AMENDMENT. 16.1 Any agreement hereafter made between Southlake and Keller shall be ineffective to modify, release, or otherwise affect this Agreement, in whole or in part, unless such agreement is in writing and signed by both parties. 17. WAIVER. 17.1 The failure of either party to this Agreement to complain of any action, non-action, or default of the other party shall not constitute a waiver of any of such party's rights under this Agreement. 17.2 Waiver by either party to this Agreement of any right for any default of the other party shall not constitute a waiver of any right for either party for a prior or subsequent default of the same obligation or for any prior or subsequent default of any other obligation. 17.3 No right or remedy of either party under this Agreement or covenant, duty, or obligation of either party under this Agreement shall be deemed waived by the other party to this Agreement unless such waiver is in writing and signed by the waiving party. 18. PARTIES AND SUCCESSORS. 18.1 Subject to the limitations and conditions set forth elsewhere herein, this Agreement shall bind and inure to the benefit of the respective heirs, legal representatives, successors, and assigns of the parties hereto. 19. CAPTIONS. 19.1 The captions in this Agreement are inserted only as a matter of convenience and for reference and they in no way define, limit, or describe the scope of this Agreement or the intent of any provision hereof. 20. NUMBER AND GENDER. 20.1 All genders used in this Agreement shall include the other genders, the singular shall include the plural, and the plural shall include the singular, whenever and as often as may be appropriate. 21. ENTIRE AGREEMENT. 21.1 This Agreement, including all exhibits which may be attached hereto (which exhibits are hereby incorporated herein and shall constitute a portion hereof contains the entire agreement between Keller and Southlake with respect to the subject matter hereof. Further, the terms and provisions of this Agreement shall not be construed against or in favor of a party hereto merely because such party or its counsel is the drafter of this Agreement. 22. ATTORNEY'S FEES. 22.1 In the event Southlake or Keller defaults in the performance of any of the terms, agreements or conditions contained in this Agreement and the enforcement of this Agreement, or any part thereof, is placed in the hands of any attorney who files suit upon the same, the non-prevailing party shall pay the reasonable attorneys fees, expenses and costs of the prevailing party. EXECUTED as of the date hereinabove first set forth. CITY OF SOUTHLAKE, TEXAS CITY OF KELLER, TEXAS J s BillBill C pti I, City Mhnager L e l . fresher, City Manager ATTES ,,,.o�3�H •,,,, ATTEST: Lori Farwell, City Secretary = heila tep e i y cretary Approv d as to Form ** •,.�' Appro, to F r Southlake City A. cmey L. Stanton Lo , City Attorney « ` � m cn \ \ \ \ $ ( I § k a | EEca ::D O _ | § \ G �/ )| \� R ' D : - - - - 2 d ƒ . ! ! ¥ � ! i , {� \ i E G | o , . z q CD k � »� " 4 _b. l 8 HX] EXHIBIT "B" K- V p 4000 t t 4000' t: a s' s' •c 1c• 1i Ti 1e' p' )i >o 21- t1' p• CAYLOR 5 MG TART( OvERFLOw ELY 853 n' n' .w' F 1 f 48' ) i EXISTING SUPPLY WATER LINE E%STWG FW NGRTNSOE 11')TATER LIRE EXISTING FW NGRFYSIDE I:WATER LINE PROPOSED NATER LINES 1 r aROPOSCO UNE SIZE yaleti a )WK v 5 TRp. .i tac vcr v APiP aS T- EXHIBIT B K FORT WORTH WATER TRANSMISSION IMPROVEMENTS EXHIBIT "C" Existing Connections Outside of the Keller System None Existing Connections Outside of the Southlake System None