HomeMy WebLinkAboutResolution 1996-042RESOLUTION NO. 96-42
WHEREAS, the City of North Richland Hills has been involved in litigation with the
City of Watauga concerning an option to purchase a portion of the North Richland Hills
Water and Sewer System; and
WHEREAS, the parties have mediated and settled the case under court ordered
mediation in Cause No. 236-i554oa-94; and
WHEREAS, these mediation and settlement activities have taken place under a
court imposed silence order and all deliberations of this City Council have taken place in
executive session; and
WHEREAS, this City Council has heretofore passed Resolution No. 96-35 and
96-36 which authorize the settlement and further authorize the Mayor and City Manager
to execute the settlement agreements in connection with said litigation; and
WHEREAS, the on the 14th day of June, 1996 the settlement agreements in their
final form were executed by the two cities.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
NORTH RICHLAND HILLS, TEXAS, that:
1.
The passage and approval of Resolution 96-35 and 96-36 be, and are hereby, in
all things ratified,
2.
All findings in both Resolution 96-35 and Resolution 96-36 are hereby readopted
and ratified.
3.
The City Council, further finds that the portions of the water and sewer systems sold
to the City of Watauga, as a result of the settlement of Cause No. 236-155408, are no
longer needed to provide efficient and effective water and sewer service to the City of
North Richland Hills and its inhabitants. It further finds that a registered professional
engineer who is not an employee of the City of North Richland Hills, but whose
professional services have been engaged by the City of North Richland Hills, has certified
that the consideration to be paid to the City of North Richland Hills by the City of Watauga
pursuant to the settlement agreement are sums not less than the value of the portions of
the systems sold to the City of Watauga. It further finds that the terms of the settlement
agreements do not violate the covenants contained in prior revenue bond ordinances and
that the bondholders who were intervenors in Cause No. 236-155408, have approved said
settlement agreements as evidenced by signatures of counsel on the Motion to Dismiss
and Order of Dismissal in Cause No. 236-155408.
4.
The settlement documents which have been executed by the parties in Cause No.
236-155408 are identified as follows:
(1) Exhibit "A" to this resolution entitled SETTLEMENT AND PURCHASE
AGREEMENT;
(2} Exhibit "B" to this resolution entitled FACILITIES OPERATING
AGREEMENT;
(3} Exhibit "C" to this resolution entitled JOINT USE AGREEMENT.
These agreements and their execution by officials of this City are hereby ratified
and they are ordered attached to this resolution as Exhibits, above described.
PASSED AND APPROVED this 24th day of June, 1996.
APPROVED:
Tommy Brown, r
ATTEST:
Patricia Hutson, City Secretary
APPROVED AS TO FORM AND LEGALITY:
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SETTLEMENT AND PURCHASE AGREEMENT
BETWEEN THE CITY OF WATAUGA
AND THE CITY OF NORTH RICHLAND HILLS
For the purpose of resolving disputed claims and pursuant to the authority of the Interlocal
Cooperation Act, this Settlement and Purchase Agreement (the "Agreement") is made and entered
into by and between the City of Watauga, Texas, ("Watauga") and the City of North Richland
Hills, Texas, ("NRH"), both being Texas home-rule municipal corporations.
PREAMBLE
WHEREAS, on the 6th day of April 1971, Watauga passed its Ordinance No. 79, a copy
of which is attached as Exhibit A to this Agreement, which gave its consent to the use of its
present and future streets, alleys, highways, and public grounds by NRH for the purpose of
constructing, maintaining, and operating a water and wastewater system for public and private
use within Watauga's city limits; and
WHEREAS, in Ordinance No. 79, Watauga granted to NRH a franchise to provide water
and wastewater service within the city limits of Watauga; hereinafter called the "Franchise Area";
and
WHEREAS, Ordinance No. 79 was accepted by NRH on April 29, 1971; and
WHEREAS, Paragraph 7 of Ordinance 79 provides that Watauga has a continuing option
to purchase said water and wastewater system from NRH at any time; and
WHEREAS, because of other ordinances passed and approved by the cities of NRH and
Watauga, NRH contends that Section 7 of Ordinance 79 cannot be construed to give the City of
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Watauga the right to specific performance thereunder and a lawsuit has resulted which both
parties wish to settle; and
WHEREAS, both Watauga and NRH enter into this agreement to finally settle all issues
in Cause No. 236-155408-94 in the 236th District Court of Tarrant County; and
WHEREAS, Watauga desires to assume service and responsibilities in its city limits and
NRH agrees to sell to Watauga certain water and wastewater facilities in Watauga that Watauga
agrees to buy pursuant to the terms of this Agreement; and
WHEREAS, the properties that are sold to Watauga by NRH are no longer needed by
NRH to provide efficient service to the inhabitants of NRH; and
WHEREAS, NRH, as part of the sale, agrees to also sell and transfer its certificate of
convenience and necessity to serve the Watauga Franchise Area; and
WHEREAS, Watauga and NRH desire to provide for an orderly transfer of the operation
of the water and wastewater facilities in the Franchise Area by allowing NRH to operate and
maintain the facilities for Watauga for a period of time after the purchase and transfer to
Watauga.
NOW THEREFORE, in consideration of the mutual promises and releases set forth herein,
the performance of each, and other good and valuable consideration, the receipt and sufficiency
of which are acknowledged, Watauga and NRH contract and agree as follows:
SECTION 1: DEFINITIONS
For the purposes of this Agreement, the following words, terms, phrases, and their
derivations shall have the meanings given herein. When not inconsistent with the context, words
iz i2~ooo-oo2.ccrr 2
used in the present tense include the future tense, words in the plural number include the singular
number, and words in the singular number include the plural number. The word "shall" is always
mandatory and not merely directory.
1.1 "Date of Transfer" means the effective date of the sale and conveyance of facilities
pursuant to Section 14.1 of this Agreement, which shall occur between October 1, 1996, and
January 1, 1997.
1.2 "Facilities Operatine Agreement" means the document entitled Facilities Operating
Agreement Between the City of Watauga and the City of North Richland Hills executed by
Watauga and NRH simultaneously with this Agreement. The Facilities Operating Agreement is
the instrument by which NRH will provide operation, maintenance, billing, and collection services
to Watauga during the Transition Period.
1.3 "Franchise Area" means the land contained within the city limits of the City of
Watauga.
1.4 "Franchise Area Svstem" means the water and wastewater transmission mains,
distribution and collection lines, facilities, and appurtenances used to provide water and
wastewater service within the Franchise Area as more specifically described in Sections 4.1
through 4.5 of this Agreement.
1.5 "Fort Worth Water Contract" means the Contract for Water Service Between the
City of Fort Worth, Texas and North Richland Hills, Texas, dated July 6, 1989, and all
amendments thereto.
1.6 "Joint Use Agreement" means the document entitled Joint Use Agreement Between
the City of Watauga and the City of North Richland Hills executed by Watauga and NRH
iz iz~ooa~ooz.cr..ty 3
simultaneously with this Agreement. The Joint Use Agreement is the instrument by which
Watauga and NRH share the use of certain water and wastewater facilities owned by each city.
1.7 "Transition Period" means the three year period from the Date of Transfer during
which NRH and Watauga intend to implement an orderly transition of the operations of the
facilities purchased by Watauga from NRH.
SECTION 2: MUTUAL RELEASE OF CLAIMS AND DISMISSAL OF PROCEEDINGS
2.1 In consideration for the mutual releases set forth in this Paragraph, as well as for
other good and valuable consideration, Watauga and NRH hereby RELEASE AND FOREVER
DISCHARGE the other and their respective predecessors, officers, council members, insurers,
agents, servants, representatives, employees, attorneys, consultants, successors and assigns, and
any and all persons and entities in privity with them, jointly and severally, (whether current or
former) from any and all claims, demands, obligations, debts, costs, liabilities, actions, and causes
of action (hereinafter referred to as "claims") of whatever kind or character that Watauga or NRH
may now have or hereafter have against the other for or by reason of any matter, cause or thing
whatsoever occurring prior to the date of this instrument, whether known or unknown, suspected
or unsuspected, asserted or unasserted, related to or arising under Paragraph 7 of Watauga
Ordinance No. 79 or relating to the matters or things set forth and alleged in the claims and/or
defenses made in Cause No. 236-155408-94 filed in the 236th Judicial District Court of Tarrant
County, Texas.
2.2 Further, in consideration of the promises and covenants stated herein, Watauga and
NRH agree to dismiss within ten (10) days of the execution of this Agreement their claims in
1212\OOa002.CLN 4
Cause Number 236-155408-94 pending in the 236th Judicial District Court of Tarrant County,
Texas, with prejudice to the refiling of same in any form or in any court, with the understanding
that court costs shall be taxed against the Parties incurring same. Watauga and NRH agree to
bear their own attorneys' fees incurred in Cause No. 236-155408-94 as well as any expenses or
fees incurred in connection with this matter prior to the filing of such cause. The Joint Motion
to Dismiss with Prejudice and the proposed Order of Dismissal with Prejudice shall be in the
form attached hereto as Exhibit B.
SECTION 3: PURCHASE OF WATER AND WASTEWATER FACILITIES
3.1 Because of Watauga's desire to assume service obligations for the water and
wastewater demand in the Franchise Area, the NRH water and wastewater facilities used to
provide service within the Franchise Area, with the exception of those water facilities retained
by NRH, are excess property and are no longer needed by NRH; therefore NRH enters into this
Agreement for the purpose of selling this surplus property.
3.2 Except as specifically reserved or excluded in this Agreement, Watauga agrees to
pay NRH the sum of $9,200,000.00 for the water and wastewater transmission mains, distribution
and collection lines, facilities, and appurtenances installed, owned or operated by NRH and used
to provide water and wastewater service within the Franchise Area, as more specifically described
in Section 4 of this Agreement, pursuant to the provisions of Ordinance No. 79, dated April 6,
1971 and accepted by NRH on April 29, 1971 (Exhibit A) and NRH agrees to transfer its rights,
title, and interest to such property, both real and personal, as more specifically described in
Section 4, to Watauga upon the receipt of $9,200,000.00.
1212\000-002.CLN 5
SECTION 4: WATER AND WASTEWATER FACILITIES
4.1 NRH agrees to sell and Watauga agrees to purchase, the NRH water mains,
distribution lines, facilities, and related appurtenances comprising a part of the water system used
to provide water service in the Franchise Area and certain NRH water mains and related
appurtenances connected to the water system, together with all and singular the rights and
appurtenances pertaining thereto, including such right, title and interest NRH has in and to any
special purpose rights-of--way or easements across private property that contain any of the said
mains or appurtenances, and together with any improvements, fixtures, and personal property
situated thereon or attached to the water system, including but not limited to any and all wells,
pumps, pipes, valves, electrical connections, storage tanks, meters, meter vaults, fire hydrants, and
any and all other appurtenances thereto. The above-described facilities include all water system
facilities used to provide water service within the city limits of Watauga except the following
facilities that will continue to be owned by NRH:
a. The present water connection with the City of Fort Worth located at the NRH's
Booster Pump Station #2, S l0.SWestern Center Blvd. (Saginaw-Watauga Road).
b. NRH's Booster Pump Station #2 located at 5105 Western Center Blvd.
c. The 2,000,000 gallon ground storage facility located at 5105 Western Center Blvd.
d. The real property upon which a, b, and c, are situated.
e. Any interest owned by NRH in the water line and easement from the Fort Worth
water source at Beach Street to the station at 5105 Western Center Boulevard.
f. The Watauga Road Water Lines consisting of the following:
Approximate
Length
1) 24" Water Line from Pump Station south to
Watauga Road 400 feet
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2) 16" Water Line from the 24" Water Line connection
to Denton Highway 2,550 feet
3) 12" Water Line from Denton Highway to Saramac Road 8,149 feet
4) 8" Water Line from Saramac Road to Stardust Road 1,830 feet
5) 12" Water Line from Stardust Road to Rufe Snow Drive 2,519 feet
Pursuant to the Joint Use Agreement executed simultaneously herewith, Watauga and NRH will
share the use of the above-listed facilities a. through f., that will continue to be owned by NRH.
4.2 NRH agrees to replace the 8" water line running along Watauga Road from
Saramac Road to Stardust Road. The replacement water line shall be a minimum of 12" diameter
line. NRH agrees to complete construction of the replacement water line within one year from
the Date of Transfer.
4.3 Pursuant to the Joint Use Agreement, Watauga and NRH agree to share use of the
following water facilities that will be owned by Watauga:
Approximate
Length
a. D.L. Hall 24" Transmission Line 5,497 feet
b. Denton Highway Transmission Line
1) 16" Water Line from Watauga Road to Chapman 2,792 feet
2) 24" Water Line from Chapman to Hightower 2,377 feet
c. Hightower Road 16" Transmission Line
1) Denton Highway to Whitley 2,180 feet
2) Whitley to Echo Hills 1,530 feet
3) Echo Hills to McCoy 2,400 feet
1212\00Q002.CLN 7
4) McCoy to Rufe Snow Drive 1,300 feet
d. Starnes Road Transmission Line
1) 16" Water Line from Denton Highway to Whitley 2,050 feet
2) 12" Water Line from Whitley to Indian Springs 2,455 feet
3) 16" Water Line from Indian Springs to Rufe Snow 3,377 feet
4.4 The Franchise Area System does not include customer water meters in the
Franchise Area. Watauga shall purchase the customer water meters by paying NRH on the Date
of Transfer the depreciated value of the customer meters, which has been determined to be
$40,000.
4.5 NRH agrees to sell, and Watauga agrees to purchase, the NRH wastewater mains,
collection lines, facilities, and related appurtenances comprising the wastewater system used to
provide wastewater service in the Franchise Area and certain NRH wastewater mains and related
appurtenances connected to the wastewater system, together with all and singular the rights and
appurtenances pertaining thereto, including such right, title and interest NRH has in and to any
special purpose rights-of--way or easements across private property that contain any of the said
mains or appurtenances, and together with any improvements, fixtures, and personal property
situated thereon or attached to the wastewater system, including but not limited to any and all
manholes, structures, meters, meter vaults, pipes, electrical connections, and any and all other
appurtenances thereto. The wastewater facilities to be purchased by the City of Watauga include
all wastewater system facilities within the city limits of the City of Watauga and also include the
wastewater transmission main that extends from the southern city limits of Watauga to the point
of entry to the City of Fort Worth's wastewater system south of NE Interstate Loop 820. This
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sewer main south of the Watauga border to the Fort Worth main is in an easement with a sewer
main retained by NRH and the parties agree to share this easement for the stated purpose of
maintaining both the sewer main sold to Watauga and the main retained by NRH. NRH shall
convey to Watauga a 50% undivided interest in this easement so that Watauga may have full
rights of use and enjoyment of the easement. NRH shall obtain for Watauga's benefit any
consent or authorization from landowners or additional grant of easement rights that are necessary
to allow Watauga to exercise full rights of use and enjoyment of the easement in which the sewer
mains are located.
4.6 On or before the Date of Transfer, NRH agrees to provide Watauga with a set of
up-to-date as-built plans and GIS Data for the Franchise Area System in hard copy and on
computer media in a format that can be readily used by Watauga. If Watauga, after exercising
due diligence, is unable to locate any of the facilities comprising the Franchise Area System,
NRH shall, at Watauga's request, provide assistance to Watauga in locating them. NRH's
obligation to provide such assistance to Watauga shall survive the Date of Transfer. NRH agrees
to provide Watauga with maintenance records for the past ten year period for all Franchise Area
System facilities. These records shall include, but not be limited to, water main leak repairs,
wastewater main blockages, replacement, and rehabilitation.
4.7 Watauga shall assume responsibility for inspection, operation, maintenance, and
repair of the Franchise Area System two years after the Date of Transfer in accordance with the
Facilities Operating Agreement.
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SECTION 5: TRANSITION PERIOD OPERATION
5.1 During the Transition Period, NRH agrees to operate and maintain the Franchise
Area System according to the terms and conditions in the Facilities Operating Agreement.
SECTION 6: INSTALLATION OF SUBTRACTION METERS
6.1 Watauga and NRH agree that the amount of water delivered to Watauga will be
calculated by use of meters measuring the amount of water leaving Watauga and entering NRH
(the "subtraction meters"). The subtraction meters will be installed at the boundary between
Watauga and NRH at the following three locations:
a. Starnes Road 16" Transmission Line at Rufe Snow Drive,
b. Hightower Road 16" Transmission Line at Rufe Snow Drive, and
c. Watauga Road 12" Transmission Line at Rufe Snow Drive.
6.2 Watauga shall purchase and install the subtraction meters and meter vault structures
at its expense, but North Richland Hills shall own the meters. Watauga will consult with North
Richland Hills and the City of Fort Worth concerning the design of the subtraction meters and
metering stations. North Richland Hills shall pay for the operation, maintenance, testing, and
replacement of the subtraction meters as provided in the Joint Use Agreement.
SECTION 7: ACCESS TO RIGHTS-OF-WAY
7.1 Watauga agrees to cooperate with NRH with respect to granting NRH future
licenses for the construction, operation, and maintenance of water and/or wastewater trunk mains
and related appurtenances within Watauga's street or drainage rights-of--way in the Franchise Area
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and gives NRH the right to condemn private property in Watauga for future water and wastewater
improvements necessary for NRH to serve its citizens within the city limits of NRH. If NRH
performs any construction, operation, or maintenance activity in any rights-of--way in Watauga,
NRH shall properly replace and repair the surface, base, and landscape treatment of any sidewalk,
street, or right-of--way that may be excavated or damaged by reason of such activities within a
reasonable time after completion of the work in accordance with the standards of Watauga in
effect at the time of the work.
7.2 NRH agrees to cooperate with Watauga with respect to granting Watauga future
licenses for the construction, operation, and maintenance of water and/or wastewater trunk mains
and related appurtenances within NRH's street or drainage rights-of--way and gives Watauga the
right to condemn private property in NRH for future water and wastewater improvements
necessary for Watauga to serve its citizens within the city limits of Watauga. If Watauga
performs any construction, operation, or maintenance activity in any rights-of--way in NRH,
Watauga shall properly replace and repair the surface, base, and landscape treatment of any
sidewalk, street, or right-of--way that may be excavated or damaged by reason of such activities
within a reasonable time after completion of the work in accordance with the standards of NRH
in effect at the time of the work.
7.3 NRH specifically agrees that all construction, maintenance, and operational
activities conducted by NRH within the city limits of Watauga will be performed in accordance
with such regulations or ordinances as Watauga may from time to time adopt to address such
activities.
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SECTION 8: TERMINATION OF EXISTING CONTRACT
8.1 Watauga and NRH agree that after the execution of this Agreement, the Facilities
Operating Agreement, and the Joint Use Agreement, the provisions of Ordinance No. 79 that
established the NRH franchise are no longer needed and the franchise shall be deemed terminated
as of the Date of Transfer.
8.2 Watauga and NRH agree that upon the execution of this Agreement, the Facilities
Operating Agreement, and the Joint Use Agreement, the option to purchase granted in Paragraph
7 of Ordinance No. 79 shall be considered exercised and no longer operative.
SECTION 9: PAYMENTS AND COSTS
9.1 Watauga shall make full payment for the Franchise Area System by a one-time
lump sum payment. Watauga's payment of $9,200,000.00 to NRH shall occur by means of a
wire transfer between October 1, 1996 and January 1, 1997.
9.2 Pursuant to the Facilities Operating Agreement, NRH shall be responsible for the
cost of operation and maintenance of the Franchise Area System for a period of two years
beginning on the Date of Transfer. During this two year period, Watauga shall pay NRH
$1,500,000 per year in equal monthly payments of $125,000.00 for the operation and maintenance
services, including meter reading and billing but shall not include cost of water or Fort Worth
charges for wastewater transportation and treatment. After the conclusion of the two-year
operation and maintenance period, NRH shall continue to read the meters and to bill for the
accounts served by the Franchise Area System for an additional year. During this one-year
period, Watauga shall pay NRH $250,000.00 in equal monthly payments of $20,833.33 for meter
izi2~ooaoo2.cuv 12
reading and billing services. If Watauga has adequate staff to assume the meter reading and
billing responsibilities during the third year of the Transition Period, Watauga shall have the
option to perform these services. If Watauga exercises the option to perform the meter reading
and billing services, Watauga shall pay NRH a reduced amount equal to $140,000 instead of
$250,000.
9.3 Revenue generated from accounts in the Franchise Area and collected by NRH
shall be paid to Watauga as required by the Facilities Operating Agreement. On the Date of
Transfer, Watauga shall pay NRH the sum of $150,000 as settlement for the garbage
administration fee for two years. If Watauga does not exercise the option concerning meter
reading and billing services contained in Section 9.2, Watauga shall pay NRH $75,000 at the
beginning of the third year of the Transition Period as settlement for the garbage administration
fee.
9.4 Watauga shall bear the costs incurred in disconnecting the Franchise Area System
from NRH's water and wastewater system in accordance in the plan described in Section 13.1
of this Agreement.
SECTION 10: CERTIFICATES OF CONVENIENCE AND NECESSITY
10.1 NRH shall file an application with the Texas Natural Resource Conservation
Commission seeking transfer of the applicable portion of NRH's Certificate(s) of Convenience
and Necessity ("CCN") to Watauga. NRH shall provide any required notices and shall diligently
prosecute its application to conclusion.
1212\OOd002.CLN 13
10.2 Watauga shall cooperate and assist with the filing and prosecution of NRH's
application to transfer the CCN.
SECTION 11: FIRE HYDRANTS
11.1 Watauga agrees to allow the NRH Fire Department to utilize, without charge, fire
hydrants located in the city limits of Watauga within 200 feet of the common boundary of
Watauga and NRH along Rufe Snow, for fire protection of property within the NRH city limits
in that vicinity; provided, however, that this provision shall never be construed as a guarantee or
warranty that water pressure will be sufficient at such fire hydrants or that Watauga will be
responsible for fire protection within the area described in this section.
11.2 NRH agrees to allow the Watauga Department of Public Safety to utilize, without
charge, fire hydrants located in the city limits of NRH within 200 feet of the common boundary
of Watauga and NRH along Rufe Snow, for fire protection of property within the Watauga city
limits in that vicinity; provided, however, that this provision shall never be construed as a
guarantee or warranty that water pressure will be sufficient at such fire hydrants or that NRH will
be responsible for fire protection within the area described in this section.
SECTION 12: CONTRACTS WITH THE CITY OF FORT WORTH
12.1 Potable water will be provided to serve the Franchise Area pursuant to the Fort
Worth Water Contract. If, for any reason, Fort Worth imposes any type of penalty, charge or
surcharge in order to accommodate this concept of resale by NRH, such penalty, charge or
surcharge shall be passed on to Watauga.
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12.2 Watauga will contract separately with the City of Fort Worth for wastewater
service. The wastewater contract between Watauga and the City of Fort Worth shall be effective
as soon after the Date of Transfer as is practicable.
SECTION 13: STUDIES AND INVESTIGATIONS
13.1 Watauga shall develop and submit to NRH for review and approval a preliminary
plan for separating the Franchise Area System from NRH's water and wastewater systems, and
the approval by NRH will not be unreasonably withheld.
13.2 During the Transition Period, Watauga and NRH shall discuss and arrive at a
method for determining each city's share of demand charges arising under the Fort Worth
Contract. Until a method is determined, each City's share of demand charges shall be based upon
each City's proportionate use of water during the period in question.
13.3 Watauga and NRH intend to continue collecting community impact fees for their
water and wastewater systems after the Date of Transfer. Watauga and NRH shall share, on a
50/50 basis, the cost of a study to update the impact fees applicable in NRH and Watauga.
Watauga and NRH shall cooperate in selecting and hiring any consultants necessary for preparing
the impact fee study.
13.4 Watauga shall have the same review and supervision authority as NRH concerning
the Carter & Burgess, Inc. investigation being conducted in response to the U.S. Environmental
Protection Agency's (EPA) Administrative Order, Docket No. VI-96-1207, dated February 16,
1996, to the extent the investigation concerns the Franchise Area System. If Watauga decides to
seek EPA's reconsideration and amendment of Administrative Order, Docket No. VI-96-1207,
1212\000-002.CLN ~ 15
as it relates to the Franchise Area System, NRH shall provide Watauga any necessary
information. NRH will pay for the total cost of the response to the original EPA Administrative
Order and the initial phases of testing and study from surcharges to be levied on all users of the
wastewater system. NRH will calculate its surcharge to completely pay for the initial study and
testing by levying the surcharge for a period not to exceed eighteen (18) months. At the Date
of Transfer, Watauga may, at its option, pay its remaining portion of the surcharge in a lump sum
payment to NRH. In the event the final cost of the response and the Carter & Burgess, Inc.
investigation is more or less than anticipated, an adjustment to the surcharge shall be made.
13.5 During the Transition Period, NRH shall propose an agreement for the handling
of an emergency connection between the water supply systems owned by the cities to be
applicable when the water supply systems are separated.
SECTION 14: EFFECTIVE DATE OF TRANSFER OF FACILITIES
14.1 NRH and Watauga agree that the Date of Transfer of ownership of the Franchise
Area System shall occur between October 1, 1996 and January 1, 1997, and shall be the day on
which NRH transfers ownership and Watauga pays the purchase price as provided in this section.
The transfer of ownership will be effected by an instrument of conveyance from NRH, in which
NRH will quitclaim all of the right, title, and interest it has in the real and personal property in
the Franchise Area System. NRH shall deliver the fully executed instrument of conveyance to
Watauga simultaneously with Watauga's payment of $9,200,000 pursuant to this Agreement. The
transfer of operation of the Franchise Area System shall occur as provided in the Facilities
Operating Agreement.
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SECTION 15: NRH'S REPRESENTATIONS. WARRANTIES. AND COVENANTS
15.1 NRH hereby represents and warrants as follows, which representations and
warranties shall be true and correct as of the date of execution of this Agreement and the Date
of Transfer and shall survive the Date of Transfer, and the truth of which representations and
warranties shall be a condition precedent to Watauga's obligation to close and complete the
transaction contemplated by this Agreement:
(A) NRH has, without the joinder of any other person or entity, the full right, power
and authority to sell and convey by quitclaim the Franchise Area System to
Watauga and to carry out the obligations of NRH hereunder, and no third party,
except as specifically set forth herein, has any interest in or right to acquire the
Franchise Area System.
(B) To the best knowledge of NRH, there is no condition existing with respect to the
Franchise Area System or any part thereof which violates any law, rule, regulation,
ordinance, code, order, decree or ruling of any city, state or federal governmental
agency or court.
(C) Except as referenced in Section 2 of this Agreement, there is no existing or
pending litigation, nor are there any known existing or pending claims,
condemnations or sales in lieu thereof, contracts of sale, options to purchase, or
rights of first refusal with respect to any portion of the Franchise Area System,
nor have any such actions, suits, proceedings, claims or other such matters been
threatened or asserted, save and except EPA Administrative Order VI-96-1207.
izi2~ooaoo2.ctty 17
(D) The party or parties executing this Agreement on behalf of NRH have been duly
authorized and are empowered to bind NRH to this Agreement.
(E) NRH will not, after the date of execution of this Agreement, without the express
prior written consent of Watauga, create or allow to be placed upon the Franchise
Area System or any part thereof any restrictions, encumbrances, liens, easements
or any other matters that would constitute an encumbrance upon the Franchise
Area System. Nothing herein shall be construed to prevent the issuance by NRH
of Revenue Bonds which are secured by the future revenues of the NRH water and
sewer system.
15.2 Each of the foregoing warranties and representations are true and correct as of the
date hereof and shall be true and correct as of the Date of Transfer. If any of the representations
or warranties contained herein are untrue or incorrect, NRH shall, at all times before the Date of
Transfer, use best efforts to make such representations or warranties true and correct and shall
take all action as may be necessary or appropriate in connection therewith.
15.3 As a continuing obligation, NRH agrees to indemnify, defend, and hold Watauga
harmless against all legal or administrative proceedings brought against Watauga, and all
demands, claims, fines, damages, liabilities, penalties, or costs of whatever nature occasioned by
the negligent or intentional activities of NRH or its employees or agents during its ownership
and/or operation of the property purchased by Watauga pursuant to this Agreement and arising
out of such ownership and/or operation or arising from any breach of any warranty and/or
representation contained in this Section.
i2 i2~ooo-ooz.ct.ty 18
SECTION 16: CASUALTY LOSS
16.1 All risk of loss or damage to the Franchise Area System shall remain upon NRH
prior to the Date of Transfer, except that this obligation does not include such loss or damage
caused by: (1) Watauga, its officers, agents or employees, or an independent contractor of
Watauga, in the course of disconnecting the Franchise Area System from the NRH system; or (2)
any negligent act or omission of Watauga, its officers, agents, employees or independent
contractors in the course of business prior to the Date of Transfer. Except as otherwise provided
in this section, in the event of loss, damage or destruction to the Franchise Area System prior to
the Date of Transfers, NRH shall, at NRH's expense, repair the same prior to the expiration of
six months after the Date of Transfer.
SECTION 17: MANDATORY MEDIATION PROVISIONS
17.1 Notwithstanding any other provisions of this Agreement, Watauga and NRH agree
that prior to either Party bringing suit for specific performance, injunction, or damages for the
alleged failure of the other Party to comply with any terms, conditions, or provisions of this
Agreement, this Agreement shall be submitted for mediation in accordance with this section.
17.2 In order to institute mediation, either Party may, on written notice to the other
Party, initiate non-binding mediation before a single mediator affiliated with Judicial Arbitration
and Mediation Service, Inc. ("JAMS") in Tarrant County, Texas, or another mediation service
mutually agreeable to the Parties. The Mediator shall be selected by agreement of the Parties
within thirty (30) days after either Party first requests mediation of the other. If a single mediator
cannot be agreed upon, then each Party shall select its own mediator from those on the approved
iziz~ooaoo2.c[.ty 19
list of the mediation service used; those two mediators will then select a third independent
Mediator who will conduct the mediation session(s).
17.3 Neither Party shall be excused from complying with any of the terms and
conditions of this Agreement because of any failure of the other Party upon any one or more
occasions to insist upon or to seek compliance with any such terms or conditions.
SECTION 18: GENERAL PROVISIONS
18.1 NOTICES. Any notices required to be given herein shall be deemed to have been
sufficiently given to either party for all purposes hereof if mailed by certified mail, postage
prepaid, addressed as follows:
TO CITY OF NORTH RICHLAND HILLS
City Manager
City of North Richland Hills
7301 N.E. Loop 820
North Richland Hills, Texas 76182-0609
TO CITY OF WATAUGA
City Manager
City of Watauga
7101 Whitley Road
Watauga, Texas 76148
or to such other respective address as the parties may designate from time to time in writing in
accordance with this notice provision.
18.2 GOVERNING LAW. This Agreement shall be governed and construed pursuant
to the laws of the State of Texas. All obligations herein shall be performable and all payment
shall be due and payable in Tarrant County, Texas.
18.3 INCORPORATION. The Preamble set forth before Section 1 of this Agreement
is hereby incorporated by reference as if set forth fully at this point.
iziz~ooaooz.cr.ty 20
18.4 ENTIRE AGREEMENT. This Agreement contains all commitments and
agreements of NRH and Watauga with respect to the subject matter hereof, and no verbal or
written commitments, other than the Joint Use Agreement or the Facilities Operating Agreement
shall have any force or effect if not contained herein. This Agreement may not be modified or
amended other than by a written instrument executed by Watauga and NRH.
18.5 SEVERABILITY. If any section, subsection, sentence, clause, phrase, term,
provision, condition, covenant or portion of this Agreement is for any reason held invalid or
unenforceable by any court of competent jurisdiction, the remainder of this Agreement shall not
be affected thereby but shall be deemed as a separate, distinct and independent provision, and
such holding shall not affect the validity of the remaining portions hereof, and each remaining
section, subsection, sentence, clause, phrase, term, provision, condition, covenant and portion of
this Agreement shall be valid and enforceable to the fullest extent permitted by law.
18.6 CAPTIONS AND CONSTRUCTION. All section titles or captions contained in
this Agreement shall not be deemed a part of this Agreement and shall not affect the meaning
or interpretation of this Agreement or any provision hereof. Both parties have participated in the
preparation of this Agreement so that this Agreement shall not be construed either more or less
favorably for or against either party.
18.7 TRANSFER BY QUITCLAIM. The parties agree that any term in the above and
foregoing agreement which calls for NRH to SELL, BARGAIN, ASSIGN, TRANSFER OR
CONVEY shall be construed as an assignment by quitclaim.
iziz~ooaooz.ct_ty 21
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 this day of .~(.1,1~I c! 1996.
CITY OF WATAUGA, TEXAS
By: _ O _ v
`~ , Ma o
ATTEST:
./ /~
,City Secretary
(SEAL)
CITY OF NORTH RICHLAND HII.LS, TEXAS
/=
By: ~ i~~
/f ,Mayor
By
ATTEST:
~'
ity Sec ary
(SEAL)
~ City Manager
inz~ooaooz.cuv 22
APPROVED AS TO FORM AND CONTENT:
B ~~ ~. K/~i~ -~1~w 7~- /_/Ark C ~:f7vkl
y ~/~irf Iy
ORDINANCE
GRANTING TO NORTH RICHLAND HILLS A FRANCHISE
F OR A PERIOD Or^ THIRTY FIVE YEARS FOR THE
OPERATION OF A WATER~IORKS AND SEWER SYSTEM
I~' THE TOWN OF WATAUGA AND ORDAINING OTHER
\/iATTERS RELATING TO THE SUR7ECT.
~~VHER~AS, fne Tarrant County Water Supply Corporation, which
provides water and se~arerage service to the Tovm of Watauga, i~ comprised
OI tha C'.j' V- ~.'Jr til Rtc::tand iiii~J, The To~fm of Richla:.d Ili11S, +l~C ~.itTjl
of Azle a.^.d Lakeside Village, all sound together by a joint ana mutual
contract which brought the aforesaid cor: oration (non-profit) into being; and,
~V:~EREAS, aithoug'r~ the Town of Watauga is not a ccnstitt~.ent
member or shareholder in the Tarrant County Water Supply Corpcratio.^.,
it is nevertheless vitally corcerred anc af:ected by sae functi:.::s •r.' said
corporatio„ vrit in its r :anicipal 'ccundaries; ard,
G,T=;EnEAS, North .=.ich'_anc :ills i:; prepsred to accuire, on behal:
of the Tovm cf 'vlatauga, the existing waver Gazd seure;° -y::tem n,;w operated
within. the Towr. of Watauga by Tarrant County Water Supp'_y •'_,orporacion;
and,
tJ,rEREAS, all water arc se~t~er pre;,arties cf Corparatic~. G:e
ccvered by a si r~gle indenture of :•~:^•tgare and ~ee~~ c. ' rust snd S~^pl•.:z;er~t::
thereto, to secse the payment c? Cerporatior.'s cL.'atanding bonds in t'r.e
amount of $5, 750, OOC. 00; and,
WHEREAS, said Indenture of Mortgage and Deed of Trust, including
Supplements, provides that when said bonds in said sum are paid i^ full
( the last mataring bonds being dce in tr.e year 1995, A. D. )that title to
EXHiBtT ~
said water and sewer or water or sewer properties, as the case may be,
and those adjacent thereto shall revert to and be owned by said constituent
member munucipal corporations individually; and,
~V?•iFREAS, North Richland Hills has agreed with all other municipal
corporations herein named to fund and pa;- at1 ct the Corporation's out-
standing bonds, and all other municipal corporations have agreed that
upon such payment of said 'ponds that North Richland Hills would thereupon
become the owner of a1i properties of Corporation wherever situated; and,
~~~ ~~R~AS, it is for the benefit of the Tcwn of Watauga and is
citizens ghat `,ort ;Richland 'Hills arnish water service to its citi~tns:
3F ?T JRl)~!?+.J BY THE ^_'C't.'lvT COUNCIL OF THE TOUN
OF WATAUG_S, TF~AS, '.' AT:
Sec~ior_ 1.
1 Ge 10VI ; Of ..c:2C ja, :2Xc~ '.l:~rclnaI:2r SOT :etlmry5 Ca1'.ed " i~0'1r.1"),
hereby ~__•ant:. is consent tc the cse c° itsrresent e.rd future streets, alleys,
highways and public grounds co the C~*_y of Nort}~ :tichland -ri'.1s, a rnunicipai
Corpcxa~ion Cnereinafter called "lvtZH"), within the corporate limits of
u~atavga, for the purpose of constructing, maintaining 2.rd cperatinc; its
water (and se~cer) system, including its mains, pipes, conduits, and other
distributing appliances necessary and proper fcr the conducting any? furnish-
ing of wa~er (and sewer) service for cublic snd private use- to s2.id Town
aria i ~S i^ f:~b l`cntS.
Section 2.
The tam hereof shall be for a period of thirty-five (3~) years, or
until all bonds issued by the NRH and as subsequently refn.*~ded or refiManced
have been paid and retired.
Section 3.
X11 mains, lines and appliances shall be so constructed as to not
unreasor.2.b1y i:,terfere witn the traffic on streets and alleys, and such
EXNi~lY ~
system shall be laid not less than eighteen (lil) inches under the s~:x*'ace
of the street. A11 said mains and appurtenances shall be instilled and main-
twined in a good workmanlike manner.
Section 4.
The NRH agrees to restore any street or other public place which
it is necessary to break or open for the erection, construction, extension
or maintenance of its system to its former condition. i^ accordance with the
requirements of thy. ordinances of :ne Tuwn. :1Ra :ssun:es sll Liability
which may be occasioned as a result of the breaki:: or opening of a :;:
street or public place and the failure to properly restore ::a.-ne,_nd •:..
this connection t e NRH will hold and save the Tovm of ~~~atauga harmless
fror_~ any and all claims, causes of action or damages resulting from,4 or in
connection with, the opening or breaking of any of said straets or publ:;;
places.
Section 5.
Li lieu of all other ices, 1lcenses and ta~:es ~: 311 kind a::~_' c^~racter
on said water ar_d sewer system, saving and excapti.rg any ad valorem tax_
. , .,
now or at a.-~y time hereafter levied by the Town o*' ~ila:auga, NR.Ii shall
pay to the Towr_ an amount equal tc two per c. =.~a of the gross receipts
,~, ..
received by NRH from the sale of water an~~ from. sewer service charges to
..
its domestic and commercial customers within the City limits of said Town;
said amount shall be paid on or before Janu~~y 15 and July 15 of each year
covering said amount due daring the six-mcr::hs perioc prier tc trio first day
of January and July, respectively. Said 1vfZH, upon. the payment of said moneys,
:.hall file with the Tovm Secretar y a swcr ^ statement showin.J the gross
rECeipts fiom_ the sale o: water (ana of the sewer service charges) to its
. .;•
domestic and commercial users vrithin the Ciry limits of said Town for the
respective periods of time covered 'cy said payment. '
As soon alter the close of each operating year as may reascnably be
done the NRH shall have the books, records and accounts of t'ne Corporation
~HlRIT ~ audited by an independent certified public acccurtant or accounting firm and
small file a CO;`V O Such ailClt ~.xliCti": th? 10'J,~'1 Secreia_,~, and t^O `rOl"v?? t)y itS
agents, engineers, accountants and attorneys shall have the right at all
reasonable times to examine and inspect the property, books and records
of NRFi.
Section 6.
N-RH shall not charge rates for water and sewer services in amounts
that will be more than that sufficient to pay the cost of operating and main-
taining the ~arater (and sewer) system; to pay the interest on the bonds issued
by NRH as such comes due; to pay the principal of such bonds as such mature
and establish a •siric'_ng fund therefor; to set aside the amounts rewired by
the indenture cf trusi, or ot::er instruments securing such bonds, tc be placed
in the customary reserve funds established by such indenture or other in-
struments; to pay the amount to the Town required by Section 5 hereof; and
to accommodate the grov~th of the Town AND TO SP.RVICE T?,RRITORIF,S TAKEN
IN BY EXTENSIONS OF BOIINDRIFS AND ANNF~XATIONS.
Section 7.
The Towr. of ~,~iatauga shall have the option to purchase from \'RH
said water and sewer system at any time, the price bayed upon engineering
studies at the time o purchase or as otherwise agreed upon between the
parties, taki:~g into consideration any penalties or added expenses that may
occur in said purchase.
Section 8.
The b'rarchise herein granted shall never be carried on the bc;oks
of NF~H at a value in excess of One ($1.00) Dollar, nor shall any value be
attached t?:ereto °n excess of said su:n for gray purpcse.
SECTION 9
Anal at ne time shall the customers residing is
the T•wn of Watauga be charged ~ rate on water and sewage ex-•
ceeding the rates charted the customers residing in N•rth
2lchland Hills. '
_ -~ - ~H161T ~
..,
Section 10
This ordinance sha11 become effective upon its acceptance by
NRH.
PASSED AND APPROVED this W DAY OF APRIL 1971
~~ ~
iGIA'~'~R of he ~ovm of Watauga, eta
ATTEST: '
~ ~r~~1~t/'4
TOWN SEC: ~ETARY of the Town
of Watauga, Texas
THE STATE OF TEXAS Y , .
COUNTY OF TARRANT I
I, ttia u;ldersigned Town Secretary of the Town of Watauga, Texas,
3o hereby certify that the foregoing is a true, full, and correct copy o: 2n
Ordinance passed by tha To~tn Council of the Tewn cf Watauga, Texas, on
:he ~ day of APRIL' ~ 1971 granting to the City of North Richland
Sills (NRH), a municipal corporation, sewer franchise, said Ordinance
Being duly of record in the minutes of the said Town Council.
EXECUTED under m
~f ~`.-APBI~ .1971 ~-~
'EXHIBIT ~
~.y..~ r.XrjC~..
y hand and seal of said Town this the ~ day
. ~ /
Town Secretat~, Town of Watauga, Texas "'
,. ;' * . .
NOW COMES the City of North Richland Hills, a municipal
corpcration, and accepts all~the terms and conditions of the above
Ordinance and agrees to aside by and be bound by all the terms
and conditions of said Orainance.
CITY OF NORTH RICHLAND HILLS,
TEXAS
3y: ~! tiC~~~~~/iYI
Mayor Pro Tem
ATTEST:
~.~~~~-
t
/Cit Secret~.ry
THE STATE OF TEXAS i
COUNTY OF TARR.?NT I
BEFORE ME, the undersioned auth:.riry, ~ this day personally
appeared Dick Faram ,who, after being duly sworn by me, deposes
and states 'hat he. has affixed his signature to the foregoing instrument for
the purposes and consideration and in the capacity therein stated.
SUBS.CrZIBED AND S':~IORN TO before me by the said Dick
Faram this 29 day of April 1971.
Notzry Public in and for Tarrant
Couiib,~, Texas
~XX~I~iT ~
NO. 236-155408-94
THE CITY OF WATAUGA, TEXAS § IN THE DISTRICT COURT
V. § 236TH JUDICIAL DISTRICT
THE CITY OF NORTH RICHLAND §
HILLS, TEXAS § TARRANT COUNTY, TEXAS
JOINT MOTION TO DISMISS WITH PREJUDICE
TO THE HONORABLE JUDGE OF SAID COURT:
The City of Watauga, Texas, Plaintiff, the City of North Richland Hills, Defendant, and
Raymond Watson, James K. and Jane G. Biggs, Susan Cross Cornell (for Lee Douglas Cornell),
Patricia A. Foffum, Gregg A. Fusazo, Debra Kirkham, Myron Krom, John W. Langford, Lloyd
McGhee, Rob McLellan, Martha Nickell, Kevin Pearson, Travis Ratliff, Robert F. Rigamonti,
Patricia C. Ritthaler, and Ethel B. Schwartz, Intervenors and file this Motion to Dismiss with
Prejudice and in support thereof would respectfully show as follows:
Plaintiff, Defendant, and Intervenors have fully and finally compromised and settled all
matters of fact, disputes, and things in controversy between them. Plaintiff, Defendant, and.
Intervenors request that the Court enter an order dismissing this case in its entirety, including any
counterclaims, cross claims, and claims in intervention, with prejudice to the rights of any party
to refile the action or any part of it, and that all costs of court be taxed to the party incurring
same.
MOTION TO DISMISS WITH PREJUICE
Page 1
1212\000-029.PLD
EXHIBIT B
Respectfully submitted,
LLOYD, GOSSELINK, FOWLER,
BLEVINS & MATHEWS P.C.
111 Congress Avenue
Suite 1800
Austin, Texas 78701
(512) 322-5800
FAX (512) 472-0532
LAMBETH TOWNSEND
State Bar No. 20167500
RICHARD L. HAMALA
State Bar No. 08810750
LAW OFFICES EVANS, GANDY,
DANIEL & MOORS
Sundance Square
115 West Second Street
Suite 202
Fort Worth, Texas 76102
(817) 332-3822
FAX (817) 332-2763
MARK G. DANIEL
State Bar No. 05360050
ATTORNEYS FOR CITY OF WATAUGA
MOTION TO DISMISS WITH PREJUICE
Page 2
1212\000-029.PLD
EXHIBIT B
REX McENTIRE
State Bar No. 13590000
P.O. Box 820609
7301 N.E. Loop 820
North Richland Hills, Texas 76182-0609
(817) 581-5501
FAX (817) 581-5516
ATTORNEY FOR DEFENDANT,
CITY OF NORTH RICHLAND HILLS, TEXAS
LAW OFFICES OF EARL RUTLEDGE, P.C.
1845 Precinct Line Road
Suite 209
Hurst, Texas 76054
(817) 577-2332 metro
FAX (817) 577-1630
EARL RUTLEDGE
State Bar No. 17641000
ATTORNEY FOR INTERVENORS
MOTION TO DISMISS WITH PREJUICE
Page 3
1212\000-029.PLD
EXHIBIT B
NO. 236-155408-94
THE CITY OF WATAUGA, TEXAS § IN THE DISTRICT COURT
V. § 236TH JUDICIAL DISTRICT
THE CITY OF NORTH RICHLAND §
HILLS, TEXAS § TARRANT COUNTY, TEXAS
ORDER OF DISMISSAL WITH PREJUDICE
On this day came on for consideration the Joint Motion to Dismiss with Prejudice filed
by Plaintiff, Defendant, and Intervenors in this case. The parties have announced that they have
fully compromised and settled this lawsuit and requested that this case be dismissed in its entirety
with prejudice. The Court, after having considering the Motion, finds that the Motion should be
in all things GRANTED.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that the above-entitled
and numbered cause, including any counterclaims, cross claims, and claims in intervention filed
therein, be, and the same hereby aze, DISMISSED WITH PREJUDICE TO THE RIGHTS OF
ANY PARTY TO REFILE THE ACTION OR ANY PART OF IT.
IT IS FURTHER ORDERED that all court costs be taxed against the parties
incurring same.
SIGNED this day of , 1996.
JUDGE THOMAS LOWE
ORDER OF DISMISSAL WITH PREJUDICE
Page 1 12121000-030.PLD
EXHIBIT B
APPROVED AS-TO-FORM:
LLOYD, GOSSELINK, FOWLER,
BLEVINS & MATHEWS, P.C.
111 Congress Avenue, Suite 1800
Austin, Texas 78701
(512) 322-5800
FAX (512) 472-0532
LAMBETH TOWNSEND
State Baz No. 20167500
RICHARD L. HAMALA
State Bar No. 08810750
LAW OFFICES EVANS, GANDY,
DANIEL & MOORE
Sundance Squaze
115 West Second Street
Suite 202
Fort Worth, Texas 76102
(817) 332-3822
FAX (817) 332-2763
MARK G. DANIEL
State Baz No. 05360050
ATTORNEYS FOR PLAINTIFF,
CITY OF WATAUGA, TEXAS
ORDER OF DISMISSAL WITH PREJUDICE
Page 2
REX McENTIRE
State Baz No. 13590000
P.O. Box 820609
7301 N.F,. Loop 820
North Richland Hills, Texas 76182-0609
(817) 581-5501
FAX (817) 581-5516
ATTORNEY FOR DEFENDANT,
CITY OF NORTH RICHLAND HILLS,
TEXAS
LAW OFFICES OF EARL RUTLEDGE,
P.C.
1845 Precinct Line Road, Suite 209
Hurst, Texas 76054
(817) 577-2332 metro
FAX (817) 577-1630
EARL RUTLEDGE
State Baz No. 17641000
ATTORNEY FOR INTERVENORS
1212\000-030.PLD
EXHIBIT B
NO. 236-155408-94
THE CITY OF WATAUGA, TEXAS § IN THE DISTRICT COURT
V, § 236TH JUDICIAL DISTRICT
THE CITY OF NORTH RICHLAND § .
HILLS, TEXAS § TARRANT COUNTY, TEXAS
JOINT MOTION TO DISMISS WITH PREJUDICE
TO THE HONORABLE JUDGE OF SAID COURT:
The City of Watauga, Texas, Plaintiff, the City of North Richland Hills, Defendant, and
Raymond Watson, James K. and Jane G. Biggs, Susan Cross Cornell (for Lee Douglas Cornell),
Patricia A. Foffum, Gregg A. Fusaro, Debra Kirkham, Myron Krom, John W. Langford, Lloyd
McGhee, Rob McLellan, Martha Nickell, Kevin Pearson, Travis Ratliff, Robert F. Rigamonti,
Patricia C. R.itthaler, and Ethel B. Schwartz, Intervenors and file this Motion to Dismiss with
Prejudice and in support thereof would respectfully show as follows:
Plaintiff, Defendant, and Intervenors have fully and finally compromised and settled all
matters of fact, disputes, and things in controversy between them. Plaintiff, Defendant, and
Intervenors request that the Court enter an order dismissing this case in its entirety, including any
{ ~
counterclaims, cross claims, and claims in intervention, with prejudice to the~igfits o~a~iy party
a~~
a, j :'
to refile the action or any part of it, and that all costs of court be taxed tQ~-the part ncurr~gj,t
~ V ~ I..,,
same. ~ ~ ~. r~RT
~ ~r°0
..
'. cn ~
v
MOTION TO DISMISS WITH PREJUICE
Page 1 1212\000-029.PLD
Respectfully submitted,
LLOYD, GOSSELINK, FOWLER,
BLEVINS & MATHEWS P.C.
111 Congress Avenue
Suite 1800
Austin, Texas 78701
(512) 322-5800
FAX (512) 472-0532
_ LAMBETH TOWNSEND
- ~ State Bar No. 20167500
RICHARD L. HAMALA
State Bar No. 08810750
LAW OFFICES EVANS, GANDY,
DANIEL & MOORE
Sundance Square
115 West Second Street
Suite 202
Fort Worth, Texas 76102
(817) 332-3822
FAX (817) 332-2763
MARK G. DANIEL
State Bar No. 05360050
ATTORNEYS FOR CITY OF WATAUGA
MOTION TO DISMISS WITH PREJUICE
Page 2 1212\000-029.PLD
REXI~vicENTIRE
State Bar No. 13590000
P.O. Box 820609
7301 N.E. Loop 820
North Richland Hills, Texas 76182-0609
(817) 581-5501
FAX (817) 581-5516
ATTORNEY FOR DEFENDANT,
r CITY OF NORTH RICHLAND HILLS, TEXAS
LAW OFFICES OF EARL RUTLEDGE, P.C.
1845 Precinct Line Road
Suite 209
Hurst, Texas 76054
(817) 577-2332 metro
FAX (817) 577-1630
~~
EARL RUTLEDGE
State Bar No. 17641000
ATTORNEY FOR INTERVENORS
MOTION TO DISMISS WITH PREJUICE
Page 3 1212\000-029.PLD
M
c~o~~
N0.236-155408-94
THE CITY OF WATAUGA, TEXAS § IN THE DISTRICT COURT
V, § 236TH JUDICIAL DISTRICT
THE CITY OF NORTH RICHLAND §
HILLS, TEXAS § TARRANT COUNTY, TEXAS
ORDER OF DISMISSAL WITH PREJUDICE
On this'day came on for consideration the Joint Motion to Dismiss with Prejudice filed
by Plaintiff, Defendant, and Intervenors in this case. The parties have announced that they have
fully compromised and settled this lawsuit and requested that this case be dismissed in its entirety
with prejudice. The Court, after having considering the Motion, finds that the Motion should be
in all things GRANTED.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that the above-entitled
and numbered cause, including any counterclaims, cross claims, and claims in intervention filed
therein, be, and the same hereby aze, DISMISSED WITH PREJUDICE TO THE RIGHTS OF
ANY PARTY TO REFILE THE ACTION OR ANY PART OF IT.
IT IS FURTHER ORDERED that all court costs be taxed against the parties
incurring same. /
SIGNED this (~ da of ~~~ , 1996.
Y
v
JUI~ THOMAS LOWS
ORDER OF DISMISSAL WITH PREJUDICE
Page 1 1212\000-030.PLD
A
APPROVED AS TO FORM:
LLOYD, GOSSELINK, FOWLER,
BLEVINS & MATHEWS, P.C.
111 Congress Avenue, Suite 1800
Austin, Texas 78701
(S 12) 322-5800
FAX (512) 472-0532
LAMBETH TOV~NSEND
State Baz No. _20167500 '
RICHARD L. HAMALA
State Bar No. 08810750
LAW OFFICES EVANS, GANDY,
DANIEL & MOORE
Sundance Square
115 West Second Street
Suite 202
Fort Worth, Texas 76102
(817) 332-3822
FAX (817) 332-2763
MARK G. DANIEL
State Bar No. 05360050
ATTORNEYS FOR PLAINTIFF,
CITY OF WATAUGA, TEXAS
ORDER OF DISMISSAL WITH PREJUDICE
Page 2
FAX McF{~TIRE
State Baz No. 13590000
P.O. Box 820609
7301 N.E. Loop 820
North Richland Hills, Texas 76182-0609
(817) 581-5501
FAX (817) 581-5516
ATTORNEY FOR DEFENDANT,
CITY OF NORTH RICHLAND HILLS,
TEXAS
LAW OFFICES OF EARL RUTLEDGE,
P.C.
1845 Precinct Line Road, Suite 209
Hurst, Texas 76054
(817) 577-2332 metro
FAX (817) 577-1630
EARL RUTLEDGF~
State Bar No. 17641000
ATTORNEY FOR INTERVENORS
1212\000-030.PLD
a
~Xhr6~f ~
,Qe,SDlutior /U0. ~~- ~~
FACILITIES OPERATING AGREEMENT,
BETWEEN THE CITY OF WATAUGA
AND THE CITY OF NORTH RICHLAND HILLS,
THE CITY OF WATAUGA, TEXAS, ("Watauga") and THE CITY OF NORTH
RICHLAND HILLS ("NRH"), both being Texas home-rule municipal corporations and together
sometimes referred to herein as the Parties, enter into this Facilities Operating Agreement (the
"Agreement"). The purpose of this Agreement is to establish the method by which the
responsibility to operate and the obligation to provide services in relation to certain Water and
Wastewater Facilities will be transferred to Watauga pursuant to the Settlement and Purchase
Agreement executed by the Parties simultaneously with this Agreement.
PREAMBLE
WHEREAS, the Parties have entered into a Settlement and Purchase Agreement conveying
ownership of certain Water and Wastewater Facilities from NRH to Watauga; and
WHEREAS, the Parties desire to provide for an orderly transfer of the operation of such
Water and Wastewater Facilities by allowing NRH to continue to operate and maintain the
Facilities and bill Facilities Customers for a period of time after the Facilities are purchased by
and transferred to Watauga,
NOW, THEREFORE, in consideration of the mutual promises, covenants, benefits, and
releases set forth herein, Watauga and NRH contract and agree as follows:
l2! 2!000-003.CLN 1
i
SECTION 1. DEFINITIONS
For the purposes of this Agreement, the following words, terms, phrases, and their
derivations shall have the meanings set forth below. When not inconsistent with the context,
words used in the present tense include the future tense, words in the plural number include the
singular number, and words in the singular number include the plural number. The word "shall"
is always mandatory and not merely directory.
1.1 "Date of Transfer" means the date at which ownership of the Facilities is
transferred from NRH to Watauga pursuant to Section 14.1 of the Settlement and Purchase
Agreement.
1.2 "Facilities" or "Water and Wastewater Facilities" mean the water and wastewater
facilities transferred from NRH to Watauga pursuant to the Settlement and Purchase Agreement
and include, but are not limited to, all water and wastewater transmission mains, distribution and
collection lines, facilities, appurtenances, easements, special purpose rights of way, improvements,
fixtures, and attached personal property (such as wells, pumps, pipes, valves, electrical
connections, storage tanks, meters, meter vaults and fire hydrants and any and all appurtenances
thereto) located within the city limits of Watauga and the wastewater transmission main extending
from the southern city limit of Watauga to the point of entry into the City of Fort Worth's
wastewater system. For the purposes of this Agreement, the term does NOT include facilities
located within the city limits of Watauga that were NOT transferred to Watauga pursuant to the
Settlement and Purchase Agreement as listed below:
(1) The present water connection with the City of Fort Worth located at the NRH #2
Booster Pump Station, 5101 Western Center Blvd. (Saginaw-Watauga Road).
1212!000-003.CLN
2
(2) North Richland Hills Booster Pump Station #2 located at 5105 Western Center
Blvd.
(3) The 2,000,000 gallon ground storage facility located at 5105 Western Center Blvd.
(4) The real property upon which (1), (2), and (3 ), are situated.
(5) Any interest owned by NRH in the water line and easement from the Fort Worth
water source at Beach Street to the station at 5105 Western Center Boulevard.
(6) The Watauga Road Water Lines consisting of the following:
Approximate
Length
a) 24" Water Line from Pump Station south to
Watauga Road 400 feet
b) 16" Water Line from the 24" Water Line connection
to Denton Highway 2,550 feet
c) 12" Water Line from Denton Highway to Saramac Road 8,149 feet
d) 8" Water Line from Saramac Road to Stardust Road 1,830 feet
e) 12" Water Line from Stardust Road to Rufe Snow Drive 2,519 feet
1.3 "Facilities Customers" means those utility customers located within the Service
Area that are provided water and wastewater service by the Facilities that are the subject of this
Agreement. The term includes all present and future customers within the Service Area unless
otherwise indicated.
1.4 "Operate" or "Operations" means to manage, inspect, maintain, and repair the
Facilities. The term includes, but is not limited to, the provision of standby personnel for
emergencies; routine Facilities inspections, including those mandated by all applicable statutes,
12121000-003.CLN 3
ordinances, and regulations; compliance with reporting requirements of regulatory agencies; and
the maintenance and repair of the Facilities.
1.5 "Revenues" means all amounts of money collected by NRH from Facilities
Customers during the Transition Period relating to water and wastewater service including but
not limited to water and wastewater fees, drainage utility fees, service connectldisconnect fees,
delinquent billing fees, donations, garbage fees, and any other special fees assessed on Facility
Customers except the surcharge for the cost of the response and investigation relating to U.S.
Environmental Protection Agency's Administrative Order, Docket No. VI-96-1207.
1.6 "Service Area" means the area located within the city limits of Watauga that
contains the Water and Wastewater Facilities transferred to Watauga from NRH pursuant to the
Settlement and Purchase Agreement. The Service Area includes all customer accounts previously
served by NRH that have been transferred to Watauga in accordance with the Settlement and
Purchase Agreement.
1.7 "Service Fee" means those fees paid by Watauga to NRH as set forth in Section
6 of this Agreement in consideration of NRH's continued Operation of the Facilities and
continued billing and collection from Facilities Customers during the Transition Period.
1.8 "Settlement and Purchase Agreement" means the document entitled "Settlement and
Purchase Agreement Between the City of Watauga and the City of North Richland Hills"
executed by Watauga and NRH simultaneously with this Agreement. The Settlement and
Purchase Agreement is the instrument by which Watauga and NRH contracted for the sale of the
Water and Wastewater Facilities that are the subject of this Agreement.
1 2 1 21000-00 3.CLN 4
1.9 "Transition Period" means three years from the Date of Transfer. During this three
year period, NRH and Watauga intend to implement an orderly transition of the Operations of
the Facilities purchased by Watauga from NRH as provided in this Agreement.
SECTION 2. TERM
2.1 This Agreement will remain in full force and effect for a period of three years
from the Date of Transfer.
SECTION 3. FACILITIES INSPECTION. OPERATION. MAINTENANCE. AND REPAIR,
3.1 NRH shall Operate the Facilities on behalf of Watauga for the first two years of
the Transition Period beginning from the Date of Transfer. During this two year period, NRH
shall be obligated to deliver water and wastewater services to Facilities Customers in accordance
with the Customers' needs and demands.
3.2 In the event that NRH is unable to repair and maintain the Facilities in proper
working condition during the first two years of the Transition Period as required by Section 3.1
because of a catastrophic event, Watauga may, upon reasonable notice, perform maintenance and
repairs by use of either Watauga's employees, independent contractors, or both. NRH shall
reimburse Watauga for the cost of all labor, materials, equipment, and supplies used in
performing maintenance and repairs. "Repair maintenance" as used herein does not include
maintenance required by EPA AO Docket No. VI96-1207 or an EPA order resulting from the
studies done pursuant to EPA AO VI96-1207.
1212/000-003.CLN 5
3.3 On the first day of the third year of the Transition Period, Watauga will take over
responsibility for the Operation of the Facilities from NRH. During the third year of the
Transition Period, NRH will not be responsible for Operations of the Facilities.
3.4 Watauga shall be responsible for collection of water and sewer connection fees
including deposits and all water and sewer impact fees at the time of permitting in the City of
Watauga. Collection of any special costs will also be the responsibility of Watauga. The
following items will be delivered to NRH by Watauga concerning these fees:
(a) A copy of the receipt for each customer's payment will be delivered to the NRH
Utility Billing Department. These receipts will account for all monies paid by the
customer concerning water and sewer service.
(b) Separate accounting of the City of Fort Worth access fees collected along with
payment will be delivered to the Finance Director by the 10th day of the month
following their collection.
(c) The cost of the water meter will be paid by Watauga to NRH including any
special costs associated with the installation of the service. Special costs shall
include such charges as contract charges for boring under streets and tapping of
concrete steel cylinder pipe.
3.5 The work of maintaining and operating the Facilities shall be done under the
regulations and policies of the NRH Public Works Department.
3.6 If the repair, maintenance, and/or operation of the Facilities requires the excavation
of any Rights-of--Way in Watauga, NRH shall replace and properly relay and repair the surface,
base, and landscape treatment of any sidewalk or Right-of--Way that may be excavated or
1212/000-003.CLN 6
damaged by reason of such maintenance, repair, and/or operation of the Facilities within a
reasonable time after completion of the work in accordance with existing standards of Watauga
in effect at the time of the work.
3.7 Except in an Emergency, NRH shall not excavate any Right-of--Way without first
notifying the Department of Public Works of Watauga. The Director of the Watauga Department
of Public Works or designee shall be notified as soon as practicable regarding work performed
under Emergency conditions, and NRH shall comply with any reasonable requirements of
Watauga for the restoration of the Rights-of--Way.
3.8 Watauga and NRH agree that their obligations hereunder shall include compliance
with the requirements made under all applicable and valid laws, and any rules and regulations
issued pursuant thereto, provided, however, that nothing contained herein shall be construed as
affording any rights, causes of action, or remedies to any person not a party to this Agreement.
3.9 Within 30 days after the last day of the second year of the Transition Period, NRH
shall provide Watauga with an updated set of all of the data, plans, and GIS system information
specified in Section 4.6 of the Settlement and Purchase Agreement. This information shall be
provided in hard copy and compatible computer media and shall include all available information
developed for the Facilities.
SECTION 4. BILLING
4.1 NRH agrees to read Facilities Customer meters and bill Facilities Customers during
the entire three year Transition Period. Provided, however, Watauga may exercise its option to
12121000-003.CLN 7
perform the meter reading and billing services during the third year of the Transition Period as
provided in Section 9.2 of the Settlement and Purchase Agreement.
4.2 During the Transition Period, NRH shall continue to bill Watauga customers on
the first billing cycle, which is currently the 7th day of the month.
SECTION 5. COLLECTION AND TRANSFER OF REVENUES
5.1 NRH agrees to collect Revenues from Facilities Customers, on behalf of Watauga,
during the Transition Period and transfer such Revenues on a monthly basis to Watauga less the
Service Fee provided in Sections 6.1 and 6.2 below. NRH's monthly transfer of Revenues to
Watauga will be made no later than the 10th day of the month following the month in which the
Revenues were collected. There shall be subtracted from the Revenues the cost of water and the
cost of sewer treatment and transportation paid to Fort Worth.
5.2 NRH shall keep accurate books of accounting concerning its collection of
Watauga's Revenues.
5.3 Watauga shall have the right and privilege by and through its auditor or other
persons designated by it to freely examine the books, vouchers, and records maintained by NRH
at any reasonable time upon request, for any reason, including without limitation, to determine
that correct amounts of Revenue are transferred to Watauga.
5.4 In the event Watauga determines that NRH has underpaid amounts owed to
Watauga, Watauga shall promptly notify NRH.
12 t Z/000-003.CLN
8
SECTION 6. SERVICE FEES PAID BY WATAUGA
6.1 Watauga agrees to pay NRH $1,500,000.00 per year for the first two years of the
Transition Period, payable in monthly installments of $125,000.00. Such monthly installments
shall be deducted from NRH's monthly transfer of Revenues collected on behalf of Watauga as
provided in Section 5.1 above.
6.2 Watauga agrees to pay NRH $250,000.00 during the third year of the Transition
Period, payable in monthly installments of $20,833.33, unless the option provided in Section 9.2
of the Settlement and Purchase Agreement is exercised. If the option is exercised, Watauga shall
pay NRH $140,000 during the third year of the Transition Period in equal monthly installments.
Such monthly installments shall be paid by Watauga to NRH by the 15th day of each month.
6.3 In the event that NRH's cost of providing the services to be performed by NRH
under this Agreement exceed the Service Fees to be paid to NRH by Watauga, NRH shall not
be entitled to any additional compensation and will remain obligated to perform all of the services
provided under the terms of this Agreement.
SECTION 7. CUSTOMER SERVICE, ACCOUNTS, AND SECURITY DEPOSITS,
7.1 NRH shall maintain all Facilities Customer accounts and security deposits during
the Transition Period or until Watauga exercises the option to perform the meter reading and
billing services as provided in Section 9.2 of the Settlement and Purchase Agreement. NRH shall
endeavor to settle any Facilities Customer disputes regarding amounts owed to NRH for service
provided by NRH prior to the Date of Transfer.
1212/000-003.CLN g
7.2 On the last day of the Transition Period or at the time Watauga exercises the
option provided in Section 9.2 of the Settlement and Purchase Agreement, NRH shall transfer all
Facilities Customer accounts and security deposits to Watauga. NRH may retain a customer's
security deposit to the extent such deposit reimburses NRH for outstanding payments due NRH
for services provided to such customer by NRH prior to the Date of Transfer.
SECTION 8. FACILITIES INSURANCE
8.1 NRH shall be liable for claims arising from its negligence in operation of the
facilities during the first two years of the transition period.
SECTION 9. GENERAL PROVISIONS.
9.1 NOTICES. Except the notice required by Sections 3.2 and 3.7 of this Agreement,
any notices required to be given herein shall be deemed to have been sufficiently given to either
party for all purposes hereof if mailed by certified mail, postage prepaid, addressed as follows:
TO CITY OF NORTH RICHLAND HILLS,
City Manager
City of North Richland Hills
7301 N.E. Loop 820
North Richland Hills, Texas 76182-0609
TO CITY OF WATAUGA
City Manager
City of Watauga
7101 Whitley Road
Watauga, Texas 76148
or to such other respective address as the parties may designate from time to time in writing in
accordance with this notice provision.
12127000-003.CLN 10
9.2 PUBLIC PURPOSE; RESERVATION OF RIGHTS,. All of the regulations
provided in this Agreement are hereby declared to be for a public purpose and the health, safety,
and welfare of the general public. Any member of the governing body or city official or
employee of either Party charged with the enforcement of this Agreement, acting in the discharge
of his or her duties, shall not thereby be rendered personally liable; and is hereby relieved from
all personal liability for any damage that might accrue to persons or property as a result of any
act required or permitted in the discharge of said duties.
9.3 SEVERABILITY. If any section, subsection, sentence, clause, phrase, term,
provision, condition, covenant or portion of this Agreement is for any reason held invalid or
unenforceable by any court of competent jurisdiction, the remainder of this Agreement shall not
be affected thereby but shall be deemed as a separate, distinct and independent provision, and
such holding shall not affect the validity of the remaining portions hereof, and each remaining
section, subsection, sentence, clause, phrase, term, provision, condition, covenant and portion of
this Agreement shall be valid and enforceable to the fullest extent permitted by law.
9.4 ENTIRE AGREEMENT. This Agreement shall constitute the entire Agreement
between Watauga and NRH and may not be modified or amended other than by a written
instrument executed by both Parties.
9.5 INDEMNIFICATION. (a) To the extent allowed by law, NRH shall indemnify
and hold Watauga harmless against all claims, causes of action, costs, expenses (including
reasonable attorney fees) and damages to persons or property, to the extent proximately caused
by the negligence or willful misconduct of NRH's officers, employees or agents arising directly
or indirectly out of the Operation of the Facilities during the Transition Period. This duty to
1 2 1 21000-0 0 3.CLN 11
indemnify only applies where, and to the extent, NRH's negligence or willful misconduct is either
the sole or a contributing cause of the injury, death or damage. It does not extend to any portion
of any injury, death or damage caused by either the sole or contributing negligence or intentional
act or omission of Watauga or any third party under the control of Watauga. Watauga shall give
written notice to NRH within fifteen (15) days of receipt by Watauga of any claim against
Watauga that might give rise to a claim based on the indemnity provided herein, stating the
nature and basis of the claim and the amount thereof. Watauga shall have the sole right and
authority to determine the disposition of any action, suit, claim or proceeding brought against it,
provided that Watauga in exercising its rights and discharging its obligation under this indemnity,
shall at all times act in good faith and shall settle, compromise or dispose of such actions, suits,
claims or proceedings as if it were ultimately liable with respect thereto. However, in the event
any action, suit or proceeding is brought with respect to which NRH may have liability under the
indemnity provided herein, NRH shall have the right, without prejudice to Watauga's rights
hereunder, at its sole expense, to be represented by counsel of its own choosing and with whom
counsel for Watauga shall confer in connection with the defense of any action, suit or proceeding.
In such a case, each party shall make available to the other party, and its counsels and
accountants, all books and records of such party relating to such action, suit or proceeding and
the parties agree to render to each other such assistance as may reasonably be requested in order
to insure the proper and adequate defense of any such action, suit or proceeding. In the event
NRH may be obligated under this Section to indemnify Watauga, NRH shall be entitled to
assume the defense of such action, suit, claim or proceeding upon the delivery to Watauga of
written notice of its election so to do. After delivery of such notice, NRH shall not be liable to
1212/000-003.CLN 12
Watauga under this Agreement for any fees of counsel subsequently incurred by Watauga with
respect to the same proceeding, provided that (i) Watauga shall have the right to employ its own
counsel in any such proceeding at Watauga's own expense; and (ii) if (A) the employment of
counsel by Watauga has been previously authorized by NRH, (B) Watauga shall have reasonably
concluded that there may be a conflict of interest between NRH and Watauga in the conduct of
any such defense, or (C) NRH shall not, in fact, have employed counsel to assume the defense
of such proceeding, then the fees and expenses of Watauga's counsel shall be borne by NRH.
(b) To the extent allowed by law, Watauga shall indemnify and hold NRH harmless
against all claims, causes of action, costs, expenses (including reasonable attorney fees) and
damages to persons or property, to the extent proximately caused by the negligence or willful
misconduct of Watauga's officers, employees or agents arising directly or indirectly out of
Watauga's Operation of the Facilities during the Transition Period. This duty to indemnify only
applies where, and to the extent, Watauga's negligence or willful misconduct is either the sole
or a contributing cause of the injury, death or damage. It does not extend to any portion of any
injury, death or damage cause by either the sole or contributing negligence or intentional act or
omission of NRH or any third party under the control of NRH. NRH shall give written notice
to Watauga within fifteen (I S) days of receipt by NRH of any claim against NRH that might give
rise to a claim based on the indemnity provided herein, stating the nature and basis of the claim
and the amount thereof. NRH shall have the sole right and authority to determine the disposition
of any action, suit, claim or proceeding brought against it, provided that NRH in exercising its
rights and discharging its obligation under this indemnity, shall at all times act in good faith and
shall settle, compromise or dispose of such actions, suits, claims or proceedings as if it were
{212)000-003.CLN 13
ultimately liable with respect thereto. However, in the event any action, suit or proceeding is
brought with respect to which Watauga may have liability under the indemnity provided herein,
Watauga shall have the right, without prejudice to NRH's rights hereunder, at its sole expense,
to be represented by counsel of its own choosing and with whom counsel for NRH shall confer
in connection with the defense of any action, suit or proceeding. In such a case, each party shall
make available to the other party, and its counsels and accountants, all books and records of such
party relating to such action, suit or proceeding and the parties agree to render to each other such
assistance as may reasonably be requested in order to insure the proper and adequate defense of
any such action, suit or proceeding. In the event Watauga may be obligated under this Section
to indemnify NRH, Watauga shall be entitled to assume the defense of such action, suit, claim
or proceeding upon the delivery to NRH of written notice of its election so to do. After delivery
of such notice, Watauga shall not be liable to NRH under this Agreement for any fees of counsel
subsequently incurred by NRH with respect to the same proceeding, provided that (i) NRH shall
have the right to employ its own counsel in any such proceeding at NRH's own expense; and (ii)
if (A) the employment of counsel by NRH has been previously authorized by Watauga, (B) NRH
shall have reasonably concluded that there may be a conflict of interest between Watauga and
NRH in the conduct of any such defense, or (C) Watauga shall not, in fact, have employed
counsel to assume the defense of such proceeding, then the fees and expenses of NRH's counsel
shall be borne by Watauga.
(c) Neither paragraph (a) or (b) is intended to create liability for the benefit of third
parties but are solely for the benefit of Watauga and NRH.
1 2 1 21000-00 3.CLN 1
9.6 MANDATORY MEDIATION PROVISIONS. (a) Notwithstanding any other
provisions of this Agreement, Watauga and NRH agree that prior to either Party bringing suit for
specific performance, injunction, or damages for the alleged failure of the other Party to comply
with any terms, conditions, or provisions of this Agreement, this Agreement shall be submitted
for mediation in accordance with paragraph (b) this Section 9.6.
(b) In order to institute mediation, either Party may, on written notice to the other Party,
initiate non-binding mediation before a single mediator affiliated with Judicial Arbitration and
Mediation Service, Inc. ("JAMS") in Tarrant County, Texas, or another mediation service
mutually agreeable to the Parties. The Mediator shall be selected by agreement of the Parties
within thirty (30) days after either Party first requests mediation of the other. If a single mediator
cannot be agreed upon, then each Party shall select its own mediator from those on the approved
list of the mediation service used; those two mediators will then select a third independent
Mediator who will conduct the mediation session(s).
(c) Neither Party shall be excused from complying with any of the terms and conditions
of this Agreement because of any failure of the other Party upon any one or more occasions to
insist upon or to seek compliance with any such terms or conditions.
9.7 OPERATING EXPENSES. Watauga represents and covenants that all payments
to be made by it under this Agreement shall constitute reasonable and necessary "operating
expenses" of its combined waterworks and sewer system, as defined in Article 1113, Tex. Rev.
Civ. Stat. Ann., as amended, and that all such payments shall be payable solely from the revenues
of its combined waterworks and sewer system. Watauga represents and has determined that the
Operation of the Facilities that is the subject of this Agreement is absolutely necessary and
12121000-003.CLN 15
essential to the present and future operation of its water system and, accordingly, all payments
required under this Agreement to be made by Watauga shall constitute reasonable and necessary
operating expenses of Watauga's system as described above.
9.8 FORCE MAJEURE. In case by reason of force majeure, as hereafter defined,
either Party shall be rendered unable wholly or in part to carry out its obligations under this
Agreement, then if such Party shall give notice and full particulars of such force majeure in
writing to the other Party within a reasonable time after occurrence of the event or cause relied
on, the obligation of the Party giving such notice, so far as it is affected by such force majeure,
shall be suspended during the continuance of the inability then claimed, but for no longer periods,
and any such Party shall endeavor to remove or overcome such inability with all reasonable
dispatch. The term "force majeure" as employed herein, shall mean: acts of God; strikes,
lockouts, or other industrial disturbances; acts of public enemy; orders of any kind of the
Government of the United States, of the State of Texas, or of any civil or military authority;
insurrections; riots; epidemics; landslides; lightening; earthquakes; fires; hurricanes; storms;
floods; washouts; droughts; arrests; restraining of government and people; civil disturbances;
explosions; breakage or accidents to machinery, pipe lines, or canals; partial or entire failure of
water supply; any other causes not reasonably within the control of the party claiming such
inability. It is understood and agreed that the settlement of strikes and lockouts shall be entirely
within the discretion of the Party having the difficulty, and that the above requirement that any
force majeure shall be remedied with all reasonable dispatch shall not require the settlement of
strikes and Iockouts by acceding to the demands of the striking or opposing parties when such
settlement is unfavorable in the judgment of the Party having the difficulty.
1212/000-003.CLN 16
9.9 REGULATORY BODIES. This Agreement shall be subject to all valid rules,
regulations, and laws applicable hereto passed or promulgated by the United States of America,
the State of Texas, or any governmental body or agency having lawful jurisdiction, or any
authorized representative or agency of any of the above.
9.10 GOVERNING LAW. This Agreement shall be governed and construed pursuant
to the laws of the State of Texas. All obligations herein shall be performable and all payment
shall be due and payable in Tarrant County, Texas.
9.11 CAPTIONS AND CONSTRUCTION. All section titles or captions contained in
this Agreement shall not be deemed a part of this Agreement and shall not affect the meaning
or interpretation of this Agreement or any provision hereof. Both parties have participated in the
prepazation of this Agreement so that this Agreement shall not be construed either more or less
favorably for or against either party.
9.12 INCORPORATION. The Preamble set forth before Section 1 of this Agreement
is hereby incorporated by reference as if set forth fully at this point.
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 this day of ~.J G .v. , 1996.
CITY OF WATAUGA, TEXAS
1212/000-003.CLN
ay: ~ ----
Mayor ~
17
s
ATTEST:
_~~~~.
~(J ,City Secretary
(SEAL)
ATTEST:
_ ~ fin, ,~
X~L r
ity Sec
(SEAL)
CITY OF NORTH RICHLAND HILLS, TEXAS
,Mayor
By:
/ ,City anager
APPROVED AS TO FORM AND CONTENT:
By: ~ C • L''~i~ I~ ~~ C~ANi~~
City Att rney for the City of Wata
By: i L .~ .mil
City Att3~ney or the City of North Rich`rand Hills
1212/000-003.CLN
18
~esalut~or~ No goo y
~ ~`~,.
JOINT USE AGREEMENT
BETWEEN THE CITY OF WATAUGA
AND THE CITY OF NORTH RICHLAND HILLS
THIS JOINT USE AGREEMENT (the "Agreement"), by and between the City of
Watauga ("Watauga") and the City of North Richland Hills ("NRH"), both being Texas home-rule
municipal corporations, together sometimes referred to herein as the Parties, is for the operation
and maintenance of water utility facilities jointly serving Watauga and NRH.
PREAMBLE
WHEREAS, the Parties have entered into a Settlement and Purchase Agreement, wherein
the Parties have agreed to the terms and conditions whereby certain utility facilities will be sold
by NRH and purchased by Watauga; and
WHEREAS, certain water utility facilities will remain in the ownership of NRH, but will
also be used by Watauga to provide water utility services to the citizens of Watauga, and certain
water utility facilities will be owned by Watauga but will also be used by NRH to provide water
utility services to the citizens of NRH (both herein referred to as the "Joint Use Facilities"); and
WHEREAS, the Parties hereto desire to set forth the terms and conditions under which
each Party will have the use of the Joint Use Facilities, and under which the Parties will share
in the costs of maintenance and operation of such Joint Use Facilities;
NOW, THEREFORE, for and in consideration of the mutual promises, covenants, benefits
and obligations hereinafter set forth, NRH and Watauga hereby contract as follows:
1212/000-004.CLN 1
SECTION 1. DEFINITIONS
For the purposes of this Agreement, the following words, terms, phrases, and their deriva-
tions shall have the meanings given herein. When not inconsistent with the context, words used
in the present tense include the future tense, words in the plural number include the singular
number, and words in the singular number include the plural number. The word "shall" is always
mandatory and not merely directory.
1.1 "Adiusted O & M Fee" means the O & M Fee described in Section 4, as adjusted
after each Annual Payment Period, as provided in this Agreement.
1.2 "Annual Pavment Period" means the period beginning on October 1 of each
calendar year and ending on the last day of September of the next calendar year.
1.3 "Date of Transfer" has the same meaning as in the Settlement and Purchase
Agreement by and between NRH and Watauga, executed simultaneously with this Agreement,
and refers to the effective date of the sale and conveyance of facilities under the terms of the
Settlement and Purchase Agreement, which shall occur between October 1, 1996, and January 1,
1997.
1.4 "Emergency" means a reasonably unforeseen occurrence with a potential to
endanger personal safety or health, or cause substantial damage to property, that calls for
immediate action.
1.5 "Fort Worth Contract" means the Contract for Water Service Between the City of
Fort Worth, Texas and North Richland Hills, Texas, dated July 6, 1989, and all amendments
thereto.
1212/000-004.CLN
2
1.6 "Joint Use Facilities" means the following described water lines that are owned by
Watauga and the use of which will be shared between NRH and Watauga:
Approximate
Length
a. D.L. Hall 24" Transmission Line 5,497 feet
b. Denton Highway Transmission Line
1) 16" Water Line from Watauga Road to Chapman 2,792 feet
2) 24" Water Line from Chapman to Hightower 2,377 feet
c. Hightower Road 16" Transmission Line
1) Denton Highway to Whitley 2,180 feet
2) Whitley to Echo Hills 1,530 feet
3) Echo Hills to McCoy 2,400 feet
4) McCoy to Rufe Snow Drive 1,300 feet
d. Starnes Road Transmission Line
1) 16" Water Line from Denton Highway to Whitley 2,050 feet
2) 12" Water Line from Whitley to Indian Springs 2,455 feet
3) 16" Water Line from Indian Springs to Rufe Snow 3,377 feet
"Joint Use Facilities" shall also mean the following described water facilities and lines that
are owned by NRH and the use of which will be shared between NRH and Watauga:
a. The present water connection with the City of Fort Worth located at the NRH's
Booster Pump Station #2, 5101 Western Center Blvd. (Saginaw-Watauga Road).
b. NRH's Booster Pump Station #2 located at 5105 Western Center Blvd.
c. The 2,000,000 gallon ground storage facility located at S 105 Western Center Blvd.
1212/000-004.CLN 3
d. The real property upon which a, b, and c are situated.
e. Any interest owned by NRH in the water line and easement from the Fort Worth
water source at Beach Street to the station at 5105 Western Center Boulevard.
£ The Watauga Road Water Lines consisting of the following:
Approximate
Length
1) 24" Water Line from Pump Station south to
Watauga Road 400 feet
2) 16" Water Line from the 24" Water Line connection
to Denton Highway 2,550 feet
3) 12" Water Line from Denton Highway to Saramac Road 8,149 feet
4) 8" Water Line from Saramac Road to Stardust Road 1,830 feet
5) 12" Water Line from Stardust Road to Rufe Snow Drive 2,519 feet
1.7 "Rate of Use Charge" means the charge so designated in the Fort Worth Contract,
representing the charge for: (1) Maximum Day Demand in excess of Average Daily Use; and
(2) Maximum Hour Demand in excess of Maximum Day Demand.
1.8 "Right-of-Wav", or "Riehts-of-Wav" means the surface of, the space within, and
the space above and below any public street, sidewalk, alley, or other public passage now or
hereafter existing as such within Watauga.
1.9 "Settlement and Purchase Agreement" means the document entitled "Settlement and
Purchase Agreement Between the City of Watauga and the City of North Richland Hills"
executed by Watauga and NRH simultaneously with this Agreement. The Settlement and
Purchase Agreement is the instrument by which Watauga and NRH contracted for the sale of the
Water and Wastewater Facilities that are the subject of this Agreement.
1212/000-004.CLN 4
SECTION 2. TERM
2.1 This Agreement shall remain in effect from and after the Date of Transfer and
continue for the life of the Joint Use Facilities and any replacements thereof.
SECTION 3. MAINTENANCE AND REPAIR OF SHARED FACILITIES
3.1 NRH agrees that it shall throughout the term of this Agreement continuously
maintain and keep the Joint Use Facilities that it owns in good and working condition in order
that their usefulness to Watauga and structural integrity shall be at all times protected and
maintained.
3.2 Watauga agrees that it shall throughout the term of this Agreement continuously
maintain and keep the Joint Use Facilities that it owns in good and working condition in order
that their usefulness to NRH and structural integrity shall be at all times protected and
maintained.
3.3 NRH and Watauga agree that the O & M Fee payments made by Watauga
hereunder shall be sufficient to pay its share of all expected maintenance and operation expenses,
and all scheduled repairs. However, to the extent that unexpected repairs are necessary, NRH
agrees that it will promptly undertake all such repairs, and any outages or other periods of time
in which the Joint Use Facilities are not operational due to such unexpected repairs shall be kept
to an absolute minimum.
1212/000-004.CLN 5
SECTION 4. OPERATIONS AND MAINTENANCE FEE
4.1 As consideration for Watauga's use of Joint Use Facilities owned by NRH,
Watauga agrees to pay NRH an annual Operations and Maintenance Fee ("O & M Fee")
calculated as described herein. Watauga shall not be obligated to begin paying the O & M Fee
until twenty-four (24) months after the Date of Transfer.
4.2 The O & M Fee shall be calculated on an annual basis. On or before June 1 of
each year of this Agreement, NRH shall give Watauga written notice of the anticipated operations
and maintenance costs ("O & M Costs") relating to the Joint Use Facilities owned by NRH to be
incurred by NRH for the ensuing Annual Payment Period. NRH shall also provide to Watauga
budgetary documentation supporting such estimate of O & M Costs. Watauga's annual O & M
Fee shall be the product of multiplying the total anticipated O & M Costs of the Joint Use
Facilities owned by NRH by a percentage representing the ratio for the previous year of the
volume of water used by Watauga compared to the total volume of water received from the City
of Fort Worth at the connection located at the NRH Booster Pump Station #2, 510 Western
Center Blvd. Watauga shall pay its annual O & M Fee in twelve (12) approximately equal
monthly installments, to the extent that equal installments are practical, on or before the tenth
(10th) day of each month.
4.3 At the close of each Annual Payment Period, NRH shall determine the actual
amount of O & M Costs incurred by NRH during the Annual Payment Period and related to the
Joint Use Facilities owned by NRH. NRH shall calculate Watauga's Adjusted O & M Fee by
determining the difference between:
1212/000-004.CLN (')
a. the estimated amount of O & M Costs for Joint Use Facilities owned by
NRH that was the basis for the O & M Fee paid by Watauga during the
Annual Payment Period, and
b. the actual amount of O & M Costs for Joint Use Facilities owned by NRH
during the Annual Payment Period.
The difference, if any, between estimated and actual O & M Costs shall be multiplied by the
same percentage used in calculating the O & M Fee, and the product shall be applied as a credit
or debit to Watauga's account with NRH, and shall be credited or debited in one-twelfth (1/12)
increments to Watauga's next twelve (12) monthly payments, or as otherwise agreed upon
between Watauga and NRH, provided the total amount of the credit or debit shall be made within
the next twelve (12) months.
4.4 If Watauga at any time disputes the amount to be paid by it to NRH, Watauga
shall nevertheless promptly make the disputed payment or payments, but if it is subsequently
determined by agreement or court decision that the disputed amount paid by Watauga should have
been less, or more, NRH shall promptly revise and reallocate Watauga's annual O & M Fee in
a manner that Watauga, or NRH, will recover the amount due.
SECTION 5. REPLACEMENT FUND
5.1 As additional consideration for the use of the Joint Use Facilities owned by NRH,
Watauga shall escrow an amount annually for Watauga's pro-rata share of replacement costs of
the Joint Use Facilities owned by NRH into an escrow account administered by NRH. NRH shall
deposit such money into an escrow account with a banking institution of Watauga's choice. The
escrow account (Replacement Fund) will be earmarked for use in accordance with this section,
i.e. replacement of the Joint Use Facilities owned by NRH. Watauga shall be entitled to show
1212/000-004.CLN 7
the fund as a Watauga asset on its balance sheet. Watauga's pro-rata share shall be the ratio of
the volume of the water used in Watauga to the total volume of water received from the City of
Fort Worth at the connection located at NRH Booster Pump Station #2, 5105 Western Center
Blvd.
5.2 The amount paid into the Replacement Fund shall be based on a per 1000 gallon
volume charge for all water used by the City of Watauga. Funds will be disbursed for
replacement projects on Joint Use Facilities owned by NRH upon approval of both cities. The
Replacement Fund fee shall be escrowed monthly at a rate that will accumulate sufficient funds
to satisfy Watauga's pro-rata share of the replacement cost of the Joint Use Facilities owned by
NRH. The amount to be paid by Watauga will be adjusted annually in October by computing
the ratio of water used by Watauga to the total volume of water received from the City of Fort
Worth the preceding year from the pump station at 5105 Western Center Blvd.
5.3 NRH intends to pay its pro-rata share to replace the Joint Use Facilities owned by
NRH by normal capital funding. NRH's share and Watauga's share of replacement cost shall be
based upon the ratio of water used by each City from the pump station at 5105 Western Center
Blvd. during the period that Watauga has been required by this Agreement to pay into the
Replacement Fund.
5.4 The parties agree that replacement cost of the 2 MG ground storage tank at 5105
Western Center Blvd. will be $700,000 with a life expectancy of 30 years; that the replacement
cost of the pumps/motors and control values will be $300,000 with a life expectancy of 15 years;
and that the replacement cost of the balance of the facilities owned by NRH is $1,200,000 based
1212/000-004.CLN g
upon a 30 year life expectancy. These costs and life expectancies shall be adjusted each five
yeazs on the anniversary date of the Date of Transfer, by one engineer chosen by each City.
5.5 Watauga shall retain investment rights over the Replacement Fund and shall have
unrestricted rights to interest accruing on the Replacement Fund. Also, should the balance of the
Replacement Fund become excessive based on replacement estimates, Watauga may request a
distribution of the excess funds from its account. Watauga shall request written approval from
NRH prior to receiving any excess distribution, with such approval not being unreasonably
withheld.
5.6 Any deficiency for Watauga's pro-rata shaze of replacement costs of the Joint Use
Facilities owned by NRH shall be the responsibility of Watauga and shall be required at the time
of replacement.
SECTION 6. MONTHLY WATER USE CHARGES
6.1 NRH is a wholesale treated water customer of the City of Fort Worth under the
provisions of the Fort Worth Contract. The water connection with the City of Fort Worth, a Joint
Use Facility owned by NRH, is the point of entry for water service to both NRH and Watauga,
and the meter at the water connection thereby measures water use by both NRH and Watauga.
In order to determine the amount of water from the City of Fort Worth used by Watauga,
Watauga shall construct and install subtraction meters at the Starnes Road, Hightower Road, and
Watauga Road connections with NRH's water lines. After such construction and installation,
NRH shall own such meters and shall be responsible for reading the meters, shall maintain and
operate such meters, and shall replace such meters when necessary, all at no cost to Watauga.
1212/000-004.CLN 9
6.2 NRH and Watauga shall, on a regular monthly basis, jointly read the subtraction
meters, and shall subtract the readings therefrom from the meter reading at the water connection
with the City of Fort Worth. The difference between the total readings of the subtraction meters
and the meter at the water connection with the City of Fort Worth shall be the volume of water
used by Watauga during the preceding monthly period.
6.3 The rates paid by NRH to the City of Fort Worth are composed of a Treatment,
Pumping and Transmission Chazge, a Raw Water Charge, a Rate of Use Chazge, and a Service
Chazge. NRH shall, on a regular monthly basis, prepaze and provide a bill to Watauga for
Watauga's monthly water use, as determined in Section 6.2 above. All such bills shall be due
and payable by Watauga not more than thirty (30) days from the billing date. It is the intent of
the parties hereto that billings from NRH to Watauga for Watauga's actual water use shall be a
"pass-through" of the charges due to the City of Fort Worth, and NRH shall not retain any
revenues resulting from such billings, but shall pass the revenues on directly to the City of Fort
Worth.
6.4 The monthly water use bill prepazed by NRH from Fort Worth's actual bill shall
be submitted to Watauga along with a copy of the total bill from Fort Worth.
6.5 Watauga's Rate of Use chagge shall be calculated based on Watauga's consumption
compared to NRH's total consumption of water from the City of Fort Worth; i.e. if the total
monthly Rate of Use charge from the City of Fort Worth is $50,000 and if Watauga's
consumption is 20% of the total water taken from Fort Worth, Watauga's Rate of Use chagge for
that month would be 20% of $50,000. The final bill from the City of Fort Worth for each fiscal
1212/000-004.CLN 10
year ("Settle-Up") will determine the ultimate annual Rate of Use charge to each City, based upon
percentage of use.
SECTION 7. SYSTEM ACCESS FEE
7.1 Under the terms of the Fort Worth Contract, NRH is obligated to pay to the City
of Fort Worth a System Access Fee for each new connection made to NRH's water system.
Watauga agrees that it shall charge to and collect from each new connection to its water system
a fee at least sufficient to pay the System Access Fee to the City of Fort Worth and remit those
access fees to NRH monthly.
7.2 The amount of and conditions under which such System Access Fee shall be
collected by Watauga for payment to the City of Fort Worth through NRH shall be governed by
the Fort Worth Contract. The accounting records in the form required by the City of Fort Worth
shall be kept by Watauga and a copy submitted monthly to NRH with payment.
SECTION 8. METERS
8.1 NRH shall routinely test for accuracy, and service and calibrate if necessary, the
subtraction meters described in Section 6 above, no less than once during each twelve (12) month
period. Copies of the results of such calibration and all related information shall be provided to
Watauga. Watauga shall have access to the metering facilities at all reasonable times; provided,
however, that any reading, calibration or adjustment to such metering equipment shall be done
by employees or agents of NRH, or other mutually approved third party calibration agent, in the
presence of representatives of Watauga and NRH, if so requested by Watauga. Notification of
1212/000-004.CLN 11
any proposed test shall be provided to Watauga at least seventy-two (72) hours prior to such test
being conducted and Watauga may observe such test, if so desired. Testing cost shall be shared
equally by Watauga and NRH.
8.2 Upon any calibration, if it is determined that the accuracy envelope of such meter
or meters is found to be lower than ninety-five percent (95%) or higher than one hundred five
percent (105%) expressed as a percentage of the full scale of the meter, the registration of the
flow as determined by such defective meter shall be corrected for a period extending back to the
time such inaccuracy began, if such time is ascertainable, or, if such time is not ascertainable,
then for a period extending back one-half (''/z) of the time elapsed since the date of the last
calibration, but in either event the correction shall not be extended back for a period greater than
six (6) months. All meters will be properly sealed, and the seals shall not be broken unless
representatives of both parties have been notified and given a reasonable opportunity to be
present.
8.3 If any meter used to determine the flow of treated water from Watauga to NRH
is out of service or out of repair so that the amount of water metered cannot be ascertained or
computed from the reading thereof, the water delivered during the period such meter is out of
service or out of repair for the period determined according to Section 8.2 shall be estimated and
agreed upon by the parties hereto upon the basis of the best data available. The basis for
estimating such flow includes, but is not limited to, extrapolation of past patterns of flow for said
metering station under similar conditions. In the event that the parties hereto cannot agree on the
extrapolated estimate of water volume delivered, agreement on the flow volume will be
determined by mediation, as hereinafter provided.
1212/000-004.CLN 12
SECTION 9. GENERAL CONDITIONS OF USE
9.1 The work of maintaining and operating the Joint Use Facilities owned by NRH
shall be done under the ordinances, regulations and policies governing the NRH Public Works
Department.
9.2 If the repair, maintenance, and/or operation of the Joint Use Facilities owned by
NRH requires the excavation of any Rights-of--Way in Watauga, NRH shall replace and properly
relay and repair the surface, base, and landscape treatment of any sidewalk or Right-of--Way that
may be excavated or damaged by reason of such maintenance, repair, and/or operation of the
Joint Use Facilities within a reasonable time after completion of the work in accordance with
existing standards of Watauga in effect at the time of the work.
9.3 NRH agrees to provide Watauga with maintenance records and related costs for
all Joint Use Facilities owned by NRH. The records provided shall include but not be limited
to water main leak repairs, replacement, and rehabilitation. The records shall be provided
annually during the term of this Agreement.
9.4 Except in an Emergency, NRH shall not excavate any Right-of--Way without first
notifying the Department of Public Works of Watauga. The Director of the Watauga Department
of Public Works or designee shall be notified as soon as practicable regarding work performed
under Emergency conditions, and NRH shall comply with any reasonable requirements of
Watauga for the restoration of the Rights-of--Way.
9.5 Watauga and NRH agree that their obligations hereunder shall include compliance
with the requirements made under all applicable and valid laws, and any rules and regulations
1212/000-004.CLN 13
issued pursuant thereto, provided, however, that nothing contained herein shall be construed as
affording any rights, causes of action, or remedies to any person not a party to this Agreement.
SECTION 10. OWNERSHIP AND LIABILITY
10.1 No provision of this Agreement shall be construed to create any type of joint or
equity ownership of any property, any partnership or joint venture, nor shall same create any
other rights or liabilities. Watauga's payments to NRH for use of Joint Use Facilities owned by
NRH shall not be construed as granting Watauga partial ownership of or equity in the NRH water
system. NRH's use of the Joint Use Facilities owned by Watauga shall not be construed as
granting NRH partial ownership of or equity in the Joint Use Facilities owned by Watauga.
10.2 Neither Party hereto shall bear any responsibility for the quality of water passing
through the Joint Use Facilities.
10.3 Contracts made and entered into by either Watauga or NRH for the construction,
reconstruction, or repair of any Joint Use Facilities shall include the requirement that the
contractor must provide adequate insurance protecting both Watauga and NRH as co-insureds.
Such contract must also provide that the contractor covenant to indemnify, hold harmless and
defend both Watauga and NRH against any and all suits or claims for damages of any nature
arising out of the performance of such contract.
1212/000-004.CLN 1 Gl
SECTION 11. GENERAL PROVISIONS
11.1 NOTICE. Any notices required to be given herein shall be deemed to have been
sufficiently given to either party for all purposes hereof if mailed by certified mail, postage
prepaid, addressed as follows:
TO CITY OF NORTH RICHLAND HILLS
City Manager
City of North Richland Hills
7301 N.E. Loop 820
North Richland Hills, Texas 76182-0609
TO CITY OF WATAUGA
City Manager
City of Watauga
7101 Whitley Road
Watauga, Texas 76148
or to such other respective address as the parties may designate from time to time in writing in
accordance with this notice provision.
11.2 PUBLIC PURPOSE: RESERVATION OF RIGHTS. All of the regulations
provided in this Agreement aze hereby declazed to be for a public purpose and the health, safety,
and welfare of the general public. Any member of the governing body or city official or
employee of either Party charged with the enforcement of this Agreement, acting in the dischazge
of his duties, shall not thereby render himself personally liable; and he is hereby relieved from
all personal liability for any damage that might accrue to persons or property as a result of any
act required or permitted in the discharge of his said duties.
11.3 SEVERABILITY. If any section, subsection, sentence, clause, phrase, term,
provision, condition, covenant or portion of this Agreement is for any reason held invalid or
unenforceable by any court of competent jurisdiction, the remainder of this Agreement shall not
be affected thereby but shall be deemed as a separate, distinct and independent provision, and
such holding shall not affect the validity of the remaining portions hereof, and each remaining
1212/000-004.CLN 15
section, subsection, sentence, clause, phrase, term, provision, condition, covenant and portion of
this Agreement shall be valid and enforceable to the fullest extent permitted by law.
11.4 ENTIRE AGREEMENT. This Agreement shall constitute the entire Agreement
between Watauga and NRH and may not be modified or amended other than by a written
instrument executed by both parties.
11.5 INDEMNIFICATION. (a) To the extent allowed by law, NRH shall indemnify
and hold Watauga harmless against all claims, causes of action, costs, expenses (including
reasonable attorney fees) and damages to persons or property, to the extent proximately caused
by the negligence or willful misconduct of NRH's officers, employees or agents arising directly
or indirectly out of the operation, repair, and, maintenance of the Joint Use Facilities. This duty
to indemnify only applies where, and to the extent, NRH's negligence or willful misconduct is
either the sole or a contributing cause of the injury, death or damage. It does not extend to any
portion of any injury, death or damage caused by either the sole or contributing negligence or
intentional act or omission of Watauga or any third party under the control of Watauga. Watauga
shall give written notice to NRH within fifteen (15) days of receipt by Watauga of any claim
against Watauga that might give rise to a claim based on the indemnity provided herein, stating
the nature and basis of the claim and the amount thereof. Watauga shall have the sole right and
authority to determine the disposition of any action, suit, claim or proceeding brought against it,
provided that Watauga in exercising its rights and discharging its obligation under this indemnity,
shall at all times act in good faith and shall settle, compromise or dispose of such actions, suits,
claims or proceedings as if it were ultimately liable with respect thereto. However, in the event
any action, suit or proceeding is brought with respect to which NRH may have liability under the
1212/000-004.CLN 16
indemnity provided herein, NRH shall have the right, without prejudice to Watauga's rights
hereunder, at its sole expense, to be represented by counsel of its own choosing and with whom
counsel for Watauga shall confer in connection with the defense of any action, suit or proceeding.
In such a case, each party shall make available to the other party, and its counsels and
accountants, all books and records of such party relating to such action, suit or proceeding and
the parties agree to render to each other such assistance as may reasonably be requested in order
to insure the proper and adequate defense of any such action, suit or proceeding. In the event
NRH may be obligated under this Section to indemnify Watauga, NRH shall be entitled to
assume the defense of such action, suit, claim or proceeding upon the delivery to Watauga of
written notice of its election so to do. After delivery of such notice, NRH shall not be liable to
Watauga under this Agreement for any fees of counsel subsequently incurred by Watauga with
respect to the same proceeding, provided that (i) Watauga shall have the right to employ its own
counsel in any such proceeding at Watauga's own expense; and (ii) if (A) the employment of
counsel by Watauga has been previously authorized by NRH, (B) Watauga shall have reasonably
concluded that there may be a conflict of interest between NRH and Watauga in the conduct of
any such defense, or (C) NRH shall not, in fact, have employed counsel to assume the defense
of such proceeding, then the fees and expenses of Watauga's counsel shall be borne by NRH.
(b) To the extent allowed by law, Watauga shall indemnify and hold NRH harmless
against all claims, causes of action, costs, expenses (including reasonable attorney fees) and
damages to persons or property, to the extent proximately caused by the negligence or willful
misconduct of Watauga's officers, employees or agents arising directly or indirectly out of the
use by Watauga of the Joint Use Facilities. This duty to indemnify only applies where, and to
1212/000-004.CLN 17
the extent, Watauga's negligence or willful misconduct is either the sole or a contributing cause
of the injury, death or damage. It does not extend to any portion of any injury, death or damage
caused by either the sole or contributing negligence or intentional act or omission of NRH or any
third party under the control of NRH. NRH shall give written notice to Watauga within fifteen
(15) days of receipt by NRH of any claim against NRH that might give rise to a claim based on
the indemnity provided herein, stating the nature and basis of the claim and the amount thereof.
NRH shall have the sole right and authority to determine the disposition of any action, suit, claim
or proceeding brought against it, provided that NRH in exercising its rights and discharging its
obligation under this indemnity, shall at all times act in good faith and shall settle, compromise
or dispose of such actions, suits, claims or proceedings as if it were ultimately liable with respect
thereto. However, in the event any action, suit or proceeding is brought with respect to which
Watauga may have liability under the indemnity provided herein, Watauga shall have the right,
without prejudice to N1ZI-I's rights hereunder, at its sole expense, to be represented by counsel
of its own choosing and with whom counsel for NRH shall confer in connection with the defense
of any action, suit or proceeding. In such a case, each party shall make available to the other
party, and its counsels and accountants, all books and records of such party relating to such
action, suit or proceeding and the parties agree to render to each other such assistance as may
reasonably be requested in order to insure the proper and adequate defense of any such action,
suitor proceeding. In the event Watauga may be obligated under this Section to indemnify NRH,
Watauga shall be entitled to assume the defense of such action, suit, claim or proceeding upon
the delivery to NRH of written notice of its election so to do. After delivery of such notice,
Watauga shall not be liable to NRH under this Agreement for any fees of counsel subsequently
1212/000-004.CLN 1 g
incurred by NRH with respect to the same proceeding, provided that (i) NRH shall have the right
to employ its own counsel in any such proceeding at NRH's own expense; and (ii) if (A) the
employment of counsel by NRH has been previously authorized by Watauga, (B) NRH shall have
reasonably concluded that there may be a conflict of interest between Watauga and NRH in the
conduct of any such defense, or (C) Watauga shall not, in fact, have employed counsel to assume
the defense of such proceeding, then the fees and expenses of NRH's counsel shall be borne by
Watauga.
(c) Neither paragraph (a) or (b) is intended to create liability for the benefit of third
parties but aze solely for the benefit of Watauga and NRH.
11.6 MANDATORY MEDIATION PROVISIONS. (a) Notwithstanding any other
provisions of this Agreement, Watauga and NRH agree that prior to either Party bringing suit for
specific performance, injunction, or damages for the alleged failure of the other Party to comply
with any terms, conditions, or provisions of this Agreement, this Agreement shall be submitted
for mediation in accordance with this Section 11.6.
(b) In order to institute mediation, either Party may, on written notice to the other
Party, initiate non-binding mediation before a single mediator affiliated with Judicial Arbitration
and Mediation Service, Inc. ("JAMS") in Tarrant County, Texas, or another mediation service
mutually agreeable to the Parties. The Mediator shall be selected by agreement of the Parties
within thirty (30) days after either Party first requests mediation of the other. If a single mediator
cannot be agreed upon, then each Party shall select its own mediator from those on the approved
list of the mediation service used; those two mediators will then select a third independent
Mediator who will conduct the mediation session(s).
1212/000-004.CLN 19
.~
(c) Neither Party shall be excused from complying with any of the terms and
conditions of this Agreement because of any failure of the other Party upon any one or more
occasions to insist upon or to seek compliance with any such terms or conditions.
11.7 OPERATING EXPENSES. Watauga represents and covenants that all payments
to be made by it under this Agreement shall constitute reasonable and necessary "operating
expenses" of its combined waterworks and sewer system, as defined in Article 1113, Texas
Revised Civil Statutes, as amended, and that all such payments shall be payable solely from the
revenues of its combined waterworks and sewer system. Watauga represents and has determined
that its use of the Joint Use Facilities owned by NRH is absolutely necessary and essential to the
present and future operation of its water system and, accordingly, all payments required under
this Agreement to be made by Watauga shall constitute reasonable and necessary operating
expenses of Watauga's system as described above.
11.8 FORCE MAJEURE. In case by reason of force majeure, as hereafter defined,
either party hereto shall be rendered unable wholly or in part to carry out its obligations under
this Agreement, then if such party shall give notice and full particulars of such force majeure in
writing to the other party within a reasonable time after occurrence of the event or cause relied
on, the obligation of the party giving such notice, so far as it is affected by such force majeure,
shall be suspended during the continuance of the inability then claimed, but for no longer periods,
and any such party shall endeavor to remove or overcome such inability with all reasonable
dispatch. The term "force majeure" as employed herein, shall mean: acts of God; strikes,
lockouts, or other industrial disturbances; acts of public enemy; orders of any kind of the
Government of the United States, of the State of Texas, or of any civil or military authority;
1212/000-004.CLN 2~
r
insurrections; riots; epidemics; landslides; lightening; earthquakes; fires; hurricanes; storms;
floods; washouts; droughts; arrests; restraining of government and people; civil disturbances;
explosions; breakage or accidents to machinery, pipe lines, or canals; partial or entire failure of
water supply; any other causes not reasonably within the control of the party claiming such
inability. It is understood and agreed that the settlement of strikes and lockouts shall be entirely
within the discretion of the party having the difficulty, and that the above requirement that any
force majeure shall be remedied with all reasonable dispatch shall not require the settlement of
strikes and lockouts by acceding to the demands of the opposing party or parties when such
settlement is unfavorable in the judgment of the party having the difficulty.
11.9 REGULATORY BODIES. This Agreement shall be subject to all valid rules,
regulations, and laws applicable hereto passed or promulgated by the United States of America,
the State of Texas, or any governmental body or agency having lawful jurisdiction, or any
authorized representative or agency of any of the above.
11.10 GOVERNING LAW. This Agreement shall be governed and construed pursuant
to the laws of the State of Texas. All obligations herein shall be performable and all payment
shall be due and payable in Tarrant County, Texas.
11.11 CAPTIONS AND CONSTRUCTION. All section titles or captions contained in
this Agreement shall not be deemed a part of this Agreement and shall not affect the meaning
or interpretation of this Agreement or any provision hereof. Both parties have participated in the
preparation of this Agreement so that this Agreement shall not be construed either more or less
favorably for or against either party.
1212/000-004.CLN 21
. .
11.12 INCORPORATION. The Preamble set forth before Section 1 of this Agreement
is hereby incorporated by reference as if set forth fully at this point.
IN WITNESS WHEREOF, the parties hereto, 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 this /~ /h day of ~.~ e. , 1996.
CITY OF WATAUGA, TEXAS
ATTEST:
~~
~/ ~ ,City Secretary
(SEAL)
1212/000-004.CLN
B.
v ,Mayor f
CITY OF NORTH RICHLAND HILLS, TEXAS
By: a~
Mayor
By:
~ ~ ~ , Cit~ Manager
22
ATTEST:
~-
~~('~ity S etary
(SEAL)
APPROVED AS TO FORM AND CONTENT:
B h / WQr ~ l~~v ~ r/~ V • ~~C
y' - - _~
City Attorney for the City o~atau
w ~ ~_
C
By:
City~Attor ey for the City of North Richland Hills
1212/000-004.CLN
23