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HomeMy WebLinkAbout05-22-86-11 - Resolution - 05/22/1986RESOLUTION NO. 5-22-86-11 A RESOLUTION AUTHORIZING THE CITY MANAGER TO SIGN AN ADDEN- DUM TO THE CONTRACT AND AN ASSIGNMENT AGREEMENT WITH WELL- BORN WATER SUPPLY CORPORATION. WHEREAS, on the 22nd day of May, 1986, the City Council met and considered the Addendum to the contract and the Assign- ment Agreement with Wellborn Water Supply Corporation worked out between the City Staff and Wellborn Water Supply Corporation and its legal counsel, copies of which docu- ments are attached hereto as Exhibits "A" and "B". NOW, THEREFORE, BE IT RESOLVED By the City Council of the City of College Station that after consideration of the addendum to the contract and the Assignment Agreement with Wellborn Water Supply Corporation, the City Council hereby authorizes the City Manager to execute both documents. PASSED and APPROVED this 22nd day of May, 1986. ATTEST: APPROVED: 005676 ASSIGNMENT AGREEMENT THE STATE OF TEXAS COUNTY OF BRAZOS KNOW ALL MEN BY THESE PRESENTS: .WHEREAS, WELLBORN WATER SUPPLY CORPORATION is seeking a loan from the FARMERS' HOME ADMINISTRATION in the amount of Nine Hun- dred Thousand Dollars ($900,000.00) for the purpose of installing new waterlines and refurbishing old waterlines; WHEREAS, the FARMERS' HOME ADMINISTRATION has objected to the current water sale contract between the CITY OF COLLEGE STA- TION and WELLBORN WATER SUPPLY CORPORATION, which contract was executed by the parties on the 6th day of July, 1982, and amended by the parties on June 23, 1983, and again on the 3rd day of January, 1985; WHEREAS, the parties of the CITY OF COLLEGE STATION, WELL- BORN WATER SUPPLY CORPORATION, and FARMERS' HOME ADMINISTRATION have been unable to reach an agreement as to the terms of Section 3.4 of the water sale contract, which reads as follows: The City shall apply for on behalf of Wellborn an Amended Certificate of Convenience and Necessity for the Wellborn System and shall request Public Utility Commission approval of a certified area agreement under which the City will assume service in newly annexed areas from the Wellborn System; WHEREAS, it is the position of the CITY OF COLLEGE STATION City Council that the removal of the above-mentioned Section 3.4 of the water sale contract between WELLBORN WATER SUPPLY CORPORA- TION and the CITY OF COLLEGE STATION affects the intended consid- eration to be conveyed thereby; WHEREAS, it is recognized that the extraterritorial juris- diction of the CITY OF COLLEGE STATION which is currently served by WELLBORN WATER SUPPLY CORPORATION contains few taps that would be taken over by the CITY OF COLLEGE STATION, and it is further recoqnized that the FARMERS' HOME ADMINISTRATION loan funds are not designated for expenditure in this area, other than for transmission lines not affecting this area; and 005677 WHEREAS, it is also recognized that the CITY OF COLLEGE STATION does not intend to grow into the WELLBORN WATER SUPPLY CORPORATION beyond the Lick Creek - Bee Creek drainage basin boundary line during the next six years, encompassed in this agreement; said line is designated by the map attached and incorporated hereto by reference. NOW, THEREFORE, for and in consideration of the monetary consideration and covenants in the fulfillment of the terms of this Agreement hereinafter made: This Agreement (hereinafter referred to as "Agreement") is made and entered into by and between the CITY OF COLLEGE STATION, a Texas Municipal Corporation with home rule powers (hereinafter referred to as "COLLEGE STATION") acting herein by and through its City Manager with the authorization of the City Council, by Clty Ordinance duly adopted on the ~ day of ~ 1986, and WELLBORN WATER SUPPLY CORPORATION, a Texas Corporation, (hereinafter referred to as "WELLBORN") acting herein by and through its ~,u~ with the authorization of the Board of Directors by Resolution duly adopted on the t,~-~- day of ., 1986, under the terms and conditions hereunder set out. 1. The sale of water during the remainder of the original five (5) year term and the five (5) year option period on the original contract entered into by and between COLLEGE STATION and WELLBORN for the sale of water to WELLBORN shall be at a rate equivalent to one times the residential water rate set by CITY OF COLLEGE STATION ordinance provided WELLBORN assigns to COLLEGE STATION a certain certificate of deposit numbered .~;-~' issued by ' .'o, ~ for Fifty Thousand Dollars ($50,000.00) and attached hereto in lieu of a change in the water rate in the original contract for the sale of water by and between COLLEGE STATION and WELLBORN and to assist in the payment of a sum(s) to be paid to WELLBORN in the event of a sale of any or all of WELLBORN's water taps to COLLEGE STATION in the COLLEGE STATION - 2- 005678 growth area, said sum to be determined as per the requirements of paragraph 2 herein. 2. WELLBORN has delivered to COLLEGE STATION and COLLEGE STATION does hereby acknowledge receipt of the Certificate of De- posit described above and said Certificate of Deposit (therein- afte~ referred to as "Funds") to be held by COLLEGE STATION as hereinafter set forth. WELLBORN hereby assigns said Certificate of Deposit to COLLEGE STATION subject to the terms of this Agree- ment. Upon the parties reaching an agreement as to the cost of any taps, WELLBORN may apply to COLLEGE STATION and COLLEGE STA- TION shall agree to the reduction of the Funds by the amount of the transaction. WELLBORN shall provide COLLEGE STATION with a new Certificate of Deposit which shall be substituted for the then current Certificate of Deposit and shall then become the new Funds. (a) COLLEGE STATION shall keep and preserve the Certificate of Deposit Funds by reasonable care and management and upon maturity shall manage such Funds to produce the maximum safe return hereon. The parties further agree that any accumulated interest shall be paid to WELLBORN annually on the anniversary date of this agreement. (b) Any remaining Funds accumulated as a result of a change in the multiplier factor, but not reduced by the purchase of tads under Section 3 above, shall be paid to WELLBORN at the expiration of the agreement. 3. In the event the Fund is depleted by the purchase of taps, WELLBORN shall have the option to either: (a) pay the multiplier factor on the residen- tial rate, which factor shall be determined by the City Council. The City Council shall 005679 -- 3 -- set the multiplier factor by determining the estimated funds needed to purchase projected taps from WELLBORN. The said multiplier factor may be recalculated by the City Council annually on its own motion; or, (b) deliver to the CITY OF COLLEGE STATION a new Certificate of Deposit in an amount to be calculated by multiplying the price of the last tap purchased by the City's projection of the number of taps to be purchased during the remaining period of the contract. (The value of the last tap purchased shall be calculated to include any facilities purchased prorated by the total number of taps.) 4. In the event that COLLEGE STATION annexes any area in the WELLBORN certificated area, both COLLEGE STATION and WELLBORN mutually agree to negotiate in good faith a purchase price for the sale of any WELLBORN water taps to COLLEGE STATION subject to the approval of the FARMERS' HOME ADMINISTRATION and Public Util- ity Commission. The cost of any tap shall be calculated by agreement and shall include an agreed value for facilities in the event the CITY OF COLLEGE STATION takes over any WELLBORN facili- ties. 5. In the event that the parties are unable to reach an agreement, the parties shall submit their dispute as to the value of any tap to the Public Utility Commission for its decision as to the value. 6. The undersigned executing this Agreement on behalf of WELLBORN and COLLEGE STATION do hereby represent and warrant that they have all requisite authority to execute this Agreement for and on behalf of WELLBORN and COLLEGE STATION, respectively. 7. Upon termination of the agreement for the sale of water to WELLBORN, any remaining Funds deposited with COLLEGE STATION which were accumulated as a result of the change in the multi- 0O5680 plier factor or deposited in the form of a Certificate of Desposit shall be disbursed to WELLBORN. This Agreement shall terminate and be of no further force and effect. 8. Should any litigation be commenced between the parties to the Agreement concerning the disposition and disbursement of the ~nds under this Agreement or the rights and duties in rela- tion thereto, the party prevailing in such litigation shall be entitled, in addition to such other relief as may be granted, to a reasonable sum as and for its attorney's fees in such a litiga- tion, which sum shall be determined by the Court in such litiga- tion or in a separate action brought for this purpose. 9. Any and all notices which may be required under the terms of this Agreement shall be mailed to the representative parties at the address indicated. To: Wellborn Water Supply Corporation P.O. Drawer 1040 Wellborn, TX 77881 To: City of College Station P. O. Box 9960 College Station, Texas 77840 or at such other address as either party may furnish in writing to the other party herein named. 10. This Agreement as executed shall be performed in Brazos County, Texas and shall be governed by the laws of the State of Texas. 11. This Agreement shall bind and inure to the benefit of the respective parties, their successors and assigns. 12. By executing their signatures hereunder, the parties, both of them, agree that they have read and do hereby agree to the foregoing terms and provisions. IN WITNESS WHEREOF, the undersigned do hereby execute this Agreement on this the ~D day of ~'~Q .&J~ , 1986. CITY OF COLLEGE STATION WELLBORN WATER SUPPLY CORPORATION ~ 5 ~ 00568 TIME CERTIFICATE OF DEPOSIT NOT NEGOTIABLE -- NOT SUBJECT TO CHECK BANKERS SYSTEMS, INC., 1983, ST. CLOUD, MINN. MPCD 10/31/83 xZ 005682