1701 kingsville, texas 78364-1701 memorandum tostwa.org/agendas/2016/stwa_agenda_050516.pdf · box...

STWA SOUTH TEXAS WATER AUTHORITY

TO: FROM: DATE:

MEMORANDUM

South Texas Water Authority Board of Directors Kathleen Lowman, President April27, 2016

P. 0. BOX 1701

KINGSVILLE, TEXAS 78364-1701

SUBJECT: RESCHEDULED Meeting Notice and Agenda for the South Texas Water Authority

The April 26, 2016 Regular Meeting of the STW A Board of Directors has been rescheduled for:

Thursday, May 5, 2016 5:30p.m.

South Texas Water Authority 2302 East Sage Road, Kingsville, Texas

The Board will consider and act upon any lawful subject which may come before it, including among others, the following:

Agenda

I. Call to order.

2. Citizen comments. This is an opportunity for citizens to address the Board of Directors concerning an issue of community interest that is not on the agenda. Comments on the agenda items must be made when the agenda item comes before the Board. The President may place a time limit on all comments. The response of the Board to any comment under this heading is limited to making a statement of specific factual information in response to the inquiry, or, reciting existing policy in response to the inquity. Any deliberation of the issue is limited to a proposal to place it on the agenda for a later meeting.

3. New Board members' oaths of office.

4. Election of officers.

5. Approval of Minutes. (Attachment 1)

6. Quarterly Repmt/Treasurer's Report/Payment of Bills. (Attaclm1ent 2)

7. TCEQ Enforcement Action and State Office of Administrative Hearings. (Attachment 3)

8. Kingsville Pump Station Bond Projects- Construction of the l.OMG Ground Storage Tank. • Pay Estimate #5 -Preload LLC. • HDR Invoice No. 271994-b (Attaclunent 4)

9. Kingsville Pump Station Bond Projects- Pump Replacement. (Attachment 5) • Pay Estimate #3 - ACP • Change Order #1 • HDR Invoice No. 271991-b

STW A Agenda- 05/05/2016 Page I of2

Kathletn Lowman, President Filiberlo Tre\iilo Ill, Vice-Pn?sident Rudy Galvan, Sei:retary.Treasurer Lupita Perez (361) 592-9323 Or (3'61) 692-0337 (C.C:. line)

Fax: (361) 592-5965

Patsy A. Rodgers Dr. Alberto Ruiz Chuck Schultz Stenn C. Vaughn Carola G. Serrato, Executh·e Director

10. Joint Project with Nueces Water Supply Corporation- Pump Station Improvements at the Driscoll Pump Station. (Attachment 6) • Pay Estimate #I

11. Assessment of STWA's 42" waterline. (Attachment 7)

12. Amendments to Wholesale Water Supply Contract Template and current City of Agua Dulce Water Supply Contract related to the South Texas Water Authority Tax-Exempt Bonds, Series 2013 as well as contracts offered or to be offered to the cities of Bishop, Driscoll and Kingsville and the Nueces County Water Control & Improvement District #5. (Attachment 8)

13. Approval of Amended Water Supply Contract with Nueces Water Supply Corporation. (Attachment 9)

14. Approval of Amended Water Supply Contract with Ricardo Water Supply Corporation and Amended Quitclaim. (Attachment 10)

15. Quote from Mercer Controls, Inc. for modifications to the Bishop-East Pump Station Building. (Attachment 11)

16. Proposed Tax Foreclosure Auction of Resale Properties located within STW A's district in Nueces County. (Attachment 12)

17. Resolution 16-07. Resolution authorizing an auction of resale propet1ies located within South Texas Water Authority's district. (Attachment 13)

18. Close out of Health Reimbursement Account Checking Account. (Attachment 14)

19. HDR Chloramine Conversion Proposal for Driscoll Booster Station. (Attachment 15)

20. Fiscal Year 2016 Budget Amendments. (Attachment 16)

21. Adjournment.

The Board may go into closed session at any time when permitted by Chapter 551, Government Code. Before going into closed session a quorum of the Board must be assembled in the meeting room, the meeting must be convened as an open meeting pursuant to proper notice, and the presiding officer must announce that a closed session will be held and must identify the sections of Chapter 551, Government Code, authorizing the closed session.

KL/CGS/fdl Attachments

This meeting notice was posted on STWA's website, www.stwa org and on indoor and outdoor bulletin bo,ards~t STWA's administrative offices, 2302 East Sage Road, Kingsville, Texas at '-1: vO ().l'il)) on Ap~~

c' cwi:Lti Frances De Leon -Assistant Secretary

STW A Agenda- 05/05/2016 of2

ATTACHMENT 1

Approval of Minutes

Board Members Present:

Filiberto Trevino Lupita Perez Patsy Rodgers Dr. Albert Ruiz Steven Vaughn

Staff Present:

Carola G. Serrato Frances De Leon

1. Call to Order.

SOUTH TEXAS WATER AUTHORITY Regular Board of Directors Meeting

March 22, 2016 Minutes

Board Members Absent:

Kathleen Lowman Rudy Galvan Charles Schultz

Guests Present:

None

Mr. Filibetto Trevino, Board Vice-President, called the Regular Meeting of the STW A Board of Directors to order at 5:59p.m. A quorum was present.

2. Citizen Comments.

Mr. Trevino opened the floor to citizen's comments. No comments were made.

3. Approval of Minutes.

Ms. Rodgers made a motion to approve the minutes of the Febmary 23,2016 Public Hearing and the February 23,2016 Regular Meeting as presented. Ms. Perez seconded. The motion passed by unanimous vote.

4. Treasurer's Report/Payment of Bills.

The following repotts were presented for the Board's consideration:

Treasurer's Repatt for period ending February 29,2016 Revenue Fund Income Statement for period ending February 29,2016 Tax Fund Income Statement for period ending Febtuary 29,2016 STWA Revenue Fund Balance Sheet- February 29,2016 STWA Revenue Fund GL Account Summary Repott as of February 29,2016 STWA Debt Service Fund Income Statement for period ending February 29,2016 STWA Debt Service Fund Balance Sheet February 29,2016 STWA Debt Service Fund GL Account Summary Report as of February 29,2016 STWA Capital Projects Fund Income Statement for period ending February 29, 2016 STWA Capital Projects Fund Balance Sheet- Febmary 29,2016 STWA Capital Projects Fund GL Account Summary Report as of February 29,2016 STWA 2012 Bond Election Repott

STW A Regular Meeting Minutes March 22, 2016 Page 2

Anticipated vs. Actual Water Rate Charged Maintenance & Technical Report from O&M Supervisor

Ms. Serrato noted that an amount of$7,167listed as Other Income in the Capital Projects Fund is a refund from Nueces County for overpayment on election expenses.

The following outstanding invoices were presented for Board approval:

• Automated Concepts $ 11,522.50

• Kevin Kiesclmick-NC Tax Assessor $ 3,463.92

• Nueces County Appraisal District $ 1,496.00

• Willatt & Flickinger, Attorneys at Law $ 3,840.63

• Kleberg County Appraisal District $ 4,848.54

• City of Corpus Christi $ 90,686.80

• Foxco $ 1,783.75

• Corpus Christi Builder's Hardware, Inc. $ 2,282.25

A motion was made by Mr. Vauglm and seconded by Dr. Ruiz to approve the Treasurer's Report and payment of the bills as presented. The motion carried.

5. TCEO Enforcement Action and State Office of Administrative Hearings. • Authorizing the Executive Director to request a proposal from HDR Engineering, Inc.

for conversion of the Driscoll Booster Station from free chlorine to chloramine injection.

Ms. Serrato stated that the conference was held on March 171h and she felt it was very helpful.

She, Bill Flickinger (Willatt & Flickinger) and Aaron Archer (HDR Engineering, Inc.) spoke with Amber Ahmed, Amanda Patel and David Simons ofTCEQ. The TCEQ personnel listened to the concerns regarding the items listed in Appendix B such as upstream and downstream sampling point distances, the need for a sampling point between the proposed ammonia injection and the existing chlorine injection at the Driscoll Booster station and limiting the number of times the 42" waterline is tapped. Mr. Simons' responses indicated that some of the items on the list are somewhat flexible with the understanding that STW A will be adding sampling points and proceeding with conversion of the Driscoll Booster Station to chloramine injection. Ms. Serrato explained to the Board that she and Mr. Flickinger agree that the Administrative Law Judge will most likely support the TCEQ's recommendation to conveti the Driscoll Booster Station. She therefore recommended Board authorization to request a proposal from HDR Engineering, Inc. for the conversion. She added that Mr. Archer feels a proposal can be prepared by the April Board meeting.

Mr. Vaughn made a motion to authorize Ms. Serrato to request a proposal for engineering services from HDR Engineering, Inc. Ms. Rodgers seconded. The motion carried.

STW A Regular Meeting Minutes March 22, 2016 Page 3

6. Kingsville Pump Station Bond Projects- Construction of the 1.0 MG Ground Storage Tank. • Pay Estimate #4 - Preload LLC

Ms. Sen·ato rep01ted that the PAX mixing system has been delivered but has not yet been installed. She added that the contractors have been made aware of the potential for liquidated damages being assessed. She presented Pay Estimate #4 to Preload LLC in the amount of $112,161.75 and requested authorization for payment as recommended by Mr. Christensen. She also presented an invoice from HDR Engineering in the amount of$7,200.

Ms. Rodgers made a motion to approve Pay Estimate #4 in the amount of$112,161.75 and HDR Invoice #266433-b in the amount of$7,200. Ms. Perez seconded and all voted in favor.

7. Kingsville Pump Station Bond Projects - Pump Replacement. • Pay Estimate #2- ACP

Ms. Serrato stated that work continues on the pump replacement project and the pumps should be ready for testing this week. She presented Pay Estimate #2 for Associated Construction Partners, LTD in the amount of$137,130.60 and requested authorization for payment as recommended by Mr. Christensen. In addition she presented HDR Invoice #266439-b in the amount of$3,375.

Mr. Vaughn made a motion to approve payment of Pay Estimate #2 and Invoice #266439-b. Dr. Ruiz seconded. All voted in favor.

8. Joint Project with Nueces Water Supply Corporation- Pump Station Improvements at the Driscoll Pump Station.

Ms. Serrato rep01ied that Mercer Controls has provided a revised timeline, and testing and closeout of the project is expected by Wednesday, March 291

h. No pay estimates have been received from Mercer Controls, but Ms. Serrato presented HDR Invoice 266435-b in the amount of$950.

Ms. Rodgers made a motion to approve payment oflnvoice #266436-b in the amount of$950 from HDR Engineering. Mr. Vaughn seconded. All voted in favor.

9. Assessment ofSTWA's 42" waterline.

Ms. Serrato reported that HDR Engineering personnel arrived and performed some surveying and testing tasks but has postponed remaining testing until after the fields dty out from the recent heavy rain. She presented HDR Invoice 266444-b in the amount of$13,353.99 for the field work completed.

Mr. Vaughn made a motion to authorize payment ofHDR Invoice #266444-b in the amount of $13,353.99. Ms. Perez seconded. The motion carried.

STW A Regular Meeting Minutes March 22,2016 Page4

10. Amendments to Wholesale Water Supply Contract Template, current City of Agua Dulce Water Supply Contract, current Nueces Water Supply Corporation Contract. and current Ricardo Water Supply Corporation Contract related to the South Texas Water Authority Tax-Exempt Bonds. Series 2013 as well as contracts offered or to be offered to the cities of Bishop, Driscoll and Kingsville and the Nueces County Water Control & Improvement District #5.

Ms. Serrato reported that an amended Water Supply Contract with Ricardo Water Supply Corporation was finalized and forwarded to RWSC President Baldemar Garcia. She hopes to have an amended contract for Nueces Water Supply Corporation very soon and she anticipates that the contracts will be listed on the Corporations' Aprill21

h agendas. Work will continue on the Agua Dulce, Kingsville and Bishop conti·acts as well those for Banquete and Driscoll.

II. Adjournment.

With no futther business to discuss, Ms. Trevino adjourned the meeting at 6:29p.m.

Respectfully submitted,

1?1~ Ftances De Leon

ssistant Secretary

ATTACHMENT 2

Quarterly Report/Treasurer's Report/Payment of Bills

CASH ACCOUNTS GENERAL ACCT- PROSPERITY BANK GENERAL ACCT TEXPOOL 1371300002 GENERAL ACCT TEXSTAR 1111-000 PAYROLL ACCT- PROSPERITY BANK OPERATIONS ACCT- PROSPERITY BANK HEALTH REIMB. ACCT.- PROSPERITY BANK DEBT SERVICE ACCT TEXPOOL 1371300008 TOTAL CASH ACCOUNTS

GENERAL ACCT- PROSPERITY BANK GENERALACCTTEXPOOL 1371300002 GENERALACCTTEXSTAR 1111-000 PAYROLL ACCT- PROSPERITY BANK OPERATIONS ACCT- PROSPERITY BANK HEALTH REIMB. ACCT.- PROSPERITY BANK DEBT SERVICE ACCT TEXPOOL 1371300008 TOTALS

SOUTH TEXAS WATER AUTHORITY INVESTMENT REPORT

FOR QUARTER ENDED MARCH 31, 2016

ENDING ENDING BOOK VALUE MARKET VALUE TRANSFERS REVENUES EXPENSES INTEREST

1-Jan-16 1-Jan-16 FOR JANUARY, FEBRUARY, & MARCH

403,404.11 403,404.11 530,000.00 418,762.55 1,227,297.21 272.17 1,309,878.71 1 ,309, 773.92 (700,000.00) 627,051.83 0.00 1,035.52 3,421,887.75 3,421, 702.97 0.00 0.00 0.00 2,647.36

41,490.49 41,490.49 70,000.00 0.00 88,650.27 21.96 63,241.04 63,241.04 100,000.00 0.00 180,593.63 25.70

9,649.93 9,649.93 0.00 1,500.00 0.00 6.23 142,239.30 142,227.92 0.00 216,003.91 67,725.00 189.97

J 5,391, 791.33 1 5,392,007.00 o.oo 1 1,263,318.29 1 1,564,266.11 1 4,198.91

AVG. MAT. JANUARY JANUARY FEBRUARY FEBRUARY MARCH 313112016 RATE EARNING RATE EARNING RATE immediate 0.2500% $84.96 0.2500% $101.23 0.2500% 45 days 0.2674% $335.11 0.3010% $359.10 0.3273% 45 days 0.2713% $788.45 0.3147% $855.71 0.3450%

immediate 0.2500% $7.35 0.2500% $7.75 0.2500% immediate 0.2500% $9.91 0.2500% $9.06 0.2500% immediate 0.2500% $2.04 0.2500% $1.91 0.2500% 45 days 0.2674% $45.18 0.3010% $64.98 0.3273%

$1,273.00 $1,399.74

THIS REPORT IS IN COMPLIANCE WITH THE STRATEGIES AS APPROVED AND

ENDING ENDING BOOK VALUE MARKET VALUE

31-Mar-16 31-Mar-16

125,141.62 125,141.62 1 ,237,96.6.06 1 ,238,052. 72 3,424,535.11 3,424,836.47

22,862.18 22,862.18 (17,326.89) (17,326.89) 11,156.16 11 '156.16

290,708.18 290,728.53 5,095,042.42 1 5,095,246.22

MARCH EARNING TOTALS

$85.98 $272.17 $341.31 $1,035.52

$1,003.20 $2,647.36 $6.86 $21.96 $6.73 $25.70 $2.28 $6.23

$79.81 ~189.97

$1,526.17 $4,198.91

STWA Water Sales:

Entity

Kingsville Bishop AguaDulce RWSC Driscoll NCWCID#5 NWSC TOTAL

SOUTH T;EXAS WATER AUTHORITY Treasurer's Report

For Period Ending March 31, 2016

Cost of Water Out of from City of District

Water Corpus Christi Handling Surcharge Usage $2.314471 Charge@ and Pass-

(1,000 g) per 1000 g $0.426386/1000g Thru Credit

6,086 $14,085.87 $2,594.99 $0.00 4,252 $9,841.13 $1,812.99 $0.00 1,974 $4,568.36 $841.61 $0.00 7,905 $18,295.89 $3,370.58 $0.00 3,624 $8,387.41 $1,545.18 -$30.85 2,090 $4,837.15 $891.13 $686.20 12,154 $28,130.98 $5,182.46 $0.00 38,085 $88,146.79 $16,238.94 $655.35

Water Cost and Usage for Period of: 03/02/16 to City of Corpus Christi Invoice for Cost of Water Purchased: Gallons of Water Recorded by City of Corpus Christi: Gallons of Water Recorded by STWA from Customer's Master Meters: Water Loss Percentage:

Annual Usage for FY 2016 Gallons of Water Recorded by City of Corpus Christi: Gallons of Water Recorded by STW A from Customer's Master Meters: Water Loss Percentage: (year to date)

Total Due

$16,680.86 $11,654.12

$5,409.97 $21,666.47

$9,901.74 $6,414.48

$33,313.44 $105,041.08

04/01116 $74,757.40. 32,300,000 38,085,070

-17.91%

Annual 221,450,000 . 229,022,650

-3.42%

REVENUE FUND INCOME STATEMENT

FOR PERIOD ENDING MARCH 31,2016 50.00%1

2016 %OF 2016 2015 2015 MONTHLY YEAR TO ADOPTED FINAL YEAR TO FINAL

DATE BUDGET BUDGET DATE BUDGET REVENUES Water Service Revenue 88,147 539,255 1,211,645 45% . 497,175 1 '155,000 Handling Charge Revenue 16,239 112,176 216,969 52% 90,312 . 212,000 Surcharge - Out of District 686 4,117 . 8,234 50% 3,906 7,812 Interest Income 443 2,091 1,600 131% 924 2,020 Other Revenue Opera~ng & Maintenance Fees 52,943 234,644 449,150 52% 218,720 442,500 Miscellaneous Revenues 3,921 6,744 30,000 22% 6,268 24,000 NWSC reimbursement for Driscoll PS 0 0 72,764 0% 0 0

TOTAL REVENUES 162,379 899,027 1,990,362 45% 817;305 1,843,332

EXPENDITURES Water Service Expenditures: Bulk Water Purchases 74,757 516,104 1,214,970 42% 495,990 1 '158,325 Payroll Costs

Salaries & Wages- Perm: Employees 48,451 272,125 551,225 49% 258,779 527,135 Salaries & Wages - Part-Time 1,128 6,871 10,283 . 67% 5,100 11,072 Overtime - NWSC 843 5,098 10,000 51% 4;842 9,850 Stand-by Pay - NWSC 75 625 1,300 48% 650 1,350 Overtime - RWSC 239 4,942 10,000 49% 2,848 7,300 Stand-by Pay - RWSC 75 . 625 1,300 48% 650 1,350 Overtime- STWA 808 7,183 21,000 34% 7,780 15,720 Stand-by Pay- STWA 75 625 1,300 48% 650 1,350 Employee Retirement Premiums 7,330 40,555 81,002 50% 35,870 67,142 Group Insurance Premium 48,242 173,496 357,280 49% 178,171 314,277 Unemployment Compensation 496 2,334 1,755 133% 2,042 300 Workers' Compensation 0 13,418 13,692 98% 14,259 14,260 Car Allowance 400 2,400 4,800 50%. 2,400 4,800 Hospital Insurance Tax 557 3,633 7,332 50% 3,429 7,352

Supplies & Materials Repairs & Maintenance 18,638 49,859 82,500 60% . 44,787 107,000

;

Meter Expense 0 4,125 16,265 25% 4,125 4,125 Tank Repairs 0 1,950 8,735 22% 20,390 20,390 Major Repairs 0 0 25,000 0% 6,097 25,000

Other Operating Expenditures: Professional Fees

Legal 4,438 47,160 65,000 73% 25,221 75,000 Auditing 0 8,835 8,950 99% 8,581 8,581 Engineering 0 16,200 10,000 162% 1,187 14,500 Management & Consulting 0 878 2,000 44% 89 5,500 Inspection 0 1,125 2,500 45% 1,600 1,900 Field-Professionals 0 0 Q. 0% 0 0

Consum Supplies/Materials Postage 0 4,808 17,500 27% 7,799 14,300 Printing/Office Supplies 1,894 5,825 15,000 39% 13,024 24,500 Janitorial/Site Maintenance 282 1,175 5,000 24% 1,806 ' 5,000 Fuel/Lubricants/Repairs 3,351 24,416 67,500 36% 28,685 65,000 Chemicals/Water Samples 6,808 16,260 58,000 28% 25,102 59,000 Safety Equipment 0 564 1,000 56% 0 750 Small Tools 10 10 1,000 1% 266 1,000

50.00%1

2016 . %OF 2016 2015 2015 MONTHLY YEAR TO ADOPTED FINAL YEAR TO FINAL

DATE BUDGET BUDGET DATE BUDGET

Recurring Operating Costs Telephone/Communications 783 7,238 19,750 37% 7,872 19,800 Utilities 7,752 43,858 115,000 38% 49,052 108,500 D & 0 Liability Insurance 1,000 3,023 2,800 108% 1,441 2,300 Property Insurance 0 30,566 31 '190 98% . 29,107 30,500 General Liability 0 2,647 2,500 106% 2,643 2,643 Auto Insurance 0 1,792 2,002 90% 2,885 2,885 Travel/Training/Meetings 163 3,222 11,000 29% 2,769 10,000 Rental-Equipment/Uniforms 0 2,815 5,000 56% 704 3,200 Dues/Subscriptions/Publication 520 2,975 12,500 24% . 2,153 12,500 Pass Through Cost 31 181 500 36% 176 500 Educational Materials 0 0 660 0% 0 260

Miscellaneous Miscellaneous Expenditures 403 2,892 7,500 39% 3,945 7,500

Total Administrat[ve & Operations Exp. 229,550 1,334,433 2,883,591 46% 1,304,966 2,773,717

Capital Outlay Capital Acquisition (11,523) 0 131,500 0% 33,242 52,080 Engineering 950 9,500 19,000 50% 3,136 14,736

TOTAL EXPENDITURES (w/o D.S. exp.) 218,978 1,343,933 3,034,091 44% 1,341,343 2,840,533

Excess (Deficiencies) of Revenue Over Expenditures (56,599) (444,906) (1,043,729) 43% (524,038) (997,201)

OTHER FINANCE SOURCE (USES) Transfer to Other Funds

Transfer from Tax Account (565,599) (939,974} (991 ,617} 95% (866,989} (906,603} Extra Ordinary Income

Disposition of Assets (Surplus Sale) 0 0 0 0% 0 (610}

TOTAL OTHER FINANCING (565,599) (939,974) (991 ,617) 95% (866,989} (907,213} SOURCES (USES}

EXCESS (DEFICIENCES} OF REVENUES OVER OTHER SOURCES (USES} 509,000 495,068 (52, 112} 342,951 (89,988}

NET INCOME 509,000 495,068 (52, 112} 342,951 (89,988}

TAX FUND INCO:ME STATEMENT

FOR PERIOD ENDING MARCH 31,2016 50.000/ol

2016 %OF 2016 2015 2015 YEAR TO ADOPTED FINAL YEAR TO FINAL

MONTHLY DATE BUDGET BUDGET DATE BUDGET REVENUES Ad-Valorem -Current 19,867 960,056 1,000,362 96% 897,051 929,750 Delinquent Tax Revenue 2,102 14,499 27,500 53% 16,f26 29,350 Penalty & Interest- Tax Accounts 2,198 8,235 16,000 51% 10,082 19,150

. Miscellaneous 0 b 0% 0 0

TOTAL TAXES & INTEREST 24,167 982,791 1,043,862 94% 923,259 978,250

· EXPENDITURES Tax Collector Fees 3,329 34,057 34,860 98% 44,767 47,739 Appraisal Districts 3,605 8,760 17,385 50% 11,503 23,908

TOTAL EXPENDITURES 6,934 42,817 52,245 82% 56,269 71,647

Transfer to General Fund 565,599 939,974 991,617 95% 866,989 906,603

EXCESS REVENUES & OTHER FINANCING SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (548,366) (0) 0 0 0

Current Assets STW A - General STW A - Payroll STW A - Operations Health Reimbursement Petty Cash TexPool- STW A General Due From Capital Projects Fund Due from Debt Service Fund Due from D.S .-Collect Service Tax Accounts Receivable Allowance for Uncollect Taxes Service accts receivable Interlocal Rec-Ricardo Interlocal Rec-Nueces Inter local Rec. - Tax Assessor Miscellaneous Receivables Inventory

Total Assets

Current Liabilities Trade Accounts Payable Salaries & Wages Payable Hospital Ins Tax Payable Empty Retire Prem Payable Unemployment Comp. Pbl. Miscellaneous Payables Compensated Absences Defened tax revenue

Total Liabilities

Fund Equity Unassigned Fund Balance Assigned Fund Bal. - Inventory Current Eamiug

Total Fund Equity

Total Liabilities & Fund Equity

South Texas Water Authority Balance Sheet

March 31, 2016

$

ASSETS

125,141.62 22,862.17

(17,326.89) 11,156.16

150.00 1,237,966.06 1,467,403.55

12,962.43 3,664.70

152,507.31 (51,061.95) 144,967.37

9,892.06 12,449.17 4,137.70

179.62 22,170.84

$

LIABILITIES AND FUNDS EQUITY

$ 554,488.17 23,176.56

(0.04) . (95.90)

2,411.38 (174.64)

14,732.82 101,445.36

1,945,999.34 22,170.84

495,068.03

Unaudited- For Management Purposes Only

$

3,159,221.92

695,983.71

2,463,238.21

3,159,221.92

South Texas Water Authority Gl Account Summary Report

As of: March 31, 2016

Account Descri{!tion Beginning Debit Change Credit Change Net Change Ending Balance Balance

Current Assets STW A - General 356,725.26 $ 182,075.02 $ (413,658.66) $ (231,583.64) $ 125,141.62 STWA- Payroll 52,669.90 6.86 (29,814.59) (29,807.73) 22,862.17 STWA- Operations 35,974.61 6.73 (53,308.23) (53,301.50) (17,326.89) Health. Reimbursement 9,653.88 1,502.28 0.00 1,502.28 11,156.16 Petty Cash 150.00 0.00 0.00 0.00 150.00 TexPool - STWA General 1,211,133.17 26,832.89 0.00 26,832.89 1,237,966.06 Due From Capital Projects Fund 1,009,917.89 461,855.66 (4,370.00) 457,485.66 1,467,403.55 Due from Debt Service Fund 11,844.37 1,118.06 0.00 1,118.06 12,962.43 Due from D.S .-Collect Service 1,271.61 2,393.09 0.00 2,393.09 3,664.70 Tax Accounts Receivable 149,282.97 5,765.34 (2,541.00) 3,224.34 152,507.31 Allowance for Uncollect Taxes (51,061.95) 0.00 0.00 0.00 (51,061.95) Service accts receivable 171,794.61 139,540.80 (166,368.04) (26,827.24) 144,967.37 Interlocal Rec-Ricardo 3,770.00 9,892.06 (3,770.00) 6,122.06 9,892.06 Interlocal Rec-Nueces 11,811.00 12,449.17 (11,811.00) 638.17 12,449.17 Interlocal Rec. -Tax Assessor 6,559.64 4,137.70 (6,559.64) (2,421.94) 4,137.70 Miscellaneous Receivables 179.62 0.00 0.00 0.00 179.62 Inventory 22,170.84 0.00 0.00 0.00 22,170.84 Total Assets 3,003,847.42 847,575.66 (692,201.16) 155,374.50 3,159,221.92

Current Liabilities Trade Accounts Payable (380,855.27) 461,937.01 (635,569.91) (173,632.90) (554,488.17) Salaries & Wages Payable (16,840.32) 16,840.32 (23,176.56) (6,336.24) (23,176.56) Hospital Ins Tax Payable 0.00 1,113.98 (1,113.94) 0.04 0.04 Withholding Taxes Payable 0.00 4,044.85 (4,044.85) 0.00 0.00 Emply Retire Prem Payable 96.00 9,500.74 (9,500.84) (0.10) 95.90 Unemployment Comp. Pbl. (1,915.47) 0.00 (495.91) (495.91) (2,411.38) Miscellaneous Payables 66.09 6,699.08 (6,590.53) 108.55 174.64 Compensated Absences (13,478.27) 0.00 (1,254.55) (1,254.55) (14,732.82) Deferred tax revenue (98,221.02) 2,541.00 (5,765.34) (3,224.34) (101,445.36) Total Liabilities (511,148.26) 502,676.98 (687,512.43) (184,835.45) (695,983.71)

Fund Equity Unassigned Fund Balance (1,936,094.65) 1,254.55 (11,159.24) (9,904.69) (1,945,999.34) Assigned Fund Bal. - Inventory (22,170.84) 0.00 0.00 0.00 (22, 170.84) Total Fund Equity (1,958,265.49) 1,254.55 (11,159.24) (9,904.69) (1,968,170.18)

Totals 534,433.67 $ 1,351,507.19 $ (1,390,872.83) $ (39,365.64) $ 495,068.03

DEBT SERVICE FUND INCOME STATEMENT

FOR PERIOD ENDING MARCH 31, 2016 50.00%1

2016 % OF2016 2015 2015

YEAR TO ADOPTED ADOPTED YEAR TO FINAL

MONTHLY DATE BUDGET BUDGET DATE BUDGET

REVENUES Ad-Valorem- Orrrent 6,857 331,346 345,253 96% 340,888 353,400

Delinquent Tax Revenue 613 4,125 7,000 59% 3,520 6,750

Penalty & Interest- Tax Accounts 659 2,149 5,500 39% 2,553 4,450

Intererest on Temporary Investments 80 215 100 215% 32 95

Miscellaneous Q Q Q 0% Q Q TOTAL TAXES & INTEREST 8,208 337,835 357,853 .94% 346,993 364,695

OTHER FINANCING SOURCES Excess Bond Proceeds Q Q Q 0% Q Q

TOTAL OTHER FINANCE SOURCES 0 0 0 0 364,695

TOTAL REVENUE AND OTHER FINANCE SOURCES 8,208 337,835 357,853 94% 346,993 364,695

EXPENDITURES Fiscal Agent Fees 0 100 200 50% 100 200

Bond Interest Expense 0 67,625 139,450 48% 69,725 139,450

Bond Principal Payments 0 0 210,000 0% 0 210,000

Tax Collector Fees 1,149 11,754 13,760 85% 0 0

Appraisal District Fees 1,244 3,023 7,425 41% 0 0

Miscellaneous Q Q Q 0% Q Q TOTAL EXPENDITURES 2,393 82,502 370,835 22% 69,825 349,650

EXCESS REVENUES OVER(UNDER) EXPENDITURES AND OTHER USES 5,815 255,333 (12,982) 277,168 15,045

Current Assets Debt Service Acct. - TexPool Interlocal Rec.-Tax Assessors Taxes Receivable

Total Current Assets

Other Assets

Total Other Assets

Total Assets

Current Liabilities Deferred Tax Revenue Due to General Fund

Total Current Liabilities

Long-Term Liabilities

Total Long-Term Liabilities

Total Liabilities

Fund Balance. Fund Balance NetJncome

Total Fund Balance

STW A Debt Service Fund Balance Sheet

· March 31, 2016

ASSETS

$ 290,708.18 15,295.63

1,395.51

$

LIABILITIES Al~ FUNDS EQUITY

$ 15,295.63 16,627.13

20,143.93 255,332.63

Total Liabilities & Fund Balance $

Unaudited- For Management Purposes Only

307,399.32

0.00

307,399.32

31,922.76

0.00

31,922.76

275,476.56

307,399.32

STW A Debt Service Fund Gl Account Summary Report

As of: March 31,2016

Account Account Descri}!tion Beginning Debit Change Credit Change Net Change Ending Balance Number Balance

10400 Debt Service Acct. - TexPool 281,522.39 $ 9,185.79 $ 0.00 $ 9,185.79 $ 290,708.18 13001 lnterloca1 Rec.-Tax Assessor 11,456.82 7,099.64 (3,260.83) 3,838.81 . 15,295.63 13300 Taxes Receivable 2,252.73 1,395.51 (2,252.73) (857.22) 1,395.51 21700 Deferred Tax Revenue (11,456.82) 3,260.83 (7,099.64) (3,838.81) (15,295.63) 24000 Due to General Fund (13,115.98) 0.00 (3,511.15) (3,511.15) (16,627 .13) 39100 Fund Balance (21,141.71) 3,283.50 (2,285.72) 997.78 (20,143.93)

Totals 249,517.43 $ 24,225.27 $ (18,410.07) $ 5,815.20 $ 255,332.63

CAPITAL PROJECTS FUND INCOME STATEMENT

FOR PERIOD ENDING MARCH 31,2016 50.00%1

2016 %OF 2016 2015 2015 YEAR TO ADOPTED ADOPTED YEAR TO FINAL

MONTHLY DATE BUDGET BUDGET DATE BUDGET REVENUES Bond Proceeds 0 0 0 0% 0 0 Interest Income 1,003 3,833 1,850 207% 904 1,850 Other Income -7,167 0 0 0% 0 0

TOTAL REVENUE AND OTHER FINANCE SOURCES -6,164 3,834 1,850 . 207% 904 1,850

EXPENDITURES Right of Way Acquisition 0 0 7,264 0% 0 0 Engineering Fees 33,663 117,246 406,773 29% 13,500 70,000 Construction Costs 428,193 1,345,825 2,411,955 56% 87,069 197,923

Pipeline Condition Assessment 0 0 300,000 0% 0 0 Legal & Administrative Fees 0 0 181,712 0% 0 0 CostofBondlssuance 0 0 0 0% 0 0 Miscellaneous Fees Q Q Q 0% Q Q

TOTAL EXPENDITURES 461,856 1,463,071 3,307,704 44% 100,569 267,923

EXCESS REVENUES OVER(UNDER) EXPENDITURES AND OTHER USES (468,019) (1,459,237) (3,305,854) (99,666) (266,073)

Current Assets TexSTAR- Construction Fund

Total Current Assets

Property and Equipment

Total Property and Equipment

Other Assets

Total Other Assets

Total Assets

STWA Capital Projects Fund Balance Sheet ·

March 31, 2016

ASSETS

$ 3,424,534.39

3,424,534.39

0.00

0.00

$ 3,424,534.39

LIABILITIES AND FUNDS EQUITY

Current Liabilities Due to General Fund

Total Current Liabilities

Long-Term Liabilities

Total Long-Term Liabilities

Total Liabilities

Fund Balance Fund Balance Net Income

Total Fund Balance

Total Liabilities & Fund Balance

$ 1,467,403.55

3,416,368.38 (1,459,237.54)

Unaudited -For Management Purposes Only

1,467,403.55

0.00

1,467,403.55

1,957,130.84

$ 3,424,534.39

Account Account Number Description

11300 TexSTAR- Construction 12100 Due from General Fund 2400 Due to General Fund 39100 Fund Balance

Totals

STW A Capital Projects Fund Gl Account Summary Report

As of: March 31,2016

Beginning Debit Change Credit Change Balance

3,423,531.19 $ 1,003.20 $ 0.00 0.00 7,167.48 (7,167.48)

(1,009,917.89) 11,537.48 (469,023.14) (3,404,830.90) 0.00 (11,537.48)

Net Change Ending Balance

$ 1,003.20 $ 3,424,534.39 0.00 0.00

(457,485.66) (1,467,403.55) (11,537.48) (3,416,368.38)

(991,217.60) $ 19,708.16 $ (487,728.10) $ (468,019.94) $ (1,459,237.54)

SOUTH TEXAS WATER AUTHORITY 2012 BOND ELECTION

Cost of Bond Issuance:

Proposition #1: REGIONAL WATERLINE

< Proposition #2: KINGSVILLE PUMP STATION

Proposition #3: BISHOP FACILITY

TOTAL BOND PROCEEDS:

Cost of Bond Issuance Financial Advisory Fee (First Southwest) Computer Structure Fee (for bidding securities) Bond Counsel - Leroy Grawunder (MP&H) Attorney General - State Fees and Review Standard & Poor's -Rating Agency Paying Agent- Bank processing bonds/paid semi annually Document Preparation/Printing Miscellaneous Accrued Interest- use to make first Debt Payment

TOTAL Cost of Bond Issuance FUNDS WITBJIE;LD FROM BOND PROCEEDS/PAID IN FULL

Proposition #1: REGIONAL WATERLINE 36.54%

Construction: Lewis Construction Change Order #1 Change Order #2 Change Order #3 Change Order #4

ROW Acquisition: Pipeline Condition Assessment:

HDR Engineering Construction Related Costs:

HDR Engineering Non-Construction Related Costs:

TOTAL Proposition # 1

Engineer Estimate

$1,130,100.00

$1,130,100.00 $64,700.00

$300,000.00

$312,600.00

$92,600.00 $1,900,000.00

Contract Amount

. $1,035,100.00 $4,320.85

$30,815.17 -$5,100.00 $13,954.16

$1,079,090.18 $60,541.31

$105,900.00 $209,300.00

$36,076.45 $1,490,907.94

$107,386.40

$1,900,000.00

$2,925,000.00

$375,000.00

$5,307,386.40

$30,385.00 $6,000.00

$39,000.00 $5,110.00

$11,000.00 $200.00

$5,000.00 $1,973.90 $8,717.50

$107,386.40

Percent Expended

95.49% 93.57%

53.55% 64.43%

38.96%

36.54%

56.25%

7.21%

100.00%

Amount Expended

$1,035,100.00 $4,320.85

$30,815.17 -$5,100.00 $13,954.16

$1,079,090.18 $60,541.31

$0.00 $56,709.45

$201,421.26

$36,076.45 $1,433,838.65

Amount Remaining

$51,009.82 $4,158.69

$243,290.55 $111,178.74

$56.523.55 . $466,161.35

Proposition #2: KINGSVILLE PUMP STATION 56.25%

Engineer Contract Percent Amount Amount Estimate Amount Expended Expended Remaining

ROW Acquisition: $0.00 $0.00 $0.00 Pipeline Condition Assessment: $0.00 $0.00 $0.00 Construction Related Costs: $0.00

Ground Storage Tank- PreLoad $1,894,460.00 $1,319,700.00 75.76% $999,803.75 $894,656.25 New Pumps- ACP $327,378.00 $295,000.00 74.69% $220,333.51 $107,044.49

Change Order # 1 $12,310.75 $307,310.75

- Odessa Pumps $20,162.00 $20,162.00 100.00% $20,162.00 $0.00

Engineering - GST $234,800.00 $234,800.00 100.00% $234,800.00 $0.00 Engineering - Pmnp Station $91,600.00 $91,600.00 97.54% $89,350.00 $2,250.00

Non-Construction Related Costs: Other $356,600.00 Rock Engineering, Inc. $1,121.00

TOTAL Proposition #2 $2,925,000.00 $1,973,572.75 $1,565,570.26 $1,,003,950.74

Proposition #3: BISHOP FACILITY 7.21%

Engineer Contract Percent Amount Amount Estimate Amount Expended Expended Remaining

Construction: Mercer $277,100.00 $109,900.00 42.44% $117,596.50 $159,503.50 Change Order: Painting building $3,996.00

Change to WYE $3,700.00 $117,596.00

ROW Acquisition: · $0.00 $0.00 $0.00 Pipeline Condition Assessment $0.00 $0.00 $0.00 Construction Related Costs: $52,200.00 $52,200.00 100.00o/o $52,200.00 $0.00

LNV Engineering Non-Construction Related Costs: ~28,600.00 $13,330.35 46.61% ~13,330.35 ~15,269.65

TOTAL Proposition #2 $357,900.00 $183,126.35 $183,126.85 $174,773.15

OUTSTANDING INVOICES FOR BOARD APPROVAL

\INVDATE\ VENDOR INV# DESCRJPTION \STATUS\ AMOUNT

3/21/2016 Kevin Kieschnick-NC Tax Assessor February 2016 per parcel fees pending $4,006.56 4/12/2016 Kevin Kieschnick-NC Tax Assessor _March 2016 per parcel fees pending $471.92 3/31/2016 \Villatt & Flicldnger March Legal pending $4,438.40 4/!1/2016 City of Corpus Christi March water pending $74,757.40 4113/2016 Trucker's Equipment, Inc. 1311019 Liftgate, installation, wheel chock pending $2,160.00

Total $85,834.28

Nueces County Courthouse 901 Leopard, Suite 301

Corpus Christi, TX 78401

South Texas Water District

C/0 Carola Serrato

P.O. Box 1701

Kingsville, TX 78363

Kevin Kieschnick Assessor and CollectorofTaxes

March 21, 2016

Fees for Collection of Ad Valorem Taxes· during the month of FEBRUARY 2016

Total collected parcels

Collection Fee per Parcel

Total for FEBRUARY

Please Make Checks Payable To:

Nueces County Tax Assessor-Collector

For information contact: voice

fax

Motor Vehicle (361) 888-0459 (361) 888-0482

Pioperty Tax (361) 888-0230 (361) 888-0218

Administration (361) 888-0307 (361) 888-0308

[f?d~~~~'\§~[Q) MAR 2 8 2016

SOUTH TEXAS WATER AUTHORITY

2,946

$1.3600

$4.006.56

Voter Registration (361) 888-0404 (361) 888-0339

Nueces County Courthouse 901 Leopard, Suite 301

·Corpus Christi, TX 78401 Kevin Kieschnick .

Assessor and Collector ofTaxes

Administration (361) 888-0307 (361) 888-0308

[R1~([;~~~~[Q) APR 2 0 2016

April12, 2016 'SOUTH TEXAS WATER AUTHORITY

South Texas Water District C/0 Carola Serrato P.O. Box 1701 Kingsville, TX 78363

Fees for Collection of Ad Valorem Taxes during the month of MARCH 2016

Total collected parcels

Collection Fee per Parcel

Total for MARCH

Please Make Checks Payable To: -Nueces Coupty Tax Assessor-Collector

For information contact: voice

fax

Motor Vehicle (361) 888-0459 (361) 888-0482

Property Tax (361) 888-0230 (361) 888-0218

347

$1.3600

$471.92

Voter Registration (361) 888-0404 (361) 888-0339

WILLATT & FLICKINGER, PLLC ATTORNEYS AT LAW

2001 NORTIIL.\MAR • AUSTIN, TEMS 78705 • (512) 476-6604 • F.LX (512) 469-9148

March 31,2016

VIA ELECTRONIC TRANSMISSION ONLY

Ms. Carola Serrato Executive Director South Texas Water Authority P.O. Box 1701 Kingsville, Texas 78364-1701

Re: · Billing for Professional Services Rendered

Dear Caro1a:

Enclosed is our bill.for professional service.s rendered since the date oflast billing.

. BF/an Enclosure

Bill Flickinger

WILLATT & FLICKINGER, PLLC ATTORNEYS AT LAW

2001 NORTH LAMAR • AUSTIN, TEXAS 78705 • (512) 476-6604 • FAX(512) 469-9148

March 31, 2016

Ms. Carola Serrato · Executive Director South Texas Water Authority P.O, Box 1701 Kingsville, Texas 783 64-1701

FOR PROFESSIONAL SERVICES RENDERED since date of last billing:

GENERAL

BILL FLICKINGER

03/07116

03/14/16

03115/16

03/17/16

03/28/16

Telephone conference with Carola Serrato on draft letter and amendment to contr&ct with customers. (0.2 Hours). Telephone conference with Noel Valdez.on same. (0.2 Hours).

Telephone conference with Noel Valdez on wholesale contracts and draft letter to Ricardo WSC. (0.4 Hours).

Continue review of proposed changes to wholesale contracts, and send revised redline drafts via email to Carola Serrato, Noel Valdez. and Leroy Grawunder. (2.4 Hours). Telephone conference with Carol a Serrato on same. (0.3 Hours). Draft and

.send email to Noel Valdez on water supply contract revisions and to advise a conference call should not be necessary. (0.2 Hours).

Draft and send email to Noel Valdez on status of his review of most recent revisions to Ricardo vise contract, and receive and review his response. (0.4 Hours). Receive and begin review of comments from Noel Valdez on revised Ricardo WSC contract. (0.4 Hours). Telephone conference with Carola Serrato on same: (0.2 Hours). Continue revising amended water contract with Ricardo WSC, arid ernailblack-1ined. draft and execution (clean) version of same to Carol a Serrato along with red line and final of Quitclaim. (1. 7 Hours). Review current management contract with Ricardo WSC, and send email to Carola Serrato to advise no amendments are needed. (0.5 · Hours).

Receive, review and respond to email from Carola Serrato on proposal from Mercer Controls. (0.4 H9urs).

Attorney BF: 7.3 Hours

WILLA IT & FLICKINGER, PLLC

Ms. Carola Serrato March 31,2016 · Page2

ALLISON NIX

03/31/16 Review files in connection with Nueces WSC 20-year contract. Forward same in ·Word to Carola Serrato with cover email. (0.9 Hours).

Legal Assistant AN: 0.7 Hours

TCEO ENFORCEMENT ACTION

BILL FLICKJNGER

03/01/16

03/02/16

03/07/16

03/08/16

03/l0/16

03/14/16

03Jl6/16

03/17/16

Emails to and from Aaron Archer and Carola Serrato on possible conference call to prepare for conference with TCEQ on sampling points. (0.2 Hours). Continue review ofED's Initial Closing Brief from remand in TCEQ enforcement action. (0.5 HoJlrs).

Telephone conference with Carilla Serrato on TCEQ brief in enforcement action remand and on upcoming call with TCEQ on sampling points. (0.2 Hours).

Conference call with Carol a Serrato and Aaron Archer to review TCEQ's prior email on sampling points to prepare for conference call with TCEQ later this week. ( 1.2 Hours). Email to Amber Ahmed and Meaghan Bailey on setting up Thursday's conference call1ink. (0.2 Hours) ..

Emails to and from Amber Ahmed, Caro!a Serrato and Aaron Archer on rescheduling conference call with TCEQ bn sampling points. (0.5 Hours).

Receive and review email from Amber Ahmed on rescheduling TCEQ conference call. (0.2 Hours).

Telephone conference with Aaron Archer on TCEQ closing brief in remand of enforcement action. (0.2 Hours).

Draft and send email to Amber Ahmed requesting she send call-in/login information for tomorrow's conferenc.e 'call on sampling points, and receive and review her response. (0.2 Hours). · ·

Prepare for and participate'in conference call with Carola Serrato, Aaron Archer and TCEQ staff on proposed samp'!ing points. (0. 7 Hours). Telephone· conference with

WILLATT & FLICKINGER, PLLC

Ms. Carol a Serrato March 31, 2016,. Page 3

Carola Serrato on conference call and on conversion of Driscoll booster station. (0.2 Hours).

03/30/16 Continue preparation of Reply Brief in remand ofTCEQ enforcement action. ( 1.0 ·Hours). ·

03/31/16 Continue preparation of Reply Brief in connection with TCEQ enforcement action remand. (1.5 Hours). Telephone conference with Amber Aluned on issues related to last conference call with TCEQ on remand in enforcement action. (0.2 Hours).

Attorney BF: 7,0 Hours

ALLISON NIX

03/29/16 Continue drafting Authority's Reply Brief in connection with TCEQ enforcement action. (0.4 Hours).

Legal Assistant AN: 0.4 Hours

Attorney BF: 7.3 Hours @ $300.00 per hour Attorney BF: 7.0 Hours TCEQ Enforcement Action@ $300.00 per hour Legal Assistant AN: 0.7 Hours@ $95.00 per hour Legal Assistant AN: 0.4 Hours TCEQ Enforcement Actic!n@ $95.00 per hour

CLIENT EXPENSES

122 Photocopies@ $.20 each

39 Color Photocopies @$.50 each

g\bil\s\STWA.201&3 J/Jlll6

$24.40

$19.50

Total 'client Expenses

TOTAL AMOUNT DUE

$2,190.00 $2,100.00

$66.50 .$38.00

$43.90

$4,438.40

~~-. •"

r;~~--.. ;).. _c_ ITY'oF Account Name: SOUTH TX WATER AUTH

~ lml_ ) CORPUS Monthly Slalement of Utility Services Account Number: 612 3-5 8 8 0 -

":.~- CHRISTl ~_C:,';':;?~,cms~.TX'""-"97ServiceAddress: END DR RAW WTRS -(361)880-:i«o'.,,.,w.room.oom Account Type: PUBLIC AGENCY FOR RE

U-5"- .-- _: ,,,. Bill Date: 4/11/16 Cycle/Route: 01-60 --I#~"~{Jm .. J~ih~lf~:$~.~~-~-~=

$9Q,686.8Q l J -$.9.Q,686AUL. - $0.00 $_Q • .ll.Q _____ Jl~~~75"-'7"-".4"-'0'----'~----"$"-'0.""00"---------' ID" 75Z.4Q ___ .

1-lETER INFDRNATION

Heter Service Current Previous Consur;ption ro Type Read Read 4/2016

WT200006 WA 3062500 3030200 32300 SERVICE PERIOD: 3/02/16 4/01/16 30 DAYS

[R{~~rE~IW~[Q) APR f 4 2016


• IMPORTANT ~lESSAGE

Effective February 1, 2016 the Utility Business Office Hours of operation will be

Monday· Friday 8:00am· 5:00pm

Sign up for Sprlng_Break & Summer activities with CC Parks & Recreation Dept. Visit www .ccparka nd rec .com

Sports· Swimming· Fishing- Movies & Concerts in the Park Camps· Open Recreation -leagues- Outdoor Adventures

- FOR MORE INFORM.ATIOU VISIT \'l\'l\'1 ,CCTEXAS.COM *** -OR CALL 361,826.2489-

Sign up for the latest City news at www.cctexas.com/mycity

ACCOUNT ACTIVITY

LAST BILL $90,686.80 TOTAL PAID SINCE LAST BILL -$90,686.80 ADJUSTI-IENTS $0.00

BALANCE FORI•IARO OUE NOV/ $o.ooj NE\1 CHARGES \•lATER $42, 71S .80 R\1CA $0. 992/TGAL $32,041.60 TOTAL \·lATER $74,757.40

TOTAL GAS $0.00

TOTAL \•IASTEI1ATER $0.00

TOTAL STREET FEES $0.00

TOTAL SOLID \•IASTE $0.00

PAY THIS AliOUNT BY 5/02/16: $74,757.40J

ACCOUNT BALANCE $74,757.40J PLEASE ALLOW 5 BUSINESS DAYS BEFORE DUE DATE TO EUSURE PROPER CREDIT.

PLEASE FOLD ON PERFORATION BEF(lRETEARlNG ~RETURN BOTTOM PORTION WITH YOUR PAYMENT. MAKE CHECKS PAYABLETO CITY OF CORPUS CHR!STI.!NCLUOEACCOUNT NUMBER ON THE CHECK

~ CITYoF . ,-, ~~lg~~~yls. . ~~::

• .lS~~ i.:~.: }, ;~.:;_-,:~--:_-~ l. P.O. Box 9257 • Corpus Chrisli, 1X 78469-9097 .2.':..~-'-'-". (361) 880-3440 • www.cclexas.cam · ·-·- .·---

Working to Serve'{ou Better.

9-20 56

SOUTH TX WATER AUTH P 0 BOX 1701 KINGSVILLE TX 78364-1701

l'll•l•llll·lllllllllllllllllllllllooi''IIIIIIIIJIIII'Illll···" l .

Account Number: Service Address: Cycle-RDute #:

OUE DATE:

AMOUNT DUE:

6123-5880 END DR RAW WTR5 01-60

AFTER DUE DATE PAY:

5/02/16

$74,757.40

$78,495.27

When making payment in person, please bring entire statement.

Remit to:

CITY OF CORPUS CHRISTl P. 0. BOX 659722 SAN ANTONIO TX 78265-9722

0000061230000058800074757401

Truckers Equipment, Inc. INVOICE 1501 North Port Avenue Corpus Christi, TX 78401 [F{j [E: ~[~~'I&[E:[Q) Phone: Fax:. Toll Free:

(361) 882-2508 (361) 887-0129 (800) 242-3277

BILL TO: 002998

APR 2 0 2016



P.O. BOX 1701 KINGSVILLE TX 78364-1701

_Qate ..

SHIP TO: 002998 SOUTH TEXAS WATER AUTHORITY

P.O. BOX 1701 KINGSVILLE TX 78364-170.1

04/13/16 11079 001 203 CPU 867607.00

Quantity

PAGE: 1

1311019

-~~9!r,~~~~~:- :~~~~!~Pi~~§i ~~~~&t~t~~~ ~~~~~~-~~~~~~-~~}} ~ ~!8i~~~iw_. 1 60-1040TP27 LIFTGATE 58X27 EA 1798.00 1798.00

t:OOOihDAl .

1 LABOR 001000 LABOR EA 300.00 300.00

1 T260 ER]{TS;FOR LIFTGATE EA 0.00 0.00

02-12 F250-350

VI Nit 1 FTB2BT5BEB66: '644 F250. . . - ·-· • • -!. - :---·, - . -._ •

4 4 7001 WHEEL CHOCK \>1/EYE EA 15.50 62.00

Seller mates no "?.orrarotles \\tilth ertend-beyond the desctlp5on en the face hereof and seller's responsltllfitJ' ceases upon r~u.lp1b.y carrier. llo retums • Wllhoul prior permission and" handling charge on all returns. ?!lws sub)ectlo char.pe 'hWi,)UtnoUc:a. An~ ch~e.s V<'ll b~ marge!! f()f past due accronls.

·. 'BOLT.".·

. -~- . ... · .· ....

: ... _'_~- . -

. -·o-:.:_·

.. ;. .. ·•·.·

·. f - . ,·_ ,-:

< :. . :t . ·.I .... · .. , / . !

Terms are 'Ne!JO oars·. Net du! 30 daJ~ IrDm lrwoice dale. Accctmls O'rer 3{1 daf.l are subjad \o 1·112% &er;ice: charge (annual rate 18%) and aU costs o1 CQne.dlon lndudlng reasonable atll)fnets fees.

m merchaodlse must be acrompanled trjlhls lrr.-olc.e. All retums are subject to a 20% restoD:Ing cllarge.. Tills lrr."Olce I~ d.us and payable ln corpu;, Ch~~n. Ntteces t»Un.'Y. TH.as.

CHECK# ____ _

·.· .

~~o~,!\;~pu~-~

2160.00

Print Name:-----~---------~~~~~~"""'

P.O. Box 4727

ORIGINAL corpus Christl, TX 78469

Oct-15 Nov-15 Dec-15 Jan-16

.Feb-16 Mar-16 Apr-16

May-16 Jun-16 Jul-16

Aug-16 Sep-16

Avg Cost

All Customers

Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16

May-16 Jun-16 Jul-16

Aug-16 Sep-16

TOTAL

Kingsville Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16

Aug-16 Sep-16

TOTAL

ANTICIPATED (BUDGETED) vs. ACTUAL WATER RATE CHARGED

ANTICIPATED (BUDGETED) CHARGES ACTUAL CHARGES Handling Handling Charge CC Cost Total Charge CC Cost Total

$0.426386 $2.3815 $2.8079 $0.426386 $2.343657 $2.770043 $0.426386 $2.3827 $2.8091 $0.426386 $2.343373 $2.769759 $0.426386 $2.3832 $2.8096 $0.426386 $2.356844 $2.783230 $0.426386 $2.3840 $2.8104 $0.426386 $2.314230 $2.740616 $0.426386 $2.3852 $2.8115 $0.426386 $2.310492 $2.736878 $0.426386 $2.3825 $2.8088 $0.426386 $2.314471 $2.740857. $0.426386 $2.3802 $2.8066 $0.426386. $0.426386 $0.426386 $2.3805 $2.8069 $0.426386 ... $0.426386 $0.426386 $2.3794 $2.8057 $0.426386 $0.426386 $0.426386 $2.3792 $2.8056 $0.426386 $0.426386 $0.426386 $2.3776 $2.8040 $0.426386 $0.426386 $0.426386 $2.3805 $2.8069 $0.426386 $0.426386 $0.426386 $2.3814 $2.8078 $0.426386 $2.33 $2.756897

ANTICIPATED (BUDGETED) vs. ACTUAL WATER USAGE

Budgeted Actual Difference NWSC Budgeted 41,429,710 42,894,900 1,465,190 Oct-15 9,513,552 38,870,200 42,633,540 3,763,340 Nov-15 9,247,468 37,726,244 38,469,190 742,946 Dec-15 8,794,598 36,332,368 35,321,510 -1,010,858 Jan-16 8,678,298 34,300,726 36,063,450 1,762,724 Feb-16 8,254,825 39,320,704 38,085,070 -1,235,634 Mar-16 9,725,483 44,755,102 0 Apr-16 10,624,549 44,074,968 0 May-16 10,996,587 47,252,628 0 Jun-16 12,135,821 47,586,396 0 Jul-16 12,062,677 53,297;584 0 Aug-16 13,016,456 43,909,912 0 Sep-16 10,647,528

508,856,538 233,467,660 5,487,710 TOTAL 123,697,841

Budgeted Actual Difference RWSC Budgeted 10,388,838 7,674,000 -2,714,838 Oct-15 8,446,000 10,388,838 12,271,000 1,882,162 Nov-15 7,508,400 10,388,838 8,401,000 -1,987,838 Dec-15 7,335,200 10,388,838 5,783,000 -4,605,838 Jan-16 6,875,600 10,388,838 4,913,000 -5,475,838 Feb-16 6,110,200 10,388,838 6,086,000 -4,302,838 Mar-16 8,025,400 10,388,838 0 Apr-16 10,070,000 10,388,838 0 May-16 9,628,200 10,388,838 0 Jun-16 11,234,000 10,388,838 0 Jul-16 10,854,600 10,388,838 0 Aug-16 11,755,800 10,388,838 0 Sep-16 8,411,600

124,666,052 45,128,000 -17,205,026 TOTAL 106,255,000

Difference: Actual vs. Budgeted -$0.0379 -$0.0393 -$0.0264 -$0.0697 -$0.0747 -$0.0680 -$2.3802 -$2.3805 -$2.3794 -$2.3792 -$2.3776 -$2.3805 -$0.0509

Actual Difference 14,117,140 4,603,588 12,634,890 3,387,422 12,463,720 3,669,122 12,519,970 3,841,672 12,939,260 4,684,435 12,154,387 2,428,904

0 0 0 0 0 0

76,829,367 22,615,143

Actual Difference 9,225,000 779,000 7,003,000 -505,400 6,898,000 -437,200 6,157,000 -718,600 6,588,000 477,800 7,905,000 -120,400

0 0 0 0 0 0

43,776,000 -524,800

Bishop Budgeted Actual Difference Banquete Budgeted Actual Difference Oct-15 5,858,400 4,123,000 -1,735,400 Oct-15 2,531,878 2,116,680 -415,198 Nov-15 4,977,800 3,960,000 -1,017,800 Nov-15 2,316,064 1,894,320 -421,744 Dec-15 4,528,000 4,025,000 -503,000 Dec-15 2,256,828 1,928,880 -327,948 Jan-16 3,973,200 3,873,000 -100,200 Jan-16 2,135,888 1,958,390 -177,498 Feb-16 3,658,800 4.454,000 795,200 Feb-16 2,034,534 2,170,330 135,796 Mar-16 4,663,400 4,252,000 -411.400 Mar-16 2,249,844 2,089,960 -159,884 Apr-16 6,560,000 0 Apr-16 2,419,570 0 May-16 5,645,000 0 May-16 2,593,264- 0 Jun-16 5,489,600 0 Jun-16 2,645,506 0 Jul-16 6,327,000 0 Jul-16 2,638,934 0

Aug-16 9,502,800 0 Aug-16 2,698,054 0 Sep-16 7,263,800 0 Sep-16 2,480,760 0

TOTAL 68,447,800 24,687,000 -2,972,600 TOTAL 29,001,124 12,158,560 -1,366,476

Driscoll Budgeted Actual Difference Agua Dulce Budgeted Actual Difference Oct-15 2,310.420 3,244,400 933,980 Oct-15 2,380,622 2,394,680 14,058 Nov-15 2,297,860 2,870,300 572,440 Nov-15 2,133,770 2,000,030 -133,740 Dec-15 2,301,060 2,874,500 573,440 Dec-15 2, 121,720 1,878,090 -243,630 Jan-16 2,267,520 3,103,100 835,580 Jan-16 2,013,024 1,927,050 -85,974 Feb-16 2,057,640 3,016,100 958,460 Feb-16 1,795,889 1,982,760 186,871 Mar-16 2,258,840 3,623,900 1,365,060 Mar-16 2,008,899 1,973,823 -35,076 Apr-16 2,448,320 0 Apr-16 2,243,825 0 May-16 2,554,380 0 May-16 2,268,699 0 Jun-16 2,791,920 0 Jun-16 2,566,943 0 Jul-16 2,685,640 0 Jul-16 2,628,707 0

Aug-16 2,801,940 0 Aug-16 3,133,696 0 Sep-16 2,334,790 0 Sep-16 2,382,596 0

TOTAL 29,110,330 18,732,300 5,238,960 TOTAL 27,678,391 12,156,433 -297,491

Kingsville Actual Usage vs. Bell Chart Volume Target Actual

Volume Volume Difference Oct-15 11,656,465 7,674,000 -3,982,465 Nov-15 8,089,650 12,271,000 4,181,350 Dec-15 5,062,145 8,401,000 3,338,855 Jan-16 4,650,000 5,783,000 1,133,000 Feb-16 5,316,780 4,913,000 -403,780 Mar-16 8,359,305 6,086,000 -2,273,305 Apr-16 10,482,750 0

May-16 12,892,900 0 Jun-16 14,072,400 0 Jul-16 15,365,770 0

Aug-16 15,777,915 0 Sep-16 13,274,700 0

TOTAL 125,000,780 45,128,000 1,993,655

Net Revenue per Thousand (1 ,000) Gallons

Kingsville Actual Net Rev Per1000g NWSC Actual Net Rev Per1000g Oct-15 7,674,000 $2,824.31 $0.3680 Oct-15 14,117,140 $4,338.33 $0.3073 Nov-15 12,271,000 $3,557.04 $0.2899 Nov-15 12,634,890 $4,383.96 $0.3470 Dec-15 8,401,000 $2,107.23 $0.2508 Dec-15 12,463,720 $3,741.06 $0.3002 Jan-16 5,783,000 $1 '156.70 $0.2000 Jan-16 12,519,970 $4,053.64 $0.3238 Feb-16 4,913,000 $1,087.16 $0.2213 Feb-16 12,939,260 $4,137.35 $0.3198 Mar-16 6,086,000 $0.0000 Mar-16 12,154,387 $0.0000 Apr-16 0 #DIV/0! Apr-16 0 #DIV/0! May-16 0 #DIV/0! May-16 0 #DIV/0! Jun-16 0 #DIV/0! Jun-16 0 #DIV/0! Jul-16 0 #DIV/0! Jul-16 0 · #DIV/0!

Aug-16 0 #DIV/0! Aug-16 0 #DIV/0! Sep-16 0 #DIV/0! Sep-16 0 #DIV/0!

TOTAL 45,128,000 $10,732.44 $0.2378 TOTAL 76,829,367 $20,654.34 $0.2688

Bishop Actual Net Rev Per 1000g RWSC Actual Net Rev Per1000g Oct-15 4,123,000 $428.00 $0.1038 Oct-15 9,225,000 $2,0!)3.37 $02269 Nov-15 3,960,000 $490.05 $0.1238 Nov-15 7,003,000 $1,915.20 $0.2735 Dec-15 4,025,000 $535.61 $0.1331 Dec-15 6,898,000 $1,410.69 $0.2045 Jan-16 3,873,000 $494.07 $0.1276 Jan-16 6,157,000 $1,447.20 $0.2350 Feb-16 4,454,000 $499.34 $0.1121 Feb-16 6,588,000 $1,550.91 $0.2354 Mar-16 4,252,000 $0.0000 Mar-16 7,905,000 $0.0000 Apr-16 0 #DIV/0! Apr-16 0 #DIV/0! May-16 0 #DIV/0! May-16 0 #DIV/0! Jun-16 0 #DIV/01 Jun-16 0 #DIV/0! Jul-16 0 #DIV/0! Jul-16 0 #DIV/0!


TOTAL 24,687,000 $2,447.07 $0.0991 TOTAL 43,776,000 $8,417.37 $0.1923

Driscoll Actual Net Rev Per1000g Banquete Actual Net Rev Per1000g Oct-15 3,244,400 $859.68 $0.2650 Oct-15 2,116,680 $412.60 $0.1949 Nov-15 2,870,300 $603.10 $0.2101 Nov-15 1,894,320 $470.26 $0.2482 Dec-15 2,874,500 $409.67 $0.1425 Dec-15 1,928,880 $299.63 $0.1553 Jan-16 3, 103,100 $812.54 $0.2618 Jan-16 1,958,390 $386.58 $0.1974 Feb-16 3,016,100 $734.08 $0.2434 Feb-16 2,170,330 $341.38 $0.1573 Mar-16 3,623,900 $0.0000 Mar-16 2,089,960 $0.0000 Apr-16 · 0 #DIV/0! Apr-16 0 #DIV/0! May-16 0 #DIV/0! May-16 0 #DIV/0! Jun-16 0 #DIV/0! Jun-16 0 #DIV/0! Jul-16 0 #DIV/0! Jul-16 0 #DIV/0!


TOTAL 18,732,300 $3,419.07 $0.1825 TOTAL 12,158,560 $1,910.45 $0.1571

Agua Dulce Actual Net Rev Per1000g All Customers Actual Net Rev Per1000g Oct-15 2,394,680 $251.65 $0.1051 Oct-15 42,894,900 $11,207.94 $0.2613 Nov-15 2,000,030 $398.06 $0.1990 Nov-15 42,633,540 $11,817.67 $0.2772 Dec-15 . 1,878,090 $0.31 $0.0002 Dec-15 38,469,190 $8,504.20 $0.2211 Jan-16 1,927,050 $162.96 $0.0846 Jan-16 35,321,510 $8,513.69 $0.2410 Feb-16 1,982,760 $131.35 $0.0662 Feb-16 36,063,450 $8,481.57 $0.2352 Mar-16 1,973,823 $0.0000 . Mar-16 .· 38,085,070 $0.0000 Apr-16 0 #DIV/01 Apr-16 0 #DIV/0!. May-16 0 #DIV/0! May-16 0 #DIV/0! Jun-16 0 #DIV/0! Jun-16 0 #DIV/0! Jul-16 0 #DIV/0! Jul-16 0 #DIV/0!

Aug-16 0 #DIV/0! Aug-.16 0 #DIV/0! Sep-16 0 #DIV/0! Sep-16 0 #DIV/0!

TOTAL 12,156,433 $944.33 $0.0777 TOTAL 233,467,660 $48,525.07 $0.2078

INTER-OFFICE MEMO

TO: FROM: DATE:

Carola G. Serrato, Executive Director Jacob Hinojosa, O&M Supervisor April20, 2016

RE: Maintenance & Technical Repmt

During the week of March 14, 2D16 the following work was completed.

• Safety Meeting for all Field Techs.

• Exercised generators.

• Downloaded GPS.

• Perfmmed line locates.

• Took Unit #6 to get wheel alignment and fuel filters ch~nged.

• Mowed grass at office.

• Took Unit #3 for oil change.

• Worked on wiper blades for Unit #4 and fuses for haul trailer.

During the week of March 21, 2016 the following work was completed.



• Downloaded GPS.

• Performed line locates.

• Had to trouble shoot chlorine at Kingsville Pump Station.

• Cleaned out ROW for the 42" line behind Kingsville Office.

• Checked generator for Banquete Pump Station.

• Took Water samples.

• Checked for bare wires on haul trailer to trouble shoot running lights.

• Worked on repairing power washer.

• Worked on SCADA for Banquete tower.

• Picked up and installed pressure transmitter for Driscoll tower.

• Reset repeater and Driscoll Pump Station for SCAD A.

During the week of March 28,2016 the following work was completed.



• Downloaded GPS.


• Took Unit #2 for oil change.·

• Mowed grass at pump stations.

• Met with Odessa Pumps and Scott Electric to trouble shoot pump/meter at Kingsville

Pump Station.

O&M Supervisor Report April 20, 2016 Page 2

• Trouble shot pumps for Agua Dulce and Central Pump Station.

• Diamond Enterprise came in and worked on Banquete tower.

• Repaired light on 14" trailer.

• Cleaned inside pump stations.

• Checked on contract work at Driscoll Pump Station.

During the week of April4, 2016 the following work was completed.



• Downloaded GPS.


• Met with HDR Engineering to inspect work done by Preload for the GST and ACP for Kingsville Pump Station.

• Mowed around office.

• Trimmed trees on west parking lot of the office.

• Replaced tire for John Deere mower.

• Met with OMNI technician to correct multiplier for the Kingsville meter.

• Diamond enterprise finished working on repairing tower at Banquete Pump Station.

• Took pressure washer to AC Lawn to get quote on getting repaired.

• Replaced filter on ice machine and purchased filters for office.

• Took Unit# I for oil change.

During the week of April II, 2016 the following work was completed.



• Downloaded GPS.


• Installed 120 VAC to 24 VDC converter at Stevens Plant.

• Took Unit #6 to get Tommy lift installed.

• Trouble shot LAS pump at Bishop East Pump Station.

• Took photos of work that was done at Banquete water tower.

• Mowed grass at pump stations.

• Cleaned and replaced lights at Kingsville office.

• Ordered new rim for Unit #2.

• Cleaned out gutters at Kingsville office.

• Delivered chlorine to pump stations.

• Took Unit #10 to get oil change.

ATTACHMENT 3

TCEQ Enforcement Action and SOAH

To: From: Date: Re:

Memorandum

South Texas Water Authority Board of Directors Carola G, Serrato, Executive Director Aprill8, 2016 Texas Commission on Environmental Quality (TCEQ) Enforcement Action and SOAH (State Office of Administrative Hearings)

Background:

Enclosed is the Authority's closing brief filed in response to the TCEQ's closing brief per the Administrative Law Judge's (ALJ) instructions in the remanded SOAH case. TCEQ will have until May 20th to file their response to the enclosed brief. The next step w!ll be for the ALJ to submit his recommendations to the Commissioners of the TCEQ. According to my discussions with Bill Flickinger, Willatt and Flickinger, the ALI's recommendations may not be submitted until the latter part of June. The item may not be placed on a Commission agenda until possibly September or later.

Analysis:

In the meanwhile, staff has requested, per Board Authorization and as patt of a separate agenda item, and received a proposal from HDR Engineering, Inc. on services to convett the Jiee chlorine booster station in Driscoll to a chloramination station. This will include the use of a one-ton chlorine cylinder in place of the 150 lb cylinders currently being used to add small amounts of chlorine. These small amounts of chlorine combine with residual ammonia which is intended to prevent nitrification.

Legal counsel and staff are certain that the ALJ will recommend this conversion to a chloramination booster station capable of returning the residual to 4.0 mg/1. As you can see from the enclosed timeline proposed by STW A, the question will remain whether or not there will be sufficient flow to maintain a boosted chloramine residual to all delivery points south of Driscoll.

Staff believes that getting a "jump" start on this matter which will require submittal of plans for TCEQ's review will not only save time in meeting Agreed Order deadlines but it will fmther support STW A's assettions that the Authority has been and will continue to work on solving the residual problem despite a number of factors being beyond its control.

Staff Recommendation:

Provide feedback to staff and consultants.

Board Action:

Determine ifthere are any other actions that staff or the Authority's consultants should be pursuing.

Summarization:

Last month staff repmted that staff and consultants agreed that the recent conference call with TCEQ legal and technical staff was helpful. Staff and consultants also agree that moving forward with the Driscoll booster station conversion sooner rather than later may allow for some additional assistance from the TCEQ. A prime example would be requesting an exception on monitoring between the chlorine and ammonia injection points on the convetted booster station as suggested by TCEQ during the recent conference call.

Carola Serrato

From: Sent: To: Cc: Subject: Attachments:

Dear Carola and Aaron:

Bill Flickinger <[email protected]> Friday, April 08, 2016 2:06 PM 'Carola Serrato'; Archer, Aaron D. Bill Flickinger TCEQ Enforcement Action Response Brief of STWA.pdf

Please find attached the Response Brief of South Texas Water Authority which was filed with the Chief Clerk and SOAH today.

Thank you.

Very truly yours,

Willatt & Flickinger, PLLC Attorneys at Law 2001 Nmth Lamar Austin, Texas 78705 Ph: (512) 476-6604 Fx: (512) 469-9148 bflic kin ger(t/J'wfa us tin .com

CONFIDENTIALITY NOTICE: This e-mail transmission (and/or the attachments accompanying it) may contain confidential information belonging to the sender which is protected by the attorney-client privilege. The information is intended only for the use of the Intended recipient. If you are not the intended recipient, you are hereby notified that any disdosure, copying, distribution or the taking of any action in reliance on the contents of this information is strictly prohibited. Any unauthorized interception of this transmission is illegal under the law. If you have received this transmission in error, p!ease promptly notify the sender by reply e·mail, and then destroy all copies of the transmission.

1

SOAH DOCKET NO. 582-12-5353 TCEQ DOCKET NO. 2011-1647-PWS-E

EXECUTIVE DIRECTOR OF THE § BEFORE THE TEXAS COMMISSION ON § ENVIRONMENTAL QUALITY, §

Petitioner § § STATE OFFICE OF

v. § §

SOUTH TEXAS WATER AUTHORITY, § Respondent § · ADMINISTRATIVE HEARINGS

RESPONSE BRIEF OF SOUTH TEXAS WATER AUTHORITY

TO THE HONORABLE ADMINISTRATIVE LAW JUDGE:

COMES NOW, South Texas Water Authority ("STWA" or the "Authority") and files this,

its response brief in connection with the remand of the above-captioned docket.

Respectfully submitted,

WILLA IT & FLICKINGER, PLLC Attorneys at Law 2001 North Lamar Austin, Texas 78705 Telephone: (512) 476-6604 Telecopier: (512) 469-9148

By:~ Bill Flickinger State Bar No. 07149050

ATTORNEY FOR RESPONDENT, SOUTH TEXAS WATERAUTHORlTY

Response Brief of South Texas \Vater Authority SOAH Docket No, 582-12-5353 TCEQ Docket No, 2011-1647-PWS-E Page2

PROCEDURAL HISTORY OF THIS ENFORCEMENT CASE.

In general, the Executive Director presents an accurate procedural history of this

enforcement case. STWA continues to maintain its assertion that it is not a Public Water System

as defined in the TCEQ Rules. Because the remand concerned only the costs of compliance and

methods of compliance, no evidence was introduced in the remand regarding the definition of a

Public Water System. STWA strongly objects to the Executive Director's request in its prayer

asking that the ALJ amend his proposal to find that Respondent is a Public Water System. It is

inappropriate to suggest a change to that prior determination as it is completely outside of the

scope of this remand.

DESCRIPTION OF STWA'S SYSTEM.

The summary by the Executive Director regarding STW A's system as described on page 6

of its brief is reasonably accurate; however, STWA's system is not a distribution system.

CHLORAMINE RESIDUAL.

On page 7 of the Executive Director's brief is a quote from the deposition of STWA's

Executive Director, Carola Serrato. It is unfair to quote one sentence out of a 217-page

transcript from a six (6)-hour deposition. The quote used by the Executive Director appears at

the bottom of page 79 of Ms. Serrato's deposition transcript, which is hearing exhibit ED-R22.

However, on pages So and 81 of the deposition transcript, Ms. Serrato clarifies that the

disinfectant residual requirements apply to a distribution system and that the Authority does

not have a distribution system. Additionally, Ms. Serrato at pages 50-52 of her deposition

explains that the Authority boosts the residual so it can be properly maintained in the tanks

prior to the wholesale customers' taking the water and that the wholesale customers are

maintaining the residuals in their distribution system, and the residual requirements for

distribution systems are thereby met.

Response Brief of South Texas \Vatcl' Authority SOAH Docket No. 582~12-5353 TCEQ Docket No. 2011-1647-PWS-E Pagc3

RESEARCH AND ANALYSIS BY THE TOP TEAM.

On page 8 of the Executive Director's brief begins a discussion of the research and

analysis of STIV A's system performed by the TOP team. The implication appears to be that

STIV A was uncooperative or unable to assist the TOP team in their analysis. Ms. Serrato

described the sequence of events and efforts of STIV A during the time period when the

Commission expected effotts to be made to identify cost-effective options for maintaining the

chloramine residual. There was considerable delay in the action by TOP, and STIV A was taking

actions to address the recommendations received as they were presented. (Tr. Vol. 2, Pages 105-

107). The Executive Director asse1ts in his brief that the water age in STIVA's system is

reasonable, that the water chemistry in STIVA's ~ystem is poorly managed, that a lack of

representative sampling locations prevent STIV A from managing the chemistly of the water

within the distribution line, and that nitrification is occurring in the system that causes the

disinfectant residual to quickly delay.

WATERAGE.

Aaron Archer calculated the water age in STIVA's system and reviewed the TCEQ's

corrected water age study. He testified that in both cases, the maximum water age when the

City of Kingsville is not taking water is about 25 to 30 days and that he was concerned with that

maximum number. (Tr. Vol. 2, Pages 27-28). By contrast, the Executive Director on page 9 of

his brief focuses on a calculated average removing data during a period when the City of

Kingsville took no water and Vl~th current use by Ricardo WSC. Aaron Archer explained the

importance of using the maximum water age to prevent nitrification from occurring rather

than allowing it to occur and t1y to control it. (Tr. Vol. 2, Page 28). STIVA cannot mandate the

amount of water taken by the City of Kings\~lle beyond the term of the current one-year

contract, and therefore the maximum water age is the important calculation. STIV A \viii

Response Brief of South Texas ·watel' Authority SOAH Docket No. 582-12·5353 TCEQ Docket No. 2011-1647-PWS-E Pagc4

continue to negotiate a long-term contract with the City of Kingsville. However, even with that

long-term contract, STW A may not be successful in persuading the City of Kingsville to take

more water on a consistent basis.

SAMPLING POINTS.

Carola Serrato testified that once the sampling locations were identified and the costs

determined, the STWA Board likely would approve additional sampling locations. (Tr. Vol. 2,

Page 94). Subsequent to the hearing on this remand, STWA and the Executive Director have

been discussing the appropriate sampling points. This likely "~II not be a point of contention

going forward.

NITRIFICATION.

On page 12 of his brief, the Executive Director asserts that nitrification is occurring

within STWA's main transmission line and in the storage tanks at STWA's customer connections

downstream of the Driscoll Booster Station. Aaron Archer pointed out that the TCEQ's report

indicated some of the worst nitrification in the STW A system is in the ground storage tank at

Kingsville. (Tr. Vol. 2, Page 9). Mr. Archer also described the 1.7 million dollar project

underway to replace the pumps so water can be pumped out of the tank and to replace the tank

with a smaller tank so the water doesn't sit stagnant in the tauk as long. He also testified that

the project includes a mixing system in that tank to prevent it from getting stratified to help it

maintain a residual and to have chloramine injection into that tank. (Tr. Vol. 2, Page 10). On

cross-examination, Mr. Archer established that the project v.>ill also improve the disinfectant

residual in the 42-inch line. (Tr. Vol. 2, Pages 44-46). STWA is already making these

improvements to address nitrification. Mr. Archer is of the opinion that nitrification in STWA's

42-inch line is due to water age. (Tr. Vol. 2, Page 59). Flushing STWA's system to prevent

nitrification is not a proper solution to that problem. Aaron Archer testified that flushing is

regularly used by utilities but normally in a distribution system and for water quality, not to

Response Brief of South Texas Water Authotity SOAH Docket No. 582-12-5353 TCEQ Docket No. 2011-1647-PWS-E Pages

prevent nitrification. He has not seen it used in a situation like STWA. (Tr. Vol. 2, Page 6o). He

also testified that flushing is a short term solution and that moderate and frequent flushing

would not result in any major benefits. (Tr. Vol. 2, Page 23). The Executive Director, at page 17

of his brief, recommends a Nitrification Action Plan that would include corrective actions

including flushing and temporary conversion to free chlorine. As indicated above, water age is

the real issue and flushing of STWA's system is not the proper solution. As to free chlorine

burns, Mr. Al·cher testified that free chlorine burns are characterized as a measure of last resmt

for dealing with nitrification, that they can cause other water quality problems. He also stated

that npon ceasing free chlorine burns, the evidence suggests that the bacteria that cause

nitrification immediately resume growing and colonizing the system as soon as it's done.

There's usually an immediate beneficial effect from a free chlorine burn, and within two or three

months, that effect is lost. (Tr. Vol. 2, Pages 24-25). STWA does not agree that free chlorine

burns would be appropriate to address nitrification. Furthermore, the Executive Director, to

support its assertions that nitrification is the real problem instead of water age, relies on a

laboratmy test conducted by the TOP team which concluded that the total chlorine

concentration remained at or above 0.5 mg/L for approximately 38 days. Aaron Archer testified

at his deposition that he did not believe a laboratory study showing a water age of 38 days to

maintain compliant residual is reflective of the STWA's system and what is occurring in it. He

testified he did not think it was a transferrable laboratmy study and that it was flawed. (Aaron

Al"cher Deposition Transcript, Page 139, which is hearing exhibit ED-R23A). Mr. Al"cher, in his

memo dated August 31, 2015 at pages 2-3 (which is Exhibit 3 to his deposition transcript) (see

hearing exhibit ED-R23B), stated the following, "TCEQ states that chloramine can persist for 28

to 56 days as long as nitrification is not present. To assess the impact of nitrification, a

chloramine decay laboratory study was undertaken by TCEQ to demonstrate that a compliant

chloramine residual can be maintained for approximately 38 days in the absence of nitrification.

Response Brief of South Texas Water Authotity SOAH Docket No. 582M12M5353 TCEQ Docket No. 2011-1647-P\VS-E Pagc6

Research, however, shows that nitrifying bacteria are ubiquitous in chloraminated systems

particularly in low flow mains and away from the water treatment plant (AWWA, 2013). Real

water systems also have biofilm and sediment accumulations within the pipe that exert a

chloramine demand thereby releasing ammonia that is made available for consumption by

nitrifying bacteria. Results fi·om a controlled laboratory study that eliminates major decay

factors (biofilm, sediment, nitrifying bacteria) present in all water systems cannot be so simply

transfetTed to a real-world system .

. . . TCEQ did not find any indication of nitrification or other problems in this pottion of the

transmission line yet the 'real-world' decay rate is nearly 6 times more rapid than the controlled

laboratory study. The results of the lab study are not transferable to the STWA system."

The Executive Director's reliance on that laboratory study is misplaced.

HDR ENGINEERING RECOMMENDATIONS FOR ADDITIONAL PIPELINES TO

ADDRESS WATERAGE.

STW A takes extreme exception to the Executive Director's criticism of HDR Engineering,

especially the statement that the ED believes the options presented by HDR are the equivalent of

using a sledgehammer to crack a peanut and that they cannot be reasonably used to calculate

the cost of STW A's compliance with the minimum disinfectant residual. During a six-hour

deposition resulting in a 246-page transcript, Aaron Archer consistently stated that he was of

the opinion that addressing water age has to be done to achieve compliance, long-term

compliance, and that addressing nitrification and operational changes are a temporary fix and

\\~II not maintain long-term compliance. He testified it was treating the symptom and not the

cause. (Aaron Archer Deposition Transcript, Pages 146-147, which is hearing exhibit ED-23A).

At the hearing, Mr. Archer again testified that his opinion was the same and that to address the

water age problem, especially when Kingsville did not take water, flushing to replace that

Response Brief of South Texas 'Vater Authority SOAH Docket No. 582-12-5353 TCEQ Docket No, 2011-1647-PWS-E Page7

demand or replacement of the 42-inch line \\~th a smaller diameter line would be required. (Tr.

Vol. 2, Page 17).

LONG-TERM CONTRACTS WITH CUSTOMERS.

All parties involved agree that long-term contracts \~th STWA's customers that result in

more water flo\~ng through the system on a consistent basis \\~II help cure the disinfectant

residual. The problem is that STWA does not have a means of compelling its wholesale

customers to enter into those contracts. STW A is continuing to pursue the contracts v.~th its

customers and \~II do so in good faith, but cannot guarantee that it \~II be successful.

ADDING AMMONIA INJECTION CAPABILITIES AT THE DRISCOLL BOOSTER

STATION.

STW A agrees that the addition of ammonia injection at the Driscoll Booster Station may

be beneficial. Mr. Archer testified that the advantage would be that you could boost beyond the

concentration of chloramines coming into the system. He also stated the approximate cost

would be about $150,000, that it would take a year to design and construct and put it into

operation. Mr. Archer recommended operating it for one year prior to determining its

usefulness. (Tr. Vol. 2, Pages 12-13). Ms. Serrato testified that STW A would be able to fund this

project. (Tr. Vol. 2, Page 100).

PH ADJUSTMENTS.

The Executive Director at page 22 of his brief recommends installation of a pH

adjustment station. STWA does not believe this option is ~able or cost effective. Aaron Archer

testified his firm studied this option in 2009 and rejected it because of the concerns v.~th

possible heavy deposition and scaling on the STW A system and the systems of its customers

since some of the wholesale customers mix the water from STW A with other sources. It can also

cause problems mth residents' properties in terms of plugging up dishwashers, washing

machines and hot water heaters. (Tr. Vol. 2, Pages 21-23).

Response Brief of South Texas 'Vater Authority SOAH Docket No. 582-12.-5353 TCEQ Docket No. 2011-1647-PWS-E PageS

ADDITIONAL CHEMICAL BOOSTER STATIONS BETWEEN THE DRISCOLL

BOOSTER STATION AND THE CITY OF IGNGSVILLE.

The Executive Director on pages 23 and 24 of his brief recommends installation of one or

more additional booster stations with the ability to inject chlorine and ammonia between the

Driscoll Booster Station and the connection with the City of Kingsville. Aaron Archer testified

that land acquisition would be needed. He estimated costs per station to be approximately

$40o,ooo to $500,000 including land acquisition. Mr. Archer stated the design and

construction would take about a year but that the land acquisition could take up to two years.

(Tr. Vol. 2, Pages 14-15). This was confirmed by Ms. Serrato. (Tr. Vol. 2, Pages 97-98). Mr.

Archer recommended operating a station for one year to determine its effectiveness. (Tr. Vol. 2,

Page 15). Ms. Serrato testified that funding for these additional stations is not available unless

STW A issues additional bonds. That process could take four to five years and will require an

election. (Tr. Vol. 2, Pages 100-101).

TRANSMISSION LINE MODIFICATIONS SHOULD ALL OTHER SYSTEM

MODIFICATIONS BE INADEQUATE.

Mr. Archer testified that after STW A has gone through the process of installing and

operating as many booster stations as may be practical, he would recommend replacement of a

portion of the 42-inch line or a great deal of flushing. (Tr. Vol. 2, Page 17). These are very costly

options that STW A would only want to consider after the less costly options had been fully

implemented in a logical and cost -effective sequence and on a realistic timeline. As testified by

Ms. Serrato, STW A would want sufficient time not only to be able to implement the options and

to constmct the options, but to see if the options are working before it would have to move on to

the next option. (Tr. Vol. 2, Page 113). During that process, STWA would want assurances that

it would not be fined or subject to enforcement if the earlier stages did not cure the problem of

maintaining the specified disinfectant residual. (Tr. Vol. 2, Pages 116-121).

Response Brief of South Texas \Vater Authority SOAH Docket No. 582-12-5353 TCEQ Docket No. 2011-1647-PWS-E Pngc9

SUMMARY.

The Executive Director has suggested that operational changes and modest

modifications to STWA's system will cure the disinfectant residual problems. Based on the

opinion of its engineers, STW A does not believe that those modest changes and modifications

will cure the problem. It is fundamentally unfair to subject STW A to an enforcement order with

definite deadlines to implement changes that may not solve the problem. STW A is however

willing to pursue the changes recommended by the Executive Director, with some limited

exceptions, provided sufficient time is allowed to implement each such option and determine its

effectiveness prior to implementing the more costly options. As requested by the ALJ, attached

are proposed corrective action ordering provisions for consideration. These are being

proposed only with the assumption that the Commission ultimately determines

that STWA is a Public Water System.

Response Brief of South Texas \Vater Authority SOAH Docket No. 582-12-5353 TCEQ Docket No. 2011-1647-PWS-E Page to

S'IW A'S PROPOSED CORRECfiVE ACfiON ORDERING PROVISIONS

(This proposal assumes the Commission rules that STWA is a Public Water System.)

a. Immediately upon the effective date of the Commission Order:

i. Begin providing access to the Facility to allow entry to employees and agents of the TCEQ for the purpose of inspecting and investigating conditions related to the Facility, in accordance with 30 TEX. ADMIN. CODE§ 290.46(a); and

ii. Respond completely and adequately, as determined by the Executive Director, to all requests for information regarding these Ordering Provisions within 30 days after the date of such request, unless another deadline for response is specified below.

b. Within 30 days after the effective date of the Commission Order:

i. Check the accuracy of the continuous disinfectant analyzers using chlorine solutions of known concentrations or by comparing the results from the on-line analyzer with the results of an approved benchtop method at least once every seven (7) days and properly verify the analyzers used to determine the effectiveness of chloramination every ninety (90) days, in accordance \vith 30 TEX. ADMIN. CODE§ 290-46(s)(2);

ii. Locate, uncover, mark, document, and create a complete inventory of all existing sampling points, valves, and mains on all water lines, including the west branch, in accordance with 30 TEX. ADMIN. CODE § 290-46(n); and

iii. Submit an up-to-date map of the Facility and as-built drawings of the chloramination facilities, in accordance with 30 Tex. Admin. Code § 290.46(n).

c. Within 6o days after the effective date of the Commission Order:

i. Submit written certification in accordance with Ordering Provision No. i., below, to demonstrate compliance with Ordering Provision No. b.i.;

ii. Submit an updated monitoring plan for the system, including an updated sampling plan, in accordance with 30 TEX. ADMIN. CODE § 290.121. The monitoring plan shall include the complete inventory created pursuant to Ordering Provision No. b.ii., above, including documentation showing the location of all existing sampling points, valves, and mains on all water lines, including the west branch; and

iii. Submit a Nitrification Action Plan ("NAP"), in accordance with 30 TEX. ADMIN. CODE§ 290-46(z).

Response Brief of South Texas Water Authority SOAH Docket No, 582-12-5353 TCEQ Docket No. 2011-1647-P\VS-E Page 11

d. Within go days after the effective date ofthe Commission Order:

i. Submit a progress repmt for the preceding go-day period, and for each quarter thereafter, which shall include the following:

A. A brief summary of all actions taken and the results thereof during the preceding go-day period, including implementation of the most recent monitoring plan and efforts made to maintain compliance with disinfectant residual levels; and

B. All sampling data gathered during the preceding go-day period.

All quarterly progress reports shall be submitted to the TCEQ no later than the thirtieth (3o1h) day after the end of each qumter.

Respondent shall continue to submit quarterly progress reports to the TCEQ until Respondent can demonstrate at least 12 consecutive months of compliance with the disinfectant residual requirements.

ii. Submit documentation demonstrating the installation of any additional sampling taps and valves, in accordance with 30 TEX. ADMIN. CODE § 2g0.3g;

iii. Submit an updated monitoring plan, including an updated sampling plan, reflecting the installation of any additional sampling taps and valves, in accordance with 30 TEX. ADMIN. CODE§ 2g0.121;

iv. Submit for approval all plans and specifications to add ammonia boosting capabilities at the Driscoll Booster Station, in accordance with 30 TEX. ADMIN. CODE § 2g0.3g. The plans and specifications shall be submitted to:

Plan Review Team, MC 15g Water Supply Division Texas Commission on Environmental Quality P.O. Box 13087 Austin, Texas 78711-3087

v. Submit, to the address listed in Ordering Provision No. d.iv., above, engineering plans, specifications, maps, and other pettinent information for proposed additional sampling points and valves, including the west branch, pursuant to 30 TEX. ADMIN. CODE§ 2g0.46(n).

e. Within 120 days after the effective date of the Commission Order, provide an update on the efforts to establish water purchase contracts \\ith all purchased water systems served by the System. Respondent shall continue to negotiate such contracts in good faith and provide subsequent updates on such efforts every 180 days until all contracts have been executed or until it is clear that future negotiations are futile.

Response Brief of South Texas 'Vater Authority SOAH Docket No. 582-12-5353 TCEQ Docket No. 2011.-1647-PWS-E Page 12

f. Within 135 days after the effective date of the Commission Order, submit written certification in accordance with Ordering Provision No. i., below, to demonstrate compliance with Ordering Provision No. e.

g. Within 365 days after the effective date of the Commission Order:

i. Submit documentation demonstrating the installation of ammonia boosting capabilities at the Driscoll Booster Station, in accordance \vith 30 TEX. ADMIN. CODE§§ 290.39 and 290.110; and

ii. Submit an updated monitoring plan, including an updated sampling plan, reflecting the installation of ammonia boosting capabilities at the Driscoll Booster Station, in accordance with 30 TEX. ADMIN. CODE§ 290.121.

h. Within 730 days after the effective date of the Commission Order, submit documentation demonstrating at least 12 consecutive months of compliance with the disinfectant residual requirements, in accordance with 30 TEX. ADMIN. CODE §§ 290.110 and 290.46. If such compliance is not accomplished by this date, the Respondent shall instead submit a proposed plan \vith proposed timeline for installation of an additional booster station between Driscoll and Kingsville.

i. All documents, reports, plans and other correspondence and information required to be submitted under these Ordering Provisions shall be accompanied by detailed supporting documentation, including photographs, receipts, and/or other records, shall be signed by Respondent, and shall include the follo\ving certification language:

"I ce1tify under penalty of law that I have personally examined and am familiar with the information submitted and all attached documents, and that based on my inquiry of those individuals immediately responsible for obtaining the information, I believe that the submitted information is true, accurate and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment for· knowing violations."

Unless otherwise indicated, all documents, reports, plans, correspondence, information, supporting documents and ce1tifications shall be submitted to:

and:

Water Supply Division, MC 154 Texas Commission on Environmental Quality P.O. Box 13087 Austin, Texas 78711-3087

Order Compliance Team Texas Commission on Environmental Quality Enforcement Division, MC 149A P.O. Box 13087 Austin, Texas 78711-3087

Response Brief of South Texas 'Vater Authol'ity SOAR Docket No. 582-12-5353 TCEQ Docket No. 2011-1647-PWS-E Page 13

CERTIFICATE OF SERVICE

I hereby certify that on April 8, 2016, the foregoing document including attachment was

filed with the Chief Clerk, Texas Commission on Environmental Quality, Austin, Texas.

I further certify that on this day the foregoing document was served as indicated:

The Honorable Administrative Law Judge Craig R. Bennett State Office of Administrative Hearing 300 W. 15th Street, Suite 504 Austin, Texas 78701-1649 Via Electronic Filing (SOAR Docketing)

Amber Ahmed Petitioner's Attorney Texas Commission on Environmental Quality Litigation Division, MC 175 P.O. Box 13087 Austin, Texas 78711-3087 amber.ahmed@tceq. texas.gov Via Electronic Mail

Rudy Calderon Office of Public Interest Counsel, MC 103 Texas Commission on Environmental Quality Litigation Division, MC 175 P.O. Box 13087 Austin, Texas 78711-3087 [email protected] Via Electl•onic Mail

B'll"l' ki I F IC nger

ATIACHMENT4

Kingsville Pump Station Bond Election Improvements- 1.0 MG GST

Memorandum

To: From:

South Texas Water Authority Board of Directors Carola G. Serrato, Executive Director

Date: April19, 2016 Re: Kingsville Pump Station Bond Project- Construction of the 1.0 MG Ground Storage Tank

Background:

During the last meeting, the Board approved Pay Estimate #4 to Preload LLC in the amount of $112,161.75 bringing the total paid to date to $631,927.75. The Board also approved anHDR Engineering Inc. (HDR) Invoice in the amount of$7,200.00.

Enclosed is Pay Estimate #5 in the amount of$367,876.00. Approval of this payment will bring the total paid on this project to $999,803.75. The amount remaining to be paid including a 5% retainage is $319.896.25. The funds for this project are fi·om the STWA Bond Series 2013. Mr. Jason Christensen, HDR Engineering, Inc., and Mr. Jacob Hinojosa, O&M Supervisor, have reviewed the items listed on the pay request and agree that the work/materials have been fumished. Also, enclosed is the final HDR invoice in the amount of $4,800.00.

Analysis:

Mr. Christensen has indicated his recommendation will be to charge some amount of liquidated damages and that HDR is entitled to additional fees since the delays have required extra work for their company. As mentioned in a recent weekly update, progress on this project appears to have slowed down considerably. Enclosed is a letter fi·om Mr. Christensen, HDR, to Mr. Bruce Burke, Preload, LLC. The letter outlines the major items that are required to complete the project as well as reminding Preload,jor a second time, that liquidated damages can be assessed at a rate of$500 per day.

Also enclosed is a brief report from Mr. Christensen which provides additional details. The Board should note that the equipment for the mixing system has all"ived. It is also staffs understanding that the equipment for the chemical feed system has an-ived. However, the buildings to house the chemical feed systems will not be available until the end of May. In the meantime, staff questions why the disinfection, filling, testing, site work, and driveway tasks are not being addressed.


Keep the Board updated on this project. Approve PE#5 in the amount of$367,867.00 and the HDR invoice in the amount of $4,800.00.

Board Action:

Detetmine whether to approve Pay Estimate #5 in the amount of $367,867.00. Determine whether to approve payment to HDR in the amount of $4,800.00.

Summarization:

As you can see fi·om Mr. Christensen's letter, the liquidated damages for the fifty-seven (57) days at $500 per day would total$28,500.00. In addition, thus far the retaiuage, at 5% of the completed work, is $52,621.25. Staff believes there is sufficient financial incentive for Preload to take notice and close out this project as soon as possible.

Contractor's Application and Certificate for Payment

To: From:

South Texas Water Authority Preload, LLC

2302 East Sage Road 4000 Tower Road

Kingsville, TX 78634 Louisville, KY 40219

Application No.:

Application for Payment Change Order Summary

Change Orders Approved by Owner

Number Date Approved Additions

TOTALS

$0.00

NET CHANGE BY CHANGE ORDERS $0.00

Contractor's Certification

The undersigned Contractor certifies that to the best of the Contractor's knowledge, Information and belief, the Work covered by this Appllcatlon for Payment has been completed in accordance with the Contract Documents, that all amounts have been paid by the Contractor for Work for which previous Certificates for Payment were Jssued and p'yments received from the Owner, and that current payment shown herein Is now due.

15PD106

FIVE(05)

Deductions

By: J~·l!../i! Date: 03/31/2016 PNoload. c,: 7 . Approved For Pttyment:

Bv: Date: Carolo. Scrmto. Executive Dltoctor

Page 1 of 1

1-)~ Via:

HDR Engineering, Inc.

4401 West Gate Blvd., Suite 400

Austin, TX 787 45

!Application Period: 3/31/2016

1. ORIGINAL CONTRACT SUM $1,319,700.00

2. Net ehangc by Change Ordors $0.00

3. CONTRACT SUM TO DATE (Lino 1 + 2) $1,319,700.00

4. TOTAL COMPLETED AND STORED TO DATE (Column F on'Progr&s:s Estimate)

$1,052,425.00 5. RETAINAGE: . 5% of Completed Work and Stcited Matorlal

$52,621.25 G. AMOUNT ELIGfBLE TO DATE

$999.803.75 7. LESS PREVIOUS PAYMENTS (Uno 6 from prior ecrtlflcatc)

$0.00 $631,927.75 8. AMOUNT DUE THIS APPUCATION

$267,876.00 9. BALANCE TO FINISH, PLUS RETAJNAGE (Column G on ProgrOss Estfmato)

$319,896.25

Payment of 1 $ 367,876.00 1 is recommended.

~~· Dote,lf~1fHI' Hlnofoso. STWA

Date:4/22/16

KlnqvUio Pump Stl:ltlon-Ground Storo<'IO Tank Rcplncomoot Contractor's Prooress Estimato . 1-)~ IAPolicntion Number: ·FIVE (05}

A lic11tlon Period: 3!3112016 A llcAtlon Date: 3/3112016 A P<•load. U.C HWD106 ' D ' ' D

ltom Work Compl01:od Mat<l<lal' Total C<!mptot<>d

SchGduled p,"""~Y Sto<o<l ond Storod to D~t<> % Salttnco to Flnl~h Item Descriotion Units Ounntltv Unit Price Vnlue rrom Pr""lo"" Appllc.o.tlon I This P""od (not In C or 01 tC+O-t(l tFIBl iB·F)

One 1 1.0 MC Stow~"' Tank

1 Mobilimtion S 80,300

l.A.l Site Sub MobiliZIItion 1 $33,&:10.00 m,ooa.oo $30,&10,00 $30,1100.00 100.00'1(. $0.00

l.A.2 Preload Mobilization 1 $46,700.00 $4d,700.00 $41),700.00 $40,700.00 100,00'1(. $0.00

2 Trcneb & S,.fclV PYot«;tion $ 500

2.A.l Trench&. Sllfcty Protootioo 1 :tSOO,OO $500.00 $500,00 $500,00 100.00% """ 3 E:Wti.Plf Tank Dmnolltion {S 15,000

3.A.l Existing Tank Demolition 1 $25,000,00 $~.000,00 ;u,ooo.oo $25,000.00 100.00% $0.00

4 TllukConstn.ocli.on 1,041,100

4>A Sitcwork $ 414,480}

4.A.l Erollion &. Sedimcnt:rtion Controls I $11.200.00 $11,200.00 S&J.I!IO,OO U,II60.00 50.00% $2,240.00

4.A.2 Demo & Co Existin Pi e 1 $(\2,1100.00 $(12,800.00 $62.,600.00 $1!2,8<10.00 100.00% $0.00

4.A.3 Crane Pnds & Work Rond:;. I m.eoo.co S33,eoo.oo $33,!):00.00 ~.eoo,oo 100.00% "·"' 4.A.4 20' Inlet 1 $7g,SQO,OO $70.~0.00 $7,0.50.00 $71,550.00 $7j),SOO,OO 100.00% so.oo

4.A.S :WOLttlct 1 $16,381.00 $78,3111,00 $7,836-.10 $7C,542.00 $711,3~1.00 100.00% $0.00

4.A.6 20"0verllow I $4:2:,400,00 $42,4/)0,00 $42,400,00 $4:2:,400.00 100.00% $0.00

4.A.7 4"Drain I $5,900.00 $5,000.00 $5,900.00 $5,000.00 100,00% $0,00

4.A.8 lnitiul Site Gr:~din 1 $11i>,SOO.OO $HI,SOO.OO $11i),5{)0,00 $HI,SOO.OO 100.00% $0.00

4.A.9 Fin:~l Site Re::toration 1 $:2:1,700.00 $21,700.00 "·"' 0.00% $21,700.00

4.A.l0 Overflow Concrete Structure I $!<1,200.00 $9,200.00 $0,200.00 ~.200.00 100.00% $0,00

4,A,ll Concn:te Drive I $36,000.00 $36,000.00 $0.00 0.00% $36,000.00

4.A.l2 Sub bond l $(5,990.00 $0,G!l~.oo $6,909.00 $11,~G9.00 10().00% ".00 4.A.l3 Pn.int~orPi in 1 $5,8<10.00 .$5,800.00 $5,1:1(10.00 $5,1100.00 100.00% $0.00

4,A.l4 Site Pi in O&.M Mnnl111b l $1,700.00 $1,700.00 $0.00 0.00% $1,700.00

4.B Elcetrieal & lnstrumcntlltirm (S 48,300)

4.B.l Hvdtoranter in e.xistinP. pum bWldinr.. 1 ;1o.eao.oo $10,68MO $0.00 0.00% $10,1380,00

<t,B.2 Conduit from hvdtoranf(er to C);isrinf( ~panel. 1 $4,520,00 $4,520.00 $4,520.(1{1 $4,520.M 100.00% $0.00

4.B.3 Twi~ted shielded ollb!e from hydro!l'lllger to 3Cad:!. !)lllleL 1 $1,71MO $1,718,00 ""' 0.00% $1,71MO

4.B.4 Undor,<rround conduit from oump buildin~ to OST. 1 $15,48$.00 $15,4!18.00 1;15,488.00 $15,400,00 100.00% $0.00

4.B.5 GRC conduit up l:~dder or !Wt to tlllllge on roof of ~st. 1 $4,875.00 $4,8'15.00 $0.00 MO% $4,875.00

4.B.6 Xducor nnd cable frornGST tb!lge on roof to hydr<:~run~er. 1 $4,015.00 $4,015.00 $0.00 0.00% t4,015.00

4.B.7 Taminlltc Xducor e~~ble into hvdr '· 1 ~838.00 ~lr.l.B.OO $0.00 "''" $.2,~8.00

4.B.8 Trencbin and S~oct fill m:~terilll to bMkfill trench. 1 $4,350.M $4,:159,00 $4,:159.00 $4,35:>.00 . 100.00% $0.00

4.C Tn<~.k Con!<b'uetion ($ 578,420)

4.C.l Footiu,g& Floor ($16J,SOO)

4.C.l.a. Footin Forms l ~.700.00 $33,700.00 $3:3,700.00 $33,700,00 100.00% $0,00

4.C.l.b Rcinforoin 1 $4Q,100,00 $4g,1(10.00 $49,100.00 $49,100.00 100,00•,(, $0.00

4,C.l.c Pl:u:e Floor/Foonns Concrete I $80.700.00 U0,7M.OO $1)0,700.00 $80,700.01) 100.00% $0.00

4,C.2 WaU ($140,400

4.c.2.a. Instull Bed:! I $14,000.00 $14,000.00 $14,000.00 $14,000.00 100.00'.<. $0.00

4.c.2.b FllbrietrtcPaneta I $77,200,00 m;zoo.oo $77~0.00 $17,200,00 100,00% $0.00

.:~. ... ? ... J:: ........ t>~"~'· ' "">11MM $21.100.00 :&21.100.00 S2L100_00 100.00% sooo

Pago2of5

KinovOitt Pumo St.:ltlon-Ground Storooo Tank Roolacomont Contractor's Procrress Estimate 1-)< I

I Aoollcation NumbCtr: FIVE (OSl

A llcl'!tlon Pf}rlod: 3/31 2016 A II tlon Date: 3/31/2016

' Prolond, LLC HiP0106 c 0 ' ' G

!t~;~m Work Compl<rtud

Matorlnlu Total Comp,t.w.d Scheduled Pl'<lll..ntly Storod and Stor•d ~o Dlllo % Se~lonca to Flnl:!:h

!tom Ooecrlotlon Uolto Ouantlt Unit Price ValuG From P<QVI<>U$ AppiiC>!Itlon ) Tkllt Period h'lotlnC<>tOI (C+O,..EI IF/B) (B-Fl

4.c.2.d Joina Md Curb I £14,000.00 $14,000M $14,000.00 $14,000,00 101),00% $0.00

4.c.2.e Shotcrcte. on Dlnphm I $14,100.00 $14,100.00 $14,100,00 $14,100,00 100.00% $0.00

4.C.3 Dome($ .59,300) -4.c.3.a Erc:ct F:USI:Work I $20,000,00 $20,900.00 $20,~C.OO $20,fi00,00 100.00% $0.00

4.c.3.b Erect Form work I $12:,000.00 $12;,000,00 $12:,000.00 $12,000.00 100.00% $0.00

4.c.3.c Reinforci:w. I W,OOll.OO $9,000.00 $0,000.00 $0,000.00 100.00% $0.00

4.c.3.d Place Dome Concrete I $15.000.00 $15,000.00 $15,000.00 $15,000,00 100.00% $0,00

4.c.3.e Rcmow Formwork I $2,!i100.00 $2,00.0,00 $2.GOM!l $2,QOO.OO 1Ga.OO% $0.00

4.C.4 Prdtrdll {$ 54.500

4.c.4.a t>rclltress I $26,2:00.00 $26,2:00.00 $2:8,2.00.00 $2<l,200.00 10(1.00% "-"" 4.c.4.b Wire Coot I $9.800.00 $9,80!1.00 $9,800.00 $9,800.00 100.00% ~.oo

4.c.4.c BodyCoUL I $'12:,SOO.Oll $12,500.00 $1~,500.00 $12,SOll.OO 100.00% $0,00

4.c.4.d Fi:w.l Coat I "'"-"' $.2,2:00.00 $2,200.00 $2.200-00 100.00% $0.00

4.c.4.e Decol'll.tivo Point I $3,800.00 $3,600.00 $1,90ll.OO $1,900.00 $3,600.()0 10.0.00% $0.00

4.C.S Mi>lccllallt'005 $ 73,520

4.C.5.a T<mkPipinft I $31,520.00 $31,520.00 $23,1$40.00 $7,11l10.00 $l1,S20,00 100.00% $0.00

4.C.S.b Latldcr/HuiGh/Vcnt I $38.000.00 $38,000.00 $19,000.00 $1Q,OOO.OO $38,000.00 100.00'" $0.00

4.C.5.c Di>linfcct uttd Storilize I :tti,OOo.oo $5,000.00 $0.00 0.00% $$,000.00

4.C.5.d Fill <l!'ld Te:>t T&lk I £4.0.00.00 $oi.,000.00 $0.00 0.00% $4,000.00

4.C.S.e 'l'nlload Design Dmwin~ I $75,000.00 $75,000,00 $7S.Ga0.00 :m.ooo.oo 100.00% $0.00

4,C.5.f Porform!lllcc & Povmcnt Bond I ~.700.00 $6,700.00 $6,700.00 $13,700.00 100.00% "'"" ALTERNATEl Tlllll' M.lxin:- S)'llie(Jl ($172,700)

(Jndl!ditq; $mnll diameter piping & conduit and confirmation testini: ofmixillj.: :;:ystem)

A I GPH LAS ehemieal ump OTY of2 I $rl.415.00 $9,415,00 $0.00 0.00% $9,41:1,00

B Pu!~onDarn ~ I $2:,1170.00 $2,870.00 $0.00 0.00% .s2,a1o.oo c Calibrntion column 1 $2.870.00 $2,870.00 $0.00 0.00% $2,870.00

D Flow indicmiot 01Y Z I $3,387.00 $<.,~7.00 $0.00 0.00% $3,:187.00

E Dinphnun CQ~UT<l tu~ ~ OTY 2 I $2.!109,00 $2.oog.oo $0.00 0.00% $2,009.00

F S ill :;afe drum ~cale with indicator I $!1,750,00 $!1,759,00 $0.00 MO% $!1,7:19,00

G SX8 FRP sholter I :&:'3,406.00 $26,400.00 $0.00 O,OO'A $2:9,406.00

H Spare.'! I ~.44<1M $3,444.00 $0.00 0.00% $3,444.00

I Shipping I $S74.00 $574.00 ~0.0!1 0,00% $574.00

J GLI2 t:lnk mixeD OTY 2 I $21.1,tlat.OO S2&,St11,00 "·" 0.00% $2il',ga1.oo

K Total CL2 nnnlvzer I $10,60.00 $9,667.00 $0.00 0,00% $9,007.00

L Control box with $c:!d:t monitotnin fonunk mixers OTY 2 I $8,726.00 $6,72;(1.00 $0,00 C.OO% $6,72MO

N :Boo::ter um to feed iniection systom I $3.4+1.00 $3,444-.00 $0.00 0.00% $3,444.00

M Freie;ht I $574.00 $$74.00 $0.00 0,00% $574,00

N Ch!orin~tor o-1 00 Pt>D-Mununl"!ftnrt!sto I $1l,D:$7.00 se,037.00 $0.00 0.00% ~.037.00

0 Set ot'nwitch over Vllcuum ~p;ulutors I $5,741,00 $5,741.00 $0.00 0.00",(, $5,741.00

p 1' inieetor punel I $5,741.00 $5,741.00 $0.00 O.OD"k $5,741.00

Page3cf5

KlnavHie Pumo Sttrtion·Ground Storoao Tsnk Rocloccmont Contractor's Proaress Estimate 1-)(

,Aocllcatlon Numbor: FIVE (05)

A licntlon P~:>r!od: 313112016 A llcnrlon Dl'lto: 3/3112016 A f>lalood. LLC 15P0106 c 0 ' ' 0

Item Work Comploted M•torlal• Toul Compl•t.d

Scheduled PIOS<>ntly St~~rod ~>nd Stolod to Out~~ " Balance 'o Finish

Item Descri tlon Units Quantirv Unit Prlco Voluo Ftom Prwlous AppiiC11tlon I 1'hl~ f>orlod lnct InC or 01 <C+O+EI {F/Bl !B·Fl Chlorine dcetoe~cr with li tnndhom 1 $5,167.00 $5,167.00 $0.00 0,00% $5,1e7.00

R DUD.! h dra.ulie ISO!b evlindcr SQ)e 1 $\l.ll~g.oo ;e:,669.00 zo.oo 0.00% $0,86ll,OO

s 10X8 FRP $hdtcr l $2S,1ZI.OO $:18,120.00 $0.00 0,00% $24,120.00

T Spl!f~ l $1,722.00 $1,722.00 $0,(10 0.00% $1,722.00

u FOB job site l $1,148.00 $1,146,00 $0,00 0.00% $1,148.00

Attomote

Page4of5

s -----d MaterialS --------- r)~ For (contract): Kingsville Pump Station-Ground Storage Tank Replacement Application Number: FIVE 1051 Application Period: 3/31/2016 Application Date: 3/31/2016

Drawing Transmittal .

Invoice No. No. Materials Description Stored Previously Stored this Month lncorpora1ed in Work

Materials Date Amount Amount Date Amount Remaining in

(MonthNear) ($) ($) Subtotal (Month/Year) ($) Storage($) $0.00

$0.00

$0.00

$0.001 $0.00

' $0.00

$0.00

$0.00

$0.00

$0.001 $0.00' so.oo, $0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00 Total $0.00 $0.00 $0.00 $0.00 $0.00

Page 5 of 5

y_ ~R I ONE COMPANY ~ Ma11y Solutions""

HDR Engineering, Inc. Austin,TX 78741 Phone: (512) 912-5100

South Texas Water Authority P.O.Box 1701 Kingsville, Texas 78364

Attn: Ms. Carola Senato

Invoice Please send remittance with copy of invoice to

HDR Inc/US Engineering Accounts Rcceh•able

P.O. Box 74008202

Chicago, II 60674-8202

HDR Invoice No. 271994-h Invoice Date 4!15/20 1 () Period Ending 3/2612016

Client No.: 011144

Project No.: 216068 $

216069 $

216070 $ 4,800.00

221696 $ $ 4,800.00

Engineering Services for Kingsville Ground Storage Tank Replacement.

Lump Sum Percent Amount Fee Complete Earned

Design $ 174,700.00 100.0% $ 174,700.00 Bidding $ 12,100.00 100.0% $ 12,100.00 Construction $ 48,000.00 100.0% $ 48,000.00

Total Amount Earned to Date: $ 234,800.00 Total Amount Invoiced to Date: $ 230,000.00

Due this invoice: $ 4,800.00 $ 4,800.00

TOTAL DUE TillS INVOICE: $ 4,800.00 !

hdrinc.com

April 20, 2016

Mr. Bruce Burke, Area Manager Preload, LLC 49 Wireless Blvd, Suite 200 Hauppauge, NY 11788

RE: South Texas Water Authority Kingsville Pump Station- Ground Storage Tank Replacement Second Notification of Delay

Dear Mr. Burke,

This letter is a follow-up to the notification of delay sent to you on February 26, 2016. According to the Contract Documents for the referenced Project, the Substantial and Final Completion dates were February 22, 2016 and March 22, 2016, respectively. The Project still has not reached Substantial Completion. As of April 20, 2016, the project is 58 calendar days over the contractual Substantial Completion date. The South Texas Water Authority {STWA) is incurring additional expenses as a result of continued Contractor delays.

The contractual liquidated damages per Section 00500 are $500.00 per day for each calendar day that expires after the dates of both Substantial and Final Completion. The STWA reserves the right to assess liquidated damages for each calendar day that the work is not completed in order to recover additional expenses.

As requested in the February 26, 2016 letter, please prepare and submit a revised Project Schedule to completion as soon as possible. An updated schedule was never submitted. by Preload following the previous letter. Preload's revised Project Schedule should include accurate dates for both Substantial and Final Completion to the best of the Contractor's current knowledge; a minimum 72 hour demonstration period in accordance with Section 01650, Paragraph 3.3; temperature uniformity field testing of the installed Tank Mixing System as described in Section 11220, Paragraph 2.3J; and sufficient time for Engineer's inspection of the work, punch list and project closeout. The beginning times and procedures for the demonstration period and Tank Mixing System temperature uniformity test shall be agreed upon by Preload, HDR and the STWA in advance of initiation. When the Contractor believes the work is substantially complete, submit a Notice of Substantial Completion and Request for Inspection of the Project per Section 01650, Paragraph 3.2.E.

4401 West Gate Blvd., Suite 400, Austin, TX 78745 T 512.912.5100 F 512.912.5158 Texas Registered Engineering Firm F-754

Bruce Burke April20, 2016 Page 2

Refer to the General Conditions and Sections 01650 and 11220 for additional requirements related to Substantial and Final Completion, and system start-up.

Please call me at 512-912-5109 if you have any questions.

Sincerely, HDR Engineering, lrlc.

Jason Christensen, PE Project Manager

CC: Carola Serrato, Executive Director South Texas Water Authority

Owner:

Project Name:

Location/Item

Tank

Exposed Piping

Contract

This is a preliminary punch Jist. Items noted herein are the result of individual observations and are not to be considered all-inclusive or otherwise complete. This is not the product of a final inspection.

Punch List STWA Date: Preliminary: 04/04/2016

Kingsville Pump Station: GST Replacement Project No.: 216070

Preliminary Punch List: GST Only

Item Signed Off No. Action Required Name/Date

1 Provide extension at top of interior ladder per Detail 10 on Sheet 3D-09. Halliday Products Series L 1 E. Install adjacent to safety climb rail.

2 Safety cable on dome is in contact with dome. Revise installation to provide clearance between cable and dome, which will enable use of fall prevention system.

3 Insulate exterior wall sleeves/taps per contract documents.

4 Touch up paint around exterior wall sleeves/taps.

5 Remove spilled concrete and debris from exposed portion of old tank foundation slab.

6 Joint deflection from flange coupling adapter at 4-inch drain valve appears close to limit of 5 degrees. Measure deflection. If deflection is greater than allowable limit of 5 degrees, install fitting(s} to bring deflection within allowable limits. Hydrostatically pressure test drain pipe per Section 15060. Zero allowable leakage.

7 Tag process systems (piping and valves} per Section 10400.

8 Submit preliminary O&M manuals to HDR for tank mixing system, chemical feed systems, ultrasonic level sensor/transmitter, and butterfly and flap valves.

9 Submit record drawings to HDR

1 of 1

Remarks

SERIES L 1 E LADDER EXTENSION www.HallidayProducts.com Phone 800-298-1 027 Fox 407-298-4534

[email protected] STANDARD FEATURES:

• EASY TO INSTALL ON ALUMINUM OR STAINLESS LADDERS • SECURE LOCKING IN THE EXTENDED POSITION • LIGHT WEIGHT OPERATION • All ALUMINUM AND STAINLESS STEEL CONSTRUCTION •ALSO AVAILABLE IN All TYPE 304 OR TYPE 316 S.STL. •3 YEAR GUARANTEE

ABOVE MODEL HEIGHT LADDER

A 37" 42"

(940MM) (1067MM)

B 34" 39" I (864MM) (991MM)

•

HEIGHT

I-10 0

I I

EJ I I G I I I I

I I I I I I I I

~ SEE DETAIL

NOTES:

MIN. TANK DEPT. 73"

1854MM

55" 1397MM

ABOVE ADDER L

1

INSTALLATION & OPERATION INSTRUCTIONS Installation: A) Place ladder flat on the ground with standoffs up. B) Place 2" (52 mm) square aluminum tube In center of rungs with the "T" shaped slot below third rung as shown (Model A) or second· rung (Model B). C) Place stainless steel channel clamp over square aluminum tube so "U" clamp holes line up on either side of rungs as shown. D) Insert stainless steel "U" bolts over rung and through holes in stainless steel channel clamp as shown . E) Apply .1 0-15 foot pounds (1.3-2.1 kg./meter) of torque to all "U" bolt nuts. F) Verify that square aluminum tube is secured to ladder rungs.

Operation: A) To engage ladder extension, grasp aluminum post above the top stainless steel channel clamp, and pull straight up until lower stainless steel pin is seated. B) Rotate aluminum post 1/4 tum in either direction to secure pin in slot as shown in Detail.

I lo

I I

-b

S. STL. PIN IN LOCKED POSITION

•<:;: '-----' •

~

H II II 11:1

-

p-d

PIN MUST BE IN TO OPERATION.

LOCKED POSITION PRIOR

DETAIL

Carol a Serrato

From: Christensen, Jason <[email protected]> Tuesday, April19, 2016 10:41 AM '[email protected]'

Sent: To: Subject: Kingsville GST: Status Update

Kingsville Ground Storage Tank • Substantial Completion: 02-22-2016 • - Final Completion: 03-22-2016 • Contractor, Preload, has yet to reach Substantial Completion • As of Monday, 04-18-2016, contractor is 56 days past due on contractual Substantial Completion date • Contractor delays and extensive equipment shop drawing resubmittals have caused the engineer to exceed its

construction administration budget for the project; as of 04-09-2016, engineer is approximately $10,600 over budget • Liquidated damages will be pursued to recover engineering overage and other owner costs deemed necessary; a

notification of delay letter was sent to Preload on 02-26-2016; HDR plans to send a follow-up letter ASAP since contractor delays have continued

• The tank component of the project is near completion, but tank disinfection and leakage test must be completed; once completed, the tank can be placed into service without the tank mixing system

• Engineer inspected the tank portion of the project on 04-04-2016 and emailed a preliminary punch list for tank component of project to contractor on 04-13-2016

• Contractor still needs to complete installation, start-up and testing of tank mixing system; and remaining site work • Tank mixing system work currently being delayed by delivery date for chemical feed enclosures, which is 05-31-2016; late

delivery is the result of contractor's negligence with respect to shop drawing submittals and assumed failure to order engineer approved enclosures in a timely manner

• Engineer will conduct a second inspection once the project is considered substantially complete

Jason Christensen, PE Associate

HDR 4401 West Gate Blvd., Suite 400 Austin, TX 78745-1469 T 1512.912.5100 D 512.912.5109 [email protected]

hdrinc.comlfollow~us

1

ATTACHMENT 5

Kingsville Pump Station Bond Election Improvements -Pump Replacement

Memorandum

To: From:


Date: April 20, 2016 Re: Kingsville Pump Station Bond Project- Construction of the 1500 gpm Pumps

Background:

During the last meeting, the Board approved Pay Estimate #2 in the amount of$137,130.60, which left the amount to be paid, including retainage, of$74,666.49. The Board also approved an HDR Engineering, Inc. (HDR) Invoice in the amount of$3,375.00. Enclosed is Pay Estimate #3 in the amount of$59,916.49. With the approval of this Pay Estimate, the amount remaining to be paid is $14,750.00 which is the retainage (5% of the total project cost of$295,000). Also enclosed are:

• Change Order#! in the amountof$12,310.75 for the additional concrete pad work on the pumps,

• The Punch List showing minor corrections needed with the exception of the repair to pump #3 which is being addressed by the supplier, Odessa,

• And, an invoice from HDR Engineering, Inc. in the amount of $2,250.00.

Analysis:

The work and equipment submitted for reimbursement in the attached Pay Estimate has been recommended by Jason Christensen, HDR, and verified by Jacob Hinojosa, STW A O&M Supervisor. The work associated with Change Order #I was previously reviewed by the Board. Specifically, Odessa would not warranty the pumps if the new concrete pads had not been installed.


Approve Pay Estimate #3 submitted by Associated Construction Partners Ltd. (ACP) in the amount of $59,916.49. Approve Change Order# I in the amount of $12,310.75. Approve payment of the HDR Invoice in the amount of $2,250.00.

Board Action:

Determine whether to approve Pay Estimate #3 submitted by Associated Construction Partners Ltd. (ACP) in the amount of$59,916.49, Change Order #I in the amount of$12,310.75 and payment of the HDR Invoice in the amount of $2,250.00.

Summarization:

Last month staff reported that this project is scheduled to be complete during the third week of April. The time has arrived and this project would be finished if it were not for the third pump needing to be repaired. Nonetheless, this project has, for the most patt, proceeded smoothly.

Contractor's Application and Certificate for Payment

To: From:

South Texas Water Authority Associated Construction Partners, LTD.

2302 East Sage Road 215 West Bandera Road, Suite 114-461

Kingsville, 1X 78634 Boerne, 1X 78006

Application No.:

Application for Payment Change Order Summary

Change Orders Approved by Ovmer

Number Date Approved Additions

TOTALS

$0.00

NET CHANGE BY CHANGE ORDERS $0.00

Contractor's Certification .

The undersigned Contractor certifies that to the best of the Contractor's knoiNiedge, Information and belief, the Work covered by this Application for Payment has been completed in accordance with the Contract Documents, that all amounts have been paid by the Contractor for Work for which previous Certificates for Payment were issued and payments received from the Owner, and that current payment shown herein is now t:luA

By: _ ~p-4=.11\C\. Date: 3/25/16 Associated Construction Partners, LTD

Approved For Payment:

By: Date: Carolo Serrato, Exccutlvo Director

3

Deductions

Page 1 of 1

1-)~ Via:

HDR Engineering, Inc.

4401 West Gate Blvd., Suite 400

Austin, 1X 787 45

Application Period: 02/2!<116-03/25/16

1. ORIGINAL CONTRACT SUM $295,000.00

2.. Net change bV: Change Orders $0.00

3. CONTRACT SUM TO DATE (Line 1 + 2) $295,000.00

4. TOTAL COMPLETED AND STORED TO DATE (Column F on Progress Estimate)

$295,000.00 5. RETAINAGE: 5% of Completed Work and Stored Material

$14,750.00 6. AMOUNT EUGIBLE TO DATE

$280,250.00 7. LESS PREVIOUS PAYMENTS (Llne 6 from prior certificate)

$0.00 $220,333,51 8. AMOUNT DUE THIS APPUCATION

$59,916,49 9. BALANCE TO FINISH, PLUS RETAINAGE (Column G on Progress Estimate)

- $'!±,750.001

Payment of 1 $ 59,916.49

By~..-;:"""~

is recommended.

Date: ~~7'6 ~lnojosa, S1WA .,-

Date: 4/22/16

KlnqsviDe Pump Station Improvements Contractor's Proaress Estimate 1-)~ IAoollcatJon Number: 3

A llcatlon Period: 02·25·16..03-25-16 A lication Date: 3/25/2016 A B c D ' F G

Item Work Completed

Mllterlllls Totol Completed and Scheduled Presantly Sto~ Sto;~~~~ote % Balance to Finish

Item Description Units Quantltv Unit Price Value From Prevlow> AppllcllUon) Thl:o PerjO(j (not InC or D IF/8\ 18-F\ 1' MobilizlltionBonds and Insurance LS 1 $25,000.00 $25.000.00 $25,000.00 $0,00 $25.000.00 100.00% $0.00

Demolition of piping headers, valves, 2 pumps and 2 motors ood bnses LS 1 $17,500.00 $17.500.00 $17,500,00 $0.00 $17,500.00 100.00% $0,00

Lowering ofwllter in coordination with STWA nnd 3 instnllation of new isolontion valves LS 1 $12,500,00 $12.500.00 $12,500,00 $0.00 $12,500.00 100,00% $0.00

remove and replace surge relief valve and isolation 4 vnlve vin closing distribution vnlves in vnrd LS 1 $10,000.00 $10,000.00 $10,000.00 $0.00 $10,000.00 100.00% $0.00

Regrouting of two new pump p:tds and instnllation of 5 new pumos nnd motors LS 1 $10,000.00 $10,000,00 $10,000.00 $0.00 $10,000.00 100.00% $0,00

Pumps, Piping nnd and mech:urical connections of new 6 ""''' LS 1 $70,000.00 $70,000.00 $68,930.01 $1,069.99 so.oo $70,000.00 100.00% $0.00

7 instnlaltion of pipe supports LS 1 $7,500.00 $7,500.00 $4,500.00 $3,000.00 $7,500.00 100,00% $0.00

8 disinfections of ressure testin of new i in LS 1 $7,500.00 $7,500.00 $7.500.00 $7,500.00 100.00% $0.00

9 coatin oh licnble surfaces LS 1 $2.500.00 $2,500.00 $.2.500.00 $2,500,00 100.00% so.oo temporruy starter to run temporary owner propvided

10 ump in its existinglocntion LS 1 $10,000.00 $10,000.00 $10,000,00 $0.00 $10,000.00 100.00% $0.00

11 Testin and startu ofTem rarvMCC LS 1 $10,000.00 $10,000.00 $10,000,00 $0.00 $10,000.00 100.00% $0.00

demo of existing MCC RTU and nil electricnl 12 instrucmentntion to be removed LS 1 $5,000.00 $5,000.00 $5,000.00 $0.00 $5,000.00 100.00% $0.00

13 Instnllntions of new MCC in pro osed location LS 1 $50,000.00 $50,000,00 $50,000.00 $0.00 $50,000,00 100.00% so.oo Instnllntion of conduit runs from MCC to all pump

14 locations LS 1 $10,000,00 $10,000.00 sa.soo.oo $1,500.00 $10.000.00 100,00% $0,00

Pull voltng~ and control wires to :ill newly proposed 15 locntions ns reouired LS 1 $5,000.00 $5,000.00 $5,000.00 $5,000.00 100.00% $0,00

16 finn! terminations of control wiring nnd voltnp;e wiring LS I $2,500,00 $2,500.00 $2,500,00 $2,500,00 100.00% $0.00

testing of new MCC. RTU nnd two new pumps. 17 demonstrate operntion to owner LS 1 $5,000.00 $5,000.00 $5,000,00 $5,000.00 100.00% $0.00

demolition oftempornry'pump motor, piping nnd pipe 18 supports nnd nssoci11ted vn.lves. LS 1 $5,000.00 $5,000.00 $5,000.00 $5,000.00 100.00% $0.00

grouting of existing pump pnd, instnll ofnew pump and 19 motor includinll; testinll; and disinfections LS 1 $10,000,00 $10,000.00 $10,000.00 $10,000.00 100.00% $0.00

installation of piping, valves, pipe supports on new 3rd 20 =P LS 1 $10,000.00 $10,000.00 $10,000.00 $10,000.00 100.00% $0.00

Perfonn final terminntions of wiring. conduit 21 connections ns required LS 1 $5,000.00 $5,000.00 $5,000.00 $5,000.00 100.00% $0.00

Testing, stArtup, demonstrntion of operation nnd ftn:U 22 11diustments ns nces.sarv LS 1 $5,000,00 $5,000.00 $5,000.00 $5,000.00 100.00% $0.00

Totals $295,000.00 $231,930.01 $&3,06&.99 $0.0(1 $295,1)1)0,1)1) $14,75Cl.OO

Page 1 of 1

-~-· -- -~--~-· ·-· --······-· 1-)~ For (contract): Kingsville Pump Station Improvements Application Number: 1 Application Period: 12/25/15-1/25/16 Application Date: 1/25/2016

Drawing Transmittal

Invoice No. No. Materials Description Stored Previously Stored this Month Incorporated in Work

Materials Date Amount Amount Date Amount Remaining in

(MonthlY ear) ($) ($) Subtotal (MonthlY ear) ($) Storage($) 5810819 COHEN Dec-15 $0.00 $0.00 $0.00 3/15/2016 $14,930.01 -$14,930.01

4590545 ODESSA Dec~15 $45,000.00 $0.00 $0.00 16-Feb $45,000.00 -$45,000.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

Total $45,000.00 $0.00 $0.00 $59,930.01 -$59,930.01

Page 1 of 1

Project Namo: Kingsville Pump Station Improvements

Project O,o,ner: South Texas Wnt(lf Authorily 2302 Enst Sago Road K!ogsvi!le,-TX 78634

Projad Contraclor. Associated Conslruclion Pilflnms, I. TO. 215-W. Bandera Road, Suite I 14·461 Boorne, TX 78005

It Is anreod to modify tho Contract referred to nbovo ns follows: 11om No. Item and Dasclinl!on ol Channos

·---- ----··

CPH 01 RcpliKCmcnt of t!~ree concrete pump pads

-

·-.

{<Xt \B-:J-0; Revised Oc.t2001) Cop;f;ghl \991 HDH Er){fnenr;ng, he.

Subtotal

Oifforcnce Not

Change Order No. 01 Page 1 of 2

HDA Project No.: 207381

Date or Issuance: 4/4/16

Onto ol Contrncl: 8/25/!5

Contwct Pmlod: 260 Cn!ondm Dn.ys

Contmct Price Contrnct limo

Oecreaso tncrcaso Oocrea!lo lncroas~~

il2,310.75 10

-

~·--" ~ -

~12,310,75 !0

$12 310.75 10

Change Order No. 01 Page 2 of 2

Summary: ll Is agreed fo modify lhe Contract referred to above as follows:

Contract Price prior lo this Change Order Contract Time prior to this Change Order 260 days to Final Complotlon (05/11/:.!016)

$295,000.00

Not Increase of this Change Order Net Increase of this Cfmngo Order

$12,310.75 1ll days

Roviscd Contract Price wilh all apptoved Change Orders Rovisod COntract Timo with all npprovod Chango Orders

$307,310.75 270 davs to Final Conml!illon (illi/21/2016)

The changes Included In this Change Order are to be accomplished In accordance with the terms, stipulations and condflions of tho original Contract as though Included !heroin.

1 AttesL

---~ ---~~·---

Dislribulion: X Owner

(Oct 1990;Rov\sodOct2001) Copyri{)h! 1991 HDR Engm~enng, Inc.

X Contractor 0 Olfico

Datu~ ~~~It~~~ Onto:

~~'iJa !;__t, -Onto: (-'

[] Field 0 Other

Form 6010.{15

Carola Serrato

From: Sent: To: Subject: Attachments:

Carola/Jacob/Dony,

Christensen, Jason <[email protected]> Monday, April 11, 2016 3:05 PM Carola Serrato; 'jhinojosa'; [email protected] FW: STWA Kingsville PS: Prelim Punch List KPS Prelim Punch List.pdf

I just emailed the attached preliminary punch list to ACP. Please let me know if there are any other items that should be added or if you have any questions.

Thanks, Jason

Jason Christensen, PE T 512.912.5100 D 512-912-5109

hdrinc.com!follow-us

From: Christensen, Jason Sent: Monday, April 11, 2016 3:03 PM To: [email protected] Cc: [email protected] Subject: STWA Kingsville PS: Prelim Punch List

Chad,

Attached is the preliminary punch list for the Kingsville Pump Station. I apologize that I did not get this to you last week. Please let me know if you have any questions.

Thanks, Jason


HDR 4401 West Gate Blvd., Suite 400 Austin, TX 78745-1469 T [512.912.5100 D 512.912.5109 [email protected]

hdrinc.com/follow-us

1

Owner:

Project Name:

Location/Item

Pump Station

Electrical

Contract

--

This is a preliminary punch list. Items noted herein are the result of , ind;viduaJ observations and are not to be considered al!~inclusive or otherwise complete. This is not the product of a final inspection.

Punch List

STWA Date: Preliminary: 04/04/2016

Kingsville Pump Station Improvements Project No.: 207381

Preliminary Punch List:


1 Repair Pump No.3, perform start-up and demonstrate pump operation for minimum 120 consecutive hours per Section 01650.

2 Tag process systems (pumps, valves, piping) per Section 10400.

3 Touch-up paint on ARV No. 1. Existing coating is not uniform.

4 Anchor new MCC to housekeeping pad per manufacturer instructions.

5 Submit record drawings to HDR. .

6 Complete O&M manuals per Section 01340.

'

.

---- -------·-

1 of 1

Remarks

I.__ ~R I ONE COMPANY I"'1.A.. Many So/utions'w



Attn: Ms. Carola Serrato


HDR Inc/US Engineering Accounts Recehrable

P.O. Box 74008202


HDR Invoice No. 27 I 991·b Invoice Date 4/1 5/2016 Period Ending 3/26/2016

Client No.: 011144

con0079463 Project No.: 207379 $

207380 $ 207381 $ 2,250.00

$ 2,250.00

Engineering Services for Kingsville Pump Station Improvements.

Lump Sum Percent Amount Fee Complete Eamed

Design $ 59,100.00 100.0% $ 59,100.00 Bidding $ 10,000.00 100.0% $ 10,000.00 Construction $ 22,500.00 90.0% $ 20,250.00

Total Amount Earned to Date: $ 89,350.00 Total Amount Invoiced to Date: $ 87, l 00.00

Due this invoice: __:;:.$-=:2"-,2:-'50:0:".0::0- $ 2,250.00

TOTAL DUE TillS INVOICE: $ 2,250.00

Carol a Serrato

.~----------------------------------------------------------------------------------From: Sent: To: Subject:

Kingsville Pump Station

Christensen, Jason <[email protected]> Tuesday, April19, 2016 10:40 AM '[email protected]' Kingsville PS: Status Update

• Substantial Completion: 04-21-2016 • Final Completion: 05-21-2016 • Change Order 01 added 1 0 calendar days to the contract • Engineer inspected the project on 04-04-2016 and the work can be considered to have reached Substantial Completion

on that day • However, new pump #3, which was successfully started up on 03-11-2016, experienced an issue on or around 03-30-

2016 and has been inoperable since that time; the pump representative, Odessa Pumps, is in the process of fixing the pump as a warranty claim to the manufacturer, Paco; the pump's impeller wear ring was manufactured Incorrectly and is being replaced; current status is that pump #3 will be placed back into operation by 04-21-2016

• Engineer emailed preliminary punch list for the project to contractor on 04-11-2016


HDR 4401 West Gate Blvd., Suite 400 Austin, TX 78745-1469 T [512.912.5100 0 512.912.5109 [email protected]


1

ATTACHMENT 6

Joint Project with NWSC- Driscoll Pump Station Improvements

Memorandum

To:" From:

South Texas Water Authority Board of Directors Carola G" SeiTato, Executive Director Aprill9,2016 Date:

Re: Joint Project with Nueces Water Supply Corporation- Pump Station Improvements at the Driscoll Pump Station

Background:

> Enclosed is the "punch list" for this project. To date, no pay estimate requests have been submitted. Also enclosed is HDR Engineering, Inc. (HDR) Invoice #271997-b in the amount of$950. This invoice is for the remaining balance on the engineering service agreement executed for this project. Also enclosed is a

.. brief summary from Mr. Jason Christensen, HDR, on the status of this project.

Analysis:

As reported previously, the task of separating the cost between the building expansion and pump installation will be done in order to recoup cost of the pump and appmtenances installations from the Nueces Water Supply Corporation. However, several recent conversations with Jason Cln·istensen, HDR ' Engineering, Inc., has resulted in a few items that warrant mention:

• The substantial completion on this project was exceeded. However, as repmted previously, the delay in receiving the pump was as a result of the supplier failing to process Mercer Control's order. Although the delay did not extend as long as originally anticipated, it created problems for Mercer.

• In addition, it has been realized that a specification regarding the pump operation was not clarified. Some additional control and wiring will be needed to insure that the original rural pump and the newly installed pump are working in an alternating mode on an automatic setting. This will also need to be integrated into the SCADA system.

• Mr. Christensen and I agree that Mercer has been extremely conscientious. At this point, neither of us believe Liquidated Damages should be assessed. HDR may (or may not) request additional payment beyond the amount agreed upon in the original agreement. If such a request is made, I have infmmed Mr. Clu·istensen that it should be done in the form of an amendment to the agreement.


Keep the Board updated on this project. In the event there is a Pay Estimate provided and recommended for payment by staff and HDR Engineering, Inc., approve said payment. Approve payment to HDR in the amount of $950. If an amendment to the Engineering Service Agreement is provided by HDR, consider the request.

Board Action:

Determine whether to approve any recommended Pay Estimates presented. Determine whether to approve payment to HDR in the amount of $950. Determine whether any amended cost for engineering services should be approved.

Summarization:

Enclosed are photographs of the nearly cmnplete project. As mentioned during this project as well as the Bishop West Project (STW A Series 2013 Bond Project), Mercer Controls has done quality work.

Owner:

Project Name:

Location/Item

Site

Swing gate

Pump Station

This is a preliminary punch list. Items noted herein are the result of individual observations and are not to be considered all-inclusive or otherwise complete. This is not the product of a final inspection.

Punch List

STWA Date: · Preliminary: 04/04/2016

Driscoll Pump Station Expansion Project No.: 229360

Preliminary Punch List:


1 Remove demolished materials and trash from site.

2 90 degree elbow on chlorine injection tap leaked. STWA staff performed necessary repairs. Elbow was Sch 40, but should have been Sch 80.

3 Cap abandoned conduits at various locations around exterior of pump station building.

4 Selvage treatment for chain link fabric on swing gate is incorrect. Selvage shall be top: knuckled and bottom: twisted and barbed according to Section 02444 and shop drawing 02444-01.

5 Provide galvanized steel pipe strike embedded in concrete per Detail 1 on Sheet G-03 to enable proper gate closure

6 Closure pipe on swing gate is bent. Repair or replace to enable proper gate closure, including ability to lock the gate.

7 Install surge relief valve per contract drawings.

8 Install 90 degree elbow on surge relief discharge pipe per contract drawings.

9 Coat pump motor, valves and piping per Section 09905.

10 Install Anvil pipe supports per shop drawing 15090-01 A.

1 of 2

Remarks

2 of 2

Item Signed Off Location/Item No. Action Required Name/Date Remarks

Pump Station 11 Anchor trim on west side of new doorway.

12 Complete exterior trim installation on wall penetration at new exterior gate valve.

13 Install exterior trim on wall penetration for new louver.

14 Install metal wall panel at pipe penetration between new and old buildings per Detail 5 on SheetG-03.

15 Repair/replace Act-Pak enclosure that was damaged during relocation of existing chlorine analyzer.

Electrical 16 Reinstall exterior light fiX1ure above doorway on north side of old building.

17 Reinstall exhaust fan on old building ~ince it was scheduled to remain per Sheet A-01.

18 Install cover on interior conduit body at wall penetration above new door.

Tagging 19 Tag wall-mounted pump motor starter, pump breaker, and new pump per Section 10400.

Contract 20 Submit preliminary O&M manuals per Section 01340 to HDR for the new pump, valves '

(gate, check and surge relief) and MCC/electrical gear.

21 Submit record drawings to HDR.

..

'I._ ~R I ONE COMPANY r-J..A.. Mauy Solutions~"




Engineering Services for Driscoll Pump Expansion Project.

Lump Sum Percent Fee Complete

Design $ 39,200.00 100.0% Bidding $ 9,600.00 100.0% Construction $ 19,000.00 100.0%


HDR Inc/US Engineering Accounts Recei\·able

P.O. Box 74008202


HDR Invoice No. 271997-b Invoice Date 4/15/2016 Period Ending 3/26/2016

con0088476

Client No.: 011144

Project No.: 229358 $ 229359 $

229360 $ 950.00 $

$ 950.00

Amount Earned

$ 39,200.00 $ 9,600.00 $ 19,000.00

Total Amount Earned to Date: $ 67,800.00 Total Amount Invoiced to Date: $ 66,850.00

--7-----'-'-'-'-'::-'-"':-'--Due this invoice: $ 950.00 $ 950.00

TOTAL DUE THIS INVOICE: $ 950.00 .

Carola Serrato

From: Christensen, Jason <[email protected]> Tuesday, April19, 2016 10:40 AM Sent:

To: Carola Serrato Subject: Driscoll PS: Status Update

Driscoll Pump Station • Substantial Completion: 02-22-2016 • Final Completion: 03-22-2016 • Engineer inspected the project on 04-04-2016 and the work can be considered to have reached Substantial Completion

on that day • Based on 04-04-2016 Substantial Completion, contractor was 42 days past due on contractual Substantial Completion

date • Contractor delay is mostly attributable to failure of pump representative, DXP, to order new pump when requested by

contractor; pump shop drawing was approved on 09-23-2015 and pump was reportedly ordered by contractor in October 2015; however, DXP did not place the order until the first week of January 2016

• Engineer sent a notification of delay letter to the contractor on 01-18-2016 • Contractor delay has caused the engineer to slightly exceed its construction administration budget for the project; as of

04-09-2016, engineer is approximately $1,700 over budget • Contractor has been responsive to schedule issue and worked diligently to expedite pump delivery schedule and

subsequently incorporate the work • Engineer emailed preliminary punch list for the project to contractor on 04-12-2016 • Owner/Engineer have requested a change proposal request from the contractor to install (temporary) pump alternation

controls to enable existing booster pump #1 to automatically work in tandem with new pump #2; SCADA revisions at the pump station will be completed at a later date by others


HDR 4401 West Gate Blvd., Suite 400 Austin, TX 78745-1469 T [512.912.5100 D 512.912.$109 [email protected]


1

ATTACHMENT 7

Assessment of STWA 42-Inch Waterline

Memorandum

To: South Texas Water Authority Board of Directors From: Carola G. Senato, Executive Director ' Date: Apdl20, 2016 Re:·· Bond Project- Assessment of 42" Waterline- Update

Background:

Enclosed is the most recent email regarding the 42" Waterline Assessment Project. As reported recently, the HDR Engineering Inc. (HDR) team was able to perfotm some of the field work and then was unable to continue due to a heavy rain event. As you can see, the HDR team had intended to return on April25'" and work through May 4111

• However, the rain repmied for most of this week as well as upcoming conditions have created problems with access and perfotming the tests.

Also enclosed is an HDR invoice in the amount of$26,612.67. Thus far 53.6% of the project is considered complete. The remaining balance of the engineering service agreement is $49,190.55. Payment for this project is fi·om the Series 2013 Bonds, Proposition 1.

Analysis:

Staff should have additional information to report on the actual findings of the field work as pmi of the May 24111 Board meeting.


Keep the Board updated on this project. Approve payment for HDR's Invoice 271227-b in the amount of$26,612.67.

Board Action:

Provide feedback to staff and the engineering consultant. Determine whether to approve payment to HDR in the amount of $26;612.67.

Summarization:

Staff is hoping that the rains fi·om this week as possibly next week will either infiltrate, drain and/or evaporate quickly in order to get this project back on track.

Carola Serrato

From: Sent: To:

Carola Serrato <[email protected]> Wednesday, April 20, 2016 1:23 PM 'Pousard, Richard'

Cc: Subject:

'Archer, Aaron D.'; 'Dony Cantu'; 'Frances Rosales'; 'Jacob Hinojosa'; 'Jo Ella Wagner' RE: Flooded Fields

Richard,

That is understandable. I will let the Board know.

Carol a

Carola G. Serrato Executive Director

South Texas Water Authority P.O. Box 1701 Kingsville, Texas 78364 [email protected] 361-592-9323 x12 361-592-5965 fax

From: Pousard, Richard [mailto:[email protected]] Sent: Wednesday, April20, 20161:17 PM To: Carola Serrato <[email protected]> Cc: Archer, Aaron D. <[email protected]>; Dony Cantu <[email protected]>; Frances Rosales <[email protected]>; Jacob Hinojosa <[email protected]>; Jo Ella Wagner <[email protected]> Subject: Re: Flooded Fields

Carola-

I appreciate you and your team keeping an eye on the alignment conditions. Based on the weather predictions for the remainder of the week and into the next rain looks highly probable. As we will require an entire week with access to most of the alignment I prefer to error on the side of caution and will plan on cancelling next weeks work. The following week might be possible but its to early to tell. We will inform you once the next mobilization is scheduled. Thanks,

Richard

On Apr 20, 2016, at 9:45AM, Carola Serrato <[email protected]> wrote:

Aaron and Richard,

Dony Cantu reported this morning that the fields between Driscoll and Robstown are flooded. Per my conversation with Aaron, I wanted to let you know in case other arrangements need to be made.

Carola

Carola G. Serrato Executive Director

South Texas Water Authority

1

Invoice 1-)~ HDR Engineering, Inc. Austin,TX 78741 Phone: (512) 912-5100

Please send remittance with copy of invoice to

HDR Inc/US Engineering Accounts ReceiYable

P.O.Box 74008202




HDR Invoice No. Invoice Date Period Ending

con0103958

Client No.:

Project No.:

Engineering Services for 42-IN Pipeline Condition Assessment

$

Lump Sum Fee

105,900.00

Percent Complete

53.6%

Amount Earned

$ 56,709.45

Total Amount Earned to Date: $ 56,709.45 Total Amount Invoiced to Date: __.:::.$__;3::.:02,0:::9:..::6::...7:..::8:_

Due this invoice: $ 26,612.67

TOTAL DUE TillS INVOICE:

271227-b 4/13/2016 3/26/2016

011144

271180 $ 26,612.67

$ 26,612.67

$ 26,612.67.

ATTACHMENT 8

Amendments to Wholesale Water Supply Contracts

To: From: Date: Re:

Memorandum

South Texas Water Authority Bom:d of Directors Carola G. Serrato, Executive Director Aprill9, 2016 Amendments to Whoiesale Contract: current City of Agua Dulce Wholesale Contract, offered City of Bishop Wholesale Contract, offered City of Kingsville Wholesale Contract, offered Nueces County Water Control and Improvement District #5 Wholesale Contract and to be offered City of Driscoll Wholesale Contract

Background:

Staff and legal counsel have continued sending revised contracts to Wholesale Customers. The Ricardo Water Supply Corporation and the Nueces Water Supply Corporation have received the revised contracts and approved the amendments. The approval of those amended contracts are two (2) separate agenda items for Board action. Staff requested that Bill Flickinger, Willatt and Flickinger, continite to work on providing the next two (2) revised contracts, namely for the City of Agua Dulce and the City of Bishop. Staff has also requested that Mr. Flickinger follow-up with an email to Ms. Comtney Alvarez, Kingsville City Attorney, on the most recent changes.

Analysis:

The revised City of Agua Dulce contract was provided by Mr. Flickinger on Monday, Aprill81h.

The enclosed cover letter with a clean version and red-line version were sent to Mayor John Howard and the City Council. I spoke with the City Secretmy and she will be placing this item on the next Council Meeting scheduled for May 16th.


Keep the Board updated on this matter.

Board Action:

Provide feedback to bond counsel, legal counsel, and staff.

Summarization:

Staff believes that legal CO\tnsel has been instrumental in terms of explanations on the need for the amendments as well as describing the IRS's position on tax-exempt bonds. Therefore, staff will request that Mr. Flickinger and/or Mr. Noel Valdez, McCall, Parkhurst and Hmton, be available either in person or by telephone for the City of Agua Dulce's Council Meeting on May !61h.

STWA SOUTH TEXAS WATER AUTHORITY

Aj;1ril19,2016 __ P. 0. BOX 1701

Mayor John Howard City of Agua Dulce P.O.Box297 Agua Dulce, TX 78330-0297

KINGSVILLE, TEXAS 78364-1701

Re: Amendmimts to Wholesale Water Supply Contract between the City of Agua Dulce and South Texas Water Authority

Dear Mayor Howard:

As you know, the City of Agua Dulce (the "City") entered into a 20-year water supply contract (the "Contract''), dated January 27, 2015, with the South Texas Water Authority ("STW A"). Prior to the execution of the Contract, STW A issued General Obligation Bonds, Series 2013 (the "Bonds") in the principal amount of $5,110,000 to fmance certain capital improvements, including the relocation of the STWA's regional water transmission line as a result ofTxDOT's upgrades of US 77 to I-69 standards. Issuance of the Bonds were approved by STWA District voters on November 6, 2012 and are payable from an ad valorem tax.

STW A issued the Bonds as tax-exempt obligations in order to borrow at the lowest possible interest rate for its taxpayers. As such, STW A is obligated to comply with federal tax law requirements to preserve their tax-exempt status. These federal tax law requirements govern the types of contractual provisions that may be incorporated into water supply contracts. Unfortunately, it was my understanding that the original drafted contract template had been reviewed for such requirements; however, a recent review of the Contract by our bond counsel discovered that some Contract provisions need to be revised in order to comply with applicable federal tax law and, most impmtantly, to preserve the tax-exempt status of the Bonds. The purpose of this letter is to summarize those proposed changes. I have enclosed the original executed Contract as well as a black lined version of the Contract incorporating the revisions described below ..

1. Additional Clarifying Definitions -Section 1. Definitions

Minor changes were made to the definitions of Maintenance and Operations Tax, Corpus Christi Water Supply Agreement and Fiscal Year. As described in the next section, the new defmitions are key components in clarifying that STW A is. charging Uniform Rates.

2. Uniform Rates and Charges- Section 8 Prices and Terms

Generally, federal tax law requires STW A to sell its water to all of its wholesale customers on uniform rates and charges. Although STW A does sell its water to wholesale 9ustomers on uniform rates and charges, it provides various additional services to certain wholesale customers now defmed in the Contract as "Special Services." The inclusion of varying rates for Special Services would make it dlfftcult to demonstrate uniform rate and charges. Therefore, any Special Services will be covered by a separate contract. This has been accomplished by adding clarifying defmitions to Section 1 of the . Contract and by revising Section 8(A) of the Contract.

As charged previously, Section 8(A) provides that there are two components assessed to each wholesale customer under the Contract (1) a "pass through charge" to recover the cost of water purchased pursuant to the Corpus Christi Water Supply Agreement at a rate equal to the per 1,000 gallon cost from the City of Corpus Christi, and (2) a "handling charge" which shall be a rate equal to the estimated annual Maintenance and Operating Expenses per 1,000 gallons, less the amount of Maintenance and Operations

Kathleen Lowman, President Filiberto Trevifio Ill, Yice.-President Rudy Galvan, Seuetary:Treasurer Lupita Perez (361) 592-9323 Or (361) 692-0337 (C. C. line)

Fax: (361) 592-5965

Patsy A. Rodgers Dr. Alberto Ruiz CbuckScbultz Steven C. Vaughn Carola G. Serrato, Executive Director

Tax revenues budgeted for payment of Maintenance and Operating Expenses. Section 8(A) specifically states that "Maintenance and Operating Expenses" shall not include any management fees or similar expenses relating to Special Services. Previously, those revenues were described as a credit to the calculation of the "handling charge." STW A will now adopt a Special Services Budget which will eliminate the need for those types of credits.

3. Elimination of Take or Pay Provision- Section 8. Prices and Terms

The take or pay provision in Section 3(C) of the original Contract also jeopardizes the tax-exempt status of the Bonds under federal tax law. Therefore; such Section 3(C) has been stricken in its entirety.

4. Clarification of Water Rationing Provisions- Section 10. Corpus Christi Contract and Drought Contingency Plan

To further demonstrate that STW A is treating its \Vholesale customers uniformly under its various wholesale contracts, a paragraph has been added to Section 10 regarding water rationing. Specifically, such paragraph provides that should any water result in necessary water rationing STW A will limit and restrict all of its wholesale customers through resale, to the same extent and on a pro rata basis.

5. Wholesale Customer's Water Supply Contracts and Obligation to Provide Notice to STWASection 14. General Provisions, Subsection B. Tax Exempt Bonds

The same federal tax law requirements that apply to STWA's water supply contracts also apply to the water supply contracts entered into by STW A's wholesale customers with their retail or wholesale customers. As such, a new Section 14(B) has been added to the Contract that provides in patt that "the Wholesale Customer will not enter Into a water supply contract or other agreement with a customer of such Wholesale Customer which contains take-or-pay, contract minimums, output requirements, special rates and charges or similar provisions, unless it has notified STW A in writing of the \Vholesale Customer's intent to enter into such contract at least 60 days prior to the execution of such contract or agreement." Such provision provides a mechanism to give STW A adequate time to evaluate the implications that snch contract might have on the Bonds and to decide how best to protect the tax-exempt status of the Bonds.

As discussed above, the issuance of the Bonds as .tax-exempt obligations provided the lowest bono wing interest rate to the tax-payers of STW A and the City. However, the changes described must be made to the Contract in order to preserve the tax-exempt status of the Bonds. I hope that this letter has provided the necessary background information and the need for these changes. Nevertheless, I would appreciate the opportunity to meet with yon to further discuss your governing body's approval of these changes. Our attorneys, including bond counsel, are also available to meet with you.

:ro~ly'1><e~rr_,.a..,..p ~ Executive Direc:o~G

CGS/1 Enclosures- Amended Contract (marked/clean) cc: City of Agua Dulce Council

ATTACHMENT 9

Amended Water Supply Contract with Nueces Water Supply Corporation

Memorandum

To: South Texas Water Authority Board of Directors From: Carola G. Serrato, Executive Director Date: Aprill3, 2016 Re: Amended Nueces (NWSC) Water Supply Contract

Background:

Enclosed is a copy of the amended Water Supply Contract presented to the NWSC Board on April12, 2016 during a duly posted and open meeting. This amended contract was drafted by bond counsel with the assistance of Bill Flickinger, Willatt and Flickinger, in response to concerns petiaining to preserving the tax-exempt status of the 2013 Bonds. The NWSC Board approved the amended contract. It is now being presented to the STWA Board for its approval.

Analysis:

The amendments were reviewed in both written (see attached NWSC memo) and oral detail for the Nueces Water Supply Corporation Board of Directors. A representative ofSTWA's bond counsel, Mr. Noel Valdez with McCall, Parkhurst and Horton attended the meeting and provided explanations for the amendments as well as background information on the issued bonds. His explanations included examples of how the IRS views uniform rates, what type of projects would qualifY for a tax-exempt status and, in general, how tax-exempt bonds should benefit the public as a whole without any one sector or business benefitting to a greater extent than another group/individual.


Approve the amended Water Supply Contract with the Nueces Water Supply Corporation.

Board Action:

Determine whether to approve the amended Water Supply Contract with the Nueces Water Supply Corporation.

Summarization:

Staff believes that the Nueces Water Supply Corporation Board recognized that the contract amendment are a necessary pati of its long-term relationship with South Texas Water Authority and its efforts to maintain the tax -exempt status of the 2013 Bonds.

To: From: Date: Re:

Memorandum

Nueces Water Supply Corporation Board of Directors Carola G. Serrato, General Manager April 6, 2016 Amended Contract between the Nueces Water Supply Corporation (NWSC) and South Texas Water Authority (STW A)

Background:

In June of2015, the Nueces Water Supply Corporation entered into a 20-year water supply contract with the South Texas Water Authority. The negotiations for that conh·act had been ongoing for several years dating back to 2011 when a 5-year interim contract expired. Prior to the 5-year contract, the NWSC and STW A had a long-term contract that was in place for more than 20 years.

Enclosed is an amended contract which is being presented to the NWSC Board as a result of STW A issuing General Obligation Bonds in 2013. The Bonds were issued to pay for: (I) relocating STWA's regional water transmission line due to TxDOT's I-69 road work, (2) replacing pumps at the Kingsville Pump Station, (3) installing new pumps at the City of Bishop's Westside Pump Station, ( 4) performing an assessment on the main 42" transmission line and (5) addressing any problems on that transmission line. It is important to note that the Bonds were approved by STWA's Dish·ict voters in November of20 12. The debt on the bonds is repaid from an ad valorem tax of slightly more than 2 cents per $100 valuation.

STW A issued the Bonds as tax-exempt bonds based on legal and financial advisors recommendations in order to secure the best possible interest rate. However, in order to comply with federal tax law requirements, STW A has been advised by its Bond Counsel that ce1iain contractual changes should be made. On behalf of the STWA Board and in my capacity as STWA's Executive Director, it is important to state that it was our understanding that the originally drafted conh·acts had been reviewed for snch requirements. These amendments are also necessary to preserve the tax-exempt status of the 2013 Bonds.

Analysis:

Enclosed is a copy of the marked version showing added language (underlined) and deleted language (strike-out font). Below is a summary of the changes to the conh·act.

I. Additional Definitions are found in Section 1. Definitions. Minor changes were made to the defmitions of Maintenance and Operations Tax, Corpus Christi Water Supply Agreement and Fiscal Year. New definitions were added to clarify that STWA is charging Unifonn Rates. It is the requirement ofUnifmm Rates that is crucial to the tax-exempt nature of the Bonds.

2. The provision for Uniform Rates and Charges is found in Section 8 Prices and Terms. Federal tax law requires STW A to sell its water to all of its wholesale customers on uniform rates and charges. Although STW A sells its water based on unifmm rates and charges, STW A provides additional services now defined in the Contract as "Special Services." The Amended Conh·act will require any Special Services to be covered by a separate conh·act. It is veiY important to note that the method for charging for water is not changed. Section 8(A) provides that there are two components (as before): (I) a "pass through charge" to recover the cost of water purchased from the city of Corpus Christi and (2) a "handling charge" which recoups the estimated rumual Maintenance and Operating Expenses less the amount of Maintenance and Operations Tax revenues. Section8(A) clarifies that "Maintenance and Operating Expenses" shall not include any management fees or similar expenses relating to Special Services. Previously, those revenues were described as a credit to the calculation of the "handling charge." STW A will now adopt a Special Services Budget which will eliminate the need for those types of credits.

3. There is no longer a Take or Pay Provision in Section 8. Prices and Terms. The take or pay provision also jeopardizes the tax-exempt status of the Bonds under federal tax law and has been stricken in its entirety.

4. A paragraph has been added to clarify the Water Rationing Provisions in Section 10. Corpus Christi Contract and Drought Contingency Plan. Although less evident in terms of charging Unifonn Rates, it is also necessary to insure that even in times of drought all customers are being treated in a uniform manner. Therefore, a paragraph has been added to Section I 0 regardir1g water rationing. This paragraph states should any water rationing be necessary STW A will limit and restrict all of its wholesale customers through resale, to the same extent and on a pro rata basis.

5. The last amendment that needs to be noted is found in Section 14. General Provisions, Subsection B. Tax Exempt Bonds. This provision is likely the most complex of the amendments. As such, staff will be able to conference in Mr. Bill Flickinger, Willatt and Flickinger, if needed. The need for this provision, as a result of the federal tax law requir'ements which obliges STW A to charge Uniform Rates, must be addressed in the water supply contracts entered into between STW A and all its Wholesale Customers. As such, it creates a "domino effect" on the rates that STW A's Wholesale Customers charge to their retail or wholesale customers. Section 14(B) provides that "the Wholesale Customer will not enter into a water supply contract or other agreement with a customer of such Wholesale Custoiner which contains take-or-pay, contract minimums, output requirements, special rates and charges or similar provisions, unless it has notified STWA in writing of the Wholesale Customer's intent to enter into such contract at least 60 days prior to the execution of such contract or agreement." This gives STW A time to evaluate the contract and any impact it might have on the tax exempt status of the 2013 Bonds.


As practiced during the last four ( 4) plus years, it would be a conflict of interest for me to provide a rec01runendation on a matter related to a contract between NWSC and STW A.

Board Action:

Detem1ine whether to approve the Amended Wholesale Water Supply Contract between the Nueces Water Supply Corporation and the South Texas Water Authority.

Summarization:

As state above, the Bonds were issued as tax-exempt obligations in order to secure the lowest interest rate for the taxpayers ofSTWA's Dish·ict which in turn are the members and customers of the Corporation. The requested amendments must be made in order to preserve the tax-exempt status of the 2013 Bonds.

ALY!ENDED AND RESTATED WATER SUPPLY CONTRACT

THE STATE OF TEXAS

COUNTIES OF KLEBERG ANDNUECES·

§ § § §

This Amended and Restated Water Supply Contract is by and between the South Texas Water Authority, a gove1mnental agency, conservation and reclamation District and body politic and corperate, having been created under Chapter 436 Acts of the 6()'h Legislature, Regular Session, 1979, of the laws of the State of Texas, all pursuant to Article XVI, Section 59 of the Texas Constitution (hereinafter called the "Authority") and Nueces Water Supply Corporation, a Texas nonprofit corporation, in Nueces County, Texas (hereinafter called the "Wholesale Customer"), to replace ill its entirety that certain Water Supply Contract dated June 4, 2015 between the parties, and is as follows.

RECITALS

WHEREAS, the Authority owns a water transmission line extending from the· City of Corpus Christi 0 .N. Stevens Water Treatment Plant to the Authority's office on Sage Road in Kingsville; and ·

WHEREAS, the Authority has entered into that certain Water Supply Agreement by and between the Authority and the City of Corpus Christi dated October 14, 1980, pursuant to which the Authority purchases water for resale to its customers; and

WHEREAS, the Authority is willing to sell, and the Wholesale Customer is willing to buy, water available to the Authority from the City of Corpus Christi.

AGREEJ\1ENT

. NOW THEREFORE, in consideration of the mutual covenants and agreements· herein· contained the Authority and the Wholesale Customer agree as follows:

SECTION 1. ·DEFINITIONS. Terms and expressions as used in this Contract, unless the context clearly shows otherwise, shall have the following ·meanings:

(A) "Corpus Christi Water Supply Agreement" shall mean the Water Supply Agreement by and between the Authority and the City of Corpus Christi dated Octooer 14; 1980, as amended and supplemented from time to time and as modified by the Settlement Agreement and Mutual Release between the Authority, San Patricio Municipal Water . District and th:e City of Corpus Christi effective as of August 13, 2013.

(B) nFiscal yearn shall mean the twelve month period beginning on October 1 and ending September 30 or such other twelve month period as designated by the Authority.

TWENTY-YEAR CONTRACT PAGEl OF 13

(C) "Maintenance and Operating Expenses" shall mean all costs of the Authority for operation, maintenance, repair and replacement of the System to the point of delivery for each Vlholesale Customer, including, but not limited to, accounting, administration, engineering, and legal expenses and a reasonable reserve to pay for any extraordinary or nomecurring expenses of operation or maintenance of the System and for replacements and repairs if such expenses should become necessary. Maintenance and Operating Expenses shall include payments under contracts for the purchase of water supply or other services for the System. Maintenance and Operating Expenses shall not include any costs or expenses incuned by the Authority in connection with Special Services.

(D) "Maintenance and Operations Tax" shall mean the ad valorem tax levied by the Authority . in accordance with Chapter 49 of the Texas Water Code as authorized by the election of August 11, 2001, at a rate not to exceed $0.12 per $100 taxable value.

(E) "Special Services" shall mean services provided by the Authority to a Wholesale Customer or other entity for the operation, maintenance or management of any facilities or operations of such party that are not part of the Authority's System.

(F) "System" shall mean the Authority's existing water supply and distribution system, together with all future extensions, improvements, enlargements and additions thereto, and all replacements thereof.

(G) "System Operating Charge" shall mean the monthly charge; per 1,000 gallons described in Section 8 consisting of the "pass through charge" for the purchase of water from the City of Corpus Christi and the "handling charge" to pay Maintenance and Operating Expenses.

(H) "Wholesale Customers" shall mean the Cities of Agua Dulce, Bishop; Driscoll and Kingsville, Nueces County Water Control and Improvement District No.5, Nueces Water Supply Corporation and Ricardo Water Supply Corporation, and any other future contracting patiies that purchase water from the Authority for municipal, industrial or agricultural purposes.

SECTIQN 2. QUANTITY. The Authority agrees to sell and deliver to Wholesale Customer at the delivery points hereinafter specified, and Wholesale Customer agrees to purchase and take at said delivery points, all water required by Wholesale Customer during the period of this agreement for its own use and for distribution to all customers served by vVholesale Customer's water distribution :zystem at a maximum authorized daily purchase rate which, together with the actual production capacity of the Wholesale Customer's system, is at least 0.6 gallon per minute per connection. in the Wholesale Customer's water distribution system. The word "connection" as used in this paragraph shall have the satne meaning as in Texas Administrative Code Title 30, Part 1, Chapter 290, Subchapter D, Section 290.38(14) in an amount up to 0.6 gpm per connection.

TWENTY-YEAR CONTRACT

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The Authority will use its best efforts to remain in the position to furnish water sufficient for the reasonable demands of \Vholesale Customer, but its obligations shall be limited to the quantity of·· water available to it under its contract with the City of Corpus Christi. If the Authority determines tha:t it is not able to furnish the Wholesale Customer with the foregoing amount of water, the Wholesale Customer shall be authorized to obtain water in an amount equal to that which the Authority cannot provide from any other source.

SECTION 3. QUALITY. The water which will be delivered to the V\lholesale Customer by the Authority will be as received from the City of Corpus Christi. The Authority may add additional disinfection. The Wholesale Customer has satisfied itself that this water will be suited for its needs.

SECTION 4. POINTS OF DELIVERY, TITLE, CONVEYANCE OF FACILITIES, OPERATION AND MAINTENANCE OF FACILITIES, AND MEASUREl'vffiNT OF AMOUNT OF WATER DELIVERED TO \VHOLESALE CUSTOMER. The point of delivery of the water by the Authority to the Vlholesale Customer shall be as showu on Exhibits "A," "B," "C," ·"D," "E/' and "F" attached hereto.

The Texas Commission on Enviroinnental Quality (the "TCEQ") has contended that some of the Authority's Wholesale Customers have been served "under direct pressure," thereby triggering TCEQ Rule 290.45(£)(5), which provides as follows:

"For systems which purchase water under direct pressure, the maximum hourly purchase authorized by the contract plus the actual service pump capacity of the system must be at least 2.0 gpm per connection or provide at least l ,000 gpm and be able to meet peak hourly demands, whichever is less."

The TCEQ staff has prepared a report on what arrangements can be made to avoid being deemed ~o serve any Wholesale Customer under direct pressure. A copy of that report, ·entitled "ENCLOSURES," is attached hereto as Exhibit "G." Contemporaneously herewith, the Authority and Wholesale Customer are entering into an agreement on delivery points, and on conveyance, operation and maintenance of facilities, designed to cause Wholesale Customer not to be taking water under direct pressure.

Other exhibits may be attached to this Agreement showing. additional points of delivery and accompanying documents providing for service by Wholesale Customer to additional territory. Such exhibits shall be signed on behalf of the Authority and the Wholesale Customer.

SECTION 5. MEASURING EQUIPMENT.

(A) Authority shall furnish, iristall, operate and maintain at its oW:n expense the necessary metering equipment of standard type for measming properly the quantity of water delivered under this agreement. Such metering equipment shall be located on the Authority's supply main at a location already designated by Authority. Such meter or meters and other equipment so installed shall remain the property of Authority. The reading, calibration and adjustment of the

TWENTY -YEAR CONTRACT

Page 3 of 13

meter equipment shall be done only by the employees or agents of the Authority. However, the Wholesale Customer shall have access to such metering equipment at all reasonable times. For the purpose of this Agreement, the original record or reading of the main meter shall be the journal or other record book of the Authority in its office in which the records of the employees or agents of the Authority who take the reading are or may be transcribed. Upon written request · of Wholesale Customer, the Authority will give the Wholesale Customer a copy of such journal or record book, or permit the representative designated by 'Wholesale Customer Council resolution to have access to the same in the office of the Authority during reasonable business hours.

(B) Not more than once in each calendar year, on a date as near the end of the Authority's fiscal year as practical, the Authority shall calibrate its main meter or meters and present to the Wholesale Customer accuracy certification. This calibration shall be performed in the presence of a representative of Wholesale Customer, and the parties shall jointly observe any adjustments which are made to the meter in case any adjustments shall be necessary, and if the check meter hereinafter provided for has been installed, the same shall also be calibrated in the presence of a representative of the Wholesale Customer and the parties shall jointly observe any adjustments which are made to the meter in case any adjustments shall be necessary. The Authority shall give Wholesale Customer notice of the time when any such calibration is to be made. If a representative of Wholesale Customer is not present at the time set, the Authority may proceed with calibration and adjustment in the absence of any representative of the Wholesale Customer.

(C) If either party at any time observes a variation between a main delivery meter and the ·check meter, if any such check meter shall be installed, such party will promptly notify the other party, and the meters shali then be adjusted to accuracy. Each party shall give the other party forty-eight (48) hours notice of the time of any test of meter so that the other party may conveniently have a representative present.

(D) If, upon any test, .the percentage of inaccuracy of metering equipment is found to be in excess of two percent (2%), registration thereof shall be corrected for a period extending back to the time when such inaccuracy began, if such time is ascertainable, and if such time is not ascertainable, then for a period extending back one-half (Y,) of the time elapsed since the last date of calibration, but in no event farther back than a period of six ( 6) months. If, for any reason, the main meter is out of service or out of repair so that the amount of water delivered carmot be ascertained or computed from the reading thereof, the water delivered, through the period such meter is out of service or out of repair, shall be estimated and agreed upon by the parties thereto upon the basis of the best data available. For such purpose, the best data available shall be deemed to be the registration of any check m~ter if the. same has been installed and is accurately registering. Otherwise, the amount of water delivered during such period may be estimated (i) by correcting the error if the percentage of error is asce1iainable by calibration tests of mathematical calculation, or (ii) by estimating the quantity of delivery by deliveries during the preceding periods under sinlliar conditions when the meter was registering accurately.

(E) The \Vholesale Customer may, at its option and its own expense, install and operate a check meter to check the meter installed by tl:ie Authority, but the measurement of water for the


Page 4 of 13

purpose· of this agreement shall be solely by the Authority's meter, except in the cases ·hereinabove specifically provided to the contrary. Such check meter shall be of standard make and shall be subject at all reasonable times to inspection and examination by any employee or agent of the Authority, but the reading, calibration and adjustment thereof shall be made only by the Wholesale Customer, except during any period when a check meter may be used under the provisions hereof for measuring the amount of water delivered, in which case the reading, calibration, and adjustm~nt thereof shall be made by the Authority with like effect as if such check meter had been furnished or installed by the Authority.

SECTION 6. :MEASUREMENT AND UNIT OF 11EASUREMENT. The volume of water that is billed to the Wholesale Customer shall be the amount of water delivered through the points of delivery described in the exhibits attached to this Agreement minus the amount of water delivered by the Authority through those points of delivery that is delivered to other customers, as shown in the exhibits attached to this Agreement. The unit of measurement for water delivered hereunder shall be 1,000 gallons of water, U.S. Standard Liquid Measure.

SECTION 7. DELNERY PRESSURE. The water shall be delivered by the Authority at the point of delivery at the Vv'holesale Customer's system at "0" pressure.

SECTION 8. PRICES AND TERMS.

(A) System Operating Charge. The System Operating Charge shall be billed monthly as a price per 1000 gallons of water purchased by the Wholesale Customer. The System Operating Charge shall consist of the sum of (1) a "pass through charge" to recover the cost of water purchased pursuant to the Corpus Clu·isti Water Supply Agreement at a rate equal to the cost of water, per 1000 gallons, from the City of Corpus Christi, and (2) a "handling charge" which shall be a rate equal to the estimated armual Maintenance and Operatiog Expenses per 1000 gallons, less the amount of Maiotenance and Operations Tax revenues budgeted for payment of Maintenance and Operating Expenses. Maintenance and Operating Expenses shall not include any management fees or similar expenses related to Special Services. All rates charged for Maintenance and Operating Expenses shall be set to recover the cost of service, based on generally accepted rate making principles, including those set forth in the American Water Works Association,("A WW A") Manual M1 on water rates. The amount of the Maintenance and Operations Tax shall be determined by the board of directors of the Authority in its sole discretion.

Wholesale Customer shall be responsible for its share of the cost of operation, maintenance, repair and replacement of the facilities located after the point of delivery.

Each year after the Authority receives its audit, the Authority will conduct a "true-up" for the year to which the audit applies; i,e., the prior year, using audited costs to determine if there was any over-recovery or under-recovery of costs during that year. AJ.w over-recovery or underrecovery of costs will be· canied over as a credit or debit, as appropriate, to the costs inCluded in the budget that are considered to detetruine the price for the following year. (There will be a one-year delay in each "true-up").

T\VENTY-YEAR CONTRACT'

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(B) Authority Budget. The Authority's fiscal year shall be from October 1 through September 30 of each year, or such other period as the Authority, after sixty (60) days written notice to the Wholesale Customer, shall adopt. Not later than the forty-fifth (45th) day before the beginning of.the Authority's next fiscal year, commencing with the Authority's fiscal year in which this Agreement becomes effective, the Authority shall provide the Wholesale Customer with a copy of the Authority's proposed budget for the following fiscal year, showing the budgeted total_ annual rate, and the components thereof, to be paid by the Wholesale Customer to the Authority for the fiscal year of the Authority to which the budget applies for sale and purchase of water under this Agreement. The Wholesa,le Customer shall have thirty (30) days to review and provide written comment on the proposed budget. The Authority shall adopt its fiscal year budget as soon as practicable following the expiration of such thirty (30) day period and shall deliver to the Wholesale Customer a copy of the fiscal year budget within five(5) days after the adoption thereof.

(C) Unconditional Obligation to Pay - The Wholesale Customer shall be obligated to pay, each month, the payments required by this Agreement, without offset or counterclaim. This covenant shall be for the benefit of the holders of the Authority's bonds, secured in whole or in part from the revenues of the System, if as and when any bonds are outstanding.

(D) Billing and Payment - The Authority shall bill the Viholesale Customer monthly for the amounts due the Authority hereunder for the preceding billing period which bill shall disclose the nature of the amounts due. Such monthly bills shall be normally delivered to the Vlholesale Customer within ten business days after the end of each calender month. All such bills shall be paid by the Wholesale· Customer on or before the last day of the month in which they are received, at the office of the Authority in Kingsville, Texas.. Any mistakes in calculations or figures shall not alleviate the \Vholesale Customer's obligation to pay the bill in full. Any mistakes in any calculations or figures shall be conected immediately upon discovery and the conected bill will be furnished to the Wholesale Customer. An adjustment in the amount paid as a result of such mistake in calculation or figme will be added or deducted from the following month's bill, as appropriate. If the Wholesale Customer disputes a bill, it shall nevertheless pay the bill, in full, pending any refund, as may be deterinined as a result of appeal of the disputed bill. The dispute may be resolved by agreement, or by appropriate administrative agency or court decision. ·

(E) . Late Pavment - In the event the Wholesale Customer shall fail to make any payment required to be made to the Authority under this Contract, within the time specified· herein, interest on the amount due shall accrue from the time payment is due at the rate of fifteen percent (15%) per annum, or the maximum rate allowed by law, whichever is less. In the event any such payment is not made within sixty days from date such payment becomes due, the Authority may, at its option, discontinue the delivery of water to the Viholesale Customer until the amount then due the Authority is paid in full with interest as above specified.


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SECTION 9. SPECIAL CONDITIONS.

(A) Wholesale Customer represents and covenants that the water supply to be obtained pursuant to this Contract is essential and necessary to the operation of its waterworks system, and that all payments to be made hereunder by it will constitute reasonable and necessary "operating expenses" of Wholesale Customer's waterworks system, and that all such payments. will constitute reasonable and necessary operating expenses of Wholesale Customer's \vatervwrks system under any and all revenue bond issues of Wholesale Customer, with the· effect that the IV'holesale Customer's obligation to make payments from its waterworks revenues under this Contract shall have priority over its obligations to make payments of the principal of and interest

· on any and all of its revenue bonds.

(B) Vlholesale Customer agrees to fix and collect such rates aud charges for water and services to be supplied by its waterworks system as will make possible the prompt payment of all expenses of operating and maintaining its waterworks system, including all payments contracted hereunder, and the prompt payment of the principal of and interest on its obligations payable from the revenues of its waterworks system.· .

· (C) During any period of time when, in the judgment of the Authority, there is a critical shortage of water in the sources of supply available to Authority, which makes it impractical or inadvisable for Authority to deliver to the Wholesale Customer and its other customers with whom it has water supply contracts the full amounts of water required to be delivered thereunder, the water deemed available by the Authority :ii·om its sources of supply, shall be rationed to the Wholesale Customer and the other customers during each month of such period of time, in accordance with the "Drought Contingency Plan for the South Texas Water Authority" adopted on May 28, 2013, as it may be amended from time to time. Such rationing shall also be subject to the requirements of Section 10 of this Contract.

(D) The W'holesale Customer is participating in the Federal Flood Insurance Program and will continue to do so during the term of this Contract.

SECTION 10. CORPUS CHRISTI CONTRACT AND DROUGHT CONTINGENCY PLAN. The Viholesale Customer acknowledges that it is required by Sec. 11.1272, Water Code, to develop a drought contingency plan consistent with the appropriate approved regional water plan. W'holesale Customer also acknowledges that the Corpus Christi Water Supply Agreement requires that, if the City of Corpus Christi implements any measures under its Water Conservation and Drought Contingency Plan, the Authority shall within thirty (30) days of notice of the implementation of any restrictions, surcharges or rationing by the City of Corpus Christi, impose similar restrictions, surcharges or rationing measures on its Wholesale Customers. Any contract for the resale of water furnished by the Authority shall contain a similar condition.

Accordingly, the Wholesale Customer agrees that it will adopt a water conservation plan and drought contingency plan consistent with those of the City of Corpus Christi, as the latter may be amended fi:oin time to time. ·

TWENTY -YEAR CONTRACT

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Wholesale Customer understands and agrees that all vVholesale Customers shall be subject to and bound by the same provisions regarding priorities ofus~r of water and that, therefore, should there be a shmiage in the basic supply of water, from the City of Corpus Christi or otheru~se, which requires the restriction or curtailing of any \Vholesale Customer of water (alkJa rationing of water), the Authority will limit and restrict all of its Wholesale Customers, to the same extent andon a pro rata basis, and will require its 'h'holesale Customers to treat all of their customers equally.

SECTION 11. FORCE MAJEURE. In case by reason of force majeure either party hereto shall be rendered unable wholly or pmiially to carry out its obligations under this Contract, other than the obligation of \Vholesale Customer to make the payments required under the terms hereof, then if such pmiy shall give notice and full particulars of such force majeure in writing to the other pmiy within a. reasonable time after occunence 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 pmiod, and any such pmiy 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 a public enemy, orders of. any kind of the Government of the United States or the State of Texas or any civil or 1nilitary authority, insunections, riots,. epidemics, landslides, lightrring, earthquake, fires, hunicaues, storms, floods, washouts, droughts, arrests, restrain of goveiTilllent and people, civil disturbances, explosions, breakage or accidents to machinery, pipe lines or canals, pa1iial or entire failure of water supply, or inability on the part of the Authority to delivery water hereunder on account of any other causes not reasonably within the control of the Authority. It is understood and agreed that the s~ttlement of strikes and lockouts may be difficult, and that the above requirement that any Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of sh·ikes and loekouts by acceding to the demands of the opposing party or pa1iies when such settlement is Unfavorable to it in the judgment of the party having the difficulty.

SECTION 12. TERM OF CONTRACT. This Contract shall be and continue in full force and effect for a period of twenty (20) years from the Effective Date.

SECTION 13. REMEDIES UPON DEFAULT

(A) Remedies. The parties agree that the Authority's undertaking to provide water is m obligation, failure in the performance of which cmot be adequately compensated. in money damages alone. Accordingly, the Authority agrees, in the event of my default on its part, that the Wholesale Customer shall be entitled to specilic performance in addition to my other availabk legal or eqvitable remedies.

(B) Remedies Cumulative/Not Exclusive. The remedies provided for herein me not exclusive remedies. All other remedies at law or in equity may be avaiied of by either pmiy and shall be cumulative except to the extent otherwise specilically provided, or limited, under this Agreerilynt.


Page 8 of 13

(C) CONSEQUENTIAL DAMAGES. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN TillS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUJ\TITIVE, EXEMPLARY OR Il\lDIRECT DAMAGES OR LOST PROFITS WHETHER ARISING IN AGREEMENT, TORT, STRICT LIABILITY OR OTHERWISE.

(D) Jurisdiction. The Authority and the Wholesale Customer agree that, if either of them disputes the rate charged pursuant to this contract, either of them may appeal the rate to the Texas Commission on Environmental Quality (the "TCEQ") pursuant to the provisions of 30 TAC 291.128 et seq. If the TCEQ for any reason denies the appeal for want of jurisdiction, or otherwise, the dispute may be resolved by the district court ofKleberg County, Texas.

SECTION 14. GENERAL PROVISIONS

(A) Covenant of Good Faith and Fair Dealings. The Authority and the Wholesale Customer agree to cooperate and to deal with one another fairly and in good faith at all times to effectuate the purposes and intent of this Contract. They also agree to execute and deliver such fw.iher legal documents or instruments and to perfmm such fw.ther acts as are reasonably necessary to effectuate the purposes and intent of this Contract.

(B) TAX-EXEMPT BoNDs. The Vl"holesale Customer understands that the Authority has issued or will issue bonds the interest on which is excludable from the gross income of the ovmers thereof for federal income tax purposes ("Tax-Exempt Bonds") for improvements to the System and that the federal income tax laws impose certain restrictions on the use of proceeds of any such TaxExempt Bonds and on the use of the facilities and property frnanced by the Tax-Exempt Bonds and the output produced from such facilities and property. Accordingly, the Wholesale Customer will not enter into a water supply contract or other agreement with a customer of such Wholesale Customer which contains take-or-pay, contract minimums, output requirements, special rates and charges or sirb..ilar provisions, unless it has notified the Authmity in writing of the Wholesale Customer's intent to enter into such contract at least 60 days prior to the execution of such contract or agreement. The parties may rely on the opinion of nationally-recognized bond counsel to ensure compliance with this Section. This Section shall no longer apply ·to any Wholesale Customer if any of the outstanding bonds of the Authority allocable to the portion of the System used by the Wholesale Customer are not Tax-Exempt Bonds. ·

(C) Notices. Any notice to be giv<;>n hereunder by either party to the other pmiy shall be in \Vriting and may be effected by personal delivery, by facsimile, or by sending said notices by registered or certified mail, return receipt requested, to the address set forth below. Notice shall be deemed give~ when received by facsimile or by personal delivery, or three days after deposited with the United States Postal Service with sufficient postage affixed.


Page 9 of 13

Ally such notice mailed to the Authority shall be addressed:

SouthTexas Water Authority P.O. Box 1701 Kingsville, Texas 78364 Attn: Executive Director Fax: (361) 592-5965

Any such notice mailed to the Wholesale Customer shall be addressed:

Nueces Water Supply Corporation .P.O. Box 415 · Kingsville, Texas 78364-0415 Attn: General M~ager Fax: (361) 592-5965

Either party may change the address or facsimile number for notice to it by giving notice of such change in accordance with the provisions of this paragraph.

(D) Approvals. Whenever the te1m "approve" or "approval" is used in this Contract, the party whose approval is required will not unreasonably withhold or delay it. Where approval is necessary, the· party seeking approval may request approval in ·writing. If the party whose approval is requested fails to either approve the submittal or provide written comments specifically identifying the required changes within 21 working days, the submittal, as submitted by the requesting party, will be deemed to have been approved by the party whose approval is requested.

(E) Waiver. The failure on the part of either party to require perfmmance by the other of my portion of this Contract shall not be deemed a waiver of, or in my way affect that party's rights to enforce such provision. Any waiver by either party or any provision of this Contract shall not be a waiver of any other provision hereof.

(F) Severability. The invalidity or unenforceability of any provision of this Contract shall not affect the validity or enforceability of my other provision of this Contract.

(G) . Attomey's Fees. In the event either party shall become a party to any litigation against. the other to enforce or protect any rights or interest under this Contract and shall prevail, the losing party shall reimburse the prevailing party for all investigative and court costs and attomcy' s fees incurred in such litigation.

(H) Goveming Law. This Contract shall be govemed by the laws of the State of Texas and venue shali lie in Kleberg County, Texas. ·

(I) Binding Effect. The Contract shall be binding upon md inure to the benefit of the parties md their respective successors md assigrrs.


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" (J) Time. Time is of the essence. Unless otherwise specified, all references to "days" means calendar days. If the date for performance of any obligation falls on a Saturday, Sunday, or legal public holiday, the date for performance will be the next following regular business day.

(K) No Partnership; Agency or Third Patty Beneficiaries Intended. Nothing in this Contract will be construed as creating any fmm of partnership or joint venture relationship between the parties, nor shall either party be authorized to act as an agent for the other party. Nothing in this Contract shall be construed to confer any right, privilege or benefit on, or to otherwise create any vested right or third-party beneficiary relationship with any person or entity not a party to the Contract.

(L) Authoritv. Each of the persons signing on behalf of the Wholesale CuStomer and.the Authority hereby confirm that they have the authority to execute this Contract on .behalf of the patiy indicated by their signature and have the authority to bind such patiy hereto.

(M) Headings. The captions and headings appearing in this Contract are inserted merely to facilitate reference and will have no bearing upon its interpretation.

(N) Entire Contract. This Contract contains all agreements betvreen the parties hereto and any agreement not contained herem shall not be recognized by the parties. The captions used herein are for convenience only and shall not be used to construe this Agreement. Words of gender shall be construed to include any other gender, and words in the singular shall included the plural and vice versa unless the context requires otherwise.

(0) Counterpmts. Tbis Agreement may be executed by the parties in any number of counterparts, each of which when so executed and delivered shall be deemed an original instrument, but all such counterparts together shall constitute but one and the same instrument.

(P) Effective Date. The effective date of this Contract shall be the date on which it has been executed by both the Authority and the Wholesale Customer.

[Signatures to follow.]

T\VEN1Y-YEAR CON1RACT

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SOUTH TEXAS WATER AUTHORlTY

By: --~~~~--~~~-------------

President, Board of Directors .Date of execution: -----------------

ATTEST:

Secretary, Board of Directors

[AUTHORlTY'S SEAL]

TWENTY-YEARCON1RACT

Page 12 of 13

NUECES WATER SUPPLY CORPORATION

. By: f24~rA~ Title: ?f?« ~J/~ Date of execution: L/ ~ / :z ---/6-

ATTEST:

[CORPORATION'S SEAL]

TwENTY-YEAR CONTRACT

Page l3 of l3

ATTACHMENT 10

Amended Water Supply Contract with Ricardo Water Supply Corporation and Amended Quitclaim

Memorandum

To: South Texas Water Authority Board of Directors From: Carola G. Serrato, Executive Director Date: Aprill3, 2016 Re: Amended Ricardo (RWSC) Water Supply Contract and Quit Claim Deed

Background:

Enclosed are copies of the amended Water Supply Contract and Quit Claim Deed presented to the RWSC Board on April12, 2016 during a duly posted and open meeting. These amended documents were drafted by bond counsel with the assistance of Bill Flickinger, Willatt and Flickinger, in response to concems pertaining to preserving the tax-exempt status of the STWA 2013 Bonds. The RWSC Board approved both amended documents. They are now being presented to the STW A Board for approval.

Analysis:

The amendments were reviewed in both written (see attached RWSC memo) and oral detail for the Ricardo Water Supply Corporation Board of Directors. Staff had made arrangements to have Mr. Flickinger available by speaker phone for the meeting. RWSC Board President Baldemar Garcia indicated that if needed staff could contact Mr. Flickinger. Staff proceeded with reiterating infmmation provided by Mr. Noel Valdez with McCall, Parkhurst and Hatton that was shared during a morning meeting on April12'11• The information included examples of the IRS's interpretation of uniform rates, the kind of projects that tax-exempt bonds could be used to constmct and the need for tax-exempt bonds to benefit the general pl!blic as opposed to only one business or individual or sector.


Approve the amended Water Supply Contract and Quit Claim Deed with the Ricardo Water Supply Corporation.

Board Action:

Determine whether to approve the amended Water Supply Contract and Quit Claim Deed with the Ricardo Water Supply Corporation.

Summarization:

As with the Nueces Water Supply Corporation Board, staff believes tha.t the Ricardo Water Supply Corporation Board understood the impmtance of working with the Authority in order to preserve the tax-exempt status of the 2013 Bonds.

To: From: Date: Re:

Memorandum

Ricardo Water Supply Corporation Board of Directors Carola G. Serrato, General Manager April 6, 2016 Amended Contract between the Ricardo Water Supply Corporation (RWSC) and South Texas Water Authority (STW A)

Background:

In August of2015, the Ricardo Water Supply Corporation entered into a 20-year water supply contract with the South Texas Water Authority. The negotiations for that contract had been ongoing for several years dating back to 2011 when a 5-year interim contract expired. Prior to the 5-year contract, the RWSC and STW A had a long-term contract that was in place for more than 20 years.

Enclosed is an amended contract which is being presented to the RWSC Board as a result of STW A issuing General Obligation Bonds in 2013. The Bonds were issued to pay for: (1) relocating STW A's regional water transmission line due to TxDOT's I-69 road work, (2) replacing pumps at the Kingsville Pump Station, (3) installing new pumps at the City of Bishop's Westside Pump Station, (4) perfonning an assessment on the main 42" transmission line and (5) addressing any problems on that transmission line. It is important to note that the Bonds were approved by STWA's District voters in November of2012. The debt on the bonds is repaid from an ad valorem tax of slightly more than 2 cents per $100 valuation.

STW A issued the Bonds as tax-exempt bonds based on legal and financial advisors recommendations in order to secure the best possible interest rate. However, in order to comply with federal tax law requirements, STW A has been advised by its Bond Counsel that certain contractual changes should be made. On behalf of the STWA Board and in my capacity as STWA's Executive Director, it is impmtant to state that it was our understanding that the originally drafted contracts had been reviewed for such requirements. These amendments are also necessary to preserve the tax-exempt status of the 2013 Bonds.

Analysis:

Enclosed is a copy of the marked version showing added language (underlined) and deleted language (strike-out font). Below is a summary of the changes to the contract.

I. Additional Definitions are found in Section 1. Definitions. Minor changes were made to the defmitions of Maintenance and Operations Tax, Corpus Cln·isti Water Supply Agreement and Fiscal Year. New definitions were added to clarify that STW A is charging Unifmm Rates. It is the requirement ofUniform Rates that is crucial to the tax-exempt nature of the Bonds.

2. The provision for Uniform Rates and Charges is found in Section 8. Prices and Terms. Federal tax law requires STW A to sell its water to all of its wholesale customers on unifonn rates and charges. Although STW A sells its water based on uniform rates and charges, STW A provides additional services now defined in the Contract as "Special Services." The Amended Contract will require any Special Services to be covered by a separate contract. It is very important to note that the method for charging for water is not changed. Section 8(A) provides that there are two components (as before): (1) a "pass through charge" to recover the cost of water purchased fi·om the city of Corpus Christi and (2) a "handling chat·ge" which recoups the estimated annual Maintenance and Operating Expen.ses less the amount of Maintenance and Operations Tax revenues. Section 8(A) clarifies that "Maintenance and Operating Expenses" shall not include any management fees or sinailar expenses relating to Special Services. Previously, those revenues were described as a credit to the cal~nlation of the "handling charge." STWA will now adopt a Special Services Budget which will eliminate the need for those types of credits.

3. There is no longer a Take or Pay Provision in Section 8. Prices and Terms. The take or pay provision also jeopardizes the tax-exempt status of the Bonds under federal tax law and has been stricken in its entirety.

4. A paragraph has been added to clarify the Water Rationing Provisions in Section 10. Corpus Christi Contract and Drought Contingency Plan. Although less evident in terms of charging Unifmm Rates, it is also necessaty to insure that even in times of drought all customers are being treated in a unifonn manner. Therefore, a paragraph has been added to Section 10 regarding water rationing. This paragraph states should any water rationing be necessary STW A will limit and restrict all of its wholesale customers through resale, to the same extent and on a pro rata basis.

5. The last amendment that needs to be noted is found in Section 14. General Provisions, Subsection B. Tax Exempt Bonds. This provision is likely the most complex of the amendments. As such, staff will be able to conference in Mr. Bill Flickinger, Willatt and Flickinger, if needed. The need for this provision, as a result of the federal tax law requirements which obliges STW A to charge Uniform Rates, must be addressed in the water supply contracts entered into between STW A and all its Wholesale Customers. As such, it creates a "domino effect" on the rates that STWA's Wholesale Customers charge to their retail or wholesale customers. Section l 4(B) provides that "the Wholesale Customer will not enter into a water supply contract or other agreement with a customer of such Wholesale Customer which contains take-or-pay, contract minimums, output requirements, special rates and charges or similar provisions, unless it has notified STWA in writing of the Wholesale Customer's intent to enter into such contract at least 60 days prior to the execution of such conh·act or agreement." This gives STW A time to evaluate the contract and any impact it might have on the tax exempt status of the 2013 Bonds.


As practiced during the last four ( 4) plus years, it would be a conflict of interest for me to provide a reconnnendation on a matter related to a contract between R WSC and STW A.

Board Action:

Determine whether to approve the Amended Wholesale Water Supply Contract between the Ricardo Water Supply Corporation and the South Texas Water Authority.

Summarization:

As state above, the Bonds were issued as tax-exempt obligations in order to secure the lowest interest rate for the taxpayers of STW A's District which in turn are the members and customers of the Corporation. The requested amendments must be made in order to preserve the tax-exempt status of the 2013 Bonds.

''. '.

AME:t{DED AND RESTATED WATER SUPPLY CONTRACT

THE STATE OF TEXAS § .

COUNTY OF KLEBERG §

This Amended and Restated Water Supply Contract ("Contract'') is by and between the South · .Texas Water Authority, a governmental agency, conservation and reclamation District and body politic

and corporate, having been created under Chapter 436 Acts of the 66th Levslature, Regular Session, 1979; of the laws of the State of Texas, all pursuant to Article XVI, Section59 of the Texas Constitution . (hereinafter called the "Authority") and Ricardo Water Supply Corporation, a Texas nonprofit corporation, in Kleberg County, Texas (hereinafter called the "Wholesale Customer"), to replace in its entirety that certain Water Supply Contract dated August 4, 2015 between the parties, and is as follows.

RECITALS

WHEREAS, the Authority owns a water transmission line extending from the City of Corpus Christi 0 .N. Stevens Water Treatment Plant to the Authority's offices at 111 E. Sage Road, Kingsville, .Texas 78363; and

WHEREAS, the Authority has entered into that certain Water Supply Agreement by and between the Authority and the City of Corpus Christi dated Octoberl4,1980 ,pursuant to which the Authority purchases water for resale to its customers; and

·WHEREAS, the Authority is willing to sell, and the Wholesale Customer is willing to buy, water available to the Authority from the City of Corpus Christi.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreementsherein contained the Authority and the Wholesale Customer agree as follows:

SECTION 1. DEF!NlTIONS.

Terms and eXpressions as used in this Contract, unless the context clearly shows otherwise, shall have the following meaniri.gs:

·(A) "Corpus Christi Water Supply Agreement" shall mean the Water Supply Agreement by and between the Authority and the City of Corpus Christi, Texas, dated October 14, 1980, as amended and suppl~mented from time to time and as modified by the Settlement Agreement and Mutual Release between the Authority, San Patricio Municipal Water District and the _ City of Corpus Christi effective as of August 13, 2013. · ·

(B) "Fiscal year" shall mean the twelVe month period beginning on October 1 and ending · . September 30 or such other twelve month period as designated by the Authority.

Page 1 oflO

. ·'

(C) "Maintenance and Operating Expenses" shall mean all costs of the Authority for operation, mainterta.Jice, repair and replacement of the System to the point of delivery for each Wholesale Customer, including, but not liniited to, accounting, administration, engineering, and legal operation or maintenance of the System and for replacements -and repairs if such expenses should become necessary. Maintenance and Operating Expenses shall include payments under contracts expenses and a reasonable reserve to pay for any extraordinary or nomecurring expenses of for the purchase of water supply or other services for the System. Maintenance and Operating Expenses shall not include any costs or expenses incurred by the Authority in connection with Special Services.

(D) "Maintenance and Operations Tax" shall mean the ad valorem tax levied by the Authority in . accordance with Chapter 49 of the Texas Water Code as authorized by the election of August 11, 2001, at a rate notto exceed $0.12 per $100 taxable value.

(E) "Special Services" shall mean services provided by the Authority to a Wholesale Customer or other entity for the operation, maintenance or management of any facilities or operations of

. such party that are not part of the Authority's System.

(F) "System" shall mean the Authority's existing water supply and distribution system, together

with all future extensions, improvements; enlargements and additions thereto, and all replacements thereof.

(G) "System Operating Charge" shall mean the-monthly charge, per 1,000 gallons described in Section 8 consisting of the "pass through charge" for the purchase of water from the City of Corpus Christi and the "handling charge" to pay Maintenance and Operating Expenses.

(H) "Wholesale Customers" shall mean the Cities of Agua Dulce, Bishop, Driscoll and Kingsville, Nueces County Water Control and Improvement District No. 5, Nueces Water Supply Corporation arid Ricardo Water Supply Corporation, and any other future contracting parties ·that purchase water from the Authority for municipal, industrial or agricultural purposes.

SECTION 2. QUANTITY.

The Authority agrees· to sell and deliver to Wholesale Customer at the delivery points hereinafter specified, and Wholesale Customer agrees to purchase and take at said delivery points, all water required by Wholesale Customer during the period of this agreement for its own use and for distribution to all customers serV-~d by Wholesale Customer's water distribution system at a maximum authorized daily purchase rate which; together with the actual production capacity of the Wholesale Customer's system, is at least 0.6 gallon per minute per connection in the \Vholesale Customer's water distribution system. The word "connection" as used in this paragraph shall have the same nieaning as in Texas Administrative Code Title 30, Part 1, Chapter 290, Subchapter D, Section 290.38'(14) in an amount up to 0.6 gpm per connection. .

The Authority will use its best efforts to remain in the position to furnish water sufficient for the reasonable demands of Wholesale Customer, but its obligations shall be limited to the quantity of water available to it under its contract with the City of Corpus Christi. If the Authority determines that it is not able to furnish the Wholesale Customer with the foregoing amount of water, the Wholesale Customer

Page 2 oflO

shall be authorized to obtain water in an amount equal to that which the Authority cannot provide from any other source. .

SECTION 3. QUALITY.

The water which will be delivered to the Wholesale Customer by the Authority will be as re"ceived from the City of Corpus Christi, as modified by the transportation process. The Authority may add additional disinfection. The Wholesale Customer has satisfied itself that-this water will be suited for its needs.

SECTION 4. POJNTS OF DELIVERY, TITLE, CONVEYANCE OF FACJLITJES, OPERATION. AND MAINTENANCE OF FACJLITJES, AND MEASUREMillrr OF AMOUNT OF WATER DELIVERED TO WHOLESALE CUSTOMER.

The Point of Delivery of the water by the Authority tb the Wholesale Customer shall be the· outlet of Wholesale Customer's meter on its twelve-inch (12") line adjacent to the Authority's ·office at 111 E. Sage Road, Kingsville, Texas 78363. Wholesale Customer shall maintain an air gap between the Point of Delivery and its distribution system. · ·

Title to all water supplied hereunder shall remain in the Authority to the Point of Delivery, and upon passing through the Authority's meters installed at the specified Point of Delivery such title to the water shall pass to the Wholesale Customer. Each of the parties hereto shall be responsible for and agrees to save and hold the other party harmless from all claims, demands and causes of action which maybe asserted by anyone on account of the transportation, delivery and disposal of said water while title remains in such party.

SECTION 5. MEASURING EQUIPMENT.

(A) Wholesale Customer has furnished a meter ou its twelve-mch (12") liue adjacent to the Authority's office at 111 E. Sage Road, Kingsville, Texas 78363. Such meter or meters aud other equipment so installed shall remain the property of Wholesale Customer. The reading, calibration and adjustment of the meter equipment shall be done only by the employees or agents of the Authority. However, the Wholesale Customer shall have access to such metering equipment at all reasonable times. For the purpose of this Agreement, the original record or reading of the main meter shall be the journal or other record book of the Authority in its office in which the records of the employees or agents of the Authority who take the reading are or may be transcribed. Upon written request of the Wholesale" Customer, the Authority will give the Wholesale Customer a copy of such journal or record book, or permit the representative designated by Wholesale Customer· Council resolution to have access to the same in the office of the Authority during reasonable business hours.

cB) Not more than once ~each calendar year, on a date as ne~r the end of the wholesale Customer's fiscal year as practical, the Wholesale Customer shall calibrate its main meter or meters and present to the Authority accuracy certification. This calibration shall be performed in the J:lresence of a· representative of the Authority, and the parties shall jointly observe auy adjustments which are made to · the meter in case any adjustments shall be necessary, and if the check meter hereinafter provided for has been installed, the same shall also be· calibrated in the presence of a representative of the Authority and the parties shall jointly observe any adjustments which are made to the meter in case any adjustments shall be necessary. The Wholesale Customer shall give Authority notice of the time when any such ·calibration is to be made. If a representative of Authority is not present at the time set, the Wholesale Customer may proceed with calibration and adjustment in the absence of any representative of the Authority.

Page3.of10

(C) If either party at any time observes a variation between a main delivery meter and the check meter, if any such check meter shall be installed, such party will promptly notify the other party, and the meters shall then be adjusted to accuracy. Each party shall give the other party forty-eight ( 48)"hours' notice of the time of any test of meter so that the other party may conveniently have a representative present.

(D) If, upon any test, the percentage of inaccuracy of metering equipment is found to be in excess of two percent (2%), registration thereof shall be corrected for a period extending back to the time when such inaccuracy began, if such time is ascertainable, and if such time is not. ascertainable, then for a period extending back one-half (1/2) of the tirlle elapse·d since the last date of calibration," but in no event farther back than a period. of six ( 6) months: If, for.any reason; the main meter is out of service or out of repair so that the amount of water delivered cannot be ascertained or computed from the reading thereof, the water delivered, through the period such meter is out of service or out of repair, shall be estimated and agreed upon by the ·parties thereto upon th; basis of the best data available. For such purpose,. the best data available shall be deemed to be the registration of any check meter if the same has been installed and is accurately registering. Otherwise, the amount of water delivered during such period may be estimated (i) by correcting the error if the percentage of error is ascertainable by calibration. tests of mathematical calculation, or (ii) by estimating the quantity of delivery by deliv<'(ries during the preceding periods under. similar conditions when the meter was registering accurately.

(E) The Authority may, at its option and its own expense, install and operate a check meter to check the meter installed by the Wholesale Customer, but the measurement of water for the purpose of this agreement shall be solely by the Wholesale Customer's meter, except in the cases hereinabove specifically provided to the contrary. Such check meter .shall be of standard make and shall be subject at all reasonable times t9 inspection and examination by any employee or agent of the Wholesale Customer, but the readirig, calibration and adjustment thereof shall be made only by the Authority, except during any period when a check meter may be used under the provisions hereof for measuring the amount of water delivered, in which case the reading, calibration, and adjustment thereof shall be made by the Wholesale Customer with like effect as if such check meter had been :fUrnished or installed by the Wholesale Customer. The Authority owns the meters currently located at Pump Station #1, Pump Station #2 .and Pump Station #3. These meters shall remain in place, and the Authority may use them to verify the accuracy ofthe water measured by the meter atthe Point of Delivery.

SECTION 6. MEASUREMENT AND UNIT OF "MEASUREMENT.

The volume of water that is billed to the Wholesale Customer shall be the amount of water delivered through the point of delivery described in this Agreement. The unit of measurement for water delivered hereunder shall be 1,000 gallons of water, U.S. Standard Liquid Measure.

SECTION 7. DELIVERY PRESSURE.

The water shall be delivered by the AuthoritY at the point of delivery at the Wholesale Customer's system at noll pressure.

SECTION 8. PRICES AND TER1\1S.

(A) System Operating Charge. The System Operating Charge shaJl be billed monthly as a price per 1000 gallons of water purchased by the 'Wholesale Customer. The System Operating Charge shall consist of the sum of (1) a "pass through charge" to recover the cost of water purchased pursuant to the Corpus Christi Water Supply Agreement at a rate equal to the cost of water, per 1000 gallons, from the

Page 4 oflO

City_ of Corpus Christi, and (2) a "handling charge" which shall be a rate equal to the estimated annual Maintenance and Operating Expenses per 1000 gallons, less the amount of Maintenance and Operations Tax revenues budgeted Joi: payment of Maintenance and Operating Expenses. Maintenance and Operating Expenses shall notinclude any management fees or ·similar expense~ related to Special Services. All rates charged for Maintenance and Operating Expenses shall be set to recover the cost of service, based on generally accepted rate makiwi principles, including those set forth in the American Water Works Association ("A WW A") Manua!Ml on water rates. The amount of the Maintenance and Operations Tax shall be determined by the board of directors of the Authority in its sole discretion.

Wholesale Customer shall be responsible for the cost of operation, maintenance, repair and replacement of the facilities located after the point of delivery, including those facilities owned by the Authority

Each year after the Authority receives its audit, the Authority wi)l conduct a "true-up'' for the year to which the audit applies; i.e., the prior year using audited costs to determine lf there was any

· over-recovery or under-recovery' of costs during that year. Any over-recovery or under-recovery of costs will be carried over as a credit or debit, as appropriate, to the costs included in the budget that are considered to determine the price for the following year. (There will be a one-year delay in each ''true-up''),

(B) Authority Budget, The Authority's fiscal year shall be from October 1 through September 30 of each year, or such other period as the Authority, after sixty (60) days written notice to the Wholesale Customer, shall adopt Not later than theforty-fifth (45th) day before the beginning of the Authority's next fiscal year, connnencing with the Authority's fiscal year in which this Agreement becomes effective, the Authority shall provide the Wholesale Customer with a copy of the Authority's proposed budget for the following fiscal year, showing the budgeted total annual rate, and the components thereof, to be paid by the Wholesale Customer to the Authority for the fiscal year of the Authority to which the budget applies for sale and purchase of water under this Agreement. The ·w'holesale Custoiner shall have thirty (30) days to review and provide written connnents on the proposed budget: The Authority shall adopt its fiscal year budget as soon as practicable following the expiration of such thirty (30) day period and shall deliver to the Wholesale Customer a copy of the fiscal year budget within five (5) days after the adoption thereof.

(C) Unconditional-Obligation to Pay. The Wholesale Cnstomer shall be obligated to pay, each month, the payinents required by this Agreement, without off~et or counterclaim. 1bis covenant shall be for the benefit ofthe holders of the Authority's bonds secured in whole or in part from revenues of the System, if as and when any bonds are outstanding ..

(D) Billing and Payment. The Authority shall bill the Wholesale Customer monthly for the amounts due the Authority hereunder for the preceding billing period which bill shall disclose the nature of the amounts due. Such monthly bills shall be normally delivered to the Wholesale Customer within ten business days after the end of each calendar month. All such bills shall be paid by the WholesaleCustomer on or before_the last day of the month in which they are received, attbe office of the Authority in Kingsville, Texas. Any mistakes in calculations or figures shall not alleviate the Wholesale Customer's obligation to pay the bill ill full. Any mistakes in any calculations or figures shall be corrected

. imniediately upon discovery and the corrected bill will be furnished to the Wholesale Cnstomer. An adjustment in the amount paid as a result of ·such mistake ill calculation or figure will be added or deducted from the following month's bill,.as appropriate. If the Wholesale Customer disputes a bill, it shall nevertheless pay the bill, in full, pending any refund, as may be determined as a result of appeal of the disputed bill. The dispute may be resolved l;ly agreement, or by appropriate administrative agency or court decision.

Page 5 of 10

(E) Late Payment. -rn the eventthe Wholesale Customer shall fail to make any payment required to be made to the Authority under this Contract, within the time specified herein, interest on the amount due shall accrue from the time payment is due at the rate of fifteen percent (15%) per annum, or the maximum rate allowed by law, whichever is less. In the event any such payment i&not made within sixty days from date such payment becomes due, the Authority may, at its option, discontmue the delivery oiwater to the Wholesale Customer until the amount then· due the Authority is paid in full with interest as above specified.

SECTION 9. SPECIAL CONDITIONS.

(A) Wholesale Customer represents and covenants that the water supply to be obtained pursuant to this Contract is essential and necessary to the operation of its waterworks system, and that all payments to be made hereunder by it will constitute· reasonable and necessary "operating expenses" .of 'Wliolesale Customer's waterworks system, and that all such payments ·will constitute reasonable and necessary operating expenses of Wholesale Customer's waterworks system under any and all'revenue bond issues of Wholesale Customer, with the effect that the Wholesale Customer's obligation to make payments from its waterworks revenues under this Contract shall have priority over its obligations to make payments of the principal ofand interest on any and all of its revenue bonds.

(B) Wholesale Customer agrees to fL'C and collect such rates and charges for water and services to be supplied by its waterworks system as will make possible the prompt payment of all expenses of operating an,d maintaining its waterworks system, including all payments contracted hereunder, and the prompt payment of the principal of and interest on its obligations payable from the revenues of its waterworks

' / system.

(C) During any period _oftime when, in the judgment of the Authority, there is a critical shortage of water in the sources of supply available to Authority, which makes it impractical or inadvisable for Authority to deliver to the Wholesale Customer and its other customers ·with whom it has water supply contracts the full amounts of water required to be delivered thereunder, the water deemed available by the Authority from its sources of supply, shall be rationed to the Wholesale Customer and the other customers during each month of such period of time, in accordance with the "Drought Contingency Plan for the South· Texas Water Authority" adopted on May 28, 20!3, as it may be amended from' time to time. Such rationing shall also be subject to the requirements of Section 10 of this Contract.

(D) The Wholesale Customer is participating in the Federal Flood Insurance Program and will continue to do so during the te1m of this Contract.

SECTION 10. CORPUS CHRlSTI CONTRACT AND DROUGHT CONTINGENCY PLAN.

The Wholesale Customer acknowledges that it is required by Sec. 11.127:2,, Water Code, to develop a drought contingency plan consistent with the appropriate approved regional water plan. Wholesale Customer also acknowledges that the Cor'pus Christi Water Supply Agreement requires that, if the City of Corpus Christi implements any measures under its Water Conservation and Drought Contingency Plan, the Authority shall within thirty (3 0) days of notice of the implementation of any restrictions, surcharges or rationing by the City of Corpus Christi, impose similar re,trictions, surcharges or rationing measures on its Wholesale Customers. Any contract for the resale of water furnished by the Authonty shall contain a similar condition.

Page 6 oflO

Accordingly, the Wholesale Customer agrees that it will adopt a water conservation plan and drought contingency plan consistent with those of the City of Corpus Christi, as the latter may be amended from time to. time.

Wholesale Customer understands and agrees that all Wholesale Customers shall be subject to and bound by the same provisions regarding priorities of user of water and that, therefore, should there be a shortage in the basic supply of water, from the City of Corpus Christi or otherwise, which requires the restriction or curtailing of any Wholesale Customer of water ( a!kla rationing of water), the Authority will limit and restrict all of. its Wholesale Customers, to the same exterit. and on a pro rata ba~is, and will require its 'Wholesale Customers to treat all of their customers equally.

SECTION 11. FORCE MAJEURE.

In case by reason of force majeure either party hereto shall be rendered unable wholly or partially to carry out its obligations under this Contract, ·other than the obligation .of Wholesale Customer to make the payments required under the terms hereof, 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 period, 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 a public enemy, orders of any kind of the Government of the United States or the

-State of Texas or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquake, fires, hurricanes, storms, floods; washouts, droughts, arrests, restrain of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipe lines or canals, partial or entiie failure of water supply, or inability on the part of the Authority to delivery water hereunder on account of ~my other causes not reasonably within the. control of the Authority. It is understood and agreed that the settlement of strikes aud lockouts may be difficult, 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 to it in the judgment of the party having the difficulty ..

SECTION 12. TERM OF CONTRACT.

This Contract sl:J.all be and continue in full force and effect for a period of twenty (20) years following the date it has been executed by both parties.

SECTION 13.REMEDIESUPONDEFAULT

(A) Remedies. The parties agree thatthe Authority's undertaking to provide water is an obligation, failure in the performance of v.;hich cannot be adequately compensate.d in money damages alone. Accordi:rigly, the Authority agrees, in the event of any default on its part, that the Wholesale Customer shall be entitled to specific performance in addition to any other available legal or equitable remedies. ·

(B) Remedies Cumulative Not Exclusive. The remedies provided for herein are not exclusive remedies. All other remedies at law or in equity may be av~iled .of by either party and shall be cumulative except to the extent otherwise specifically provided, or limited, under this Agreement.

· Page 7 oflO

(C) CONSEQUENTIAL DAMAGES. NOTWITHSTANDING ANYTHING .TO THE CONTRARY CONTAINED lN THlS AGREEMENT, NEITHER PARTY S_HALL BE LlABLE TO THE OTHER PARTY FOR SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES OR LOST PROFITS WHETHER ARlSlNG IN AGREE!v!ENT, TORT, STRlCT LIABILITY OR OTHERWISE.

(D) Jurisdiction:· The Authority and the Wholesale Customer agree that, if either of them disputes the rate charged pursuant to this contract, either of them may appeal the rate to the Texas Commission on Environniental Quality (the "TCEQ") pursuant to the provisions ofTAC291.128.et seq.lfthe TCEQ for · any reason denies the appeal for want of jurisdiction, or otherwise, the dispute maybe resolved by the district court ofKleberg County, Texas.

SECTION 14. GENERAL PROVISIONS

(A) Covenant of Good Faith and Fair Dealings. The Authority and the Wholesale Customer agree to cooperate and to deal with one another fairly and in good faith at all times to effectuate the purposes and intent of tbis Contract. They also agree to execute and deliver such further legal documents or · instruments and to perform such further acts as are reasonably necessary to effectuate the purposes and · intent of this Contract. ·

(B). Tax-Exempt Bonds. The Wholesale Customer understands that the Authority_ has issued or will issue bonds the interest on wbich is excludable from the gross income of the owners thereof for federal income tax purposes ("Tax-Exempt Bonds") for improvements to the System and that the federal income tax laws impose certain restrictions on the use of proceeds of any such Tax-Exempt Bonds and on the use of the facilities and property fmanced by the Tax-Exempt Bonds and the output produced from such facilities and property. Accordingly, the Wholesale Customer will not enter into a water supply contract or other agreement with a customer of such Wholesale Customer wbich contains take-or-pay, contract minimums, output requirements, special rates and charges or similar provisions, unless it has .notified the Aufh?rity in writing of the Viholes£tle Customer's intent to e:p.ter into su~h contract at least 60 · days prior to the execution of such contract or agreement. The parties may rely on the opinion of nationally-recognized bond cmmsel to ensure compliance with tbis Section. This Section shall no longer apply to any Wholesale Customer if any of the outstanding bonds of the Authority allocable to the portion of the System used by the 'Wholesale Customer are not Tax-Exempt Bonds.

(C) Notices. Any notice to be given hereunder by either party to the other party shall be in writing and may be effected by personal delivery, by facsimile, or by sending said notices by registered or cettified mail, return receipt requested, to the· address set forth below. Notice shall be deemed given when received by facsimile or by personal delivery, or three days. after deposited with the United States Postal Service with sufficient postage affixed.

Any such notice mailed to the Authority shall be addressed:

Page 8 oflO

South Texas Water Authority P.O.Boxl701 Kingsville, Texas 78364 Attn: Executive Director Fax: (361) 592-5965

,J

Any such notice mailed to the Wholesale Customer shall be addressed:

Ricardo Water Supply Corporation P.O. Box 1572 Killgsville, Texas 78364-1572 Attn: General Manager Fax: (361) 592-5965

Either party may change the address or facsimile number for notice to it by giving notice of such change in accordance with the provisions of this paragraph. - ·

(D) Approvals. Whenever the term "approve" or "approval" is used in this Contract, the party whose appr_oval is required will not umeasonably withhold or delay it. Where approval is necessary, the party seeking approval may request approval in writing. If the party whose approval is requested fails to either approve the submittal or provide writteii corin:ilimts specifically identifYing the required changes within 21 working days, the submittal, as submitted by the requesting· party, will be deemed to have been approved by the party whose approval is requested.

(E) Waiver. The failure on the part of either party to require performance by the other of any portion ofthis Contract shall not be deemed a waiver of, or in any way affect that party's rights to enforce such provision. Any waiver by either party or any provision of this Contract shall not be a waiver of any other provision hereof ·

(F) Severability. The invalidity or unenforceabilit)r of any provision of this Contract shall not affect the validity or enforceability of any other provision of this Contract.

(G) Attorney's Fees. In the event either party shall become a party to any litigation against the other to enforce or protect any rights or interest under this Contract and shall prevail, the losing party shall reimburse the prevailing party .for all investigative and court costs and attorney's fees incurred in such litigation.

(H) Governing Law. Tliis Contract shall be governed by the laws of the State of Texas and venue shall lie in Kleberg County, Texas.

(1) Binding Effect. The Contract shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

(J) Time. Time is of the essence. Unless otherwise specified, all references to "days" means calendar days. If the date for performance of any o-bligation falls on a Saturday, Sunday, or legal public holiday, the date for performance will be the next following regular business day.

(K) No Partnership, Agency or Third Party Beneficiaries Intended. Nothing in this Contract will be construed as creating any form of partnership or joint venture relationship between the parties, nor shall· .either party be authorized to act·as an agent for the other party. Nothing in this Contract shall be construed to confer any right, privilege or benefit on, or to otherwise create any vested right or tbird-party beneficiary-relationship with any person or entity not a party to the Contract.

(L) Authority. Each of the persons signing on behalf of the Wholesale Customer and the Authority hereby confirm that they have the authority to execute this Contract on behalf of the party indicated by their signature and have the authority to bind such party hereto. .

Page 9 oflO

(M) Headings. The captions and headings appearing in this Contract are inserted merely to facilitate·. reference and will have no bearmg upon its interpretation .

. (N) Entire Contract. This Contract contains all agreements between the parties hereto and any agreement not contained herein shall not be recognized by the parties. The captions used herein are for convemence only and shall not be used to construe this Agreement. Words of gender shall be construed to include any. other gender' and words iri tlie singular sh~ll include the plural and vice versa unless the context requires otherwise. ·

(0) Counterparts. This Agreement may be executed by the parties in any number of counterparts, each of which when so executed and delivered shall be deemed an original instrument, but all such counterparts together shall constitute but one and the same instrument.

(P) Effective Date. The effective date of this Contract shall be the date on which it has been. executed by both the Authority and the Wholesale Customer.

ATTEST:

Secretary, Board of Directors

[AUTHORITY'S SEAL]

ATTEST:

./

SOUTH TEXAS WATERAUTHORITY

By: --------------------President Board of Directors Date of execution: _______ , 2016

RICARDOWATERSUPPLYCORPORATION

By: 6~ fc~~_/ !0L Q President Board of Directors Date of execution: <j_ / ~ ,'2016

AMENDED QUITCLAlM

Date:

Grantor: South Texas Water Authority

Grantor's Mailing Address: P.O. Box 1701. :Kingsville, Kleberg County, Texas 78~64-1701

Grantee: Ricardo Water Supply Corporatir;m

Grantee's Mailing Address: P.O. Box 1572 :Kingsville, Kleberg County, Texas 78364-1572

Consideration:

The Grantee's acceptance of the obligation to operate and maintain the Property being conveyed. Grantor and Grantee further agree as additional consideration that the transfer of the Property is to provide more efficient water service to residents within the boundary of Grantor, that Grantee will use the Property to provide water service to residents within the boundary of Grantor and that Grantee will not .sell the Property or transfer an interest in the Property without Grantor's consent. Should Grantee cease to use the Property for the purposes stated herein, then in such event ownership of the Property shall automatically revert to Grantor.

Property (including any improvements):

The waterlines and associated facilities described in Exhibit "A" attached hereto.

For the Consideration, Grantor quitclaims to Grantee all of Grantor's right, title, and interest in and to the Property, to have and to hold it to Grantee and Grantee's heirs, successors, and assigns forever. Neither Grantor nor Grantor's heirs, successors, or assigns will have, claim, or demand any right or title to the Property or any part of it.

This Amended Quitclaim replaces in its entirety that prior Quitclaim dated August 4, 2015 from Grantor to Grantee. ·

When the context requires, singular nouns and pronouns include the plural.

GRANTOR:

President, South Texas Water Authority

President, .Ricardo

ACKNOWLEDGMENTS

STATEOFTEXAS § §


This instrument was acknowledged before me on _____ ,, 2016 by-----,----,,----,--,--President of South Texas Water Authority, a political subdivision, on behalf of said political subdivision,

Notary Public, State of Texas My Commission Expires: ____ _

STATE OF TEXAS § §


This instrument was, acknowledged before me on Apr\\ \7..- , 2016 by B:t \d(ll\{~ ( (---aru~ President of Ricardo Water Supply Corporation, a nonprofit corporation, on behalf of said nonprofit corporation. ·

!h'bJnllS ~. ~()Sc._()~<; Notary Public. State ofTex\ll! [" 0 My Commission Expires: 0- '-1 -Jo

EXEITBIT "A" TO QUITCLAIM

The Property consists of all waterlines, water transmission facilities, water storage facilities, and other associated facilities and appurtenances used to deliver water to Grantee downstream of the meter at the Point of Delivery pursuant to the Water Supply Contract by and between Grantor and Grantee with effective date August 4, 2015 except for the three (3) meters currently located at Pump Station #1, Pump Station #2 and Pump Station #3. Title to these three (3) meters shall remain in Grantor.

ATTACHMENT 11

Quote for Modifications to the Bishop-East Pump Station Building

Memorandum

To: From:


Date: April20, 2016 Re: Mercer Controls, Inc. Quote to Rehabilitate Bishop East Pump Station

Background:

Enclosed please find a quote from Mercer Controls, Inc. (Mercer) in the amount of$21,700 for the rehabilitation of the Bishop East Pump Station Building. This request for a bid has been processed through the Texas Ethics Commission website per the new State Law, which was recently reviewed by the Board.

Analysis:

With the repair work nearly complete at the Driscoll Pump Station, staff believes that Mercer has demonstrated the necessaty skills and workmanship needed to address many of the problems associated with the type of buildings 'that were erected in the mid-1980's when the South Texas Water Authority's Regional System was constructed. As mentioned numerous times, the type of buildings provided by Armco (a company that merged with AK Steel Corporation) have repeatedly exhibited problems with rusting at seams and patticularly at the bottom of the panels where they anchor to the floor. Consistently, there have also been problems with the roofs on these building. Through the years, staff has attempted to make patch work repairs where possible. However, staff believes that more extensive work is now needed. Field personnel recommend the Bishop East Pump Station repairs be done first as it is in need of the most work. Fmther, they suggest that the Agua Dulce Pump Station followed by the Central Pump Station should be addressed next. The last station that they recommend for this type of repair would be the Kingsville Pump Station Building.


Approve the Mercer quote for rehabilitation of the Bishop East Pump Station Building in the amount of$21,700.

Board Action:

Detennine whether to approve the Mercer quote for rehabilitation of the Bishop East Pump Station Building in the amount of$21,700.

Summarization:

In our capacity as turn-key management for the Ricardo Water Supply Corporation, our office has been gathering quotes for the replacement ofihe RWSC's tlu·ee (3) pump station buildings. Mercer has submitted the lowest bids in response to those requests. Staff believes that this information combined witli the knowledge on the quality oftheDriscoll PS work as well as their pe1fonnance at the Bishop West PS supports authorizing Mercer to do this work.

March 28, 2016

MERCER CONTROLS, INC.

P. 0. Box 777 I 804 APOLLO DRIVE

EDNA, TEXAS 77957

PH: (361) 782-7168 FAX:,(361) 782-7706

wvm.MERCERCONTROLS.com

To: South Texas Water Authority

Attn: Carola Serrato

Re: Bishop East Side Water Plant

Ms. Serrato:

S.A. Mercer, P.E.

(361) 782-5678

TI1ank you for d1e opportunity to quote modifications to the building structure at ilie East Side Water Plant.

\Y./ e propose to revise the sheet metal structure of the pump station structure, including providing a new extemal metal skin on the building. We will cut bottoms of rusted out columns, weld on new base plates and pour concrete pads under new base plates. We will install oversized 14ga base angle around perinleter of building to stabilize and secure existing structural siding into place. \Y./e will install hat channel over existing siding to accommodate new siding. Install26ga siding and ttinl, color chosen by owner. \Vl e will reset and resecure double door on Norili end of building. Paint existing escutcheons and doors to match new siding.

Price complete for all labor, material, and travel expenses: $21,700.00.

\Y./_e include a 30-day warranty on labor. The manufacturer's warranty applies to all material, beginning on the date of acceptance. Normal warranty exclusions apply.

Completion Tinle, 8 Weeks.

Respectfully Submitted,

MERCER CONTROLS, INC.

S. A. Mercer, P.E., Presiderit

SAM/ag

CERTIFICATE OF INTERESTED PARTIES FORM 1295

1 of 1

Complete Nos. 1 ~ 4 and 6 if there are interested parties. OFFICE USE ONLY Complete Nos. 1, 2, 3, 5, and 6 if there are no interested parties. CERTIFICATION OF FILING

1 Name of business entity filing form, and the city, state and country of the business entity's place Certificate Number: of business. 2016-33619 Mercer Controls, Inc.

Edna, TX United States Date Filed:

2 Name of governmental entity or state agency that i~ a party to the contract for which the form is 03/31/2016 being filed.

South Texas Water Authority Date Acknowledged:

3 Provide the identification number used by the governmental entity or state agency to track or identify the contract, and provide a description of the goods or services to be provided under the contract.

2016-0001

Bishop East Side Water Plant Rehabilitation

4 Nature of interest (check applicable) Name of Interested Party City, State, Country (place of business}

Controlling Intermediary

Mercer, Sherrel Edna, TX United States X

Gabrysch, Steven Edna, TX United States X

Koop, Kay Edna, TX United States X

Harter, Kenneth Edna, TX United States X

.

5 ' Check only if there is NO Interested Party. 0

6 AFFIDAVIT .

I swear, or affirm, under penalty of perjury, tJ:tat the above disclosure is true and correct.

l ,,··~:";:· ... GAYLE BOYD

~~ort10co~~gbu~J~~ti~ ! (~?:~i) t..Jo1ory PubliC, State of Texos r\~)' CommiSSIOn E:xpHes

April 02. 2017 .. , .. -

AFFIXNOTARYSTAMP/SEAL ABOVE

Sworn to and subscribed before me, by the said S \.~r~l M-e.rc~v- , this the' le-t

dayot ~e~ 20 I l. , to certify which, witness my hand and seal of office.

/k,6f!::::zst~ oath G-~ k 7} ()'={-d JJP Printed name of officer administering oath Title of officer administering oath

Forms provided by Texas Ethrcs Commrssron WIN\N. ethrcs.state.tx. us Vers1on V1.0.312

ATTACHMENT 12

Proposed Tax Foreclosure Auction of Resale Propetiies

Memorandum

To: . South Texas Water Authority Board of Directors From: Carola G. Senato, Executive Director Date: April 18,2016 Re: Tax Foreclosure Auction-Struck Off Properties, Nueces County

. Background:

Enclosed please find information from South Texas Water Authority's delinquent tax attorney firm, Linebarger, Goggan, Blair, and Sampson, LLP. The firm is proposing to conduct a tax foreclosure auction of stluck off properties due to non-payment of prope1iy taxes. The STW A Board considered a similar type of matter most recently in April of 2013. In order for the sale to occur, all affected govemment entities must agree to the auction. If an auctioned property is purchased, it will be restored to the tax rolls. Please note that the propetty owners were afforded all of the oppmtunities allowed by law to recover the prope1ty prior to this process.

Analysis:

Although the highest bid will likely not recoup the outstanding taxes owed, the property will be back on the tax rolls to begin generating tax revenue once again. According to my conversation with Mr. Marvin Leary, Linebarger, Goggan, Blair, and Sampson, LLP, a representative from the law finn will be present at the meeting to answer any questions related to this matter.

In addition, it should be noted that a large percentage of the properties were previously owned by a single individual. Mr. Leary indicated that there is a possibility that those parcels may be combined into several larger parcels as a means of generating more interest. It is equally as impmtant to note that these properties are part of a subdivision that was never properly developed in tenus of proper roads and available utilities.


Approve Resolution 16-07.

Board Action:

Detennine whether to approve Resolution 16-07.

Summarization:

The anticipated low bids failing to recover the taxes owed has to be considered in terms of the long-tenn benefit of getting the property back on the tax rolls and generating tax revenues in the same manner as the other taxable prope1ty in the district.

LINEBARGER GOGGAN BLAIR & SAMPSON, LLP

Ms. Carola Senato Executive Director South Texas Water Authority Post Office Box 1701 Kingsville, Texas 78364-1701

ATTORNEYS AT LAW

500 NORTH SHORELINE, SUITE III I CORPUS CHRISTI, TEXAS 7840 I

361/888-6898 FAX 361/888-4568

March 31,2016

Paul Daniel Chapa, Partner Email: [email protected]

RE: Proposed Tax Foreclosure Auction of 'Struck Off properties; Saturday, June 4, 2016

Dear Ms. Sen·ato,

As you are aware, we post many properties for tax sale each year as part of our overall effort to collect the delinquent taxes due to South Texas Water Authority, and our other clients within Nueces County. Some of these properties are "Struck Off'' to the taxing entities when no one offers the amount of the opening bid at sale. We then solicit written resale bids for these "Struck Off'' properties, and bring the resale offers before the taxing entities for their consideration.

At the present time there are approximately 250 propetiies on the Nueces County Resale List. Many of these are vacant lots in neighborhoods where there is very little new building activity or demand for vacant property. Although Nueces County is weatheting the ups and downs of the Texas economy better than most since the oilfield decline, our attempts to sell these propetiies through our regular procedure have been unsuccessful. As long as these properties are off the tax rolls, they produce no revenue for the taxing entities and must be maintained at the taxing entities expense.

With this in mind we propose to offer these properties for sale at a public auction on the courthouse steps with a reduced opening bid. We believe a low opening bid will make these propetiies attractive to a large group of potential buyers, and the competitive environment of a live auction will achieve the best price for ciur clients and return these properties to the.tax rolls as revenue producing.

Enclosed herewith is a list of tax resale properties located within the South Texas Water Authority District. All of the properties meet the criteria of being "Struck Off" the tax rolls with no offer pending. We are asking the governing body of each taxing entity, including South Texas Water Authority, to approve the sale of these prope1iies with an opening bid of 20% of the most recent tax appraisal value.

We plan to start our advertising campaign around May 1st and conduct the public auction on June 4, 2016. Therefore, we respectfully request that you place this item on your governing body's agenda for the next available meeting. We will be present to explain the proposal and answer any questions.

The taxing entities approved similar public auctions of tax resale properties in 1996, 1999,2000,2001,2002,2003,2004,2005,2007,2009,2010,2011 and 2013, all of which were successful in retuming a large number of prope1iies to the tax rolls. We expect to achieve comparable results with this proposal.

Your courtesy and cooperation in this matter are greatly appreciated. As always, if you have questions regarding any of the above, please contact me at your convenience.

~

.--sincere! ,

Pau\Daniel C Attorney at Law

'

Carola Serrato

From: Sent: To: Cc: Subject: Attachments:

Hi Carola,

Marvin Leary < [email protected]> Friday, April 01, 2016 1:59 PM [email protected] Elva Vela Galvan Proposed Tax Foreclosure Auction of 'Struck Off" properties, Saturday, June 4, 2016 STWA.pdf; doc20160401135858.pdf

.Thank you for speaking with me earlier today.

Attached please find our letter to you regarding our proposal to auction multiple Struck Off properties in Nueces County, and the list of proposed auction properties within the STWA boundaries.

Also included is a copy of Notice of Sale for the Sheriffs Tax Sale scheduled for April 5, 2016. The statutory disclaim'er and notification language you asked about is on the last 2 pages of the Notice of Sale. That language is also required in the Sheriffs Tax Deeds and Tax Resale Deeds issued to buyers at tax sale and tax resale in Nueces County .

The hard copy of the auction proposal will be mailed to you later today.

This is essentially the same auction proposal we have made several times over the last 20 years to return Struck Off properties to the active tax roll. This year there are a lot more properties within the STWA area, mainly in Ranch Amistad.

Please let me know the date and time when our proposal will be on the Board of Trustees' agenda so we can have representatives there to explain it, and address any questions or concerns that may arise.

We are also happy to answer any questions you or your staff may have in the meantime.

Thank you for your consideration,

Marv

Marvin Leary Area Manager Linebarger Goggan Blair & Sampson, LLP Attomeys at Law 500 N. Shoreline Blvd. Suite 1111 Corpus Christi, Texas 78401-0357 [email protected]· Main: (361) 888-6898 Fax: (361) 888-4405

· http://www.lgbs.com/

CONFIDENTIALITY STATEMENT This transmission may be: (1) subject to the Attorney-Client Privilege, (2) an attorney work product, or (3) strictly confidential. If you are not the intended recipient of this message, you may not disclose, print, copy or disseminate this information. If you have received this in error, please reply and notifY the sender (only) and delete the message. Unauthorized interception ofthis e-mail is a violation of federal criminal law.

1

STATE OF TEXAS

NUECES COUNTY

NOTICE OF SALE

§ § §

BY VIRTUE OF AN ORDER OF SALE

dated March_, 2016, and issued pursuant to judgment decree(s) of the District Comt of Nueces County, Texas, by the Clerk of said Court on said date, in the hereinafter numbered and styled suit(s) and to me directed and delivered as Sheriff of said County, I have on March __ , 2016, seized, levied upon, and will, on the first Tuesday in April, 2016, the same being the 5"' day of said month, at the South Door of the Courthouse of the said County, in the City of Corpus Christi, Texas, between the hours of 10:00 AM and 4:00PM on said day, beginning at 10:00 AM, proceed to sell for cash to the highest bidder all the right, title, and interest of the defendants in such suit(s) in and to the following described real estate levied upon as the propetty of said defendants, the same lying and being situated in the County of Nueces and the State of Texas, to-wit:

Sale Cause# Acct# Style of Case Legal Description Adjudged Estimated It Judgment Date Order Issue Date Value Minimum Bid --

I 08-4348-D 8765-0002-0050 NUECES COUNTY VS. TIERRA GRANDE S/D LT E SI5,654.00

08/11/09 RICHARD ANTHONY DE LA BLK 2 IN NUECES COUNTY, PENA TEXAS

2 10·03487- 1585-0005-0270 NUECES COUNTY AND CITY Lot 27, Block 5, Second revision $120,836.00 OO·O·G OF CORPUS CHRISTI VS. of Chula Vista Addition No. 1, a

01/21/16 MARIA C BENAVIDES subdivision in the City of Corpus Christi, Nueces County, Texas, according to the map or plat thereof, re~orded in Volume 21, Page 22, Map records of Nueces County, Texas.

3 2011DCV- 5280-0001-0055 NUECES COUNTY VS. MOLINA I LT5B BK I IN $114,363.00 1409-H ARNOLD GARCIA, ET AL THE CITY OF CORPUS

08/26/11 CHRISTI, NUECES COUNTY, TEXAS

4 2011DCV- 5000-0027-0070 NUECES COUNTY VS. Lots 7 and 8, Block 27, ~·leadow $82,439.00 5935-B ANABEL GARZA Park Addition, an addition to the 08/26/!3 City of Corpus Christi, Nucccs

County, Texas, according to the map or plat thereof, recorded in Volume 4, Page 52, Map Records of Nueccs County, Texas.

5 2012DCV- 8374-0002-0080 NUECES COUNTY VS. Lots 8 and 9, Block 2, Stafford $54.637.00 2249-H DrONISIO GONZALEZ, ET AL Addition, mfaddition to the City 01/131!6 of Robstown, Nucces County,

Texas, according to the map or plat thereof, recorded in Volume· ' 3, Page 49, Map Records of Nueccs County, Texas.

6 2012DCV- 9643-0000-0140 NUECES COUNTY VS. TRICIA Lot 14, Wild Wood Ranch $28,532.00 3336-B ANN PACE Estates, a subdivision in Nucccs 01/28/16 County, Texas, according to the

map or plat thereof, recorded in Volume 58, Page 186, Map Records of Nueccs COllnty, Texas.

Sale Cause# Acct# Style of Case Legal Description Adjudged Estimated II Judgment Date Order Issue Date Value Minimum Bid

-~

7 2012DCV- 9643-0000-0150 NUECES COUNTY VS. TRICIA WILD WOOD RANCH $25,732.00 3336-B ANN PACE ESTATES LT 15 JN NUECES

0!/28/16 COUNTY, TEXAS

8 2012DCV- 4730-0006-0160 NUECES COUNTY VS. PEDRO Lot I 6, Block 6, Maloy and $21,455.00 4783-B VASQUEZ Bosquez Extension #1 Addition, 0!/20/16 an addition to the Town of

Robstown, Nueces County, Texas, as described in Volume 815, Page 452, Deed Records of Nueces County, Texas.

9 2012DCV- 4072-0004-0230 NUECES COUNTY AND CITY Lot 23, Block 4, La Pascua #2, a $8,663.00 4883-G OF CORPUS CHRISTl VS. subdivision in Nueces County,

0112!/16 JOHNNY CHARLES BRYANT Texas, according to the map or Plat thereof, recorded in Volume 13, Page 50, Map Records of Nucces County, Texas.

10 20l3DCV- 4752-0000-0010 NUECES COUNTY VS. TERRY Lot I, Manor Home Subdivision, $15,381.00 0782-G EPERRY an addition to the City of Corpus

Ol/21/l6 Christi, Nueces County, Texas, according to the map or plat thereof, recorded in Volume 61, Page 144, Map Records of Nueces Counly. Texas.

ll 20l3DCV- - 0488-0004-0200 NUECES COUNTY AND CITY Lot 20, Block 4, Bay View $8,910.00 1420-H OF CORPUS CHRISTl VS. Section 3, an addition to the City

01113/16 MARIA ZERTUCHE of Corpus Christi, Nueces County, Texas, according to the map or plat thereof, recorded in Volume A, Page 25, Map Records ofNueces County, Texas.

12 20l3DCV- 0481-1101-0090 NUECES COUNTY VS. Lots 9 and lO, Block 110 l, Bay $54,220.00 1469-H ANTONIA ELIZALDI Terrace Addition #2, an addition

Ol/13/16 to the City of Corpus Christi, Nueces County, Texas, according to the map or plat thereof; recorded in Volume "A", Page 26, Map Records ofNueces County. Texas.

13 20l3DCV- 0386-0004-0030 NUECES COUNTY VS. IRMA D Lot 3, Block 4, Baldwin Park $43,682.00 2142-H MOLINA Addition, an addition to the City

Ol/13/16 of Corpus Christi, Nueces County, Texas, according to the map or plat thereof, recorded in Volume II, Page 40, Map RCcords ofNueces County, Texas. ·

Sale Cause# Acct # Style of Case Legal Description Adjudged Estimated # Judgment Date Order [ssue Date Value Minimum Bid

14 2013DCV- 5335-0001-00!0 NUECES COUNTY VS. ISMAEL Lot l and 2, Block I, Moore- $15,950.00 . 2628-E MALDONADO Amos Addition, an addition to

04/01/15 the City of Robstown, Nucces County, Texas, as described in Clerks File# 2009019748, Deed Records of Nueces County, Texas.

15 2013DCV- 7435-0004-0250 NUECES COUNTY VS. Lot 25 and the East 23.50 feet of I $30,138.00 3235-C MANUELE GUTIERREZ Lot 26, Block 4, Original

01/12/16 Townsite to the City of Robstown, Nueces County, Texas, according to the map or plat thereof, recorded in Volume "A", Page 80, Map Records of Nueces County, Texas.

16 2013DCV- 0792-0003-0130 NUECES COUNTY VS. Lots 13 and 14, Block 3, $11,224.00 3241-H ANDRES RUIZ, JR. ET AL Bluebonnet Addition, an addition

01/13/16 to the City of Robstown, Nueces County, Texas, according to the map or plat thereof, recorded in Volume 9, Pages 19 and 20, Map Records of Nucces County, Texas.

17 2013DCV- 0315-0007-0220 NUECES COUNTY VS. Lot 22, Bl_ock 7, Austin $37,644.00 4068-B EDWARD RODRIGUEZ Addition, an addition to the City

01/20/16 of Corpus Christi, Nueces County, Texas, as shown by map or plat thereof recorded in Volume 9, Page 25, Map Records of Nueces County, Texas

18 2013DCV- 5625-0001-0190 NUECES COUNTY VS. DALE Lots 19,20 and 21, Block I, $86,606.00 4119-F LONGBINE Naval Center Addition #2, an

09111115 addition to the Cily of Corpus Christi, Nueces County, Texas, according to the map or plat thereat~ recorded in Volulne 8, Page 35, Map Records of Nueces County, Texas.

19 2013DCV- 0792-0005-0230 NUECES COUNTY VS. BLUEBONNET-RUST LTS 23 $30,748.00 4685-A AURORA ROJAS GOMEZ & 24 BLK 5 IN NUECES

l0/29/14 COUNTY, TEXAS

20 2014DCV- 4225-0002-0420 NUECES COUNTY VS. Lots 42 and 43, Block 2, Las $53,624.00 0835-B YOLANDA CABRIALES Delicias Addition, an addition to

01/28/16 the City of Robstown, Nucces County, Texas, according to the map or plat thereof, recorded in Volume 8, Page 58, Map Records of Nucces County, Texas.

Sale Cause# Acct # Style of Case Legal Description Adjudged Estimated # Judgment Date Order Issue Date Value Minimum Bid

21 2014DCV- 0420-0076-0100 NUECES COUNTY VS. 50.00 feet by 100.00 feet, $74,798.00 3002-E OCfA VIO CHAVERO, ET AL containing 0.1148 acre, more or

01/05/16 less, out of the South\vcst comer of that certain 1.00 acre tract situated in the Vicente Lopez de Herrera Grand and a portion of the Barranco Grant, Nueces County, Texas; said l.OO acre tract as described in deed dated July 7, 1966, from Ben A. Bennett to Gilberta S. Ortiz, in Volume 1159, Page 386, Deed Records of Nueccs County, Texas.

22 2014DCV- 4072-0002-0050 NUECES COUNTY VS. Lot 5, in Block 2, LA PASCUA $39,102.00 5441-B GEORGE WYATT SR ADDITION# 2, a Subdivision of 01/20/16 the City of Corpus Christi, Texas,

as shown by map or plat thereof, recorded in the Map Records of Nueces County, Texas, to which reference is here made for all pertinent purposes.

.

(any volume and page references, unless otherw1se mdtcated, bemg to the Deed Records, Nueces County, Texas, to winch mstruments reference may be made for a more complete description of each respective tract.) or, upon the written request of said defendants or their attorney, a sufficient portion of the property described above shall be sold to satisfy said judgment(s), interest, penalties, and cost; and any property sold shall be subject to tl1e right of redemption of the defendants or any person having an interest therein, to redeem the said property, or their interest therein, within the time and in the manner provided by law, and shall be subject to any other and further rights to which the defendants or anyone interested therein may be entitled, under the provisions of law. Said sale to be made by me to satisfy thejudgment(s) rendered in the above styled and numbered cause(s),togethcr with interest, penalties, and costs of suit, and the oroCeeds of said sales to be aoolied to the satisfaction thereof. and the remainder. if anv. to be aonlied as the law directs.

Dated at Corpus Christi, Texas, March __ , 2016

By

Notes:

Sheriff Jim D. Kaelin

Nueces County, Texas

J. Jacobson, Deputy

The Minimum Bid is the lesser of the amount awarded in the judgment plus interest and costs or the adjudged value. However, the Minimum Bid for a person owning an interest in the property or for a person who is a party to the suit (other than a taxing unit), is the aggregate amount of the judgments against the property plus all costs of suit and sale. ALL SALES SUBJECT TO CANCELLATION WITHOUT PRIOR NOTICE. THERE MAY BE ADDITIONAL TAXES DUE ON THE PROPERTY WHICH HAVE BEEN ASSESSED SINCE THE DATE OF THE JUDGMENT. For more information, contact your attorney or LINEBARGER GOGGAN BLAIR & SAMPSON, LLP., attorney for plaintiffs, at (361) 888-6898

THIS SALE IS BEING CONDUCTED PURSUANT TO STATUTORY OR JUDICIAL REQUIREMENTS. BIDDERS WILL BID ON THE RIGHTS, TITLE, AND INTERESTS, IF ANY, OWNED BY THE DEFENDANT(S)IN SUCH SUIT(S) IN AND TO THE REAL PROPERTY OFFERED.

THE PROPERTY IS SOLD AS IS, WHERE IS, AND WITHOUT ANY WARRANTY, EITHER EXPRESS OR IMPLIED. NEITHER THE COUNTY NOR THE SHERIFF'S DEPARTMENT WARRANTS OR MAKES ANY REPRESENTATIONS ABOUT THE PROPERTY'S TITLE, CONDITION, HABITABILITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE. BUYERS ASSUME ALL RISKS.

IN SOME SITUATIONS, A LOT OF FIVE ACRES OR LESS IS PRESUMED TO BE INTENDED FOR RESIDENTIAL USE. HOWEVER, IF THE PROPERTY LACKS WATER OR WASTEWATER SERVICE, THE PROPERTY MAY NOT QUALIFY FOR RESIDENTIAL USE. A POTENTIAL BUYER WHO WOULD LIKE MORE INFORMATION SHOULD MAKE ADDITIONAL INQUIRIES OR CONSULT WITH PRIVATE COUNSEL.

***********************T*******************************

ESTA VENTA SE REALIZA CONFORME A LOS REQUISITOS ESTATOTARIOS 0 JUDICIALES. LOS POSTORES LICITARAN POR LOS DERECHOS, TITULOS E INTERESES, SI FUESE EL CASO, DE LA PROPIEDAD INMUEBLE QUE SE OFRECE.

LA PROPIEDAD SE VENDE TAL COAL, DONDE SE ENCUENTRE Y SIN NINGUNA GARANTIA EXPRESA 0 IMPLICITA. NI EL CONDADO NI EL DEPARTAMEN,_TO DEL ALGUACIL GARANTIZAN 0 REALIZAN ALGONA DECLARACION RESPECTO AL TITULO, CONDICION, HABITABILIDAD, COMERCIABILIDAD 0 APTITUD PARA UN PROPOSITO PARTICULAR. LOS COMPRADORES SE RESPONSABILIZAN PORTO DOS LOS RIESGOS.

EN ALGUNAS SITUACIONES, UN LOTE DE CINCO ACRES 0 MENOS SE PRESUME QUE SE DESTINA PARA USO RESIDENCIAL. SIN EMBARGO, SI LA PROPIEDAD CARECE DE SERVICIOS DE AGUA POTABLE 0 ALCANTARILLADO, LA PROPIEDAD PUEDE NO CALIFICAR PARA USO RESIDENCIAL. SI UN COMPRADOR POTENCIAL DESEA MAS INFORMACION DEBE PREGUNTAR 0 CONSUL TAR A UN ASESOR PRIV ADO.

STWA 2016 RESALE AUCTION LIST Auction day is June 4, 2016

ITEM SUIT DEFENDANT NAME LEGAL. DESCRIPTION DEED TOTAL BASE PROPERTY OPENING

ACCOUNT NUMBER TYPE OF PROPERTY LOCATION NUMBER NUMBER FILED TAX DUE VALUE BID

2012DCV~ 1.477 ACRES OUT Of TRACT 160 RANCHO 2 0855-G ANDRES MUNGIA JR. BANQUETE IJ, UNRECORDED 09/14/lS 3.87727 522.495 $4,500 71 02-0000· 1600 VACANT LOT 3794 COBB LN BANQUETE

3800 BLK OF COBB LANE 3 02-1602-B JOHN B. DAVIS JR. LOT 166 RANCHO BANQUETE II 08111/ll 3,781.46 522.009 54,410 7102-0000·1660 VACANT LOT BANQUETE

LOT II BLOCK 18 RANCHO AMISTAD 8 09-5423-C JUAN ESCAT!OLA SUBDIV!SJON 0Sfl6113 3,049.05 520,979 S4.200 7099-0003-0110 VACANT LOT CR44@ I!M 666

2QI !DCV-9 2094-C HECTOR GONZALEZ LOT 12 BLOCK I RANCHO AMISTAD 08/l41!3 3,036,63 S20,000 $4,000 7099-000 I -0 120 VACANT LOT CR44@FM66G

2011DCV-10 2094..(' HECTOR GONZALEZ LOT 13 BLOCK I RANCHO AMISTAD 08/14/13 3,011.12 $20,000 S4,000 7099-0001-0130 VACANTLOf CR44 @FM 666

201\DCV-

II 2094-C I-n:kTOR CONZALEZ LOT 2 BLOCK 2 RANCHO A.\11ST AD 08{!4/13 3,288,7·1 $20,000 S<\,000 7099-0002-0020 VACANT LOT CR44@ FM 666 20JJDCV-

12 2094-C HECTOR GONZALEZ LOT 5 BLOCK 2 RANCHO AMISTAD 08/14/13 2,820.05 $20,000 suoo 7099-0002-0050 VACANT LOT CR44@ FM 666 201\DCV-

13 2094-c HECTOR GONZALEZ LOT 7 BLOCK 2 RANCHO Nv!IST AD OS/14/13 2.404,67 $20,000 S4,000 7099-0002-0070 VACANT LOT CR44@FM666 2011DCV·

14 2094-C HECTOR GONZALEZ LOT 8 BLOCK 2 RANCHO AMISTAD 081\4113 2,404.67 $20,000 S4,000 7099-0002-0080 VACANT LOT CR44@ fM 665 2011DCV-

" 2094-C HECTOR GONZALEZ LOT 9 BLOCK 2 RANCHO MIIST AD 08!14/13 2,404.67 $20,000 $4.000 7099-0002-0090 VACANT LOT CR44@ FM 666 20\IDCV-

" 2094-C HECTOR GONZALEZ LOT II BLOCK 2 RANCHO A.\1!ST AD 08114/13 2,297,22 $20,000 $4,000 7099-0002-0110 VACANT LOT CR44@ FM 666 2011DCV-

17 2094-C !-lECTOR GONZALEZ LOT 12 BLOCK 2 RANCHO AMISTAD 08(14/13 2,659,82 $20,000 $4,000 7099-0002-0120 VACANT LOT CR44@FM666 201\DCV·

18 2094-C HECTOR GONZALEZ LOT 14 BL0CK2 RANCHO AMISTAD 08114113 2,297.22 S20,000 $4.000 7099-0002-0140 VACANT LOT CR44@FM66G 2011DCV-

19 2094..(' HECTOR GONZALEZ LOT I 5 BLOCK 2 RANCHO AMISTAD 08/14/13 3,128.43 S20,000 S4,000 7099-0002-0 I 50 VACANT LOT CR44@FM666 . 2011DCV~

20 2094-C HECTOR GONZALEZ LOT 16 BLOCK 2 RANCHO AMISTAD 03114/13 2.697.98 S20,000 $4,000 7099-0002-0160 VACANT LOT CR44@ fiM 666 201 IDCV-

21 2094-C HECTOR GONZALEZ LOT 17 BLOCK 2 RANCHO A MIST AD OS/14/13 2.118.02 S20,000 S4,000 7099-0002-0170 VACANT LOT CR44@ FM 666 20! IDCV·

22 2094-C HECTOR: GONZALEZ LO'f 19 BLOCK2 RANCHO AMISTAD 08114113 2,118.02 $20,000 S4,000 7099-0002-0190 VACANT LOT CR44@FM666 20IIDCV-

23 2094-C HECTOR GONZALEZ LOT 20 BLOCK 2 RANCHO Al\t!IST AD 08/14113 2,665,70 szo.ooo S4,000 7099-0002-0200 VACANT LOT CR44@ FM 666 201 IDCV-

24 2094-C HECTOR GONZALEZ LOT 21 BLOCK2 RANCHO AMISTAD 03/14/13 2,1\8,02 $20,000 $4,000 7099-0002-0210 VACANT LOT CR44 @FM666 2011DCV·

25 2094·C HECTOR GONZALEZ LOT 22 BLOCK 2 RANC!·IO AMISTAD 08/14/13 2,113,02 520,000 S4,000 7099-0002-0220 VACANT LOT CR44@ FM666 20! IDCV-

26 2094..C !·lECTOR GONZALEZ LOT 23 BLOCK2 RANCHO AMISTAD 081!4/13 2,297,22 520,000 S4,000 7099-0002-02;:10 VACANT LOT CR44@ FM666 201 mcv-

27 2094-C HECTOR GONZALEZ LOT 24 BL0CK2 RANCHO MHSTAD 03114/13 z.:m.22 S20,000 S4-.ooo 7099-0002-0240 VACANT LOT CR44@FM666 20llDCV·

28 2094-C HECTOR GONZALEZ LOT 25 BLOCK 2 RANCHO A.\11\ST AD OS/14/13 2,297,22 S20,0QO S.MOO 709~'"0002-0250 VACANT LOT CR 44 @ Rvf 666 2011DCV·

29 2094-C HECTOR GONZALEZ LOT 26 BLOCK 2 RANCHO AMISTAD 08/14/!3 2.297.22 $20,000 S4,000 7099·0002-0260 VACANT LOT CR 44 @ rr ... 1 666 2011DCV·

30 2094-C HECTOR GONZALEZ LOT I BLOCK 3 RANCHO AM!5T AD 08/14/13 3,049.05 S20,094 S4,020 7099-0003-0010 VACANT LOT CR44@ ft-,..!666 20!1DCV-

31 2094-C HECTOR GONZALEZ LOT 3 Bl,OCK 3 RANCHO AMISTAD 0Sfl4!13 4,513.00 $21,047 $4,210 7099·0003-0030 VACANT LOT CR44@ FM 666 201 !DCV-

32 209•1-C HECTOR GONZALEZ LOT 5 BLOCK) RANCHO A0\·115TAD OSf.\4/13 3,036.63 $20,000 S4,000 7099-0003-0050 VACANT LOT CR 44 @ F'M 666

Linebarger Goggan Blair Sampson, LLP Page 1 of4


ITEM SUIT DEfENDANT NAME LEGAL DESCRIPTION

DEED TOTAL BASE PROPERTY OPENING ACCOUNT NUMBER TYPE OF PROPERTY LOCATION

NUMBER NUMBC:R FILED TAX DUG VALUE BID

I " 2011DCV-2094-C I-lECTOR GONZALEZ LOT G BLOCK 3 RANCHO AM!ST AD OS/14/13 3,03S,97 $19,%9 $4,000 7099-0003-00GO VACANT LOT CR 44 @FM GGG

2011DCV-

34 2094-C HECTOR GONZALEZ LOTS BLOCK 3 RANCHO AMISTAD OS/14/13 2,1 18.02 S20,0oo $4,000 7099-0003-0080 VACANT LOT CR44@FM66G

20llDCV-

" 2094-C BECTOR GONZALEZ LOT 10 BLOCK 3 RANCHO AMISTAD OS/14/13 3,138,15 522,500 $4,500 7099-0003-0100 VACANT LOT CR44@FMG66 2011DCV-

" 2094-C HECTOR GONZALEZ LOT 1 BLOCK 4 RAi'•lCHO AMISTAD OS/W13 2,209.20 519,983 54.000 7099-0004-00tO VACANT LOT CR 44@ FIV! UG6 20JJDCV-

37 2094·C· HECTOR GONZALEZ LOT 2 BLOCK 4 RANC!-10 AMISTAD 08/!4/13 2,614.93 $20,000 $4,000 7099-0004-0020 VACANT LOT CR44@ FM 666 2011DCV-

" 2094-C HECTOR GONZALEZ · LOT 3 BLOCK 4 RANCHO AMISTAD 08/14/13 2,1 !8.02 $20,000 S4.000 7099-0004-0030 VACANT LOT CR 44 @ Fl\1 666 20llDCV·

39 2094-C HECTOR GONZALEZ LOT 4 BLOCK 4 RANC!-10 MUST AD 08(14/13 2,266.48 $20,000 $4.000 7099-0004-0040 VACAI\'TLOT CR44@FM666 2011DCV-

40 2094-C HECTOR GONZALEZ LOT S BLOCK 4 RANCHO AMISTAD 08!14/13 4,285.63 S22.362 S4,480 7099-0004-00SO VACANT LOT CR44@ FM 666 2011DCV-

" 2094-C HCCfOR GONZALEZ LOT 6 BLOCK 4 RANCHO AMISTAD 08/14/13 2,593.77 521,875 $4,380 7099-0004-0060 VACANT LOT CR44 @FM666 20\IDCV-

42 2094--C HECTOR GONZALEZ LOT 7 BLOCK 4 RANCHO AMISTAD 08!!4/!3 2.118.02 520.000 $4,000 7099-0004-0070 VACANT LOT CR44@FM666 2011DCV-

43 2094-C !·lECTOR GONZALEZ LOT 8 BLOCK 4 RANCHO AMISTAD 08!14/13 2,118.02 $20,000 $4,000 7099-0004-0080 VACANT LOT CR 44@ FM 666 201!DCY·

44 2094-C HECTOR GONZALEZ LOT 9 BLOCK 4 RANCHO AMJST AD 08fl4/13 2,567.30 $20,000 S4,000 7099-0004-0090 VACAl\'T LOT CR 44@ FM 666 201 !DCV-

45 209<1-C HECTOR, GONZALEZ LOT I 0 BLOCK 4 RANCHO AMISTAD 08/14113 2,118,02 $20,000 S4,000 7099-0004-0 I 00 VACANT LOT CR44@FM666 201JDCV-

46 2094-C HECTOR GONZALEZ LOT 1 I BLOCK 4 RANCHO M1JST AD OS/14/13 2,1I7.68 $19,983 $4,000 7099-0004-0 II 0 VACAJ'.<'TLOT CR44@ FM 666 2011DCV-

47 2094--C !·!ECTOR GONZALEZ LOT I BLOCK 5 RANCHO AMISTAD 08114113 2,559 . .35 $19,955 S4,000 7099-0005-QOIO VACANT LOT CR44@ FM 666 2011DCV·

·18 2094-C HECTOR GONZALEZ LOT 5 BLOCK 5 RANCHO AMISTAD 08/14/13 2,118,02 $20,000 $4,000 7099·0005~0050 VACANT LOT CR44 @FM 666 201 IDCY·

49 2094-C HECTOR GONZAL2Z LOT 6BLOCK5 RANCHO AMJSTAD 08/14/13 2,138.93 $20,099 $4,020 7099-0005-0060 VACANT LOT CR44@ FM666 201 IDCV·

50 2094-C HECTOR GONZALEZ LOT 7 BLOCK .S RANCHO MJJST AD 08/14/13 2.118.02 $20,000 $4,000 7099-0005-0070 VACANT LOT CR44 @FM666

201 IDCV·

" 2094-C J-IECTOR GONZALEZ LOT 8 BLOCK 5 RANCHO AMISTAD 08114/13 2,084,83 $20,000 $4,000 7099-0005·0080 VACANT LOT CR44@FM666

2011DCV· 52 2094-C HECTOR GONZALEZ LOT 9 BLOCKS RANCHO AMISTAD 08114/13 2.118.02 S20,000 $4,000 7099-0005·0090 VACANT LOT CR44@ FM 666

2011DCV·

53 2094-C HECTOR GONZALEZ LbT I BLOCK 6 RANCHO AMISTAD 08/14/13 3.562.10 $21,477 S4,300 7099-0006.-0010 VACANT LOT CR44@ FM 666 20l!DCV-

54 2094.-C HECTOR GONZALEZ LOT 2 BLOCK 6 RANCHO A MIST AD 08/14/13 3,036.63 S20,000 $4,000 7099-0006-0020 VACANT LOT CR44@FM666 2011DCV-

" 2094-C HECTOR GONZALEZ LOT4 BLOCK6 RANCHO AMISTAD 08/14/13 2,189.69 S20,000 $4,000 7099-0006-0040 VACANT LOT CR44 @FM 666 2011DCV-

56 2094-C !·lECTOR GONZALEZ LOT S BLOCK 6 RANCHO AMISTAD 08/14113 2.297.22 S20,000 $4,000 7099-0006-0050 VACANT LOT CR 44 @ F!vl 666 20l10CV-

51 2094-C HECTOR GONZALEZ LOT 6 BLOCK 1J RANCHO AMISTAD 08/14113 2,297.22 S20,000 S4,000 7099-0006·0060 VACANT LOT CR44@FM666 2011DCY·

ss 2094-C HECTOR GONZALEZ LOT S BLOCK 6 RANCHO AMIS! AD 08114/13 2.297.22 S20,000 54.000 7099-0006-00SO VACANT LOT CR44@ F'M 666

2011DCV·

59 2094-C HECTOR GONZALEZ LOT 9 BLOCK 6 RANCHO AM!ST AD 08/14/13 3,263.05 $22,500 $4,500 7099-0006-0090 VACANT LOT CR44 @FM666

Linebarger Goggan Blair Sampson, LLP Page 2 of4


ITEM SUIT DEFENDANT NAME LEGAL DESCRIPTION

DEED TOTAL BASE PROPERTY OPENING ACCOUNT NUMBER TYPE OF 'PROPERTY LOCATION

NUMBER NUMBER FIL.EO TA.'X DUE VALUE BJD

2011DCV-GO 20<>4-C !·lECTOR GONZALEZ LOT 10 BLOCKG RANCHO AMISTAD OS/14n3 2.9•!0.$5 522.500 $4,500 7099-0006-0 l 00 VACANT LOT CR44@ FM 666

201lDCV•

6l 2094-C HECTOR GONZALEZ LOT ll BLOCK 6 RANCHO AM!ST AD 08/14113 3,048.05 522,500 S4,500 7099-0006-0110 VACANT LOT CR44@ FM 666 2011DCV-

62 2094-C HECTOR GONZALEZ LOT 12 BLOCK 6 RANCHO AMISTAD 03114113 3,048.05 $22.500 $4,500 7099..0006-0120 VACANT LOT CR44@ FM 666

2011DCV-

63 2094-C HECTOR GONZALEZ LOT 13 BLOCK6 RANCHO AiVUSTAD 08114/13 3,048.05 $22,500 $4.500 7099-0006-0130 VACANT LOT CR44@FM666 2011DCY-

64 2094-C Ht::CTOR GONZALEZ LOT 14 BLOCK 6 RANCHO AMISTAD 08/14113 3,764.18 5:22,500 S4.SOO 7099-0006-0140 VACANT LOT CR44 @FM 666 20IIDCV- '

6S 2094..C HSC"roR GONZALEZ LOT IS BLOCK 6 RANCHO AM!S'rAO 08/14113 3,048.05 S22,SOO S4,500 7099-0006-0 ISO VACANT LOT CR44@FM666 201 JDCV-

66 2094-C HECTOR GONZALEZ LOT 16 BLOCK 6'RANCHO A.t\1!STAD 08114/13 3,048.05 522,500 S4,SOO 7099-0006·0 160 VACANT LOT CR 44 @ FM 6<i6

20I!DCY-67 2094-C HECTOR GONZALEZ LOT 17 BLOCK 6 RANCHO AMISTAD 08/14/13 3,048.05 522,500 S4,SOO 7099-0006-0 170 VACANT LOT CR44@ FM 666

201 JDCY-68 2094-C HECTOR GONZALEZ LOT I BLOCK 7 RANCHO AMISTAD 08/14/13 2.155.86 $20,000 $4,000 7099-0007-0010 VACANT LOT CR44@ FM 666

2011DCV-

69 2094-C HECTOR GONZALEZ LOT2 BLOCK ?RANCHO AMISTAD 08114/13 2,118.02 S20,000 $4,000 7099-0007-0020 VACANT LOT CR44@FM6G6 ' 2011DCV-

70 2094-C HECTOR GONZALEZ LOT 3 BLOCK 7 RANCHO AMISTAD OSII4/!3 2.636,88 $20.000 S4,000 7099-0007-0030 VACANT LOT CR44@ FM 666

2DliDCV-71 2094-C HECTOR GONZALEZ LOT ·1 BLOCK 7 RANCHO AMISTAD 08(!4113 2,651,56 $20,000 $4,000 7099-0007-0040 VACANT LOT CR44@ FM 666

2011DC~V-

72 2094-C HECTOR GONZALEZ LOT 5 BLOCK 7 RANCHO AMISTAD OS/14/13 2.268.30 S20.995 $4,200 7099-0007~0050 VACANT LOT CR44@ FM 666

2011DCV-73 2094-C HECTOR GONZALEZ LOT 6 BLOCK 7 RANCHO A MIST AD OS/14113 2,227.43 $20,308 S4,170 7099-0007-0060 VACANT LOT CR44 @FM 666

2011DCV-74 2094-C I-lECTOR GONZALEZ LOT 7 BLOCK 7 RANCHO AMISTAD 08114/13 2.118.02 S20,000 $4,000 7099-0007-0070 VACANT LOT CR44@ FM 666

2011DCV· 75 2094-C HECTOR GONZAt.EZ LOTS BLOCK 7 RANCI-10 AMISTAD 08114113 2,118,02 S20,000 $4,000 7099-0007-0080 VACANT LOT CR44 @FM 666

20!0DCV- LOT 18 BLOCK 83 WEST END ADDITION TO 909 W SECOND PLACE

76 5306·8 DONE DEALS INC. BISHOP 05116113 3,118.42 $2.438 S490 9377-0083~0 ISO VACANT LOT BISHOP 2010DCY· LOTS 20 AND 21 BLOCK 83 WEST END 917 WSECOND PLACE

77 S467-J.1 MARGARITA CAY AZOS ADDITION TO BISHOP 01/10112 2,118.49 $6,379 $1.280 9377-0083-0200 BISHOP

LOT 6 BLOCK 41 ORIGINAL TOWNSITE OF 78 09-5384-C YSABEL DOM!NGUt:::Z BISHOP 02110112 6,269.41 $19,710 53,950 0696-0041-0060 HOUSE AND LOT 401 ETHJRO ST BISHOP

20l2DCV~ 0.10 ACRE OUT OF THE NORTH PART OF

79 4321·0 PEEKFAMILYTRUST LOTS 1 & 2 BLOCK 23 BISHOP TOWNSITE 10/ll/13 5.645,19 $24,606 $4,930 06%-0023-0011 BUILDING AND LOT II 0 S. ASH ST ·BISHOP THE NORTH l/2 OF LOTS 15 & 16 BLOCK 74

80 09-4874-F MARTIN 0. TAPIA WEST END ADDITION TO BISHOP 11/22113 2,114.02 S2,081 S420 9377-0074-0150 VACANT LOT 307 N AVENUE H BISHOP

LOT 6 BLOCK 18 BISHOP ORIGINAL

" 1081853-H AMARO ALVAREZ TOWNSITE 04/07(]4 1,933,58 56,663 $1,340 0696-00 I 8-0060 VACANT LOT W FIRST ST BISHOP

LOT 7 BLOCK I 3 BISHOP ORIGINAL 82 1081853-H AMARO ALVAREZ TOWNSITE 04/07/14 1,865.68 56,663 $1,340 0696-0018-0070 VACANT LOT W FIRST ST BISHOP

LOT 8 BLOCK l 8 131SHOP ORIGINAL

83 108185381·1 AMARO ALVAREZ TOWNSITE 04(07/14 1,188.79 $6,663 51,340 0696-001 8-0080 VACANT LOT W FIRST ST BISHOP 2012DCV8 LOTS 4 AND 5 ALAMO SUBDIVISION IN

84 3669-H WILLIAM P CARTER BISHOP 11/06/14 I !,270,02 $23,890 $4,7SO 0113-0000-0040 MOBILE HOME AND LOT 607 ALAMO AVE BISHOP

2013DCV- LOT 13 BLOCK 19 BISHOP ORIGINAL 100 BK W FIRST ST

" 4695-E JULIO A GOMEZ JR TOWNSITE 12/31115 1,808.46 $10,148 $2,030 0696-001980130 VACANT LOT BISHOP

20ilDCV- LOT 10 BLOCK 30 BISHOP ORIGINAL 0696-0030-0100

86 J3628H MARY VASQUEZ TOWNSITE 02!05115 1.768.05 $10,726- 52.150 0696-0030-0101 VACAI'IT LOT 210 W FIRST STBISHOP

LinebargsrGoggan Blair Sampson, Ll.:.P. Page 3 of4


ITEM SUIT DEFENDANT NAME LEGAL DESCRIPTION

DEED TOTAL BASE PROPERTY OPENING ACCOUNT NUMBER TYPE OF PROPERTY LOCATION

NUMBER NUMBER FILED TAX DUE VALUE BID

2011DCV~ LOT II BLOCK 14 BISHOP ORIGINAL

" 1362-H MARY VASQUgz TOWNSITC 02/0S/15 724.6! S4,37S 5880 0696-0014-0110 VACANT LOT lOSE MAIN ST BISHOP

20J30CY· LOT 25 BLOCK 63 WEST END ADDITION TO

88 4632-A OLGA GONZALEZ BISHOP o:;to91!S 885.94 S2,92S $590 9377-0063-0250 VACANT LOT 608 WTHIRD ST BISHOP

20I2DCV~ LOT 16 BLOCK 57 WEST END ADDITION TO 89 1824-A ALFREDO S MORENO BISHOP 06/15115 2.262.49 SJ0,300 $2,060 9377-005Ml60 HOUSE AND LOT 502 W FOURTH ST BISHOP

2012DCV- LOT 15 BLOCK 28 BISHOP ORIGINAL 90 2265-H TORIBIO RSANDOVALJR TOWNSITE 06!!5115 4.900.6S $15.450 S3,090 0696-002&.0150 GARAGE AND LOT S04 W FOURTH ST BISHOP

2012DCV~ LOT 14 BLOCK 2S BISHOP ORIGINAL 91 2265-H TORIBIO RSANDOVALJR TOWNSITE 06/15/15 3,729.80 $13,092 $2,620 0696~0028·0 I 40 HOUSE AND LOT 506 W FOURTH ST BISHOP

2o1:mcv. THE NORTH 1/2 OF THE SOUTH 75 FEET OF FJR8 DJlu\1AGED HOUSE

92 1-175-A ANNETTE SANCHEZ LOTS 6 & 7 BLOCK 20 BISHOP TOWNSITE. 08/06/IS 7,121.38 S5,606 $1,130 0696-0020·0060 AND LOT 307 N AVENUE B BISHOP

2011DCV· THE SOUTH 1/2 OF LOT 42 CASA COURTS 503 N HARRELL ST

" 5272-E CLARA WALKER ADDITION 112 CITY OF BISHOP 09/14/lS 971.86 S7,990 $\,600 1416-0000-0420 HOUSE AND LOT BISHOP

2014DCV- LOTS l AND 2 BLOCK 10 WILLIAMS 94 1281·A ELOY GUTIERREZ ADDITION TO BISHOP 10!12115 2,603.55 $7,128 S1.430 9672·0010-0011 VACANT LOT W TC-'Xi\S ST BISHOP

TOTALS 5247,171.36 51,625.963 S325.340

Numh~r of il<"m~ fnr voUr iuri_qdktion 89

Unebarger Goggan B!afr Sampson, LLP Page 4 of4

ATTACHMENT 13

Resolution 16-07


Resolution 16-07

RESOLUTION AUTHORIZING AN AUCTION OF RESALE PROPERTIES LOCATED WITHIN THE SOUTH TEXAS WATER AUTHORITY'S DISTRICT.

WHEREAS, the law firm of LINEBARGER GOGGAN BLAIR & SAMPSON, LLP has been contracted by Nueces County to collect delinquent taxes for the Authority and the County, as necessmy, and

WHEREAS, as part of their tax collection effoti, the law firm posts properties for tax sale each year, and

WHEREAS, these propetiies are "Struck Off' to the taxing entities when no one offers the amount of the opening bid at sale, and

WHEREAS, written bids have been solicited for the attached "Struck Off' propetiies, and

WHEREAS, the opening bid for the sale of the "Struck Off' properties will be 20% of the most recent tax appraisal value for the properties being offered at resale auction.

NOW, THEREFORE, BE IT RESOLVED that the Board ofDirectors of the South Texas Water Authority authorizes the auction of the attached listed resale properties located within the South Texas Water Authority's district.

Duly adopted this 261h day of April, 2016.

KATHLEEN LOWMAN, PRESIDENT

ATTEST:

RUDY GALVAN, SECRETARY/TREASURER

ATTACHMENT 14

Close Out ofHRA Checking Account

Memorandum

To: From:


Date: Re:

Aprill9, 2016 Authorization to Close Bank Account for Health Reimbursement Account used with Previous United Healthcare (UHC) HRA Coverage

Background:

As the Board is aware, in Novemberof2015, South Texas Water Authority made several changes in terms of medical insurance coverage. After ten (I 0) years with United Healthcare (UHC), a policy with Blue Cross-Blue Shield was selected. Although the coverage with UHC had the usual co-pays and deductibles, it was different since it also included a Health Reimbursement Account (HRA). There were two (2) components to this HRA coverage. One was the actual bank account opened to cover the expenses that UHC processed on behalf of each covered employee or dependent. The other component was the individual HRA for each covered person/family. At the beginning of each renewal year, Ms. Jo Ella Wagner, would deposit the total required amount in the bank account to fund all covered persons' HRA.

Analysis:

Typically, after six ( 6) mouths, any outstanding insurance claims have been processed. Coverage under the UHC HRA account ended on November I, 2015. The end of April will mark the 6-mouth period. The subject of this bank account needing to be closed was discussed during the most recent staff meeting on April 18'h. Employees were asked to check their UHC claims and repott whether any unpaid claims need to be addressed. To management's knowledge, there is one (I) outstanding claim that requires resolving. Management believes it is a prudent measure to close the bank account which is no longer being used once the remaining claim has been processed.


Authorize staff to close the bank account used in conjunction with the UHC HRA medical coverage which was terminated on November I, 2015. Staff is asking for this account to be closed once the remaining claim has been processed.

Board Action:

Determine whether to authorize staff to close the bank account used in conjunction with the UHC HRA medical coverage once the remaining claim has been processed.

Summarization:

Staff believes closing au account that is no longer utilized is the responsible action, patticularly in terms of preventing tampering which often occurs in accounts that seldom have any activity.

ATTACHMENT 15

HDR Proposal for Chloramine Conversion for Driscoll Pump Station

To: From: Date: Re:

Memorandum

South Texas Water Authority Board of Directors Carola G. Serrato, Executive Director April18, 2016 HDR Engineering, Inc. Engineering Services Agreement for Conversion of Driscoll Booster Station from Free Chlorine to Chloramination Station

Background:

Per the Board's authorization during the March 2016 Board Meeting, enclosed is a proposal fi·om HDR Engineering, Inc. (HDR) for engineering services associated with converting the Driscoll Booster Station from a free chlorine booster to a chloraininatiou system. The current booster station injects small quantities of chlorine which combines with free ammonia in the 42" waterline. The original booster station was constructed in 20 I I. The proposed chloramination system should operate similarly to the chloramination systems at each of the pump stations by boosting both chlorine and allllllonia to levels that will likely be 4.0 mg/1 or slightly higher. Some of the other features being proposed would be to utilize a one-ton chlorine cylinder, additional monitoring off the 42" line upstream and downstream of the station, and a flow meter at the site.

Analysis:

As mentioned in the memo pettaining to the TCEQ/SOAH matter, the conversion of this booster station is being proposed as a direct result of the Enforcement Action. Some of the proposed monitoring additions are also in response to the TCEQ case. The addition of a one-ton cylinder is for ease of operations in terms of limiting the number of times that the 150 lb cylinders will need to be changed out. You may recall, the free chlorine burn petformed last summer was done with a temporary one-ton cylinder.

With regards to the proposal, the total amount for design, bid, and construction phases is $58,200. The cost of the design phase is $33,000. The cost of the bid phase is $7,200. And, the cost of the construction phase is $18,000. The estimated time for the three (3) phases is eleven ( 11) months total.

You will note that there is an accompanying email from Mr. Aaron Archer, HDR, in response to a conversation between Mr. Archer and me on: ( 1) the difference in engineering costs for the original free chlorine station and (2) whether the existing design for the free chlorine station together with the proposed ammonia design would save STW A any funds should a second chloramination booster station be necessary.


Approve the Engineering Service Agreement in the amount of $58,200 for HDR Engineering, Inc. services associated with convetting the current free chlorine booster station to a chloramination station including the addition of a one-ton chlorine unit, a flow meter, and the necessary monitoring points to comply with any TCEQ requirements including those associated with an Agreed Order.

Board Action:

Determine whether to approve the enclosed HDR Engineering Service Agreement in the amount of $58,200.

Summarization:

This project is a crucial step in addressing the TCEQ Enforcement Action.

Carola Serrato

From: Sent: To:

Archer, Aaron D. <[email protected]> Thursday, Aprill4, 2016 5:34 PM 'Carola Serrato' ([email protected])

Subject: RE: Driscoll Improvements Proposal

Carol a,

Below is some follow-up from our phone conversation a minute ago.

Should another chloramination (LAS+ chlorine) booster station be required on the 42-inch transmission main, I would expect the design and construction costs for that facility to be less than the combined costs of the individual (chlorine and LAS) projects completed at Driscoll. Costs are likely to be less based on the following factors:

There will only be one construction contractor which reduces mobilization and demobilization costs. The project will incur bidding costs one time (not twice). Construction contract administration costs for HDR will be less since there will be fewer total months of construction and fewer submittal reviews. Design costs will be reduced because many of the design elements can be reused.

It is difficult to estimate the anticipated design and construction costs without knowing the site that would need to be developed or the bidding atmosphere at the time of award but a reasonable guess would be somewhere around 75 to 90% of the combined (engineering and construction) costs of two separate projects (as is currently being done at Driscoll). Note that inflation and cost escalations would come into play if a second chloramination station is contemplated many years in the future.

On a related matter, I want to explain why the fee estimate for this project exceeds that of the 2010 Driscoll project for the following reasons: · ·

Inflation costs alone Would have increased the total engineering costs of the 2010 project to approximately $30,000 regardless of any other factors. The scope of this project includes additional improvements (such as the one-ton chlorine cylinder pad and shelter) The fees estimated for the 2010 project were based on an anticipated construction cost and construction effort of around $50,000 which, as you may recall, was about half of the low bid amount. Design and construction efforts were significantly more than Roger anticipated and HDR ended up losing money on the job.

Based on a planning level review, I anticipate construction costs for the LAS project will be similar the current Driscoll job ($1 00-130k). It's therefore not surprising that engineering costs for the projects are similar.

I hope this explanation proves helpful. I appreciate your confidence in m.e and HDR over the years and want you to know that I put a great amount of effort and detail into each fee proposal and stay closely connected to any work that I have enlisted the help . of others to complete.

Thanks, Aaron

Aaron Archer, P.E. D 512.912.5183 M 512.587.0882

---········-------..

From: Archer, Aaron D. Sent: Thursday, April 14, 2016 4:44 PM To: 'Carola Serrato' ([email protected]) Subject: Driscoll Improvements Proposal

Carol a,

-------- - --- . -------- --·-···----

I have attached the proposal letter and agreement for the Driscoll improvements project. Please give me a call if you have any questions or comments. I will not be in the office tomorrow but can still be reached on my mobile.

1

!hanks, Aaron

Aaron Archer, P.E. Associate

HDR 4401 West Gate Blvd, Suite 400 Austin, TX 787 45 · D 512.912.5183 M 512.587.0882 [email protected]

2

hdrinc.com

April 14, 2016

Ms. Carola G. Serrato, Executive Director South Texas Water Authority 2302 East Sage Road Kingsville, TX 78364

RE: Engineering Services Proposal for Driscoll Pump Station LAS System

Dear Ms. Serrato,

HDR Engineering, Inc. is pleased to submit this proposal for professional engineering services in connection with the referenced project. The project involves the addition of ·a liquid ammonium sulfate (LAS) delivery system at the Driscoll Pump Station to boost downstream chloramine concentrations. Specific services to be provided as part of this project are included in the Agreement and summarized below in abbreviated form:

• Development a plan to add an LAS chemical delivery system to inject LAS into the 42-inch diameter transmission main.

• Installation a new fiberglass building to house the LAS system. • Design a new manhole and tap to inject LAS and install a flowmeter for system

control and operation. • Installation of a downstream sampling tap to monitor and optimize process controls. • Develop a plan to house and shelter a one-ton gas chlorine system. • Coordination with STWA's SCADA integrator to integrate the LAS system and

flowmeter into the existing SCADA system. SCADA integration will be performed by an outside third party and is not included in this scope of work.

• Preparation of an opinion of probable construction cost. • Preparation of Contract Documents for bidding. • Assistance with advertising, obtaining, and evaluating bids for the Work. • Acting as the Owner's representative during the construction of the project.

HDR will attend the following meetings during the course of the project:

1: Preconstruction meeting. 2. Substantial completion construction meeting.

Please note as outlined in the Agreement that STWA will be responsible for contracting directly with a SCADA integrator for control of the LAS and chlorine chemical delivery systems.

4401 West Gate Blvd., Suite 400, Austin, TX 78745 T 512.912.5100 F 512.912.5158 Texas Registered Engineering Firm F·754

Carola Serrato April14, 2016 Page2

We propose to provide the services listed above for a lump sum fee not to exceed $58,200. The fees for design, bidding, and construction phase services will be lump sum amounts of $33,000, $7,200, and $18,000, respectively. The project is anticipated to require approximately 11 months to complete after authorization to proceed. Design, bidding, and construction phase services will require approximately five months, one month, and five months, respectively. Additional time may be required for TCEQ regulatory review and coordination.

Please review this proposal at your convenience and contact us if you have any questions or comments. If this proposal along with the attached Terms and Conditions fo'r Professional Service is acceptable, please acknowledge your acceptance below by. signing and returning one copy for our files. Receipt of the signed original will serve as our authorization to proceed with this work. The second original is for your files.

Sincerely, HDR Engineeri g, Inc.

Project Manager

~/~1:~·:e~::.~£ ~E ;J Senior Vice President 1 Area Manager

SHORT FORM AGREEMENT BETWEEN OWNER AND HDR ENGINEERING, INC. FOR PROFESSIONAL SERVICES

THIS AGREEMENT is made as of this day ofc:--::::-:-::::=:-==-::-:::--2016, between South Texas Water Authority ("OWNER") and HDR ENGINEERING, INC., ("ENGINEER") a Nebraska corporation, with principal offices at 8404 Indian Hills Drive, Omaha, Nebraska, 68114 for services in connection with the project known as Driscoll LAS Delivery System ("Project");

WHEREAS, OWNER desires to engage ENGINEER to provide professional engineering, consulting and related services ("Services") in connection with the Project; and

\VHEREAS, ENGINEER desires to render these Services as described in SECTION l, Scope of Services.

NOW, THEREFORE, OWNER and ENGINEER in consideration of the mutual covenants contained herein, agree as follows:

SECTION I. SCOPE OF SERVICES

ENGINEER will provide Services for the Project, which consist of the Scope of Services as qutlined on the attached Exhibit A.

SECTION II. TERMS AND CONDITIONS OF ENGINEERING SERVICES

The "HDR Engineering, Inc. Terms and Conditions for Professional Services," which are attached hereto in Exhibit B, are incorporated into this Agreement by this reference as if fully set forth herein.

SECTION III. RESPONSIBILITIES OF OWNER

The OWNER shall provide the information set forth in paragraph 6 of the attached "HDR Engineering, Inc. Terms and Conditions for Professional Services."

SECTION IV. COMPENSATION

Compensation for ENGINEER'S services under this Agreement shall be on the basis of lump sum. The amount of the lump sum is Fifty-eight thousand and Two Hundred Dollars ($58,200). Lump Sum shall mean a fixed amount which shall be the total compensation agreed upon in advance for Scope of Services.

SECTIONV. PERIOD OF SERVICE

Agreement for Professional Services 09-2015

Upon receipt of written authorization to proceed, ENGINEER shall perform the services within the time period described in Exhibit A.

Unless otherwise stated in this Agreement, the rates of compensation for ENGINEER'S services have been agreed to in anticipation of the orderly and continuous progress of the project through completion. If any specified dates for the completion of ENGINEER'S services are exceeded through no fault of the ENGINEER, the time for performance of those services shall be automatically extended for a period which may be reasonably required for their completion and all rates, measures and amounts of ENGINEER'S compensation shall be equitably adjusted.

SECTION VI. SPECIAL PROVISIONS

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above.

Agreement for Professional Services

South Texas Water Authority "OWNER"

BY:

NAME:

TITLE:

ADDRESS:

HDR ENGINEERING, INC. "ENGINEER"

BY:

NAME:

TITLE: Senior Vice President

ADDRESS: 4401 West Gate Blvd, Ste 400 Austin, TX 78745

2 09-2015

EXIITBJTA

SCOPE OF SERVICES

EXHIBIT A

SCOPE OF SERVICES, FEES, AND SCHEDULE

GENERAL

The primary purpose of this project is to add a liquid ammonium sulfate (LAS) delivery system at the STW A Driscoll pump station to boost total chlorine on the 42-inch diameter transmission main up to a concentration of appi·oximately 4.0 mg/L .. Ammonia from the LAS system will combine with chlorine delivered by an existing gas chlorine delivery system to increase total chlorine concentrations. The · project also includes upgrades to house and shelter a one-ton gas chlorine cylinder. Engineer shalf render the following project professional services.

Part 1 -BASIC SERVICES

Task 1.1 Design Phase

Task Purpose: The purpose of this Task is to prepare final Drawings and Specification for the Project that indicates the scope, extent and character of Work to be performed and fumished by a Contractor.

A. Engineer shall: 1. Develop a plan for adding a LAS chemical delivery system to the Driscoll Pump Station to

inject LAS into the 42-inch diameter transmission main. A new fiberglass building will be provided adjacent to the existing facilities to house the LAS system. Piping will be included as required to convey LAS to the transmission main.

2. Design a new manhole and tap to the 42-inch diameter transmission main to inject LAS. The manhole will be located upstream of the existing chlorine injection manhole and downstream of the existing chlorine sample and flow switch manhole. Engineer will also specify a flowmeter for installation in the new manhole.

3. Design a motive water mixing system to inject water into the 42-inch transmission main to enhance mixing of LAS and chlorine.

4. Develop a plan to conduct manual water quality sampling upstream and downstream of the chemical delivery facilities at Driscoll. It is assumed that upstream sampling will occur at the existing chlorine sample and flow switch manhole. It is assumed that downstream sampling will include a new sample tap at the valve vault south of the Driscoll Pump Station on Avenue G. No additional on-line analyzers will be provided at either location at this time.

5. Coordinate with Hanson Pipe to determine if a tap can be provided in the existing chlorine injection manhole for potential future use as a water injection point to enhance mixing within the 42-inch pipeline if required.

6. Engineer will coordinate with Owner's SCAD A integrator to make provisions to integrate the proposed flowmeter and LAS delivery system into the existing, local SCAD A and STW A SCADA systems with the existing flow switch, on-line chlorine analyzer, and chlorine delivery system. The LAS and chlorine doses will be flow proportioned based on the upstream water quality determined by the on-line chlorine analyzer and manual sampling of free ammonia and based on the desired total chlorine concentration after boosting. Engineer will not be responsible for SCADA progranmling and development of a control strategy.

7. Develop a plan to house and shelter a one-ton gas chlorine cylinder. 8. Prepare a preliminary opinion of probable construction cost.

9. Prepare final Drawings and Specifications indicating the scope, extent, and character of the Work to be performed and furnished by Contractor. Specifications shall conform to the 50-division format of the Construction Specifications Institute and will be based upon Engineer's master specifications. Engineer will rely on as-built drawings from previous construction contracts and information provided by Owner for development of the contract drawings.

10. Provide technical criteria, written descriptions, anddesign data for Owner's use in filing applications for permits from or approvals of governmental authorities having jurisdiction to review or approve the final design of the Project; assist Owner in consultations with such authorities; and revise the Drawings and Specifications in response to directives from such authmities.

11. Prepare for review and approval by Owner, its legal counsel and other advisors, contract agreement forms, general and supplementary conditions of the construction contract, proposal form, invitation to bid and instructions to bidders. '

12. Advise Owner of any adjustments to the opinion of probable construction cost known to Engineer. It is recognized, however, that neither Engineer nor the Owner has control over the cost of labor, materials or equipment; over the Contractor's methods of determining bid prices; or over competitive bidding, market or negotiating conditions. ·Accordingly, Engineer cannot and does not warrant or represent that bids or negotiated prices will not vary from the Owner's Project budget or from any opinion of construction cost or evaluation prepared or agreed to by Engineer.

13. Prepare and furnish Bidding Documents for review by Owner, its legal counsel, and other advisors, and assist Owner in the preparation of other related documents. Attend one meeting with Owner to review Bidding Documents.

14. Revise the Bidding Documents in accordance with comments and instructions from the Owner, as appropriate, and submit 5 final copies of the Bidding Documents, a revised opinion of probable Construction Cost, and any other deliverables to Owner within 21 calendar days after receipt of Owner's comments and instructions.

15. Engineer shall not be required to sign any documents, no matter by whom requested, that would result in the Engineer having to certify, guarantee, or wanant the existence of conditions whose existence the Engineer cannot asce1tain.

16. Owner agrees not to make resolution of any dispute with the Engineer or payment of any amount due to the Engineer in any way contingent upon the Engineer signing any such documents.

B. Engineer's services under the Design Phase will be considered complete on the date when the submittals required by paragraph A.l3 above have been delivered to Owner.

C. The number of prime contracts for Work designed or specified by Engineer upon which the Engineer's compensation has been established under this Agreement is one. If more prime contracts are awarded, Engineer shall be entitled to an equitable increase in its compensation under this Agreement.

D. The Owner's bidding laws/requirements may require the pre-qualification of bidders for the prime contract or subcontracts for the Project. The level of effort required of the Engineer for this Work can vary greatly. The Engineer shall be entitled to an equitable increase in its compensation under this Agreement for assisting the Owner in prequalifying prime contractors and/or subcontractors for this Project.

Task 1.2 Bidding Phase

Task Purpose: Assist 0\vner in advertising, obtaining, and evaluating bids for the Work.

A. Engineer shall: 1. Assist Owner in advertising for and obtaining bids or proposals for the Work and, where

applicable, maintain a record of prospective bidders to whom Bidding Documents have been issued, attend pre-Bid conferences, if any, and receive and process contractor deposits or charges for the Bidding Documents. Owner shall pay for advertisement of the Work.

2. Issue Addenda as appropriate to clarify, correct, or change the Bidding Documents. 3. Consult with Owner to determine the acceptability of substitute materials and equipment

proposed by potential contractor(s) when substitution prior to the award of contracts is allowed by the Contract Documents.

4. Provide information or assistance needed by Owner in the course of any negotiations with prospective contractors.

5. Consult with Owner as to the acceptability of subcontractors, suppliers, and other individuals imd entities proposed by prospective contractors for those portions of the Work as to which such acceptability is required by the Bidding Documents. Prequalifying prime contractors and subcoi1tractors is not included in this effort.

6. Prepare Bid tabulation sheets, and assist Owner in evaluating Bids or proposals and in assembling and awarding contracts for the Work.

B. The Bidding Phase will be considered complete upon commencement of the Construction Phase or upon cessation of negotiations with prospective contractors.

Task 1.3 Construction Phase

Task Purpose: Act as Owner's representative as provided in the General Conditions for the construction of the Project.

A. Upon successful completion of the Bidding Phase, Engineer shall: 1. General Administration of Construction Contract. Consult with Owner and act as Owner's

representative as provided in the General Conditions. The extent and limitations of the duties, responsibilities, and authority of Engineer as assigned in the General Conditions shall not be modified, except as Engineer may otherwise agree in writing. All of Owner's instructions to Contractor will be issued through Engineer, which shall have authority to act on behalf of bwner in dealings with Contractor to the extent provided in this Agreement and the General Conditions except as otherwise provided in writing.

2. Selecting Independent Testing Laborat01y Assist Owner in the selection of an independent testing laboratoly to perform required construction matetials testing services.

3. Pre-Constmction Conference. Participate in a Pre-Construction Conference prior to commencement of Work at the Site.

4. Schedules. Receive, review, and determine the acceptability of any and all schedules that Contractor is required to submit to Engineer, including the Progress Schedule, Schedule of Submittals, and Schedule of Values.

5. Baselines and Benchmarks. Assist Owner in establishing baselines and benchmarks for locating the Work which in Engineer's judgment are necessary to enable Contractor to proceed.

6. Visits to Site and Observation of Constmction. In connection with observations of Contractor's Work while it is in progress:

a. Make visits to the Site to observe as an experienced and qualified design professional. HDR anticipates two visits to the site during the construction phase. The first visit will coincide with the preconstmction conference. HDR will lead the preconstruction conference. The second site visit will occur at substantial completion to verify that the project was completed in general accordance with the intent of the plans and specifications and, if necessary, prepare a punchlist of additional items that need to be completed prior to project closeout. Engineer will not provide on-site representation during the project. It is assumed that Owner will provide daily on-site representation during the Project.

b. Engineer site visits are not intended to be exhaustive or to extend to every aspect of Contractor's Work in progress or to involve detailed inspections of Contractor's Work in progress beyond the responsibilities specifically assigned to Engineer in this Agreement, Task Order, and the Contract Documents, but rather are to be limited to spot checking, selective sampling, and similar methods of general observation of the Work based on Engineer's exercise of professional judgment as assisted by the Resident Project Representative. Based on information obtained during such visits and observations, Engineer will determine in general if the Work is proceeding in accordance with the Contract Documents, and Engineer shall keep Owner informed of the progress of the Work.

c. The purpose of Engineer's visits will be to enable Engineer to better can)' out' the duties and responsibilities assigned to and undertaken by Engineer during the Construction Phase, and, in addition, by the exercise of Engineer's efforts as an experienced and qualified design professional, to provide for Owner a greater degree of confidence that the completed Work will conform in general to the Contract Documents and that Contractor has implemented and maintained the integrity of the design concept of the completed Project as a functioning whole as indicated in the Contract Documents. Engineer shall not, dming such visits or as a result of such observations of Contractor's Work in progress, supervise, direct, or have control over Contractor's Work, nor shall Engineer have authority over or responsibility for the means, methods, techniques, sequences, or procedures of constmction selected or used by Contractor, for security or safety on the Site, for safety precautions and programs incident to Contractor's Work, nor for any failure of Contractor to comply with Laws and Regulations applicable to Contractor's furnishing and performing the Work. Accordingly, Engineer neither guarantees the performance of any Contractor nor assumes responsibility for any Contractor's failure to furnish and perform the Work in accordance with the Contract Documents.

7. Defective Work. Engineer will have the authority to reject Contractor's Work while it is in progress if, on the basis of Engineer's observations, Engineer believes that such Work will not produce a completed Project that conforms generally to the Contract Documents or that it will threaten the integrity of the design concept of the completed Project as a ft~nctioning \vhole as indicated in the Contract Documents. However, neither Engineer's authority to reject Work nor Engineer's decision to exercise or not exercise such authority shall give 1ise to a duty or responsibility of the Engineer to Contractors, Subcontractors, matedal and equipment suppliers, their agents or employees, or any other person(s) or entities perfonning any of the Work, including but not limited to any duty or responsibility for Contractors' or Subcontractors' safety precautions and programs incident to the Work.

8. Clarifications and Inte1pretations; Field Orders. Issue necessary clarifications and interpretations of the Contract Documents as appropdate to the orderly completion of Contractor's work. Such clarifications and interpretations will be consistent with the intent of

and reasonably inferable from the Contract Documents. Engineer may issue Field Orders authorizing minor variations in the W ark from the requirements of the Contract Documents.

9. Change Orders and \Vork Change Directives. Recommend Change Orders and Work Change Directives to Owner, as appropriate, and prepare Change Orders and Woi·k Change Directives as required.

10. Shop Drawings and Samples. Review and approve or take other appropriate action in respect to Shop Drawings and Samples and other data which Contractor is required to subrnit, but only for conformance with the information given in the Contract Documents and compatibility with the design concept of the completed Project as a functioning whole as indicated by the Contract Documents. Such reviews and approvals or other action will not extend to means, methods, techniques, sequences, or procedures of constmction or to safety precautions and programs incident thereto. Engineer shall meet any Contractor's submittal schedule that Engineer has accepted.

II. Substitutes and "or-equal." Evaluate and determine the acceptability of substitute or "or- equal" . materials and equipment proposed by Contractor.

12. Inspections and Tests. Require such special inspections or tests of Contractor's work as deemed reasonably necessary, and receive and review all certificates of inspections, tests, and approvals required by Laws and Regulations or the Contract D9cuments. Engineer's review of such certificates will be for the purpose of detetmining that the results certified indicate compliance with the Contract Documents and will not constitute an independent evaluation that the content or procedures of such inspections, tests, or approvals comply with the requirements of the Contract Documents. Engineer shall be entitled to rely on the results of such tests.

13. Disagreements between Owner and Contractor. Render formal written decisions on all duly submitted issues relating to the acceptability of Contractor's work or the interpretation of the requirements of !he Contract Documents pertaining to the execution, performance, or progress of Contractor's Work; review each duly submitted Claim by Owner or Contractor, and in writing either deny such Claim in whole or in part, approve such Claim, or decline to resolve such Claim if Engineer in its discretion concludes ffiat to do so would be inappropriate. In rendering such decisions, Engineer shall be fair and not show partiality to Owner or Contractor and shall not be liable in connection with any decision rendered in good faith in such capacity.

14. Applications for Payment. Based on Engineer's observations as an experienced and qualified design professional and on review of Application for Payment and accompanying suppmting documentation:

a. Determine the amounts that Engineer recommends Contractor be paid. Such recommendations of payment will be in writing and will constitute Engineer's representation to Owner, based on such observations and review, that, to the best of Engineer's knowledge, information and belief, Contractor's Work has progressed to the point indicated, the quality of such Work is generally in accordance with the Contract Documents (subject to an evaluation ofthe Work as a functioning whole prior to or upon Substantial Completion, to the results of any subsequent tests called for in the Contnict Documents, and to any other qualifications stated in the recommendation), and the conditions precedent to Contractor's being entitled to such payment appear to have been fulfilled in so far as it is Engineer's responsibility to observe Contractor's Work. In the case of unit price work, Engineer's recommendations of payment will include final determinations of quantities and classifications of Contractor's Work (subject to any subsequent adjustments allowed by the Contract Documents).

b. By recommending any payment, Engineer shall not thereby be deemed to have represented that observations made by Engineer to check the quality or quantity of Contractor's Work as it is petformed and furnished have been exhaustive, extended to every aspect of Contractor's Work in progress, or involved detailed inspections of the Work beyond the responsibilities specifically assigned to Engineer in this Agreement and the Contract Documents. Neither Engineer's review of Contractor's

Work for the purposes of recommending payments nor Engineer's recommendation of any payment including final payment will impose on Engineer responsibility to supervise, direct, or control Contractor's Work in progress or for the means, methods, techniques, sequences, or procedures of constmction or safety precautions or programs incident thereto, or Contractor's compliance with Laws and Regulations applicable to Contractor's furnishing and performing the Work. It will also not impose responsibility on Engineer to make any examination to ascettain how or for what purposes Contractor has used the moneys paid on account of the Contract Price, or to determine that title to any portion of the Work in progress, materials, or equipment has passed to Owner free and clear of any liens, claims, security interests, or encumbrances, or that there may not be other matters at issue between Owner and Contractor that might affect the amount that should be paid.

15. Contractor's Completion Documents. Receive, review, and transmit to Owner maintenance and operating instructions, schedules, guarantees, bonds, cettificates or other evidence of insurance required by the Contract Documents, certificates of inspection, tests and approvals, Shop Drawings, Samples and other data approved, and the annotated record documents which are to be assembled by Contractor in accordance with the Contract Documents to obtain final payment.

16. Substantial Completion. Promptly after notice from Contractor that Contractor considers the entire Work ready for its intended use, in company with Owner and Contractor, conduct an inspection to determine if the Work is substantially complete. If after considering any . objections of Owner, Engineer considers the Work substantially complete, Engineer shall deliver a certificate of Substantial Completion to Owner and Contractor.

17. Final Notice of Acceptability of the Work. Conduct a final inspection to determine if the completed Work of Contractor is acceptable so that Engineer may recommend, in writing, final payment to Contractor. Accompanying the recommendation for final payment, Engineer shall also provide a notice that the Work is acceptable the best of Engineer's knowledge, information, and belief and based on the extent of the services provided by Engineer under this Agreement.

B. Duration of Construction Phase. The Constmction Phase will connnence with the execution of the Construction Contract for the Project or any patt thereof and will terminate upon written reconm1endation by Engineer for final payment to Contractors. It is expected that the Construction Period for this Project will be six (6) months. Subject to the provisions of Part 3, Engineer shall be entitled to an equitable increase in compensation if Construction-Phase services are required after the original date for final completion of the Work as set forth in the constmction Contract.

C. Limitation of Responsibilities. Engineer shall not be responsible for the acts or omissions of any Contractor, or of any subcontractors, suppliers, or other individuals or entities performing or furnishing any of the Work. Engineer shall not be responsible for the failure of any Contractor to perform or furnish the Work in accordance with the Contract Documents.

PART 2- ADDITIONAL SERVICES

Task 2.1 Additional Services Requiring Owner's Written Authorization

A. If authorized in writing by Owner, Engineer shall furnish or obtain from others Additional Services of the types listed below.

a. Preparation of applications and suppotting documents (in addition to those furnished under Basic Services) for private or governmental grants, loans, or advances in connection with the Project; preparation or review of environmental assessments and impact statements;

review and evaluation of the effects on the design requirements for the Project of any such staterhents and documents prepared by others; and assistance in obtaining approvals of authorities having jurisdiction over the anticipated environmental impact of the Project.

b. Furnishing on-site inspector, resident project representative, construction matetials testing, and surveying services.

c. Include an on-line chlorine analyzer at a remote location downstream of the Driscoll Pump Station .

d. Include an on-line free ammonia analyzer at the Driscoll Pump Station. e. Services to make measured drawings of or to investigate existing conditions or facilities, or to

verify the accuracy of drawings or other information furnished by Owner or others. f. Services resulting from significant changes in the scope, extent, or character of the portions of

the Project designed or specified by Engineer or its design requirements including, but not limited to, changes in size, complexity, Owner's schedule, character of construction, or method of financing; and revising previously accepted studies, reports, Drawings, Specifications, or Contract Documents when such revisions are required by changes in Laws and Regulations enacted subsequent to the Effective Date of this Agreement or are due to any other causes beyond Engineer's control.

g. Services required as a result of Owner providing incomplete or incorrect Project information to Engineer.

h. Undertaking investigations and studies including, but not limited to, detailed consideration of operations, maintenance, and overhead expenses; the preparation of feasibility studies, cash flow and economic evaluations, rate schedules, and appraisals; assistance in obtaining financing for the Project; evaluating processes available for licensing, and assisting Owner in obtaining process licensing; detailed quantity surveys of materials, equipment, and labor; and audits or inventories required in connection with construction performed by Owner.

i. Furnishing services of Consultants for other than Basic Services. J. Services attributable to more than one prime construction contract. k. Services attributable to assisting the Owner in prequalifying prime contractors and/or

subcontractors/suppliers for this Project. l. Preparing for, coordinating with, participating in and responding to structured independent

review processes, including, but not limited to, construction management, cost estimating, project peer review, value engineering, and constru,ctability review requested by Owner; and performing or furnishing services required to revise studies, reports, Drawings, Specifications, or other Bidding Documents as a result of such review processes.

m. Preparing additional Bidding Documents or Contract Documents for alternate bids or prices requested by Owner for the Work or a portion thereof.

n. Assistance in connection with Bid protests, rebidding, or renegotiating contracts for construction, ITiaterials, equipment, or services.

o. Providing construction surveys and staking to enable Contractor to perform its work, and any type of property surveys or related engineering services needed for the transfer of interests in real property; and providing other special field surveys.

p. Providing Construction Phase services beyond the otiginal date for final completion of the Work.

q. Providing assistance in responding to the presence of any Constituent of Concern at the Site, in compliance with curTent Laws and Regulations.

r. Preparation of comprehensive operation and maintenance manuals beyond that required to be supplied by the Contractor within the Construction Contract.

s. Preparing to serve or serving as a consultant or witness for Owner in any litigation, arbitration, or other dispute resolution process related to the Project.

t. Providing more extensive services required to enable Engineer to issue notices or certifications requested by Owner.

u. Other services performed or furnished by Engineer not otherwise provided for in this Agreement.

Task 2.2 Additional Services Not Requiring Owner's Written Authorization

A. Engineer shall ·advise Owner that Engineer is commencing to perform or furnish the Additional Services of the types listed below. For such Additional Services, Engineer need not request or obtain specific advance written authorization from Owner. Engineer shall cease performing or furnishing such Additional Services upon receipt of written notice from Owner.

I. Services in connection with W ark Change Directives and Change Orders to reflect changes requested by Owner.

2. Services in making revisions to Drawings and Specifications occasioned by the acceptance of substitute materials or equipment other than "or-equal" items; and services after the award of the Construction Contract in evaluating and determining the acceptability of a substitution which is found to be inappropriate for the Project or an excessive number of substitutions.

3. Services resulting from significant delays, changes, or price increases occmTing as a direct or indirect result of materials, equipment, or energy shortages.

4. Additional or extended services during consti'uction made necessary by (1) emergencies or acts of God endangering the Work, (2) the presence at the Site of any Constituent of Concern, (3) Work damaged by fire or other cause during construction, ( 4) a significant amount of defective, neglected, or delayed work by Contractor, (5) acceleration of the progress schedule involving services beyond nmmal working hours, or (6) default by Contractor.

5. Services (other than Basic Services during the Post-Construction Phase) in connection with any partial utilization of any part of the Work by Owner prior to Substantial Completion.

6. Evaluating an unreasonable claim or an excessive number of claims submitted by Contractor or others in connection with the Work.

7. Services during the Construction Phase rendered after the construction period stated in l.3.B.

PART 3- OWNER'S RESPONSIDILITIES

Task 3.1 Information Owner is to Provide to Engineer

Task Purpose: The purpose of this Task is to identify information Owner shall provide to Engineer at its expense in addition to other responsibilities of Owner as set forth in this Agreement.

A. Provide Engineer with all criteria and full information as to Owner's requirements for the Project, including design objectives and constraints, space, capacity and performance requirements, flexibility, and expandability, and any budgetary limitations; and fumish copies of all design and construction standards which Owner will require to be included in the Drawings and Specifications; and furnish copies of Owner's standard forms, conditions, and related documents for Engineer to include in the Bidding Documents, when applicable.

B. Furnish to Engineer any other available information pertinent to the Project including repmts and · data relative to previous designs, or investigation at or adjacent to the Site.

C. Give prompt written notice to Engineer whenever Owner observes or otherwise becomes aware of the presence at the Site of any Constituent of Concern, or of any other development that affects

the scope or time of performance of Engineer's services, or any defect or nonconformance in Engineer's services, the Work, or in the performance of any Contractor.

D. Authorize Engineer to provide Additional Services as set forth in Part 2 of this Task Order of the Agreement as required.

E. Arrange for safe access to and make all provisions for Engineer to enter upon public and private prope1ty as required for Engineer to pmform services under the Agreement.

F. Examine all alternate solutions, studies, reports, sketches, Drawings, Specifications, proposals, and other documents presented by Engineer (including obtaining advice of an attorney, insurance counselor, and other advisors or consultants as Owner deems appropriate with respect to such examination) and render in writing timely decisions pertaining thereto.

G. Provide, as required for the Project: 1. Accounting, bond and financial advisory, independent cost estimating, and insurance

counseling services. 2. Legal services with regard to .issues pertaining to the Project as Owner requires or deems

appropriate, Contractor raises, or Engineer reasonably requests, including but not limited to the review of Contract Documents supplied by Engineer.

3. Such auditing services as Owner requires to ascertain how or for what purpose Contractor has used the moneys paid.

4. Placement and payment for advertisement for Bids in appropriate publications.

H. Advise Engineer of the identity and scope of services of any independent consultants employed by Owner to perform or furnish services in regard to the Project, including, but not limited to, cost estimating, project peer review, value engineering, and constructability review.

I. If more than one prime contract is to be awarded for the Work designed or specified by Engineer, designate a person or entity to have authority and responsibility for coordinating the activities among the various prime Contractors, and define and set f01th the duties, responsibilities, and limitations of authority of such individual or entity and the relation thereof to the duties, responsibilities, and authority of Engineer as an attachment to this Task Order that is to be mutually agreed upon and made a pmt of this Agreement before such services begin.

J. Attend the construction progress and other job related meetings, and Substantial Completion and final payment inspections.

K. Provide the services of an independent testing laboratory to pe1form all inspections, tests, and approvals of Samples, materials, and equipment required by the Contract Documents, or to evaluate the performance of materials, equipment, and facilities of Owner, prior to their incorporation into the Work with appropriate professional interpretation thereof.

L. Provide Engineer with the findings and reports generated by the entities providing services. to Owner pursuant to this paragraph.

Task 3.2 Compensation for Basic Services

A. Owner shall pay Engineer for Basic Services set forth in this Task Order, except for PostConstruction Phase services, if any, as follows:

1. Lump Sum amount of $58,200 based on the following assumed disttibution of compensation:

a. Design Phase $33,000 b. Bidding Phase $7,200 c. Construction Phase $18,000

2. The Lump Sum includes compensation for Engineer's services and appropriate amounts have been incorporated in the Lump Sum to account for labor, overhead, profit, and Reimbursable Expenses.

3. The portion of the Lump Sum amount billed for Engineer's services will be based upon Engineer's estimate of the proportion of the total services actually completed during the billing period to the Lump Sum.

B. Other Provisions Concerning Payment 1. Whenever Engineer is entitled to compensation for the charges of Consultants that the Owner

wishes to engage to provide the information needed for the Project, those charges shall be the amounts billed by Engineer's Consultants to Engineer times a factor of 1.1.

C. Compensation For Additional Services- Direct Labor Costs Times a Factor Method of Payment 1. Owner shall pay Engineer for Additional Services as follows:

a. General. For services of Engineer's employees engaged directly on the Project, except for services as a consultant or witness under paragraph 2.l.A.l8, an amount equal to Engineer's Direct Labor Costs times a factor of 3.25, plus related Reimbursable Expenses and Engineer's Consultant's charges, if any, times a factor of 1.1.

PART 4- SCHEDULE

The following schedule has been developed for the proposed Scope of Services. Engineer's receipt of an executed copy of this agreement will serve as authotization to proceed.

Task Description Duration of Phase 1.1 1.2 1.3

Design Phase Bidding Phase Construction Phase

5 months 1 month 5 months

EXHIBITB

TERMS AND CONDITIONS

HDR Engineering, Inc. Terms and Conditions for Professional Services

1. STANDARD OF PERFORMANCE The standard of care for all professional engineering, consulting and related services perfOfmed or furnished by ENGINEER and its employees under this Agreement \'lill be the care and skill ordinarily used by members of ENGINEER's profession practicing under the same or similar circumstances at the same time and in the same locality. ENGINEER makes oo warranties, express or implied, under this Agreement or other.vise, in connection with ENGINEER's services.

2. INSURANCE/INDEMNITY ENGINEER agrees to procure and maintain, at its expense, Workers' Compensation insurance as required by statute; Employer's Liability of ~2~0,000; ~ut~f?ob11e Liability insurance of $1,000,000 combined single h~rt for ~1fy InJury and property damage covering all vehicles, including h1red veh1cles, owned and non·ovmed vehicles; Commercial General Liability insurance of $1,000,000 combined single limit for personal injury and property damage; and Professional Liability insurance of $1,000,000 per claim for protection against claims arising out of the performance of seryices under this Agreement caused by negl!gent acts, errors, or OmiSSions for which ENGINEER is legally liable. OWNER shall be made ~n additional ~n~ured on C~mmercial General and Automobile liabi!ily Insurance policies and certrfJCates of insurance vJill be furnished to the OWNER. ENGINEER agrees to indemnify OWNER for claims to the extent caused by ENGINEER's negligent acts, errOfs or omissions. However, neither Party to this Agreement shall be liable to the other Party for any ~p~cial, incidental, indirect, or consequential damages (including but not hmrted to loss of profits or revenue; loss of use or opportunity; loss of good will; cost of substitute facilities, goods, or services; and/or cos~ of capital) arising out of, resulting from, or in any way related to the ~r~ject ~r the Agreement from any cause or causes, including but not l1mrted to any such damages caused by the negligence, errors or omissions, strict liability or breach of conlract.

3. OPINIONS OF PROBABLE COST (COST ESTIMATES) Any opinions of probable project cost Of probable construction cost provided by ENGINEER are made on the basis of information available to ENGINEER and on the basis of ENGINEER's.experience and qualifications, and represents its judgment as an experienced and qualified professional engineer. However, since ENGINEER has no control over the cost of labor, materials, equipment or services furnished by others, or over the COfltractor(s') methods of determining prices, or over competitive bidding or market conditions, ENGINEER does not guarantee that proposals, bids or actual project or construction cost will not vary from opinions of probable cost ENGINEER prepares.

4. CONSTRUCTION PROCEDURES ENGINEER's observation or monitoring portions of the work perfonned under construction contracts shall not rel.ieve the contractor from its responsibility for performing work in accordance with app!icab!e contract documents. ENGINEER shall not control or have charge of, and shall not be responsible for, construction means, methods, techniques, sequences, procedures of construction, health or safety programs or precautions connected with the work and shall not manage, supervise, control or have charge of construction. ENGINEER shall not be responsible for the acts or omissions of the contractor or other parties on the project. ENGINEER shall be entitled to review all construction contract documents and to require that no provisions extend the duties or liabilities of ENGINEER beyond those set forth in this Agreement. OWNER agrees to include ENGINEER as an· indemnified party in OWNER's construction contracts for the work, which shall protect ENGINEER to the same degree as OWNER. Further, OWNER agrees that ENGINEER shall be listed as an additional insured under the construction contractor's liability insurance policies.

5. CONTROLLING LAW This Agreement is to be governed by the law of the stale where ENGINEER's services are perfOfllled.

6. SERVICES AND INFORMATION OWNER will provide all criteria and information pertaining to OWNER's requirements ,tor the project, induding design objectives and constraints, space, capac1ty and performance requirements, flexibility and expendability, and any budgetary limitations. OWNER \viii also provide copies of any

B-1

OWNER-furnished Standard Details, Standard Specifications, Of Standard Bidding Documents which are to be Incorporated into the project.

OWNER will furnish the services of soils/geotechnical engineers Of other consultants that include reports and appropriate professional recommendations when such services are deemed necessary by ENGI~EER. The OWNER agrees to bear full responsibility for the technical accuracy and content of OWNER-furnished documents and services.

In performing professional engineering and related services hereunder, it is understood by OWNER that ENGINEER is not engaged in rendering any ~e of legal, insurance or accounting services, opinions or advice. Further,. ~~IS the OWNER's sole responsibility to obtain the advice of an attorney, msurance counselor or accovntant to protect the OWNER's legal and financial interests. To that end, the OWNER agrees that OWNER or the OWNER's representative will examine all studies, reports, sketches, drawings, specifications, proposals and other documents, opinions or advice prepared or provided by ENGINEER, and will obtain the advice of an attorney, insurance counselor or other consultant as the OWNER deems necessary to protect the OWNER's interests befOI'e OWNER takes action or fOfebears to take action based upon or relying upon the services provided by ENGINEER.

7. SUCCESSORS, ASSIGNS AND BENEFICIARIES OWNER and ENGINEER, respectively, bind themselves, their partners, successors, assigns, and legal representatives to the covenants of this Agreement. Neither OWNER nor ENGINEER will assign, sublet, or transfer any interest in this Agreement or claims arising therefrom without the written consent of the other. No third party beneficiaries are intended under this Agreement. ·

8. RE·USE OF DOCUMENTS All documents, including all reports, dra\vings, specifications, computer software or other items prepared or furnished by ENGINEER pursuant to this Agreement, are instruments of seNice with respect to the _project. EN~INEER retains ownership of all such documents. OWNER may retain copres of the documents for its information and reference in connection with the pr_oject; however. none of the documents are intended or represented to be surtable for reuse by OWNER Of others on extensions of the project or on any other project. Any reuse v~thout written verification or adaptation by ENGINEER for the specific purpose intended will be at OWNER's sole risk and without liability or legal exposure to ENGINEER. and OWNER vJill defend, indemnify and hold harmless ENGINEER from all claims, dama~es, losses and expenses, including .attorney's fees, arising or resu1t1ng therefrom. Any such verification or adaptation INill entiUe ENGINEER to further compensation at rates to be agreed upon by OWNER and ENGINEER.

9. TERMINATION OF AGREEMENT OW~~R or ENGINEER may terminate the Agreement, in whole or in part, by g1vrng seven (7) days written notice to the other party. Where the method of payment is ~lump sum,• or cost reimbursement, the final invoice will in9tude all services and expenses associated with the project up to the effectrve date of termination. An equitable adjustment shall also be made to provide for termination settlement costs ENGINEER incurs as a result of commitments that had become finn before termination, and for a reasonable profit for services perfOI'med,

10. SEVERABILITY If an~ provision of this agreement is held invalid or unenforceable, the remam!ng provisions shall be valid and binding upon the parties. One or more waivers by either party of any provision, term or condition shall not be construed by the other party as a waiver of any subsequent breach of the same provision, term or condition.

11. INVOICES ENGINEER will submit monthty invoices for services rendered and OWNER will make paymenls to ENGINEER wilhin thirty (30) days of OWNER's receipt of ENGINEER's invoice.

ENGINEER will retain receipts for reimbursable expenses in general accordance vJith Internal Revenue Service rules pertaining to the support

(9/2015)

of expenditures for income tax purposes. Receipts will be available for inspection by OWNER's auditors upon request.

If OWNER disputes any items in ENGINEER's invoice for any reason, including the lack of supporting documentation, OWNER may temporarily delete the disputed item and pay the remaining amount of the invoice. OWNER will promplly notify ENGINEER of the dispute and request clarification and/or correction. After any dispute has been settled, ENGINEER will include the disputed item on a subsequent, regularly scheduled invoice, or on a special invoice for the disputed item only.

OWNER recognizes that late payment of invoices results in extra expenses for ENGINEER. ENGINEER retains the right to assess OWNER interest at the rate of one percent (1%) per month, but not to exceed the maximum rate allowed by law, on invoices which are not paid vnthin thirty (30) days from the date OWNER receives ENGINEER's invoice. In the event undisputed portions of ENGINEER's invoices are not paid when due, ENGINEER also reserves the right, after seven (7) days prior written notice, to suspend the perfonnance of its services under this Agreement until all past due amounts have been paid in full.

12. CHANGES The parties agree that no change or modification to this Agreement, or any attachments hereto, shall have any force or effect unless the change is reduced to writing, dated, and made part of this Agreement. The execution of the change shall be authorized and signed in the same manner as this Agreement Adjustments in the pericxl of servlces and in compensation shall be in accordance with applicable paragraphs and sections of this Agreement. Any proposed fees by ENGINEER are estimates to perform the services required to complete the project as ENGINEER understands it to be defined. For those projects involving conceptual or process development services, activities often are not fully definable in the initial planning. In any event, as the project progresses, the facts developed may dictate a change in the services to be performed, which may alter the scope. ENGINEER will inform OWNER of such situations so that changes in scope and adjustments to the time of perfonnante and compensation can be made as required. If such change, additional services, or suspension of services results in an increase or decrease in the cost of or time required for performance of the services, an equitable adjustment shall be made, and the Agreement modified accordingly.

13. CONTROLLING AGREEMENT These Terms and Conditions shall take precedence over any inconsistent or contradictory provisions contained in any proposal, contract, purchase order, requisition, notice-to-proceed, or like document.

14. EQUAL EMPLOYMENT AND NONDISCRIMINATION In connection with the services under this Agreement, ENGINEER agrees to comply with the applicable provisions of federal and state Equal Employment Opportunity for individuals based on color, religion, sex, or national origin, or disabled veteran, recently separated veteran, other protected veteran and armed forces service medal veteran status, disabilities under provisions of executive order 11246, and other employment, statutes and regulations, as stated in nue 41 Part 60 of the Code of Federal Regulations§ 60-1.4 (a·f), § 60-300.5 (a·e), § 60-741 (ae).

15. HAZARDOUS MATERIALS OWNER represents to ENGINEER that. to the best of its knowledge, no hazardous materials are present at the project site. However, in the event hazardous materials are known to be present, OWNER represents that to the best of its knowledge it has disclosed to ENGINEER the existence of all such hazardous materials, including but not limited to asbestos, PCB's, petroleum, hazardous waste, or radioactive material located at or near the project site, including_type, quantity and location of such hazardous materials; It is acknowledged by both parties that ENGINEER's scope of services do not include services related in any way to hazardous materials. In the event ENGif\!EER or any other party encounters undisclosed hazardous materials, ENGINEER shall have the obligation to notify OWNER and, to the extent required by law or regulation, the appropriate governmental officials, and ENGINEER may, at its option and without liability for delay, consequential or any other damages to OWNER, suspend performance of services on that portion of the project affected by hazardous materials until OWNER: (i) retains appropriate specialist consultant(s) Ol contractor(s) to identify and, as appropriate, abate,

Terms & Conditions for Professional Services 8·2

- , ..• remediate, Or remove the hazardous materials; and (ii) warrants that the projectsite is In full compliance with all appliCable laws and regulations. OWNER acknow1edges that ENGINEER is' performing professional services fOl OWNER and that ENGINEER is not and shall not be required to become an •arranger,D "operator,~ &generator,• or "transporter" of hazardous materials, as defined in the Comprehensive Environmental Response, Compensation, and liability Act of 1990 (CERCLA), which are or may be encountered at or near the project site in connection with ENGINEER's services under this Agreement. If ENGINEER's services hereunder cannot be performed because of the existence of hazardous inaterials, ENGINEER shall be entitled to terminate this Agreement for cause on 30 days \Witten notice. To the fullest extent permitted by law, OWNER shall indemnify and hold harmless ENGINEER, its officers, direptors, partners, employees, and subconsultants frOm _and against all costs, losses, arid damages (including but not limited to all fees and charges of engineers,· architects, attorneys, and other professionals, and an court or arbitration or other dispute resolution costs) caused by, arising out of or resulting from hazardous materials, provided that (i) any such coSt, loss, or damage is attributable to bodily injury, sickness, disease, or death, or injury to or destruction of tangible property (other than completed Work), including the loss of use resulting therefrom, and (ii) nothing in this paragraph shall .obligate OWNER to indemnify any individual or entity from and against the consequences of that individual's or entity's sole negligence or willful misconduct.

16. EXECUTION This Agreement, including the exhibits and schedules made part hereof, constitute the entire Agreement between ENGINEER and OWNER, supersedes and controls over all prior written or oral understandings. This Agreement may be amended, supplemented or modified only by a written instrument duly executed by the parties.

17. ALLOCATION OF RISK OWNER AND ENGINEER HAVE EVALUATED THE RISKS AND REWARDS ASSOCIATED WITH THIS PROJECT, INCLUDING ENGINEER'S FEE RELATIVE TO THE RISKS ASSUMED, AND AGREE TO ALLOCATE CERTAIN OF THE RISKS, SO, TO THE FULLEST EXTENT PERMITIED BY LAW, THE TOTAL AGGREGATE LIABILITY OF ENGINEER (AND ITS RELATED CORPORATIONS, SUBCONSULTANTS AND EMPLOYEES) TO OWNER AND THIRD PARTIES GRANTED RELIANCE IS LIMITED TO THE GREATER OF $100,000 OR ITS FEE, FOR ANY ANO ALL INJURIES, DAMAGES, CLAIMS, LOSSES, OR EXPENSES (INCLUDING ATIORNEY AND EXPERT FEES) ARISING OUT OF ENGINEER'S SERVICES OR THIS AGREEMENT REGARDLESS OF CAUSE(S) OR THE THEORY OF LIABILITY, INCLUDING NEGLIGENCE, INDEMNITY, OR OTHER RECOVERY. THIS LIMITATION SHALL NOT APPLY TO THE EXTENT THE DAMAGE IS PAID UNDER ENGINEER'S COMMERCIAL GENERAL LIABILITY INSURANCE POLICY.

18. LITIGATION SUPPORT In the event ENGINEER is required to respond to a subpoena, government inquiry or other legal process related to the services in connection with a legal or dispute resolution proceeding to which ENGINEER is not a party, OWNER shall reimburse ENGINEER for reasonable costs in responding and compensate ENGINEER at its then standard rates for reasonable time incurred in gathering information and documents and attending depositions, hearings, and trial.

19. UTILITY LOCATION If underground sampling/testing is to be performed, a local utility locating service shall be contacted to make arrangements for all utilities to determine the location of underground utilities. In addition, OWNER shall notify ENGINEER of the presence and location of any undeiground utilities located on the OWNER's property which are not the responsibility of prtvate/public utilities. ENGINEER shall take reasonable precautions to avoid damaging underground utilities that are properly marked. The OWNER agrees to waive any claim against ENGINEER and will indemnify and hold ENGINEER harmless from any daim of liability, injury or loss caused by or allegedly caused by ENGINEER's damaging of underground utilities that are not property marked or are not called to ENGINEER's attention prior to beginning the underg(Qund sampling/testing.

(9/2015)

ATTACHMENT 16

Fiscal Year 2016 Budget Amendments

Memorandum

To: From:


Date: April 21, 2016 Re: Fiscal Year 2016 Budget Amendments

Background:

Enclosed are staffs recommended amendments for the FY 2016 Budget. These amendments are provided at the 6-month time frame as requested by the Board.

Analysis:

1. Total Revenues increased by $22,400 primarily from an anticipated insurance reimbursement due to the recent stmm damage to the Banquete Elevated Storage Tank and D1:iscoll Pump Station equipment.

2. Total Administrative/Operations Expenditures without Capital Outlay increased by $64,367: • Payroll Costs decreased by $37,978 associated with health insurance premium savings. • Supplies and Materials reflect a $71,000 increase due to repairs to the Banquete EST, Driscoll PS repf!irs

as well as refurbishing the building, and the proposed refurbishing of the Bishop East Pump Station. • Professional Fees are increased by $38,885 for anticipated legal fees associated with the SOAH!rCEQ

case, the Driscoll PS project, and the TCEQ Nitrification Action Plan (NAP). • Consumable Supplies/Materials is decreased by $5,500 as a result of a decrease in postage and the

Water Supply Corporations having a presmted account payable directly to the US Post Office. • Recurring Operating Costs decreased by $2,140 primarily due to lower Dues/Subscriptions/Publications.

3. Capital Outlay increased by $51,000 due to the additional cost of engineering fees for the proposed conversion of the Driscoll Disinfection Booster Station from free chlorine to chloramines.

4. Other Finance Sources decreased by $2,696 as a result of the timing of the budget prior to knowing the exact amount of tax collection and appraisal district fees and having less M&O taxes to transfer.

5. Excesses/Deficiencies of Revenues over Expenditures is increased by $95,663 for a net loss of -$147,775 as compared to the original budget's ending balance of -$52,112:


Approve the FY 2016 Budget amendments.

Board Action:

Determine whether to approve the recommended amendments.

Summarization:

The following three (3) items total $94,065, which is a difference of$1,598.00 from the additional funds being requested ($95,663):

• $58,200- HDR Engineering, Inc.- services for booster station conversion- presented to STWA Board as pm1 of this April 26th agenda,

• $21,700- Mercer Controls, Inc.- rehabilitation of Bishop East Pump Station- presented to STWA Board as pm1 of this April 26th agenda,

• $14, 165 -Mercer Controls, Inc. - rehabilitation of the Driscoll Pump Station- previously approved.

SOUTH TEXAS WATER AUTHORITY O&MTAXRATE: $0.061890 GENERAL FUND HANDLING CHARGE: $0.426386 Proposed FY2016 Amended Budget WATER RATE:

PROPOSED 2016 YEAR %0F2016 2016

ADOPTED TO DATE ADOPTED AMENDED BUDGET 03/3112016 BUDGET BUDGET VARIANCE

REVENUES Water Service Revenue $1,211,645 $539,255 45% $1,211,645 $0 Handling Charge Revenue $216,969 $112,176 52% $216,969 $0 Surcharge- Out of District $8,234 $4,117 50% $8,234 $0 Interest Income $1,600 $2,091 131% $4,000 $2,400 Other Revenue

Operating & Maintenance Fees $449,150 $234,644 52% $449,150 $0 Miscellaneous Revenues $30,000 $6,744 22% $50,000 $20,000 NWSC reimbursement for Driscoll PS $72,764 $0 0% $72,764 $0

TOTAL REVENUES $1,990,362 $899,027 $2,012,762 $22,400

EXPENDITURES Water Service Expenditures: Bulk Water Purchases $1,211,645 $516,104 43% $1,211,645 $0

Water Loss $3,325 $0 0% $3,325 $0 TOTAL WATER SERVICE $1,214,970 $516,104 $1,214,970 $0

Payroll Costs Salaries & Wages -

Permanent Employees $551,225 $272,125 49% $551,225 $0 Patt-Time Employee $10,283 $6,871 67% $15,600 $5,317

Overtime - NWSC $10,000 $5,098 51% $10,000 $0 Stand-by Pay- NWSC $1,300 $625 48% $1,325 $25 Overtime - R WSC $10,000 $4,942 49% $10,000 $0 Stand-by Pay- RWSC $1,300 $625 48% $1,325 $25 Ovettime - STW A $13,440 $3,908 29% $13,440 $0 Stand-by Pay- STW A $1,300 $625 48% $1,325 $25 Janitorial Pay- STW A $7,560 $3,275 43% $7,560 $0 Employee Retirement Premiums $81,002 $40,555 50% $81,002 $0 Group Insurance Premium $357,280 $173,496 49% $313,165 -$44,115 Unemployment Compensation $1,755 $2,334 133% $2,500 $745 Workers' Compensation $13,692 $13,418 98% $13,692 $0 Car Allowance $4,800 $2,400 50% $4,800 $0 Hospital Insurance Tax $7,332 $3,633 50% $7,332 $0

TOTAL PERSONNEL $1,072,269 $533,930 $1,034,291 -$37,978

Supplies & Materials Repairs & Maintenance $82,500 $49,859 60% $121,600 $39,100 Meter Expense $16,265 $4,125 25% $16,265 $0 Tank Repairs $8,735 $1,950 22% $40,735 $32,000 Major Repairs $25,000 $0 0% $25,000 $0

TOTAL SUPPLIES & MATERIALS $132,500 $55,934 $203,600 $71,100

Other Operating Expenditures: Professional Fees

Legal $65,000 $47,160 73% $90,000 $25,000 Auditing $8,950 $8,835 99% $8,835 -$115 Engineering $10,000 $16,200 162% $24,000 $14,000 Management & Consulting $2,000 $878 44% $2,000 $0 Inspection $2,500 $1,125 45% $2,500 $0 Field Professionals $0 $0 0% $0 $0

TOTAL PROFESSIONAL FEES $88,450 $74,198 $127,335 $38,885

2016 YEAR %OF 2016 2016 ADOPTED TO DATE ADOPTED AMENDED BUDGET 03/31/2016 BUDGET BUDGET VARIANCE

Consum Supplies/Materials Postage $17,500 $4,808 27% $12,000 -$5,500 Printing/Office Supplies $15,000 $5,825 39% $15,000 $0 JanitoriaVSite Maintenance $5,000 $1,175 24% $5,000 $0 FueVLubricants/Repairs $67,500 $24,416 36% $67,500 $0 Chemicals/Water Samples $58,000 $16,260 28% $58,000 $0 Safety Equipment $1,000 $564 56% $1,000 $0 Small Tools $1,000 $10 1% $1,000 $0

TOTAL CON. SUPPLIES/MATERIALS $165,000 $53,058 $159,500 -$5,500

RecutTing Operating Costs Telephone/Communications $19,750 $7,238 37% $19,750 $0 Utilities $115,000 $43,858 38% $115,000 $0 D & 0 Liability Insurance $2,800 $3,023 108% $3,500 $700 Property Insurance $31,190 $30,566 98% $30,600 -$590 General Liability $2,500 $2,647 106% $2,750 $250 Auto Insurance $2,002 $1,792 90% $2,002 $0 TraveVTraining/Meetings $11,000 $3,222 29% $11,000 $0 Rentai-Equipment!Unifonns $5,000 $2,815 56% $5,000 $0 Dues/Subscriptions/Publication $12,500 $2,975 24% $10,000 -$2,500 Pass Through Cost $500 $181 36% $500 $0 Educational Materials $660 $0 0% $660 $0

TOTAL RECURRING OPER. COSTS $202,902 $98,317 $200,762 -$2,140

Miscellaneous Miscellaneous Expenditures $7,500 $2,892 39% $7,500 $0

TOTAL MISCELLANEOUS $7,500 $2,892 $7,500 $0

Total Administrative & Operations Exp. $2,883,591 $1,334,433 $2,947,958 $64,367

Capital Outlay Capital Acquisition $131,500 $0 0% $124,500 -$7,000 Engineering $19,000 $9,500 0% $77,000 $58,000

TOTAL CAPITAL OUTLAY $150,500 $9,500 $201,500 $51,000

TOTAL EXPENDITURES (w/o D.S. exp.) $3,034,091 $1,343,933 $3,149,458 $115,367

Excess (Deficiencies) of Revenue Over Expenditures -$1,043,729 -$444,906 -$1,136,696 -$92,967

OTHER FINANCE SOURCE (USES) Transfer to Other Funds

Disposition of Assets (Surplus Sale) $0 $0 0% $0 $0 Transfer from Tax Accounts $991,617 $939,974 95% $988,921 -$2,696

TOTAL OTHER FINANCING $991,617 $939,974 $988,921 -$2,696 SOURCES (USES)

TOTAL EXPENDITURES $2,042,474 $403,959 $2,160,537 $118,063

EXCESS (DEFICIENCES) OF REVENUES OVER OTHER SOURCES (USES) -$52,112 $495,068 -$147,775 -$95,663

NET INCOME -$52,112 $495,068 -$147,775 -$95,663

SOUTH TEXAS WATER AUTHORITY GENERAL FUND- TAX ACCOUNTS O&MTAXRATE: $0.061890 Proposed FY2016 Amended Budget DEBT SERV. TAX RATE: $0.021360

HANDLING CHARGE: $0.426386 WATER RATE: $0.000000

PROPOSED 2016 YEAR %OF 2016 2016

ADOPTED TO DATE ADOPTED AMENDED BUDGET 3/31/2016 BUDGET BUDGET VARIANCE

REVENUES Ad Valorem- Current (M & 0) $1,000,362 $960,056 96% $1,000,362 $0 Delinquent Taxes $27,500 $14,499 53% $27,500 $0 Penalty & Interest- Tax Accounts (M & 0) $16,000 $8,235 51% $16,000 $0

TOTAL M&O TAX REVENUES $1,043,862 $982,790 94% $1,043,862 $0

EXPENDITURES Tax Collector Fees $34,860 $34,057 98% $36,075 $1,215 Appraisal Districts $17,385 $8,759 50% $18,866 $1,481 Refunds $0 $0 0% $0 $0

TOTAL EXPENDITURES $52,245 $42,816 82% $54,941 $2,696

REVENUES OVER EXPENDITURES $991,617 $939,974 95% $988,921 -$2,696

OTHER USES Transfer to Revenue Fund (Tax) $991,617 $939,974 95% $988,921 -$2,696

TOTAL EXPEND. & OTHER USES $1,043,862 $982,790 94% $1,043,862 $0

Excess Revenues and Other Financing Sources Over (Under) $0 $0 $0 Expenditures and Other Uses

FOR YOUR INFORMATION

NPRR 649 Update

Board Election 2

Wind Record 3

Chris Brewster, an attorney

with Lloyd Gosselink,

represents cities at ERCOT

on a daily basis and

participates in ERCOT

matters on your behalf.

If you have questions or

would like to discuss any

ERCOT matter, or any

communication from ERCOT

regarding your ERCOT

membership, please feel

free to contact Chris at

(512) 322-5831 or email

[email protected].

He will be happy to answer

your questions or assist you

in anyway.

In a story continuing from late 2015, as directed by the ERCOT Board of Directors, TAC again took up Nodal Protocol Revision Request ("NPRR") 649 in March. This NPRR has generated controversy this year and has taken an unusual path through the ERCOT stakeholder process. As we reported in our last update, we were pleased to see TAC reject this measure in late 2015. The proponent appealed the NPRR and the Board took it up in February. The Board granted the appeal, but asked TAC to reconsider the options for addressing the issue identified by the NPRR.

As we explained in previous updates, NPRR 649, as considered and rejected by TAC, would have given generators a "make whole" payment whenever ERCOT, based on

reliability concerns, manually overrode the computer system that dictates to generators how much they should produce, and at what price. The most controversial portion of the original measure was that it permitted the generators to recover their opportunity costs-rather than just

their direct lossesthat resulted from ERCOT's action.

In considering the appeal of NPRR 649, the ERCOT Board did not endorse or reject any particular approach to this NPRR, but granted the appeal and directed TAC to consider the

available options for addressing this issue.

In March, ERCOT Staff assisted TAC with developing and evaluating three options for addressing the issue to which NPRR 649 was directed. We objected to the concept underlying

ATTORNEY-CLIENT COMMUNICATION This memorandum is intended for cities/political subdivisions (and their employees,

contractors, or elected officials) that are clients of lloyd Gosselink. If you are not the intended recipient1 please discard this document. Any use, dissemination, or reproduction of this transmission by an unintended recipient is prohibited.

Lloyd Gosse link Rochelle & Townsend, P.C. II 816 Congress Ave., Suite 1900 Austin, TX 7870111512.322.5800 II www.lglawfirm.com

ERGOT Monitoring Report March/April2016 Page2

NPRR and generator to attest to the damages to ERCOT. that our

objection was not rooted in concern over the implementation details of the NPRR. We noted that, when ERCOT's computer systems arrive at the most efficient and reliable dispatch of power plants, and when ERCOT is required to override that dispatch for reliability reasons, consumers can suffer by paying higher wholesale prices. In our view, it is not equitable to require one party (consumers) who are harmed by these events to pay for the damages incurred by another party (the affected generators).

After a ballot in which nearly all consumers voted "no", a somewhat limited version of NPRR 649 was adopted by TAC. The approach endorsed by TAC limits generators to the actual damages incurred by ERCOT's reliability actions, and requires the

As many of you likely recall, through late February and much of March, we were issuing calls for cities and other political subdivisions in ERCOT's Commercial Consumer Segment to respond to a request for a ballot relating to the candidacy of Mr. Jorge Bermudez for Unaffiliated Director on ERCOT's Board of Directors.

City participation in these matters is key because they are such a large part of ERCOT's total membership. Without a robust response from cities via the paper ballot and consent form, ERCOT is at risk for failing to achieve quorum. In such an event, ERCOT is required to convene an in-person meeting in Austin for its entire membership. The cost and effort towards calling that meeting is

While we were disappointed that the overall direction of this NPRR was approved by TAC, the version of NPRR 649 that was ultimately approved is far preferable to the measure as originally desired by the generator who proposed it. The measure will now be limited to actual damages and does not require consumers to pay for speculative opportunity costs based on what would have happened in the market absent the override of ERCOT's computer systems for reliability reasons. This, paired with ERCOT's explanation that it uses manual overrides very rarely (for less than an hour in 2015, for instance) and plans to reduce them, further makes this outcome more palatable. This NPRR will be before the ERCOT Board later this month.

usually not worth it for issues such as this-the reelection of Unaffiliated Directors is usually not controversial and does not merit an in-person meeting. We recommended a vote for Mr. Bermudez as he remained qualified to serve as a Unaffiliated Director and his record in the office to date raised no issues.

In welcome news, ERCOT reported in March that quorum was obtained through the paper ballot and consent form, and that Mr. Bermudez was re-elected.

Thank you for your support and responsiveness on this issue in March.

lloyd Gosse link Rochelle & Townsend, P.C. II 816 Congress Ave., Suite 1900 Austin, TX 78701 II 512.322.5800 II www.lglawfirm.com

ERCOT Monitoring Report March/April2016 Page3

The ERCOT grid continues to break records for wind power production; last month, the system hit a new mark for the percentage of the system's total

customer usage served by wind power. At 1:10 am on March 23, 2016, the system set a new wind generation record high by getting 48.28% of its 27,245 MW load, or 13,154 MW, from wind power. This surpassed the previous record of 45.14% wind penetration on February 18 earlier this year. These records are a measure of the output of wind compared to customers' demand system-wide during a particular instance. Much of the time, particularly during peak usage periods when wind production is low, the penetration percentage is significantly less. ERCOT's wind production is still very significant, however; wind power accounted for 18.4% of ERCOT's 2015 energy production.

For the most part, generators in the ERCOT market must look to market prices for recovery of their costs, and ERCOT plays little role. In some cases, however, generators' costs do come into play. If ERCOT directs a generator to come on-line for reliability reasons, when the generator would otherwise have not been in the market, ERCOT compensates that generator for its costs to the extent they were not recovered by market prices. Those costs in turn are charged to customers. ERCOT also uses a generator's costs to mitigate market prices in certain instances, essentially acting as a limit on prices. The cost figures that ERCOT uses for these purposes comes out of the "verifiable cost" process-so called because generators must provide ERCOT staff with proof of the costs, and ERCOT reviews and approves them.

Fuel costs are part of the verifiable cost system. ERCOT's Verifiable Cost Manual governs what fuel (and other) costs may be included in a generator's verifiable costs. One such item is a minimum fuel quantity charge, the charge that might be incurred if a generator uses less fuel than a specified level in

the fuel supply contract. Verifiable Cost Manual Revision ("VCMRR") 009 addresses how that minimum fuel charge is to be allocated amongst the fuel used by a generator for different purposes, including fuel put in storage, and the fuel used to serve load in ERCOT. In early April, the Wholesale Market Subcommittee ("WMS") considered VCMRR 009 and the different ways that a minimum fuel charge can be allocated and addressed through the verifiable cost process. However, we argued at WMS that no minimum fuel costs should be recovered when ERCOT orders a plant to commit for reliability reasons-when that occurs, the generator is actually aided in its ability to meet its minimum fuel requirements. Customers should not be charged for a cost that otherwise would have been higher except for ERCOT's actions.

That argument did not carry the day-though other WMS representatives seemed to agree in principle-VCMRR 009 was approved in principle and remanded back to a working group for discussion of the allocation details. Discussions on it will continue in the coming months.

Lloyd Gosselink Rochelle & Townsend, P.C. 11816 Congress Ave., Suite 1900 Austin, TX 7870111 512.322.5800 II www.lglawffrm.com

ERCOT Monitoring Report March/April 2016

COPS

CREZ

CRR

EDS

EECP

EllS

EMS

ERCOT

FERC

IMM

lAAR

MW

MCPE

MMS

NATF

NERC

NPRR

NOV

NSRS

ORDC

PRR

PRS

QSE

REP

RMS

ROS

RRS

RUC

SEM

SCED

SOAH

TAC

TPTF

VFT

WMS

Capacity, Demand, and Reserves Report

Commercial Operations Subcommittee

Competitive Renewable Energy Zones

Congestion Revenue Rights

Early Delivery System

Emergency Electric Curtailment Plan

Emergency Interruptible load Service

Energy Management System

Electric Reliability Council of Texas

Federal Energy Regulatory Commission

Independent Market Monitor

load Acting as a Resource

Megawatt

Marginal Clearing Price for Energy

Market Management System

Nodal Advisory Task Force

North American Reliability Corporation

Nodal Protocol Revision Request

Notice of Violation

Non-Spin Reserve Service

Operating Reserve Demand Curve

Protocol Revision Request

Protocol Revision Subcommittee

Qualified Scheduling Entity

Retail Electric Provider

Retail Market Subcommittee

Reliability Operations Subcommittee

Responsive Reserve Service

Reliability Unit Commitment

Single Entry Model

Security-Constrained Economic Dispatch

State Office of Administrative Hearings

Technical Advisory Committee

Texas Nodal Transition Plan Task Force

Variable Frequency Transformer

Wholesale Market Subcommittee

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Lloyd Gosselink Rochelle & Townsend, P.C. II 816 Congress Ave., Suite 1900 Austin, TX 7870111 512.322.5800 II www.lglawfirm.com