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Item 8CCity of Southlake, Texas M E M O R A N D U M February 18, 2003 To: Billy Campbell, City Manager From: Pedram Farahnak, P.E., Director of Public Works, 481-2308 st Subject: Ordinance No. 841, 1 reading, approval of wholesale system access fees required by the contract for water service between the City of Southlake and the City of Fort Worth dated September 4, 2002. st Action Requested : Ordinance No. 841, 1 reading, approval of wholesale system access fees required by the contract for water service between the City of Southlake and the City of Fort Worth dated September 4, 2002. Background Information: On August 6, 2002 the Southlake City Council authorized the Mayor to execute a contract for water service between the City of Fort Worth and the City of Southlake for wholesale purchase of water. Subsequently, the Fort Worth City Council authorized and th executed the contract on September 4, 2002. In accordance with section 16.1, “System Access Fees”, on a quarterly basis, Southlake agreed to pay Fort Worth a wholesale system access fee for each new or enlarged connection for water service made within the quarter within Southlake’s service area served by the General Benefit Facilities of the Fort Worth Water System. The wholesale system access fee to Southlake for each such connection shall be based upon the size of water meter. Sections 16.1 through 16.9 of the water service contract between Southlake and Fort Worth has been included for your review with this memorandum. Attached to this memorandum is also the “System Access Fees” (Impact Fee Collection Schedule) ranging from $372.05 for a ¾” to $28,525.07 for a 10” meter. Financial Consideration: Not applicable. Citizen Input/ Board Review: Not applicable. Legal Review: The City Attorney has prepared Ordinance No. 841. Alternatives: Not applicable. Supporting Documents: Ordinance No. 841  System Access Fee or Impact Fee Collection Schedule  Section 16.1 through 16.9 of Water Service Contract with Fort  Worth Staff Recommendation: Approval of wholesale System Access Fees required by the contract for water service between the City of Southlake and the City of Fort Worth dated September 4, 2002. Staff Contact: Pedram Farahnak, P.E., Director of Public Works, 481-2308 CC: Sharen Elam, CPA, Director of Finance ORDINANCE NO. (04 AN ORDINANCE AUTHORIZING THE COLLECTION OF WHOLESALE SYSTEM ACCESS FEES FOR EACH NEW OR ENLARGED CONNECTION FOR WATER SERVICE; PROVIDING THAT THIS ORDINANCE SHALL BE CUMULATIVE OF ALL ORDINANCES; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A SAVINGS CLAUSE;AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Southlake, Texas, is a home rule city acting under its charter adopted by the electorate pursuant to Article XI, Section 5 of the Texas Constitution and Chapter 9 of the Local Government Code; and WHEREAS, on September 4,2002, the City of Southlake entered into an agreement with the City of Fort Worth,City Secretary Contract No. 27958(the"Wholesale Water Contract"),to provide water service to citizens of the City of Southlake;and WHEREAS, Section 16 of the Wholesale Water Contract provides that the City of Southlake shall pay to Fort Worth a Wholesale System Access Fee for each new or enlarged connection for water service made within the City's service area and served by the City of Fort Worth;and WHEREAS,the City of Fort Worth has adopted and imposed a new schedule of Wholesale System Access Fees effective 12002 as shown in the attached Exhibit"A";and WHEREAS, the city council of the City of Southlake desires to provide for the collection of Wholesale System Access Fees for each new or enlarged connection for water service in accordance with Exhibit"A"_ NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE,TEXAS: SECTION 1. WHOLESALE SYSTEM ACCESS FEES The City of Southlake hereby adopts the Wholesale System Access Fees set forth in the attached Exhibit "A" and authorizes the collection of such Wholesale System Access Fees for each new or enlarged connection for water service made within the City's water service area after the effective date of this ordinance. The Wholesale System Access Fees shall be in addition to any other applicable fees for water improvements and service adopted by the City. SECTION 2. PAYMENT OF FEES No water tap shall be issued until payment of such Wholesale System Access Fee is received by the City, except as provided otherwise by contract. Wholesale System Access Fee.doc Page I SECTION 3. CUMULATIVE CLAUSE This ordinance shall be cumulative of all provisions of ordinances of the City of Southlake, Texas, except where the provisions of this ordinance are in direct conflict with the provisions of such ordinances, in which event the conflicting provisions of such ordinances are hereby repealed. SECTION 4. SEVERABILITY CLAUSE It is hereby declared to be the intention of the city council that the phrases, clauses, sentences,paragraphs and sections of this ordinance are severable, and if any phrase, clause, sentence, paragraph or section of this ordinance shall be declared unconstitutional by the valid judgment or decree of any court of competent jurisdiction, such unconstitutionality shall not affect any of the remaining phrases, clauses, sentences,paragraphs and sections of this ordinance, since the same would have been enacted by the city council without the incorporation in this ordinance of any such unconstitutional phrase,clause,sentence,paragraph or section. SECTION 5. SAVINGS CLAUSE All rights and remedies of the City of Southlake are expressly saved as to any and all violations of the Code of Ordinances of the City of Southlake, as amended, or any other ordinances affecting fees which have accrued at the time of the effective date of this ordinance; and, as to such accrued violations and all pending litigation, both civil and criminal, whether pending in court or not, under such ordinances, same shall not be affected by this ordinance but may be prosecuted until final disposition by the courts. SECTION 6. EFFECTIVE DATE This ordinance shall be in full force and effect from and after its passage and publication as required by law,and it is so ordained. PASSED AND APPROVED ON FIRST READING ON THIS DAY OF , 2002. MAYOR ATTEST: CITY SECRETARY Wholesale System Access Fee.doc Page 2 PASSED AND APPROVED ON SECOND READING ON THIS DAY OF , 2002. MAYOR ATTEST: CITY SECRETARY APPROVED AS TO FORM AND LEGALITY: City Attorney Wholesale System Access Fee.doe Page 3 Impact Fee Collection Schedule Meter Size Equivalent Water Factor Impact Fees 3/4" 1.00 $372.05 1" 1.67 $621.32 1-1/2" 3.33 $1,238.93 2" 5.33 $11983.03 3" 10.00 $3,720.50 4" 16.67 $61202.07 6" 33.33 $125400.43 8" 53.33 $19,841.43 10" 76.67 $28,525.07 f �I 13. Sanitary Sewer Facilities 13.1 The Customer agrees that it will require all of its 4ustcmers, who are provided water from the Fort Worth system• to have .adequate sanitari sewage facilities meeting state health department=equirernents. 14. Additional Parties 14.1 For ''fIlorth will use its best efforts to provide an adocluate water supply for all of Its customers. Prior to the approval of additional wholesale customers. Fort ''North will provide reasonable assurances that the projected five-year water demands of the then-existing wholesale customers so seraed and the proposed additional customer can be adequately fulfilled. F,Yt U1'arth will consu.t with the: '/iato.r System Advisory committee prior to contracting with additional parties. 15. Water System Advisory Committee 15.' Customers governing body shall annually appoint a representative to be a voting rnemPr of the Water System Advisory Committee, whose purpose snail be to consult with and advise Fcrt Worth, through the Director: on matters pertaining to corsarvation. •wholesale planning, improvements. graves, wholesale rate studies, administration, budgets, and additional wholesa}e customers, whether same be wholesale customers of Customer or Fort Worth. The Cormittee may establish bylaws governing -he election of officers. meeting dates and other matters pertinent to its functioning. 16. Svstem Access Fees 16A (in a quarterly basis, Customer agrees to pay to Fart `Alorth a 4'Vhokasale System Access Fee for each new or enlarUed connection for water serdlce made within the quarter within Cilstomer's 5?n✓ice area S�-'rbed by the Generai EeneR Facilities of the Fort V%lorth 'hater System. i he '01holesale Svstem Access Fee to the Customer for :�3ch such connection hail be based upon the size cf viater meter and shall e equal to the Wholesaie Sysem Access Fee collected for the same size water meter made within the junsdir,tion of For' Worth The calculation of said Wholesale System Access Fee shall be consistent with all applicable state and federal regulations, including C;"apter 95, Texas Local Gorr rnrnent Cede, or any amendment or successor statute _hereto, and shall include orly these cnsts associated with General Benerit Faciiities expansions Ind capital improvements necessary to provide service to new development. 'Nothing within this contract shall be deemed to prevent either Fort Worth or Customer from charging their own retail customers impact fees in excess of thr Wholesale System Access Fee pravided for;rierein. 16.2 port s:Vorth agrees that alf monies remitted to it pursuant to this Section will be piaced in a separate interest bearing aca-�unt to paSi oniy for the cast of constructing capital Improvements or f u.ility expansions ,as permitted by Chapter 395. Texas Local Government Code. or any arrendment thereto, or by any successor statute thereto, and will not Ite used for operation and maintenance expenses. Qnce expended. such Funds and ail interest earned thereon will be considered a "contribution"for rate setting purposes only. 16.S Custc;mEer shall provide tc€ Fort I-North such information that relates to the making of ne.v and/or enlarged connections within its jurisdictis n as may be. requested by the Director. Including but not lirnited to building permits, with each quay erty payment required in this section. 16-4 Npithpr Fort Worth nor Customer shall waive any impact fee due from new or enlarged connectiors to its respective system within its jurisdiction. However. either Fort 'vVorth or Customer may pay such impact fee into the fund required for paying fnr the capitai improvements. 15.5 7'ie 'Hater System Advisory Committee created pursuant to Section 15 hereof shall select live f51 of its member.; to a subcommittee to be known as the Customer ImGMCt F84 (C!FL ,, Every Ehre.F, years. bef,,€nning .'une, 19s-"2. F-rt 'North ,will uindaie the iand use =isaumptions and ..apital rnii)rovem.ents pion -ipcn which the Syster-n access Fees are based- Jr June 1pS'2 and ever,, three year: thereafter, ,riEv CIFC shall submit a list of f,,,, cualifiEd engineers or plann ng consultants to the Director. The Director shall select a consultant from such Dist to assist Fort Worn in developing land use ,assumptions, dentifying capital improvements, and formulating capital improvement plans and access fees. The consultant shall be responsible to Fort Worth and its citizen's advisory committee, but shall .--]so report to the CIFC. The cost of the consultant shall be deemed a 5'.stem Ccst. In the event tl,e CIFC faiis to submit a, list of five consultants to Fort 'JVorth, Fort Worth shall select a consuitant to perform in the ranner described ' (,,rein. 16.6 Fort'Borth agrees that only those capital improvements as defired in section 1 18 hereof shall be included in the capital improvements plan for the purpose of determining Wholesale System Access Fees; provided however, For North may include other cacital improvements for the purpose of determining impact fees to its av:n retail eustorners. Fort Worth shall not be required to Include ali capital improvements in any capital improvements plan. The CIFC shall �-"e responsible for working with Fort Worth and its consultant to determine the capital improvements to be included A the calculation of any Wholesale System access Fees. The CIFC shall recommend to the Water System Advisory Committee which capital improvements shouid be included in the calculation of any Whoiesale System Access Fees. The CIFC shall also meet with Fort Worth's citizen advisory committee as such citizen's advisory comrittee reviews and considers land use assumptions, the;captal improvements plan and impact ees. 15.7 Prior to the adoption of any land use assumptions, capital improvements, or access fees by Fort `'ly.+'orth. the CIFC shall be furrlshed a copy of the proposed lard use assumptions, capital improvement plan or ar.:,ess fees at least o days prior tc any sc leduled nearing thereon. Ary reviswi: access fee ac,'op:ted pursuant c such updated capital improvements plan shall not take effect for a period of at least ninety K)days after adoption by Fort'North 163 Each year Fort V Ior*h shall ;provide to the Wholesale:'W',-•ter Advisory Ccf-.rnittee an audl ed hnanc:al statement of the Fcprt 'Vkjarth VV ter Department's records. a i, ._ Fart `A orth and Customer agree that the methoc.oicgy for the calculation of Wholesale Systarzf Access Fees required herein shati be Consistent with the methodology prescribed by Chapter 395, Texas Local Govmment Code. or any amendment or successor statute tt)ereto. in the event that such statutory methodology is amended or seplaccd by a new statute, the W'hclesale }Water Advisory Committee may engage legal counsel to work with For Worth to propose arriendment5 t0 this contrazt to conform i� it to Sufi i amendment Or ne Statute. The reasonable cost of such legal counsel shall be a System Cest. ?7. Termination t 7.1 This aareernent may be terminated in whole or in par, b` the mutual concert of Customer and For: Worth. NtDtwithstanding anything contained herein to the contrary, any material breach by either parry hereto to perform any of the duties or the obligations assumed by such party hereunder or to fa�thfuily keep and perform any of the terms, conditions and provisions hereof shall '.)e cause for termination of this :agreement by either parry in the manner set forth in this paragraph. Fort �.�rorth shall deliver to Customer ninety (90) days prior written notice of its intention to so terminate this agreement if Customer fa€Is tc cure or adjust such material breach, including in such notice a seasonable description of t e hreac'n. f within said ninety (9€)? da':='s Customer shall ail or refuse to cure such mate ial breach to the satisfaction of Fort*Orth, then and in such event. Fort fJorth shall have the right, with six months additional advance -,vritten notice to Customer and without an iy liability whatsoever On the part of Fort V`Jorth. to declare This agreement terminated. in Lne event Of i�rminaticn of iNs agr0amFnt, all nghts, powers, and sriviie des of Customer hereunder shall cease anti terminate and Customer snail mwice ro claim of any kind 4hatscever against r-c rt 'Aicrh. its agents or represenfatives. reason of such termination or any act incident thereto. provided Fort %north acted reasonably and such termi^afion was not unreasonable, arbitrary and capricious. Fort V%lorth shall advise Customer irl writing lmrnrediately upon acceptance of the cure of any branch. r,r m Major Differences between Major Differences between Current andProposedContract Current andProposedContract A Customer Water Advisory Committee will develop a A Customer Water Advisory Committee will develop a   Uniform Water Conservation Policy for adoption by Uniform Water Conservation Policy for adoption by customer cities to reduce consumption. customer cities to reduce consumption. Fort Worth has agreed to Southlake’s second point of Fort Worth has agreed to Southlake’s second point of   connection for water supply at Fort Worth’s Caylor connection for water supply at Fort Worth’s Caylor Road tank. (see map) Road tank. (see map) Fort Worth has agreed to construct an additional 48” Fort Worth has agreed to construct an additional 48”   diameter supply pipe to the Caylor tank at a cost of diameter supply pipe to the Caylor tank at a cost of $9,000,000. Southlake’s share of cost is $2,970,000 $9,000,000. Southlake’s share of cost is $2,970,000 which must be paid over 60 months starting in FY which must be paid over 60 months starting in FY 2004-2005. 2004-2005. Southlake will be required to collect “System Access Southlake will be required to collect “System Access   Fees” or impact fees for all new and enlarged Fees” or impact fees for all new and enlarged water connections. water connections.