Item 4C MemoCITY OF
SOUTHLAKE
MEMORANDUM
(February 1, 2011)
To: Shana Yelverton, City Manager
From: Robert H. Price, P.E., Director of Public Works
Subject: Declare Aqua Texas property as surplus
Action
Requested: Declare Aqua Texas property as surplus
Background
Information: In 2004 the City of Southlake entered in to a settlement agreement
with Aqua Texas (AquaSource Utility, Inc.) to purchase the water
systems in the Indian Creek and Lakewood Ridge subdivisions.
Through that agreement the City paid Aqua Texas $60,000.00 for
the purchase of the water distribution system and all the real
property (e.g., distribution lines, valves, fire hydrants, meters,
easements, right of way, etc.) associated with the water systems in
the two subdivisions. The agreement also provided that Aqua
Texas would continue to operate the wells and distribution systems
for a period of 5 years during which they agreed to produce four
million gallons of water per year per subdivision and that the city
would pay monthly installments equaling $25,000.00 each year in
return for providing that water supply. The actual monthly
payments were adjusted per the contract based on the amount of
water provided by Aqua Texas.
At the end of the five year term the final element of the agreement
was to perform an environmental site assessment and transfer the
deeds for the two properties to the City. The environmental
assessment did not yield any cause for concern regarding the
properties and the city is in the process of completing the deed
transfer. During the last five years of operation the water well
production diminished at both locations to the extent that they have
no value to the Southlake water system. Five years ago the sites
had an estimated production of 25 to 30 gallons per minute. For
comparison a typical well designed for municipal use will produce
600 -800 gallons per minute. The cost to drill a well and provide
equipment with that capacity is almost $1.3 million, not including
any storage capacity.
As shown on the location map, each of these parcels is a small
corner at the back of the adjacent properties. The property labeled
4429 Soda Ridge is approximately 0. 172 acres (7,492 sq. ft and the
property labeled 4552 Homestead Dr. is approximately 0.0574
acres (2,500 sq. ft.). If the city chooses to clear the properties of all
the above ground equipment and plug the wells to TCEQ
standards, the cost will be approximately $10,000 for each site.
Staff was contacted by a property owner adjacent to the 4429 Soda
Ridge site who is interested in purchasing that property and using
one or both of the existing wells for irrigation. Staff feels it is in the
best interest of the City to declare these sites as surplus properties
and offer them for sale as allowed by law.
Please note that the remaining real property assets described in the
first paragraph have been incorporated into the city's distribution
system and continue to provide value.
Financial
Considerations: The cost to clear the property and plug the wells on both sites is
approximately $20,000. Using the average appraised land value of
the four properties adjacent to each site, the 4429 Soda Ridge site
and 4552 Homestead site could theoretically yield about $14,000
and $6,000 respectively. The largest issue with receiving this value
via a sale of the property is that there is a lack of willing and able
buyers because these tracts are of little to no value to those other
than the adjacent property owners.
Strategic Link: The sale of these properties links to the city's strategy map relative
to the focus areas of Performance Management and Service
Delivery. The specific corporate objective that is met by the sale is:
Improve performance of delivery and operational processes.
Citizen Input/
Board Review: N/A
Legal Review: This action has been reviewed by the City Attorney.
Alternatives: The City Council may approve or deny the declaration of the Aqua
Texas properties as surplus.
Supporting
Documents: Location map
Settlement agreement letter
Settlement agreement
Assignment and Bill of Sale
Estimate to plug wells
Staff
Recommendation: Declare Aqua Texas property as surplus.
Staff Contact: Robert H. Price, P.E., Public Works Director
Chuck Kendrick, Asst. Director of Public Works
Aqua Texas Well Site Properties
I
Texas.. Aqua Texas, Inc.
1421 Wells Branch Parkway
Suite 105
March 22, 2005 Pflugerville, TX 78660
Honorable Andy Wambsganss
City of Southlake
1400 Main Street, Suite 320
Southlake, Texas 76092
Re
www.aqua- texas.com
Settlement Agreement between the City
Aqua5ource Utility, Inc. (now Aqua Utilities, Inc., dfb /a Aqua Texas)
Dear Mayor Wambsganss:
On May 1 and May 11, 2004, AquaSource commenced the delivery of groundwater into
the water distribution systems of Indian Creek and Lakewood Ridge, respectively. This delivery
was started in anticipation of Aqua Utilities and the City closing the sale of the distribution
systems from Aqua Utilities to the City shortly thereafter. As you know, the TCEQ informed us
that we were required to file an application for a Sale, Transfer, or Merger before the water
distribution systems could be conveyed as contemplated in the Settlement Agreement, With the
cooperation of the City, Aqua Utilities filed the application and is now authorized by statute to
convey its system property to the City,
In order to avoid any confusion regarding the dates contained in the Settlement
Agreement by which certain activities are to occur, Aqua Utilities proposes that the date of May
1, 2004, be used to clarify certain provisions of the Settlement Agreement, and suggests the
following modifications to dates of performance therein:
§§ 3.1, 3.2, and 3.3: The City of Southlake and Aqua Utilities agree that the parties'
performances under these provisions shall take place no later than twenty (20) calendar days
after the date both parties have executed this letter agreement.,
§ 4.1 and subparts thereof: The City of Southlake and Aqua Utilities agree that the five
year period described in this section commenced on May 1, 2004,
§4.2: The City of Southlake and Aqua Utilities agree that Aqua Utilities may remove the
34,000 gallon ground storage tank referenced in this section on or after May 1, 2009,
§§ 1.7 and 4.3 (and subparts thereof): The City of Southlake and Aqua Utilities agree
that the initial Contract Year for purposes of the Settlement Agreement shall be the 365 -day
period that commenced on May 1, 2004. Subsequent Contract Years shall commence on the
anniversary of this initial Contract Year,
§ 4.6: The City and Aqua Utilities agree that the five year period relating to the
conveyance of the facilities at the Well Sites shall commence on May 1, 2004.
An Aqua America Company
Honorable Andy Wambsganss
March 22, 2005
Page 2
For purposes of interpreting time periods not specifically mentioned above, to the extent
that any such time periods are intended by the Settlement Agreement to be calculated from the
date that Aqua Utilities transfers its Distribution Systems to the City, the parties agree that May
1, 2004, shall be used for such purposes, regardless of when the actual 1 egal transfer of such
facilities takes place in compliance with Texas Water Code § 13.301.
Aqua Utilities agrees to these modifications and is providing two signed duplicate
originals of this letter agreement. If the City of Southlake also agrees, please sign in the space
provided below on both originals and provide one of the signed documents to me,
Sincerely,
AQUA UTILITIES, INC.
Date: o By:
Robe L. Laughman
Vice - President, Operati
CITY OF S Tom--..
Date:. By:�'
Andy W bsganss
Mayor
A i TEST: .••SOU �� "'••.
s : *.A
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w
City Secretary
r r ° a4°C°� •-
OFFICIAL RECORD
SETTLEMENT AGREEMENT BETWEEN
THE CITY OF SOUTHLAKE, TEXAS
AND AQUASOURCE UTILITY, INC.
This Settlement Agreement (the "Agreement') is by and between the City of Southlake,
Texas ( "Southlake ") and AquaSource Utility, Inc. ( "AquaSource "), collectively referred to as
"Parties," for the purposes and consideration set forth below. This Agreement is effective (the
"Effective Date ") on the latest date executed by the Parties, except the provisions in Articles III
through VI inclusive shall not be effective until this Agreement is approved by the Texas
Commission on Environmental Quality pursuant to Texas Water Code section 13.248.
RECITALS
WHEREAS, Southlake is a home rule municipality organized and operating in
accordance with the laws of the State of Texas and its home rule charter; and
WHEREAS, AquaSource is a Texas corporation, authorized to do business in the State of
Texas; and
WHEREAS, AquaSource is presently providing retail water utility service to the
Lakewood Ridge Addition subdivision ( "Lakewood Ridge ") and the Indian Creek Estates
subdivision ( "Indian Creek "), both of which are located within the city limits of Southlake; and
WHEREAS, Southlake filed with the TCEQ an application to amend its water Certificate
of Convenience and Necessity ( "CCN ") No. 10101 (the "Southlake Application ") to include
territory that includes Lakewood Ridge and Indian Creek, and to decertify AquaSource from
certain areas it is authorized to serve under its CCN; and
WHEREAS, AquaSource filed with the TCEQ its protest of the Southlake Application,
the TCEQ referred the protest to the State Office of Administrative Hearings ( "SOAH "), and
SOAH held evidentiary hearings on January 14 -17, 2003; and
WHEREAS, AquaSource filed an application to amend its CCN (the "AquaSource
Application "), which application was protested by Southlake and residents of Lakewood Ridge
and referred by the TCEQ to SOAH for evidentiary hearings; and
WHEREAS, Southlake and AquaSource mutually desire to resolve the dispute between
them regarding the provision of retail water utility service to Lakewood Ridge and Indian Creek
and other issues associated with the Southlake Application and the AquaSource Application; and
WHEREAS, Southlake and AquaSource mutually desire to enter into this Agreement
setting forth the terms and conditions pursuant to which AquaSource will withdraw its
opposition to the Southlake Application, Southlake will purchase certain facilities from
AquaSource, and AquaSource will withdraw the AquaSource Application, as described herein;
NOW, THEREFORE, in consideration of the promises, mutual agreements, and
covenants contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and in settlement of their disputed claims,
Southlake and AquaSource hereby contract and agree as follows:
ARTICLE I
DEFINITIONS
The following terms and phrases shall have the definitions stated below for purposes of
this Agreement:
1625/ l6 /lgd040119 settlement agreement 2
1. 1. "Agreement in Principle " shall mean the agreement entered into by Southlake
and AquaSource on August 22, 2003, whereby interim water utility service was to be provided
by Southlake to Lakewood Ridge and Indian Creek.
1.2. "AquaSource Application" shall mean AquaSource's application for an
amendment to its water CCN No. 11157 that is the subject of a contested case proceeding before
SOAH (TCEQ Docket No. 2003- 0212 -UCR, SOAH Docket No. 582 -03- 2768).
1.3. "AquaSource Utility, Inc. " or "AquaSource" shall mean AquaSource Utility,
Inc., a retail public utility authorized to do business in Texas, and its successors and assigns.
1.4. "Certificate of Convenience and Necessity " or "CCN" shall mean a Certificate of
Convenience and Necessity issued by the Texas Commission on Environmental Quality, or its
predecessor.
1.5. "City " or "Southlake" shall mean the City of Southlake located in Denton and
Tarrant Counties, Texas.
1.6 "Continuous Supply• of Water" shall mean the daily provision of water from the
groundwater wells and /or the water storage facilities at the Well Sites in Indian Creek and
Lakewood Ridge to the Distribution Systems sufficient to meet the demands in these
subdivisions, but not to exceed AquaSource's production and storage capacity in its groundwater
wells and /or the water storage facilities serving these subdivisions. The quantity of water to be
provided and the rates at which the water shall be capable of being provided shall be as set forth
in Article IV of this Agreement.
1.7 "Contract Year" shall mean an annual period commencing on the date
AquaSource transfers its Distribution Systems as provided in section 3.2, and continuing for 365
1628/ 16/1gd040119 settlement agreement 3
consecutive days thereafter. Each subsequent Contract Year shall commence on the anniversary
date of the initial Contract Year.
1.8. "Distribution SAstem " shall mean that portion of the existing system of pipes that
is used to deliver water from the Well Site(s) to the ultimate consumer. The Distribution
Systems in both Lakewood Ridge and Indian Creek shall include all pipes owned by AquaSource
in the rights -of -way and on private property from and including the customer meters up to the
fence surrounding the Well Sites in each subdivision.
1.9. "Effective Date" shall mean the date this Agreement is effective, which shall be
the latest date executed by the Parties.
1.10. -Executive Director" or "ED" shall mean the Executive Director of the Texas
Commission on Environmental Quality.
1.11. `Force Majeurc " shall mean any cause not due to fault, negligence, or inaction of
a Party, and beyond the reasonable control of that Party. Examples of Force Majeure include,
but are not limited to, acts of God; fire; unavoidable accidents; power supply failure; civil war or
conditions arising out of or attributable to war (declared or undeclared); floods, storms,
earthquakes, and other natural disturbances; and insurrections, riots, and other civil disturbances.
1.12. 'Indian Creek Subdivision" or "Indian Creek" shall mean the Indian Creek
Estates subdivision in Southlake, Denton County, Texas.
1.13. "Lakewood Ridge Addition " or "Lakewood Ridge" shall mean the Lakewood
Ridge Addition subdivision in Southlake, Denton County, Texas.
1.14. "Party " or "Parties " shall mean a party or the parties to this Agreement,
identified in the introductory paragraph of the Agreement.
16281 6/1-dO40119 settlement agreement 4
1.15. "Southlake Applications " shall mean Southlake's application for an amendment to
its water CCN No. 10101 that is the subject of a hearing before the State Office of
Administrative Hearings, SOAH Docket No. 582 -02 -3838; TCEQ Docket No. 2002 - 0834 -UCR.
1.16. - TCEQ - shall mean the Texas Commission on Environmental Quality, or as may
be applicable, its predecessor, the Texas Natural Resources Conservation Commission.
1.17. "Well Site" shall mean the area enclosed within the security fence surrounding
the groundwater wells, storage and pressure tanks, and associated equipment and facilities in
both Lakewood Ridge and Indian Creek.
To the extent that any of the terms or phrases defined above are also defined elsewhere in
this Agreement, and a conflict exists between the definitions, the definitions stated in Article I
shall control. Any term not defined above or elsewhere in this Agreement shall have the same
meaning as provided by Texas statutes and TCEQ regulations, if any.
ARTICLE II
SETTLEMENT OF TCEQ DISPUTE
2.1. Within ten (10) calendar days after the Effective Date, Southlake and AquaSource
shall execute and file: (1) with the TCEQ a Joint Motion to approve this Agreement pursuant to
Texas Water Code section 13.248 thereby resolving all disputes between the Parties regarding
the Southlake Application and the AquaSource Application, and to approve the Southlake
Application after approving this Agreement; and (2) with the State Office of Administrative
Hearings a Joint Motion to dismiss with prejudice the AquaSource Application.
2.2. From and after the Effective Date of this Agreement, AquaSource (including its
attorneys and experts) shall not oppose, protest, challenge, appeal or otherwise contest the
Southlake Application, and shall not assist any person or entity in opposing, protesting,
1628 - 16/10040119 settlement agreement 5
challenging, appealing or otherwise contesting the Southlake Application, unless the TCEQ does
not approve this Agreement pursuant to Texas Water Code section 13.248.
2.3. The Agreement in Principle shall continue in full force and effect until the TCEQ
approves this Agreement as provided herein.
ARTICLE III.
CONVEYANCE OF WATER DISTRIBUTION SYSTEMS
3.1. No later than twenty (20) calendar days after the TCEQ approves this Agreement
pursuant to Texas Water Code section 13.248, Southlake shall pay to AquaSource the amount of
Sixty Thousand Dollars ($60,000.00) in cash for the purchase of the water utility Distribution
Systems and all real property associated with such Distribution Systems in Lakewood Ridge and
Indian Creek. The Distribution Systems shall be conveyed AS IS, with no warranties by
AquaSource, express or implied, as to their condition.
3.2. No later than twenty (20) calendar days after the TCEQ approves this Agreement,
AquaSource shall provide to Southlake a Bill of Sale evidencing the transfer of ownership of the
Distribution Systems and an assignment of the associated easements or other real property
interests to Southlake. The facilities and property to be conveyed are more particularly described
as follows:
3.2.1. Lakewood Ridge water Distribution System, as described in Attachment A
hereto.
3.2.2. Indian Creek water Distribution System, as described in Attachment B
hereto.
32.3. Easements for the Lakewood Ridge water Distribution System facilities,
as described in Attachment C hereto.
1628/1 6/lt settlement agreement 6
3.2.4. Easements for the Indian Creek water Distribution System facilities, as
described in Attachment D hereto.
3.3. The payment and conveyances described in sections 3.1, 3.2, 4.6, and 4.7 herein
shall be implemented through a title company in Tarrant County, Texas. The Parties shall
coordinate in selecting a mutually agreeable title company and date for closing. Costs for such
closings shall be equally divided between the Parties.
3.4. AquaSource has previously supplied to Southlake the current customer lists for
customers in Lakewood Ridge and Indian Creek under the provisions of the Agreement in
Principle. There are no customer deposits.
3.5. On and after the date that AquaSource transfers ownership of its property as
provided in section 3.2 of this Agreement, Southlake shall be solely responsible for the
maintenance and operation of the Distribution Systems, and AquaSource shall be solely
responsible for the maintenance and operation of equipment and facilities located at the Well
Sites.
ARTICLE IV.
PURCHASE OF GROUNDWATER;
OWNERSHIP AND MAINTENANCE OF WELLS AND FACILITIES
4.1. After AquaSource transfers its property as provided in section 3.2 of this
Agreement and for a period of five (5) years thereafter, unless otherwise agreed to by the parties
and as provided herein or as otherwise provided in section 4.7, AquaSource will continue to
maintain ownership and responsibility for maintenance and operation of all facilities located on
the Well Sites, including the groundwater wells, tanks, and pumps, and will provide a
Continuous Supply of Water to the Lakewood Ridge and Indian Creek Distribution Systems.
After termination of that five year period, AquaSource will convey the facilities and equipment
1628,16/1gd040119 settlement agreement 7
and real property at the Well Sites to Southlake as provided in this Article, unless such
conveyance occurs earlier as provided in this Agreement.
4.1.1. AquaSource shall provide a total of 4 million gallons of water on a
Contract Year basis from each of the Well Sites to the respective
Distribution Systems. The Well Site at Indian Creek shall be capable of
producing water at the rate of not less than 30 gallons per minute. The
Well Site at Lakewood Ridge shall be capable of producing water at the
rate of not less than 25 gallons per minute. Pressure tanks at each Well
Site shall be capable of delivering water from storage at a pressure of not
less than 45 pounds per square inch ( "psi "). If requested to do so by
Southlake, AquaSource may, at its sole discretion, provide more than 4
million gallons of water per year from each of the Well Sites.
4.1.2. The groundwater supplied shall be measured by existing meters currently
in use at each Well Site, such meters to be calibrated by AquaSource in
accordance with American Water Works Association standards within ten
(10) days from the start of the initial Contract Year and annually
thereafter. In the event the percentage of accuracy for such meters is
found to be within the tolerance of within two percent of accuracy when
the meters are calibrated, then such meters shall be deemed to have
correctly measured the quantity of water provided by AquaSource for the
preceding twelve months. If such tolerance is found to be in excess of two
percent of accuracy, then at AquaSource's expense such meters shall be
adjusted to register correctly and accurately and the registration thereof
1628,16/1gd040119 settlement agreement 8
shall be corrected for a period of six (6) months. Southlake, after
providing reasonable notice to AquaSource, shall be provided access to
such meters at a mutually convenient time to ensure they are in proper
working order. At AquaSource's option, AquaSource may install and /or
replace automatic meter reading devices at the Well Sites subject to
Southlake's approval of the accuracy of such devices, which approval
shall not be unreasonably withheld. Southlake shall not otherwise impose
any requirements on either the installation and /or replacement of the
automatic meter reading devices.
4.1.3. Short-term interruptions of supply caused by repair or maintenance
activities, Force Majeure events, or demand in excess of AquaSource's
production and storage capacity in its systems as contemplated in this
Agreement shall not be considered a failure to provide a Continuous
Supply of Water to the Distribution Systems, so long as AquaSource
makes a reasonable effort to ensure that the equipment and facilities at the
Well Sites are capable of operating properly and at the capacities stated in
section 4.1.1.
4.1.4. AquaSource will respond to any failure or breakdown that occurs
regarding any of the equipment or facilities at the Well Sites within two
(2) hours of becoming aware of such failure or breakdown, and will notify
Southlake of such failure or breakdown and will complete the necessary
corrective actions as soon as is practicable.
1628"16/10040119 settlement agreement 9
4.2. As soon as practicable after the date the TCEQ approves this Agreement,
AquaSource shall finish installation of the 1,500 gallon pressure tank and the 34,000 gallon
ground storage tank at the Indian Creek Well Site so that the tanks become operational as soon as
possible. Southlake shall not impose any pre- conditions on the installation of such tanks,
including, but not limited to, any requirements related to a building permit. The existing 900
gallon pressure tank shall be removed by AquaSource as soon as the new 1,500 gallon pressure
tank is operational. Southlake shall not impose any permit requirements on the removal of the
existing 900 gallon pressure tank by AquaSource. AquaSource will retain ownership of and may
remove the 34,000 gallon ground storage tank five (5) years after the TCEQ approves this
Agreement, provided that AquaSource interconnects the remaining pipe at the Indian Creek Well
Site in a manner that will ensure the Indian Creek Distribution System remains operational.
4.3. Commencing at the start of the initial Contract Year and for five (5) Contract
Years from such date, AquaSource shall sell to Southlake, and Southlake shall purchase from
AquaSource for use by the residents of Lakewood Ridge and Indian Creek, groundwater
produced by the four (4) groundwater wells and the associated tanks and conveyance systems
located at the Well Sites in Lakewood Ridge and Indian Creek. Southlake shall pay to
AquaSource the amount of Twenty -five Thousand Dollars ($25,000.00) per Contract Year, as
described herein, for five (5) Contract Years as compensation for the purchase of 4 million
gallons of water produced at each Well Site on an annual basis.
4.3.1. Contract Year payments shall be made monthly in eleven installments of
two thousand dollars ($2,000.00) and one installment of three thousand
dollars ($3,000.00). The first payment for the Contract Year shall be due
thirty (30) days after the start of the Contract Year; subsequent payments
1628 16/1gd040119 settlement agreement 10
shall be due every thirty (30) days thereafter. [For example, if the
Contract Year commences on March 15, monthly payments under this
section will be due on the 15 day of each subsequent month during the
Contract Year.]
4.3.2. At the start of each Contract Year after the initial Contract Year,
Southlake's monthly payment to AquaSource shall be adjusted as follows:
4.3.2.1. If, in the immediately preceding Contract Year AquaSource has
failed to supply at least 4 million gallons of groundwater from
each Well Site to the respective Distribution Systems, the next
monthly payment by Southlake to AquaSource shall be reduced
by an amount calculated by multiplying each 1,000 gallons of
any balance of the prior Contract Year's shortfall by the amount
of Three Dollars and Thirteen Cents ($3.13). [For example, if
AquaSource supplied 4,000,000 gallons of water from the
Indian Creek Well Site but only 3,500,000 gallons of water
from the Lakewood Ridge Well Site in the initial Contract Year
of this Agreement, the next monthly payment would be
$2,000.00 ($3.13 X 500) = $435.00.]
4.3.2.2. If AquaSource fails to provide a Continuous Supply of Water
from either system for any day during the prior Contract Year,
Southlake's next monthly payment would be reduced by
$34.25 for each such day for each system. Southlake shall
provide notice to AquaSource within thirty (30) calendar days
1628 %16 /tgd040119 settlement agreement 11
after it determines that AquaSource has failed to provide a
Continuous Supply of Water.
4.3.2.3 If, in any Contract Year, AquaSource supplies more than 4
million gallons of water from either Well Site, the next
monthly payment by Southlake to AquaSource shall be
increased by an amount calculated by multiplying each 1,000
gallons above 4 million gallons by S1.00. [For example, if
AquaSource supplied 4,000,000 gallons from the Lakewood
Ridge Well Site and 4,500,000 gallons from the Indian Creek
Well Site during the preceding Contract Year, Southlake's next
monthly payment would be $2,000.00 + ($1.00 X 500) _
$2,500.00).]
4.4. During the term of this Agreement, Southlake shall maintain pressure- activated
interconnects between its water utility system and the Distribution Systems. The pressure-
activated valves shall be set to allow flow of Southlake water into the Distribution Systems when
the pressure in either system declines to a level less than 40 pounds per square inch.
4.5. All risk of breakdown, loss, or damage to the equipment and facilities located on
the W ell Sites shall remain u pon A quaSource prior to their c onveyance to S outhlake. In the
event of breakdown, loss, damage, or destruction to the Well Sites prior to their conveyance to
Southlake, AquaSource shall at its expense repair the same as soon as is practicable, as provided
hcrein. If the cost to repair either Well Site does not exceed forty thousand dollars ($40,000) in
the initial Contract Year, thirty -two thousand dollars ($32,000) in the second Contract Year,
twenty -four thousand dollars (524,000) in the third Contract: Year, sixteen thousand dollars
1626 - -16/1. 040119 settlement agreement 12
(S16.000) in the fourth Contract Year, and eight thousand dollars (58,000) in the fifth Contract
Year, then AquaSource shall be required to make such repairs. AquaSource may choose to make
repairs if the costs to do so exceed these amounts, but it shall not be required to do so. If the
costs to repair exceed these amounts, and if AquaSource chooses to not make such repairs, then
the obligations of the parties shall be as set forth in section 4.7 of this Agreement, and the
payments shall thereafter be adjusted as provided in section 4.3 of this Agreement. AquaSource
will notify Southlake in writing if it decides to not repair or replace equipment and/or facilities
located at either Well Site within two (2) business days of making such a decision.
4.6. At the end of the five (5) year period for the purchase of the groundwater by
Southlake, and upon receipt by AquaSource of any outstanding payments owed by Southlake,
AquaSource shall convey to Southlake clear title to all the facilities located at the Well Sites,
including the groundwater wells, tanks, and pumps used to provide water to Lakewood Ridge
and Indian Creek and any real property associated therewith, except for the 34,000 gallon ground
storage tank at Indian Creek, which AquaSource will continue to own. Following conveyance of
the property described above AquaSource shall promptly remove the 34,000 gallon storage tank
at its own expense. The facilities shall be conveyed AS IS, with no warranties by AquaSource,
express or implied, as to their condition.
4.7. If AquaSource has elected not to repair or replace equipment and/or facilities at
either Well Site. as provided in section 4.5 of this Agreement, AquaSource shall convey to
Southlake clear title to the groundwater wells, tanks, and pumps used to provide water to the
pertinent Distribution System and any real property associated therewith. Title to the 34,000
U
allon ground storage tank in Indian Creek shall be as provided in section 4.6 above. The
1628, 16/1gd040119 settlement agreement 13
facilities shall be conveyed AS IS, with no warranties by AquaSource, express or implied, as to
their condition.
4.8. Prior to conveving property to Southlake as provided in section 4.6 of this
Agreement, AquaSource shall arrange for one or more qualified environmental consultants, to be
mutually agreed upon by the Parties, to conduct an environmental assessment of the Well Sites,
to identify any present or past release or threatened release of any waste materials, any chemical
substances or any hazardous substances. The cost of obtaining the environmental assessment
shall be borne equally by Southlake and AquaSource. AquaSource, at its own cost, shall remove
and dispose of all hazardous substances, waste materials and /or chemical substances, if any,
located at the Well Sites in accordance with TCEQ cleanup and disposal standards and
requirements.
ARTICLE V.
TERM AND TERMINATION OF THIS AGREEMENT
5.1 This Agreement shall be for a term beginning on the Effective Date and ending
after AquaSource conveys to Southlake title to property as specified in section 4.6 of this
Agreement, or until superseded by a subsequent written agreement by all of the Parties to this
Agreement.
ARTICLE VI.
FORCE MAJEURE
6.1. In the event any Party is rendered unable, in whole or in part, by Force Majeure to
carry out its obligations under this Agreement, such Party shall give notice of the particulars of
such Force Majeure in writing to the other Parties as soon as practicable after the occurrence of
the cause relied on. Any obligation under this Agreement of the Party giving notice, insofar as it
1628/16/10040119 settlement agreement 14
is a ffected by such Force M aicure, o ther t ban t he o bligations p rovided b y section 4.7 o f this
Agreement, shall be suspended during the continuance of any inability so caused, but for no
longer period, and such inability shall as far as practicable, be remedied with all reasonable
dispatch. All time periods specified in this Agreement for the performance of obligations or the
enjoyment of rights that are affected by Force Majeure shall be extended by the period of time
the inability caused by such Force Majeure exists.
6.2. No Party shall be in default if the action of the Party, the failure to perform by the
Party, or the delay in performance by the Party that would otherwise constitute the default was
caused by Force Majeure.
ARTICLE VII
MISCELLANEOUS
7.1. Upon the date the TCEQ approves this Agreement, the Agreement in Principle
shall terminate and be of no further force or effect. Other than the Agreement in Principle and
this Agreement, no other agreements now exist or have ever existed between Southlake and
AquaSource concerning the subject matter of this Agreement.
7.2. This Agreement shall be binding on Southlake and AquaSource and shall be
binding on and inure to the benefit of the successors and assigns of the respective Parties to this
Agreement.
7.3. This Agreement is the entire agreement between the Parties hereto with respect to
the subject matter hereof. No modifications of this Agreement shall be of any force and effect
whatsoever, except as by subsequent modification in writing signed by the Parties.
7.4. Any notice required or permitted to be given under this Agreement by one Party
to the other shall be in writing and the same shall be deemed to have been served and given if (1)
1628!16/10040119 settlement agreement 15
delivered in person to the address set forth below for the Party to whom the notice is given or (ii)
placed in the United States mail by certified mail, postage prepaid and return receipt requested,
addressed to the Party to whom the notice is given at the address set forth below. Notice shall be
effective upon receipt.
7.4.1. The address for Southlake for all purposes under this Agreement and for
all notices herein shall be:
Attn: City Manager
City of Southlake
1400 Main Street, Suite 460
Southlake, Texas 76092
7.4.2. The address for AquaSource for all purposes under this Agreement and for
all notices herein shall be:
Attn: Robert Laughman
AquaSource Utility, Inc.
1421 Wells Branch Parkway, #105
Pflugerville, Texas 78660
7.4.3. From time to time any Party may designate another address within the
United States for all purposes of this Agreement by giving the other
Parties not less than ten (10) calendar days advance written notice of such
change of address in accordance with the provisions hereof.
7.5. The section and paragraph headings contained in this Agreement are for reference
purposes only and do not affect in any way the meanings or interpretations of this Agreement.
7.6. This Agreement is performable in Denton County, Texas. Any action at law or in
equity brought to enforce any provision of this Agreement shall be brought in a court of
competent jurisdiction with venue in Denton County, Texas.
162816/1 settlement agreement 16
7.7. In the event of a default hereunder by any Party, any other Party shall be entitled
to seek damages, specific performance, injunctive relief, or any other remedy to which it is or
may be entitled at law or in equity.
7.8. Whenever the context requires, the gender of all words herein shall include the
masculine, feminine and neuter, and the number of all words shall include the singular and the
plural.
7.9. This Agreement was prepared and drafted jointly by legal counsel representing
Southlake and AquaSource.
7.10. The Parties covenant and agree that they shall execute and deliver such other and
further instruments and documents as are or may become necessary or convenient to effectuate
and carry out the intent of this Agreement.
7.11. This Agreement may be executed in multiple originals, any of which shall be
deemed to be an original.
7.12. The signatories hereto represent and affirm that they have the authority to execute
and bind the Party on whose behalf they sign below.
7.13. in the event any suit is filed between the Parties to enforce or interpret the terms
of this Agreement, or concerning the subject matter of this Agreement, the prevailing Party shall
recover from the non - prevailing Party its reasonable and necessary attorney's fees, expert
witness fees, and all other reasonable costs and expenses incurred in resolving the suit.
7.14. This Agreement is indivisible and non - severable.
1628,16/10040119 settlement agreement 17
WITNESS THE AGREEMENT by the Parties hereto, executed in duplicate originals:
Date:
ATTEST:
City Secretary
a
Date:
CITY OF SOUTHLAKE, TEXAS
By.
Printed Name: — A rai, WakK �s y es
Title: I ' cv
AQUASOURCE UTILITY, INC
C
Printed Name
a7 /o4
Title: President, AquaSource - Texas
I62Si16/1gd040119 settlement agreement 1
Attachment A
Description of Lakewood Ridge water Distribution System
Map of Distribution System attached.
Description of facilities to be conveyed by Assignment and Bill of Sale:
Twenty -eight (28) AMR meters
Four (4) six inch (6 ") flush valves
Three (3) two inch (2 ") flush valves
One (1) two inch (2 ") valve
Six (6) four inch (4 ") valves
Two thousand one hundred sixty -three linear feet (2,163') of two inch (2 ") pipe
Three thousand five hundred eight linear feet (3,508') of four inch (4 ") pipe
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Attachment B
Description of Indian Creek water Distribution System
Map of Distribution System attached.
Description of facilities to be conveyed by Assignment and Bill of Sale:
Eighteen (18) AMR meters
One thousand four hundred fifty -five linear feet (1,455') of six inch (6 ") pipe
Two (2) six inch (6 ") flush valves
Three (3) six inch (6 valves
02/02/04 09 :27 FAX 512 703 2785 Mathews & Freeland. LLP
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Attachment C
Lakewood Ridge Easements
Twenty foot (20') access easement along north 20 feet (20') of Lot 3, Block C, Lakewood Ridge
Addition.
In addition, AquaSource will convey by assignment all of its right, title and interest in and to the
public utility easements located in Lakewood Ridge (save and except the easements for the
actual Well Site), and to AquaSource's water utility facilities located therein.
Attachment D
Indian Creek Easements
Twelve foot ( 12') a ccess e asement d edicated b y p lat b etween Lot 5 and Lot 6, Indian C reek
Estates.
In addition, AquaSource will convey by assignment all of its right, title and interest in and to the
public utility easements located in Indian Creek (save and except the easements for the actual
Well Site), and to AquaSource's water utility facilities located therein.
Denton County
Cynthia Mitchell
County Clerk
Denton, TX 76202
�o zoos ooi zosm
OFFICIAL RECORD
Instrument Number: 2005 - 120907
As
Recorded On: September 29, 200' Assignment
Parties: AQUA UTILITIES Billable Pages: 7
To Number of Pages: 7
Comment:
** Examined and Charged as Follows: **
Assignment
Total Recording
40.00
40.00
* * * * * * * * * * ** THIS PAGE IS PART OF THE INSTRUMENT * * * * * * * * * * **
Any provision herein which restricts the Sale, Rental or use of the described REAL PROPERTY
because of color or race is invalid and unenforceable under federal law.
File Information:
Document Number: 2005 - 120907
Receipt Number: 230808
Recorded Date /Time: September 29, 2005 09:07A
User / Station: J Smith - Cash Station 3
Record and Return To:
CITY OF SOUTHLAKE
1400 MAIN ST STE #440
SOUTHLAKE TX 76092
C01L THE STATE OF TEXAS)
COUNTY OF DENTON }
- I hereby certify that this Instrument was FILED In the File Number sequence on the dateltime
printed heron, and was duly RECORDED in the Official Records of Denton County, Texas.
County Clerk I a
tsh Denton County, Texas
ASSIGNMENT AND BILL OF SALE
STATE OF TEXAS §
§ KNOW ALL MEN BY THESE PRESENTS
COUNTY OF DENTON §
That, AQUA UTILITIES, INC., as Assignor, for good and valuable consideration, receipt
of which is hereby acknowledged, has ASSIGNED, SOLD, TRANSFERRED AND
DELIVERED, and by these presents does ASSIGN, SELL, TRANSFER AND DELIVER unto
the CITY OF SOUTHLAKE, Texas, a municipal corporation, as Assignee, all of its rights, title,
and interest in the following described personal properties and easements (the "Assigned
Assets ") owned by Assignor and used in the business of Assignor, being the water distribution
systems owned and operated by Assignor, and public utility easements situated in the Lakewood
Ridge Addition subdivision ( "Lakewood Ridge ") and the Indian Creek Estates subdivision
( "Indian Creek ") in Denton County, Texas, as described further below.
The Assigned Assets are conveyed AS IS, with no warranties, expressed or implied, as to
their condition. The Assigned Assets include those portions of the existing systems of pipes that
are used to deliver water from the well sites in Lakewood Ridge and Indian Creek subdivisions
to the ultimate consumers in such subdivisions. The Assigned Assets in both Lakewood Ridge
and Indian Creek subdivisions shall include all pipes owned by Assignor in the rights -of -way and
on private property from and including the customer meters up to the fence surrounding the well
sites in each subdivision.
loc. No- zom - 12067 p. 2 c�4
The Assigned Assets specifically include:
(1) Lakewood Ridge water Distribution System, including:
(a) Twenty -eight (28) AMR meters;
(b) Four (4) six -inch (6 ") flush valves;
(c) Three (3) two -inch (2 ") flush valves;
(d) One (1) two -inch (2 ") valve;
(e) Six (6) four -inch (4 ") valves;
(fj Two Thousand One Hundred Sixty -Three linear feet (2,163') of two -inch
(2 ") pipe; and
(g) Three Thousand Five Hundred Eight linear feet (3,508') of four -inch (4 ")
pipe.
(2) Indian Creek water Distribution System, including:
(a) Eighteen (18) AMR meters;
(b) One Thousand Four Hundred Fifty -Five linear feet (1,455') of six -inch
(6 ") pipe;
(c) Two (2) six -inch (6 ") flush valves; and
(d) Three (3) six -inch (6 ") valves.
(3) Easements in Lakewood Ridge, including:
(a) All public utility easements located in Lakewood Ridge Addition, save
and except the easements for the well site in Lakewood Ridge Addition;
and
(b) A Twenty foot (20') access easement to the well site, being a part of the
North 20 feet of Lot 3, Block C of Lakewood Ridge Addition, an Addition
to the County of Denton, Texas according to the plat thereof recorded in
Volume 14, Page 5, Plat Records, Denton County, Texas, and being more
particularly described by metes and bounds as follows:
Beginning at the Northwest corner of Lot 3, Block C, Lakewood Ridge
Addition in the East line of Soda Ridge Road;
THENCE, East along the North line of said Lot 3, 217.97 feet to a point
for corner in the common line of this easement and the Lakewood Ridge
Addition well site;
THENCE, South parallel with the East line of said Lot 3, along said
common line, 20 fee to a point for a corner;
THENCE, West parallel to and at all times 20 feet South of the North line
of said Lot 3, a distance of 220.00 feet, more or less, to a point for corner
in the West line of said Lot 3 and in the East line of Soda Ridge Road;
2 b2D05- 1214D7 p. 3 off' 8
THENCE, in a Northeasterly direction along the West line of said Lot 3
and the East line of Soda Ridge Road, a distance of 20.76 feet, more or
less, to the point of beginning.
(4) Easements in Indian Creek, including:
(a) All public utility easements located in Indian Creek Estates, save and
except the easements for the well sites in Indian Creek Estates; and
(b) A Twelve foot (12') access easement between Lots 5 and 6, as shown on
the recorded plat of the Indian Creek Estates subdivision, Cabinet D, Page
198, Plat Records, Denton County, Texas.
TO HAVE AND TO HOLD the Assigned Assets, together with all and singular the rights
and appurtenances thereto in anywise belonging, unto the said Assignee, the CITY OF
SOUTHLAKE, Texas, its successors and assigns; and Assignor does hereby bind itself, its
successors and assigns, to WARRANT AND FOREVER DEFEND all and singular the Assigned
Assets unto Assignee, its successors and assigns, against every person whomsoever lawfully
claiming or to claim the same or any part thereof.
This Assignment and Bill of Sale is executed pursuant to the Settlement Agreement
between AQUA UTILITIES, INC. and the CITY OF SOUTHLAKE, TEXAS, dated February 3,
2004, as amended by letter agreement signed by Aqua Utilities on March 22, 2005, and by City
of Southlake on April 5, 2005.
EXECUTED AND MADE EFFECTIVE fL� , 2005.
ATTEST:
AQUA UTILITIES, IN p.
By: f' � ,
Robert Laug
Vice President perations
� p.40
t
STATE OF TEXAS §
7,g §
COUNTY OF §
This instrument was acknowledged before me on the ,�- day of /��� • , 2005, by
ROBERT LAUGHMAN, Vice President, rations of qua tilities, Inc., a
corporation, on behalf of said Zr i
Public, State of Texas
b&,. No. 2bDb- 120907 p -5 of 2
AMD P,. CASEY
f '
i GTAAY PUBLIC
81 ATE GE TEXAS
bp. 12- 12- ,.)P05
b&,. No. 2bDb- 120907 p -5 of 2
02 / 0 2-/ZA(14--NnN C� -NO, 63&7-1 IA.ow.
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31/20/2004 16:18 8173671626 AQUASOURCE PAGE 02/09
The tnlormotion shown on this mop K intended to represent the
orii;kI0 purchosed System and does not necetr9grly renect the
system currentty to pleee, The imWmation Shown woe golhered
frW hel iaspatipts, interviews with syttern opeete &. reeorde4
plots, appreisd dhtrlet maps. and 03 plops provided by
AquoSouive. This mop m0y Cronge Out to discovery In the Md.
� AquaSource
ALAN STEMMAN
Olpsal 1 Analysis, lnG 019 Coruultg
Dra t: tember 18, 2000 02M Welne All D" 012.920.1608
�P lWOOn,TSwr74725 .em.ro.•.aa.r,ot
Kindian Creek water System DOS ee see nd * Ina.
� EnQrnser■ end Conlun�ntl
0 Ica 20o awrt PW8 No. 0610174 SLIM em
Denton County etacarw" Awr,k, otx6orosee
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PAGE 714 WD AT 117017004 3 -73,35 PM ICenhal Standard Timei W- MIS -FAX010 s DNI9,7 CSID- R173671676 DURATION imm- s*03.04
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Flushing Valve
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® slow —off valve
8' PW Woter Una
MILLICAN WELL SERVICE LLC
P.O. BOX 820487
FORT WORTH, TEXAS 76182
817 - 232 -0077
Name / Address
City of Southlake
1400 Main Street
Suite 250
Southlake, Texas 76092
Estimate
Date Well Name
8/2/2010 Plugging job
Qty
Description
Cost
Total
Labor and equipment to pull the materials from the wells, measure
the total depth, plug the well according to State regulations and file
a plugging report with the owner and the TDLR.
Well # 1
3
Labor and equipment to pull the materials and measure the well.
115.00
345.00
795
Labor and equipment to plug the well. 5"x795'
5.00
3,975.00
Well #2
3
Labor and equipment to pull the materials and measure the well.
115.00
345.00
800
Labor and equipment to plug the well. 4.5" x 800'
4.50
3,600.00
Well #3
3
Labor and equipment to pull the materials and measure the well.
115.00
345.00
782
Labor and equipment to plug the well. 4.5" x 782'
4.50
3,519.00
Well #4 No information on this well
3
Labor and equipment to pull the materials and measure the well.
115.00
345.00
800
Labor and equipment to plug the well. (Estimated depth and
4.50
3,600.00
casing size)
Contractor will remove and salvage all materials from the wells.
�
Subtotal $16,074.00
Jerry Browning
o
Sales Tax (0.0 /o) $0.00
2176W1
Texas Department of Licensing and Regulation
P.O. Box 12157
$16,074.00
To
Austin, Texas 78711
512- 462 -7880