Resolution 2020-58' RESOLUTION NO.2020_58(R)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WYLIE,
TEXAS, APPROVING A SETTLEMENT AGREEMENT AND ANY
RELATED AGREEMENTS, INCLUDING A FIRST AMENDMENT TO
THE REGIONAL WATER SUPPLY FACILITIES AMENDATORY
CONTRACT BY AND BETWEEN THE CITY OF WYLIE, TEXAS, THE
NORTH TEXAS MUNICIPAL WATER DISTRICT, AND ALL MEMBER
CITIES IN SAID DISTRICT IN FULL SETTLEMENT OF ALL PENDING
PETITIONS FILED AT THE PUBLIC UTILITY COMMISSION OF
TEXAS, PUCT DOCKET NOS. 46662, 47863 AND 49043; AND PROVIDING
AN EFFECTIVE DATE.
WHEREAS, the City Council of the City of Wylie, Texas, has determined it is in the best interests
of the citizens of Wylie to approve a Settlement Agreement, and any related agreements, including
a First Amendment to the Regional Water Supply Facilities Amendatory Contract, to facilitate the
settlement and finalization of all matters at the Public Utility Commission of Texas, PUCT Docket
Nos. 46662, 47863 and 49043 - Petition of the Cities of Garland, Mesquite, Plano and Richardson
Appealing the Decision by North Texas Municipal Water District Affecting Wholesale Water
Rates.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF WYLIE, TEXAS, THAT: I
SECTION 1.
The recitals in the preamble above are hereby found to be true and correct and incorporated
herein for all purposes.
SECTION 2.
The City Council of the City of Wylie, Texas hereby approves a Settlement Agreement,
and any related agreements, including a First Amendment to the Regional Water Supply Facilities
Amendatory Contract, to facilitate the finalization of all matters at the Public Utility Commission
of Texas, PUCT Docket Nos. 46662, 47863 and 49043 - Petition of the Cities of Garland,
Mesquite, Plano and Richardson Appealing the Decision by North Texas Municipal Water District
Affecting Wholesale Water Rates.
RESOLUTION NO. 2020-58(R) REGARDING SETTLEMENT PAGE I OF 2
' OF MATTERS BEFORE THE PUBLIC UTILITY
COMMISSION OF TEXAS AND EXECUTION OF
SETTLEMENT AGREEMENTS AND RELATED
CONTRACTS
SECTION 3. '
The Mayor is hereby authorized to execute the Settlement Agreement, the First
Amendment to the Regional Water Supply Facilities Amendatory Contract, and any related
agreements and documents, upon review and concurrence by the City Attorney and the City's
special legal counsel, in full settlement and resolution of Public Utility Commission of Texas;
PUCT Docket Nos. 46662, 47863 and 49043. The form of said agreements being attached hereto
and incorporated herein as Exhibit Nos. 1 and 2.
SECTION 4.
This Resolution shall take effect and be, in full force and effect from and after the
date of its adoption and passage, and it is so resolved; and all resolutions of the City of
Wylie in conflict herewith are hereby amended or repealed to the extent of such conflict.
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
WYLIE, TEXAS ON THE 13TH DAY OF OCTOBER, 2020.
CITY OF WYLIE, TEXAS
ERIC HOGUE '
Mayor
ATTEST:
STEP ANIE STORM
City Secretary
PE
OR6010
428 or T11.011
RESOLUTION NO. 2020-58(R) REGARDING PAGE 2 OF 2
SETTLEMENT OF MATTERS BEFORE THE '
PUBLIC UTILITY COMMISSION OF TEXAS AND
EXECUTION OF SETTLEMENT AGREEMENTS
AND RELATED CONTRACTS
Exhibit No. 1
' SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement') is entered into on this the _ day of
2020, by and between the NORTH TEXAS MUNICIPAL WATER DISTRICT (the "District'),
a conservation and reclamation district and political subdivision of the State of Texas, created and
functioning under Article 16, Section 59, of the Texas Constitution, pursuant to Chapter 62, Acts
of the 52nd Legislature, Regular Session, 1951, as amended (the "District Act'), and the following:
CITY OF ALLEN, IN COLLIN COUNTY, TEXAS
CITY OF FARMERSVILLE, IN COLLIN COUNTY, TEXAS,
CITY OF FORNEY, IN KAUFMAN COUNTY, TEXAS,
CITY OF FRISCO, IN COLLIN AND DENTON COUNTIES, TEXAS
CITY OF GARLAND, IN DALLAS COUNTY, TEXAS
CITY OF McKINNEY, IN COLLIN COUNTY, TEXAS,
CITY OF MESQUITE, IN DALLAS AND KAUFMAN COUNTIES, TEXAS,
CITY OF PLANO, IN COLLIN AND DENTON COUNTIES, TEXAS,
CITY OF PRINCETON, IN COLLIN COUNTY, TEXAS,
' CITY OF RICHARDSON, IN DALLAS AND COLLIN COUNTIES, TEXAS,
CITY OF ROCKWALL, IN ROCKWALL COUNTY, TEXAS,
CITY OF ROYSE CITY, IN ROCKWALL AND COLLIN COUNTIES, TEXAS,
and
CITY OF WYLIE, IN COLLIN COUNTY, TEXAS
(collectively such cities being referred to as the "Contracting Parties").
WITNESSETH
WHEREAS, each of the Contracting Parties is a duly incorporated city and political
subdivision of the State of Texas operating under the Constitution and laws of the State of Texas;
and
WHEREAS, the District and the Contracting Parties are authorized to enter into this
Agreement; and
WHEREAS, the District presently owns various -water rights and owns and operates
other water supply and treatment facilities (the "System") which serve the Contracting
' Parties; and
Page 1 of 12
Exhibit No. 1
WHEREAS, the District has entered into a "North Texas Municipal Water District '
Regional Water Supply Facilities Amendatory Contract," dated as of August 1, 1988 (the "1988
Contract"), a "North Texas Municipal Water District — City of Allen Regional Water Supply
Facilities Agreement," dated October 1, 1998, and a "North Texas Municipal Water District —
City of Frisco Regional Water Supply Facilities Agreement," dated October 1, 2001
(collectively, the "Contracts") with the Contracting Parties; and
WHEREAS, the District presently supplies and sells treated water from the System
to the Contracting Parties under the Contracts; and
WHEREAS, the Cities of Garland, Mesquite, Plano, and Richardson, Texas
("Petitioning Cities") presented to the Public Utility Commission of Texas ("PUCT")
petitions seeking the PUCT's review of the District's rates for fiscal years 2017, 2018, 2019,
and 2020, which the PUCT respectively assigned Docket Nos. 46662, 47863, 49043, and
50382 (collectively referred to as the "PUCT Proceedings"); and
WHEREAS, the Petitioning Cities have agreed to request that the PUCT allow the
Petitioning Cities to withdraw the petition in Docket No. 46662 with prejudice and that the
PUCT issue a final order dismissing the proceedings in Docket No. 46662, and have agreed '
to otherwise withdraw with prejudice the petitions in Docket Nos. 47863, 49043, and 50382
upon issuance of a final, non -appealable order by the PUCT dismissing the proceedings in
Docket No. 46662; and
WHEREAS, the District and the Contracting Parties (collectively the "Parties") deem
it necessary and advisable that the Contracts be amended, such amendments reflected in a
separate document entitled First Amendment to North Texas Municipal Water District Regional
Water Supply Facilities Amendatory Contract (the "Contract Amendment"); and
WHEREAS, the Parties agree that resolution of the PUCT Proceedings by unanimous
settlement agreement is in the public interest; and
WHEREAS, capitalized terms used in this Agreement and not otherwise defined herein
shall have the meanings assigned to them in the Contracts, as amended.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the Parties agree as follows:
Page 2 of 12
Exhibit No. 1
' I. COVENANT TO DEFEND NATURAL DRAWDOWN METHOD AND 51511
PROCESS. The Parties agree:
A. That the Natural Drawdown Method and the 51511 Process set forth in Section 2 of
the Contract Amendment for calculating a Contracting Party's minimum amount is
just and reasonable.
B. For a period of not less than twenty (20) years, not to seek, aid, or support review
by the PUCT or its successor agency of the method for calculating a Contracting
Party's minimum amount agreed to and as described in Section 2 of the Contract
Amendment.
C. For a period of not less than twenty (20) years, not to institute, prosecute, or in any
way aid any action or suit at law or in equity against any Contracting Party or the
District for damages, costs, loss of services, expenses, or compensation for or on
account of any damage, loss or injury either to person or property, or both, whether
known or unknown, past, present or future, arising out of or related to the method
for calculating a Contracting Parry's minimum amount agreed to and as described
in Section 2 of the Contract Amendment, except for claims by any Contracting
Party against the District arising out of misapplication of the method for calculating
a Contracting Party's minimum amount.
' D. For a period of not less than twenty (20) years, not to seek, support or aid in
obtaining legislative changes to the method for calculating a Contracting Party's
minimum amount agreed to and as described in Section 2 of the Contract
Amendment.
E. To oppose efforts by any entity not a party to this Agreement to seek legislative
changes to the method for calculating a Contracting Party's minimum -amount
agreed to and as described in Section 2 of the Contract Amendment.
F. If any entity not a party to this Agreement seeks review by the PUCT, or its
successor agency, of the method for calculating a Contracting Party's minimum
amount as described in Section 2 of the Contract Amendment, the District and the
Contracting Parties agree:
1. To support the method for calculating a Contracting Party's minimum amount
agreed to and as described in Section 2 of the Contract Amendment; and
2. To oppose changes to the method for calculating a Contracting Party's
minimum amount agreed to and as described in Section 2 of the Contract
Amendment.
G. Any party to this Agreement that seeks review by the PUCT and/or through
litigation in the courts of the method for calculating a Contracting Party's minimum
' amount agreed to and as described in Section 2 of the Contract Amendment, shall
Page 3 of 12
Exhibit No. 1
be responsible for the costs of participation in such review and/or litigation of all I
parties to this Agreement.
II. ELIGIBILITY FOR CHANGE IN MINIMUM -AMOUNT METHODOLOGY. The
District's Board of Directors may apply the methods of determining the minimum amount
described in the Contract Amendment to a contract entered into under Section 4(c) of the
1988 Contract provided that
A. Any such contract shall specifically and unambiguously state the terms of the
applicable method of determining the minimum amount payable thereunder, and
B. Any such contract shall provide that the District's Board of Directors has exclusive
authority to determine rates set pursuant to such contract as such rates may be
changed from time to time.
IH. INDEPENDENT REVIEW. By March 1, 2021, and on each third anniversary of such
date thereafter, the District shall engage an independent, third -party consultant to perform
a financial management analysis of the audited financial information and all additional
relevant information for the System for the three preceding Fiscal Years. The Independent
Review shall include Items A through G, as stated below, and such other items as
determined by the Board.
A. The reasonableness of Operations and Maintenance Expenses for the I
System;
B. The assignment of shared costs to the District's various systems, including
the System, and functionalization of expenses as variable versus fixed;
C. Confirmation of the amount of the required Bond Service Component as
defined in Section 9(a)(B) of the Contract, and compliance of such amount
with the Contract and the applicable Bond Resolutions;
D. Confirmation of balances in any funds required to be established or
maintained by the provisions of the Bond Resolutions, including but not
limited to, examination of balances in any debt service reserve funds and
compliance of such balances with the requirements of the Bond
Resolutions;
E. Examination of balances, including the need for and the reasonableness of
such balances, in any other special, contingency, reserve, or other funds
established by Board policy but not otherwise required to be established or
maintained by the provisions of the Bond Resolutions; and
I
Page 4 of 12
Exhibit No. 1
' F. Examination of the District's collection and application of Other Revenues
as described in Section 9(f) of the Contracts, as amended, so as to reduce,
to the maximum extent feasible, the amounts that otherwise would be
payable by the Contracting Parties for treated water.
The consultant's review shall include, but will not be limited to, calculation
of just and reasonable rates, including analysis of any appropriate surcharge
or premium, to be charged to non -Contracting Parties in existing (when
allowed by contract), new, renewed or amended contracts, taking into
consideration: (1) the status of the Contracting Parties as long-term capital
contributors to the System with joint and several liability for repayment of
bond indebtedness, (2) the Contracting Parties' primary right to water from
the System (as set out in Sections la(12) and 7(c) of the District's Enabling
Act); (3) the non -Contracting Parties' water demands including demand for
future infrastructure and water resources; and (4) any other relevant
considerations requested by the District's Board of Directors.
G. Examination of the District's compliance with Section 9 of the Contracts, as
amended, in setting the Annual Requirement and base rate.
The consultant shall deliver a report addressing the Independent Review within nine
' (9) months of being engaged by the District. During the annual budget process, the
District's Board of Directors will review all recommendations contained in the
consultant's report. Unless the Board of Directors votes to reject any or all of the
consultant's recommendations prior to adopting the District's annual budget, the
Board of Directors shall implement the consultant's recommendations that were
not rejected by a vote of the Board.
IV. DISTRICT SETTLEMENT CONTRIBUTION. The District has agreed to contribute
$6.6 million payable to to facilitate resolution
of disputes related to the PUCT Proceedings. The contribution by the District shall not be
counted in determining the District's Annual Requirement for any year.
V. EFFECTIVE DATE. This Agreement shall become effective upon the Contract
Amendment becoming effective.
IN WITNESS WHEREOF, the Parties acting under authority of their respective
governing bodies have caused this Agreement to be duly executed in several counterparts, each of
which shall constitute an original, all as of the day and year first above written, which is the date
of this Agreement.
Page 5 of 12
Exhibit No. t
ATTEST:
Secretary, Board of Directors
(District Seal)
(City Seal)
ATTEST:
City Secretary
NORTH TEXAS MUNICIPAL WATER DISTRICT I
BY
APPROVED AS TO FORM AND LEGALITY:
Attorneys for the District
CITY OF ALLEN, TEXAS
BY 'Mayor
APPROVED AS TO FORM AND LEGALITY:
City Attorney
Page 6 of 12
Exhibit No. 1
' CITY OF FARMERSVILLE, TEXAS
BY
(City Seal)
ATTEST:
(City Seal)
ATTEST:
City Secretary
City Secretary
Mayor
APPROVED AS TO FORM AND LEGALITY:
City Attorney
CITY OF FORNEY, TEXAS
BY
Mayor
APPROVED AS TO FORM AND LEGALITY:
City Attorney
Page 7 of 12
Exhibit No. 1
(City Seal)
ATTEST:
(City Seal)
ATTEST:
City Secretary
City Secretary
CITY OF FRISCO, TEXAS I
Mayor
APPROVED AS TO FORM AND LEGALITY:
City Attomey
CITY OF GARLAND, TEXAS
MR
Mayor '
APPROVED AS TO FORM AND LEGALITY:
City Attorney
Page 8 of 12
Exhibit No. 1
I
CITY OF MCKINNEY, TEXAS
(City Seal)
ATTEST:
City Secretary
Mayor
APPROVED AS TO FORM AND LEGALITY:
City Attorney
CITY OF MESQUITE, TEXAS
' BY
Mayor
APPROVED AS TO FORM AND LEGALITY:
City Attorney
(City Seal)
ATTEST:
City Secretary
Page 9 of 12
Exhibit No. 1
(City Seal)
ATTEST:
(City Seal)
ATTEST:
City Secretary
City Secretary
CITY OF PLANO, TEXAS ,
BY
Mayor
APPROVED AS TO FORM AND LEGALITY:
City Attorney
CITY OF PRINCETON, TEXAS
BY 'City Manager
APPROVED AS TO FORM AND LEGALITY:
City Attorney
Page 10 of 12
Exhibit No. 1
' CITY OF RICHARDSON, TEXAS
BY
(City Seal)
ATTEST:
City Secretary
Mayor
APPROVED AS TO FORM AND LEGALITY:
City Attorney
CITY OF ROCKWALL, TEXAS
BY
' Mayor
APPROVED AS TO FORM AND LEGALITY:
City Attorney
(City Seal)
ATTEST:
City Secretary
Page I 1 of 12
Exhibit No. 1
(City Seal)
ATTEST:
(City Seal)
ATTEST:
City Secretary
City Secretary
CITY OF ROYSE CITY, TEXAS I
BY
Mayor
APPROVED AS TO FORM AND LEGALITY:
City Attorney
CITY OF WYLIE, TEXAS
BY 'Mayor
APPROVED AS TO FORM AND LEGALITY:
City Attorney
Page 12 of 12
Exhibit No. 2
FIRST AMENDMENT TO
NORTH TEXAS MUNICIPAL WATER DISTRICT
REGIONAL WATER SUPPLY FACILITIES AMENDATORY CONTRACT
THE STATE OF TEXAS
NORTH TEXAS MUNICIPAL WATER DISTRICT:
THIS FIRST AMENDMENT TO NORTH TEXAS MUNICIPAL UTILITY DISTRICT
REGIONAL WATER SUPPLY FACILITIES AMENDATORY CONTRACT (this
"Amendment") made and entered into by and between North Texas Municipal Water District (the
"District"), a conservation and reclamation district and political subdivision of the State of Texas,
created and functioning under Article 16, Section 59 of the Texas Constitution and the following
municipalities under the Constitution and laws of the State of Texas: City of Allen, City of
Farmersville, City of Forney, City of Frisco, City of Garland, City of McKinney, City of Mesquite,
City of Plano, City of Princeton, City of Richardson, City of Rockwall, City of Royse City, and
City of Wylie (collectively, the "Contracting Parties").
WITNESSETH:
1 WHEREAS, the District has entered into a "North Texas Municipal Water District
Regional Water Supply Facilities Amendatory Contract," dated as of August 1, 1988, a "North
Texas Municipal Water District — City of Allen Regional Water Supply Facilities Agreement",
dated October 1, 1998, and a "North Texas Municipal Water District — City of Frisco Regional
Water Supply Facilities Agreement", dated October 1, 2001 (collectively, the "Contracts") with
the Contracting Parties;
WHEREAS, as permitted by Section 14 of the Contracts and Section 24(m) of the Bond
Resolutions authorizing the issuance of the District's outstanding bonds, the District and the
Contracting Parties desire to amend the Contracts to change the allocation of the Annual
Requirement (as defined in the Contracts) among the Contracting Parties by changing the basis for
determination of each Contracting Party's minimum amount for purposes of calculating such
Contracting Party's proportionate share of each Annual .Requirement;
WHEREAS, the District and the Contracting Parties have agreed to amend the Contracts
to accomplish such change of allocation together with certain updating changes pursuant to the
terms of this Amendment; and
WHEREAS, capitalized terms used in this Amendment and not otherwise defined herein
shall have the meanings assigned to them in the Contracts.
1 Page 1 of 15
Exhibit No. 2
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained '
herein, the District and the Contracting Parties agree that the Contracts shall be amended and
modified as follows:
Section 1. Amend Subsection 1(f) of the Contracts to read as follows:
(f) "Bonds" means the Outstanding Bonds listed in the preamble to this Contract, and
all bonds, notes, or other obligations hereafter issued by the District, whether in one or more series
or issues, and the interest thereon, to acquire, construct, complete, improve, and/or extend the
System or any System facilities, including the Projects, and/or otherwise to improve or extend the
System, and any bonds, notes or other obligations_ issued to refund any Bonds or to refund any
such refunding bonds, notes, or other obligations.
Section 2. Amend Subsection 9(c) of the Contracts by adding a new Clause (3) after
Clause (2), as follows:
(3) Updated Calculation Methods. Notwithstanding any provisions of this Contract to
the contrary, other than reduction of minimum amounts related to sales by Contracting Parties to
other entities as set out in Section 9(c), commencing October 1, 2020, and ending on September
30, 2028 (the 'Natural Drawdown Period"), a Contracting Party's minimum amount (for purposes
of calculating its proportionate share of the Annual Requirement), shall be calculated on the basis
of the Natural Drawdown Method (hereinafter defined) and commencing October 1, 2028, and
thereafter, such minimum amount will be calculated on the basis of the 51511 Process (hereinafter
defined).
(i) Natural Drawdown Method. For the purpose of calculating the
minimum dollar amount of each Annual Requirement for which each Contracting Party is
unconditionally liable during the Natural Drawdown Period, for each Annual Payment
Period each Contracting Party's proportionate share of the Annual Requirement shall be
calculated in accordance with the method described below, (the "Natural Drawdown
Method")
(A) For the Annual Payment Period beginning October 1, 2020, each
Contracting Party's annual minimum amount (in thousands of gallons) will
be:
i. City of Allen:
6,011,208
ii. City of Farmersville:
280,467
iii. City of Forney:
2,345,109
iv. City of Frisco:
11,910,250
V. City of Garland:
13,721,955
Page 2 of 15
Exhibit No. 2
'
vi.
City of McKinney:
11,963,029
vii.
City of Mesquite:
8,297,666
viii.
City of Plano:
26,719,809
ix.
City of Princeton:
660,682
X.
City of Richardson:
11,019,311
xi.
City of Rockwall:
4,190,133
xii.
City of Royse City:
565,932
xiii.
City of Wylie:
1,877,558
(B) For each subsequent Annual Payment Period through the end of the Natural
Drawdown Period, and where a Contracting Party's volume of water
actually delivered by the District during the most recent Water Year is less
than the Contracting Party's then -current minimum amount (such under -
usage of water referred to as the Contracting Party's "Under -Usage Water"),
that Contracting Party's minimum amount (for purposes of calculating its
proportionate share of the Annual Requirement) will be reduced for
purposes of payment in subsequent payment periods by that Contracting
Party's proportionate share of one-third (1/3) of the total Excess Water
Usage (hereinafter defined) used by all Contracting Parties and parties to
other Contracts (as described in Section 4(c) hereof) who are not
' Contracting Parties (such Contracting Parties and other parties, collectively,
"System Customers"); provided, however, that in no event shall a
Contracting Party's minimum amount be reduced to an amount that is less
than the gallons actually delivered to that Contracting Party during the prior
Water Year. For these purposes "Excess Water Usage" means gallons of
water delivered to any System Customer that exceed its then -current
minimum amount.
(C) A Contracting Party's proportionate share of the Excess Water Usage is
calculated as the ratio of that Contracting Party's Under -Usage Water, to the
sum of that Water Year's Under -Usage Water by all System Customers
eligible for reduction in their minimum amount.
(D) The minimum amount of a Contracting Party that has Under -Usage Water
shall be drawn down at a 3:1 ratio such that for every three (3) gallons of
Excess Water used by all System Customers with Excess Water Usage, one
(1) gallon of water is drawn down, on a proportionate share basis, as
determined in (C) above, thereby reducing the respective minimum amounts
for those Contracting Parties.
(E) For a Contracting Party that has Excess Water Usage in a Water Year during
I
Page 3 of 15
Exhibit No. 2
the Natural Drawdown Period, that Contracting Party's minimum amount '
for the next Annual Payment Period will be determined based on that
Contracting Party's usage in the immediately preceding Water Year.
An example of the calculations of the reduction minimum amounts under the Natural
Drawdown Method described in this Subsection 9(c)(3)(i) is found on Attachment I hereto
and incorporated herein for all purposes
(ii) 51511 Process. Starting October 1, 2028, each Contracting Party's minimum
amount (for purposes of determining its proportionate share of the Annual Requirement)
shall be calculated based on a five-year rolling average of water usage, phased -in over five
(5) years (the "51511 Process") to be implemented as follows:
(A) In the first year of the 51511 Process, a Contracting Party's minimum amount
shall be calculated by taking the sum of a Contracting Party's actual usage
in the preceding Water Year and four (4) years of that Contracting Parry's
then -current minimum amount as adjusted at the end of the Natural
Drawdown Period (the "Base Minimum"), and dividing that sum by 5.
(B) In the second year of the 51511 Process, a Contracting Party's minimum
amount shall be calculated by taking the sum of a Contracting Party's actual '
usage in the immediately preceding two (2) Water Years and three (3) years
of that Member City's Base Minimum, and dividing that sum by 5.
(C) In the third year of the 51511 Process, a Contracting Party's minimum amount
shall be calculated by taking the sum of a Contracting Party's actual usage
in the preceding three (3) Water Years and two (2) years of that Member
City's Base Minimum, and dividing that sum by 5.
(D) In the fourth year of the 51511 Process, a Contracting Parry's minimum
amount shall be calculated by taking the sum of a Contracting Parry's actual
usage in the preceding four (4) Water Years and one (1) year of that Member
City's Base Minimum, and dividing that sum by 5.
(E) Finally, in the fifth year of the 51511 Process (that is, the rate year
commencing October 1, 2032), and each year thereafter, a Contracting
Party's minimum amount shall be calculated by taking the sum of a
Contracting Party's actual usage in the immediately preceding five (5)
Water Years and dividing that sum by 5.
Page 4 of 15 1
Exhibit No. 2
ISection 3. Amend the last sentence of Section 9(d) and amend Section 9(f) of the
Contracts to read as follows:
(d) ... Such Excess Water Charges, after payment of any rebates pursuant to policies of the
District, shall be distributed to the Contracting Parties in the same manner as surplus budgeted
funds as provided in Subsection 9(g).
(f) Other Revenues. During each Annual Payment Period, the revenues derived from
sales of System water, other than sales of treated water to Contracting Parties, shall be credited to
and be used for paying part of the Annual Requirement in the manner determined by the District,
with the result that such credits shall reduce, to the extent of such credits, the amounts which
otherwise would be payable by the Contracting Parties pursuant to the methods prescribed in sub-
sections (a), (b), (c), and (e) above. The District shall estimate all such credits which it expects to
make during each Annual Payment Period in calculating each Annual Payment. To the extent the
District collects such other revenues in an amount in excess ofthe estimated credits, such excess
amount shall be distributed to the Contracting Parties in the same manner as surplus budgeted
funds as provided in Subsection 9(g).
Section 4. Amend Subsection 9(g) of the Contracts in its entirety to read as follows;
' (g) Annual Budget. On or before the first day of the fourth calendar
month prior to the beginning of each Annual Payment Period hereafter the District
shall furnish each Contracting Party with a tentative or preliminary estimated
schedule of the monthly payments to be made by such party to the District for the
ensuing Annual Payment Period. On or before the first day of the second calendar
month prior to the beginning of each Annual Payment Period hereafter the District
shall furnish each Contracting Party with an updated estimated schedule of the
monthly payments to be made by such Party to the District for the next ensuing
Annual Payment Period. Prior to the first day of each Annual Payment Period
hereafter the District shall furnish each Contracting Party with a final estimated
schedule of the monthly payment to be made by such Party to the District for the
next ensuing Annual Payment Period, together with the supporting budgetary data
showing the basis for arriving at such schedule.
Any surplus budgeted funds remaining on hand at the end of any Annual
Payment Period in excess of amounts necessary to pay the Annual Requirement,
including, to the extent reasonable, any operation and maintenance fund balances
and other reserves established by the District, shall be distributed no later than May
1 of the following Annual Payment Period to the Contracting Parties
proportionately based upon the respective amounts of treated water actually
I
Page 5 of 15
Exhibit No. 2
delivered to the Contracting Parties for the preceding Water Year. Nothing in '
Subsection 9(g) shall be construed to limit the budgeting and rate -making authority
of the District. Each Contracting Party hereby agrees that it will make payments to
the District on or before the 101 day of each month of the Annual Payment Period.
If any Contracting Party at any time disputes the. amount to be paid by it to the
District, such complaining party shall nevertheless promptly make such payment
or payments, but if it is subsequently determined by agreement or court decision
that such disputed payments made by such complaining party should have been
less, or more, the District shall promptly revise and reallocate the charges among
all Contracting Parties in such manner that such complaining party will recover its
overpayment or the District will recover the amount due it.
Section 5. Amend Section 15 of the Contracts by adding a second paragraph as
follows:
In particular, but not by way of limitation, in, accordance with 30 Tex.
Admin. Code Section 288.5(1)(f), as amended, the Contracting Parties agree and
the District shall require each party to an Other Contract, as described in Section 4
of this Contract to agree to develop and implement a water conservation plan or
water conservation measures using the applicable elements of Chapter 288, '
Subchapter A of Title 30 of the Texas Administrative Code, to the extent that it has
not already done so. Any contract for resale of water provided hereunder or resale
of such resold water by a Contracting Party or a party to an Other Contract shall
contain provisions requiring water conservation measures using the applicable
elements of such Administrative Code Section. In accordance with Rule 15c2-12
of the United States Securities and Exchange Commission, as it may be amended
from time to time, the Contracting Parties agree to file, or provide to the District
for filing, all information required by such Rule 15c2-12.
Section 6. This Amendment shall become effective as of the date that an order(s)
adopted by the Public Utility Commission of Texas dismissing or allowing withdrawal of PUC
Docket Nos. 46662, 47863, 49043, and 50382 become(s) final and non -appealable.
IN WITNESS WHEREOF, the parties hereto acting under authority of their respective
governing bodies have caused this Amendment to be duly executed in several counterparts, each
of which shall constitute an original.
Page 6 of 15 1
Exhibit No. 2
ATTEST:
Secretary, Board of Directors
(DISTRICT SEAL)
ATTEST:
City Secretary
(CITY SEAL)
NORTH TEXAS MUNICIPAL WATER DISTRICT
President, Board of Directors
CITY OF ALLEN, TEXAS
Mayor
Page 7 of 15
Exhibit No. 2
m
ATTEST:
City Secretary
(CITY SEAL)
ATTEST:
City Secretary
(CITY SEAL)
CITY OF FARMERSVILLE, TEXAS
Mayor
CITY OF FORNEY, TEXAS
Mayor
Page 8 of 15
Exhibit No. 2
1
ATTEST:
City Secretary
(CITY SEAL)
ATTEST:
City Secretary
(CITY SEAL)
CITY OF FRISCO, TEXAS
Mayor
CITY OF GARLAND, TEXAS
Mayor
Page 9 of 15
Exhibit No. 2
ATTEST:
City Secretary
(CITY SEAL)
0
ATTEST:
City Secretary
(CITY SEAL)
CITY OF MCKINNEY, TEXAS I
Mayor
CITY OF MESQUITE, TEXAS
Mayor
Page 10 of 15
Exhibit No. 2
IC
ATTEST:
City Secretary
(CITY SEAL)
0
ATTEST:
City Secretary
(CITY SEAL)
CITY OF PLANO, TEXAS
Mayor
CITY OF PRINCETON, TEXAS
City Manager
Page 11 of 15
Exhibit No. 2
ATTEST:
City Secretary
(CITY SEAL)
ATTEST:
City Secretary
(CITY SEAL)
CITY OF RICHARDSON, TEXAS 1
By:
Mayor
CITY OF ROCKWALL, TEXAS
By: 'Mayor
Page 12 of 15 1
Exhibit No. 2
m
ATTEST:
City Secretary
(CITY SEAL)
um
ATTEST:
City Secretary
(CITY SEAL)
CITY OF ROYSE CITY, TEXAS
Mayor
CITY OF WYLIE, TEXAS
Mayor
Page 13 of 15
Exhibit No. 2
ATTACHMENT
For illustrative purposes, the reduction in a Contracting Party's minimum amount (for
purposes of calculating its proportionate share of the Annual Requirement) under the Natural
Drawdown Method described in Subsection 9(e) of the Contracts, would be calculated as follows:
1. Determine the total gallons of Excess Water Usage by all System Customers
E.g., 9 System Customers have a total Excess Water Usage of 10 million gallons.
2. Determine the total gallons of Under -Usage Water by all System Customers
E.g., the only System Customers that have under -usage are Contracting Parties 1, 2, 3,
and 4, which have total gallons of Under -Usage Water of 20 million gallons.
Determine each Contracting Party's gallons of Under -Usage Water, e.g.:
Contracting Party 1: 8 million gallons of Under -Usage Water
Contracting Party 2: 6 million gallons of Under -Usage Water
Contracting Party 3: 4 million gallons of Under -Usage Water
Contracting Party 4: 2 million gallons of Under -Usage Water '
4. Determine each Contracting Party's proportion of Under -Usage Water to the total gallons
of Under -Usage Water ("Contracting Parry's Share of Under -Usage Water")
Contracting Party 1 = 40% (8 million gallons of Under Usage - 20 million.
gallons of total Under Usage = 40%)
Contracting Party 2 = 30% (6 million gallons of Under Usage - 20 million
gallons of total Under Usage = 30%)
Contracting Party 3 = 20% (4 million gallons of Under Usage = 20 million
gallons of total Under Usage = 20%)
Contracting Party 4 = 10% (2 million gallons of Under Usage = 20 million
gallons of total Under Usage = 10%)
5. Determine the respective Contracting Party's then -current minimum amount (for purposes
of calculating its proportionate share of the Annual Requirement) for each Contracting
Party that has Under -Usage Water and reduce each such Contracting Parry's minimum
Page 14 of 15 1
Exhibit No. 2
amount by its proportionate share of 1 million gallons for each 3 million gallons of Excess
Water Usage. Thus:
[A]
[BI
[C]
ID]
[E]
[F]
Current
Annual
Minimu
m
A
Under
Usage
rBi
Share
of Under
Usage
[C] =
[B] / Total
Under
Usage
1/3 of
Total
Excess
Usage
D
Share of
1/31 of
Excess
Usage of
10
Million
Gallons
[E] =
C xD
New
Annual
Minimu
m
[F] _
A—E
Contracting Party 1
50
8
40%
3.33
1.33
48.67
Contracting Party 2
40
6
30%
3.33
1.00
39.00
Contracting Party 3
30
4
.20%
3.33
0.67
29.33
Contracting Party 4
20
2
10%
3.33
0.33
19.67
Total Under Usage
140
20
100%
3.33
136.67
Total Excess Usage
10
Page 15 of 15