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RESOLUTION NO. 15 2 0
RESOLUTION APPROVING A BOND RESOLUTION PREVIOUSLY
ADOPTED BY THE BOARD OF TRUSTEES OF THE CANYON
REGIONAL WATER AUTHORITY AUTHORIZING THE ISSUANCE OF
"CANYON REGIONAL WATER AUTHORITY TAX-EXEMPT
CONTRACT REVENUE BONDS (WELLS RANCH PROJECT II),
SERIES 2015 (TEXAS WATER DEVELOPMENT BOARD SWIRFT
PROJECT FINANCING)"; PROVIDING FOR THE PAYMENT OF THE
PRINCIPAL OF AND INTEREST ON THESE OBLIGATIONS AS
PROVIDED HEREIN; PROVIDING THE TERMS AND CONDITIONS OF
SUCH BONDS AND RESOLVING OTHER MATTERS INCIDENT AND
RELATING TO THE ISSUANCE, PAYMENT, SECURITY, SALE, AND
DELIVERY OF SUCH BONDS, INCLUDING THE APPROVAL OF AN
APPLICATION TO THE TEXAS WATER DEVELOPMENT BOARD AND
A PRIVATE PLACEMENT MEMORANDUM PERTAINING TO THE
BONDS; AUTHORIZING THE EXECUTION OF A PAYING
AGENT/REGISTRAR AGREEMENT, AN ESCROW AGREEMENT, AND
A NEW WATER SUPPLY CONTRACT; COMPLYING WITH THE
REQUIREMENTS OF THE DEPOSITORY TRUST COMPANY'S LETTER
OF REPRESENTATIONS; COMPLYING WITH THE REGULATIONS
PROMULGATED BY THE TEXAS WATER DEVELOPMENT BOARD;
AND PROVIDING AN EFFECTIVE DATE
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CIBOLO, TEXAS THAT:
Section 1. The City Council of the City of Cibolo, Texas has reviewed and hereby
approves (i)the "Bond Resolution", including the factual findings contained therein, previously
adopted by the Board of Trustees of the Canyon Regional Water Authority relating to the issuance
of obligations designated as "Canyon Regional Water Authority Tax-Exempt Contract Revenue
Bonds (Wells Ranch Project II), Series 2015 (Texas Water Development Board SWIRFT Project
Financing)" (the "Bonds"), (ii) the New Water Supply Contract (the "New Water Supply
Contract"), including the factual findings contained therein, to be executed between the City of
Cibolo, Texas, Green Valley Special Utility District, East Central Special Utility District, the City
of Marion, Texas, Crystal Clear Special Utility District, the City of Converse, Texas and the
Canyon Regional Water Authority (the "Authority") which provides certain security for the
payment of the Bonds, and (iii) the Sale and Offering Documents (as defined in the Contract).
The Mayor (including the Mayor Pro Tem) or the City Manager of the City of Cibolo, Texas is
hereby authorized to execute on behalf of the City any and all documents in connection with this
transaction, including the Approval Certificate (as defined in the Bond Resolution). This
resolution may be relied upon by the appropriate representatives to this transaction including the
Texas Attorney General in their review and approval of this transaction.
41884843.2
Section 2. The City Council recognizes that Section 52 of the Bond Resolution
contains covenants of the Authority relating to the Bonds. Since certain financial information,
financial status, operating data, and annual audits of the City's utility system will be entirely
within the control and disposition of the City, and the Texas Water Development Board
Application (the "Application"), describes a continuing disclosure undertaking agreement (the
"Undertaking") of the City, the City Council specifically adopts the covenants hereinafter
described, which comprise the Undertaking, and shall comply therewith for so long as all or any
portion of the Annual Payments made by the City under the Contract act as security for or a
source of repayment of the Bonds.
A. Definitions.
below: As used in this Section, the following terms have the meanings ascribed to such terms
EMMA means the MSRB's Electronic Municipal Market Access system, accessible by the
general public, without charge, on the intemet through the uniform resource locator (URL)
http://www.emma.msrb-org.
MSRB means the Municipal Securities Rulemaking Board.
Rule means SEC Rule 15c2-12, as amended from time to time.
SEC means the United States Securities and Exchange Commission.
B. Annual Reports.
The City shall file annually with the MSRB, (1) within six months after the end of each
fiscal year of the City ending in or after 2015, financial information and operating data with
respect to the City of the general type included in the Application authorized by Section 52 of the
Bond Resolution, being the information described in Exhibit A hereto, and (2) if not provided as
part of such financial information and operating data, audited financial statements of the City,
when and if available. Any financial statements so to be provided shall be (i) prepared in
accordance with the accounting principles described in Exhibit A hereto, or such other accounting
principles as the City may be required to employ from time to time pursuant to state law or
regulation, and (ii) audited, if the City commissions an audit of such financial statements and the
audit is completed within the period during which they must be provided. If the audit of such
financial statements is not complete within such period, then the City shall file unaudited financial
statements within such period and audited financial statements for the applicable fiscal year to the
MSRB, when and if the audit report on such financial statements becomes available. Under
current Texas law, including, but not limited to, Chapter 103, as amended, Texas Local
Government Code, the City must have its records and accounts audited annually and shall have an
annual financial statement prepared based on the audit. The annual financial statement, including
the auditor's opinion on the statement, shall be filed in the office of the City Secretary within 180
days after the last day of the City's fiscal year. Additionally, upon the filing of this financial
statement and the annual audit, these documents are subject to the Texas Open Records Act, as
amended, Texas Government Code, Chapter 552.
41884843.2 -2-
If the City changes its fiscal year, it will file notice of such change (and of the date of the
new fiscal year end) with the MSRB prior to the next date by which the City otherwise would be
required to provide financial information and operating data pursuant to this Section.
C. Notice of Certain Events.
The City shall file notice of any of the following events with respect to the Bonds to the
MSRB in a timely manner and not more than 10 business days after occurrence of the event:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or
final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other
material notices or determinations with respect to the tax status of the Bonds, or other material
events affecting the tax status of the Bonds;
(7) Modifications to rights of holders of the Bonds, if material;
(8) Bond calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Bonds, if
material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership, or similar event of the City, which shall
occur as described below;
(13) The consummation of a merger, consolidation, or acquisition involving the City or
the sale of all or substantially all of its assets, other than in the ordinary course of business, the
entry into of a definitive agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if material; and
(14) Appointment of a successor or additional paying agent/registrar or the change of
name of a paying agent/registrar, if material.
For these purposes, any event described in the immediately preceding paragraph (12) is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent,
or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has
41884843.2 -3-
assumed jurisdiction over substantially all of the assets or business of the City, or if such
jurisdiction has been assumed by leaving the existing governing body and officials or officers in
possession but subject to the supervision and orders of a court or governmental authority, or the
entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the assets or
business of the City.
The City shall file notice with the MSRB, in a timely manner, of any failure by the City to
provide financial information or operating data in accordance with this Section by the time
required by this Section.
D. Limitations Disclaimers and Amendments.
The City shall be obligated to observe and perform the covenants specified in this Section
for so long as, but only for so long as, the City remains an "obligated person" with respect to the
Bonds within the meaning of the Rule, except that the City in any event will give notice of any
deposit that causes the Bonds to be no longer Outstanding.
The provisions of this Section are for the sole benefit of the holders and beneficial owners
of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or
equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide
only the financial information, operating data, financial statements, and notices which it has
expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any
other information that may be relevant or material to a complete presentation of the City's
financial results, condition, or prospects or hereby undertake to update any information provided
in accordance with this Section or otherwise, except as expressly provided herein. The City does
not make any representation or warranty concerning such information or its usefulness to a
decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE CITY, WHETHER NEGLIGENT OR WITH OR WITHOUT FAULT ON ITS PART, OF
ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under the Bond Resolution for purposes of any other provision of
the Bond Resolution.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the City, but only if (1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase or
41884843.2 -4-
sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule to the date of such amendment, as well as such
changed circumstances, and (2) either (a)the holders of a majority in aggregate principal amount
(or any greater amount required by any other provision of the Bond Resolution that authorizes
such an amendment) of the Outstanding Bonds consent to such amendment or (b) a person that is
unaffiliated with the City (such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interests of the holders and beneficial owners of the
Bonds. The City may also repeal or amend the provisions of this Section if the SEC amends or
repeals the applicable provisions of the Rule or any court of final jurisdiction enters judgment that
such provisions of the Rule are invalid, and the City also may amend the provisions of this
Section in its discretion in any other manner or circumstance, but in either case only if and to the
extent that the provisions of this sentence would not have prevented an underwriter from lawfully
purchasing or selling Bonds in the primary offering of the Bonds, giving effect to (a) such
provisions as so amended and (b) any amendments or interpretations of the Rule. If the City so
amends the provisions of this Section, the City shall include with any amended financial
information or operating data next provided in accordance with this Section an explanation, in
narrative form, of the reasons for the amendment and of the impact of any change in the type of
financial information or operating data so provided.
E. Information Format—Incorporation by Reference
The City information required under this Section shall be filed with the MSRB through
EMMA in such format and accompanied by such identifying information as may be specified
from time to time thereby. Under the current rules of the MSRB, continuing disclosure
documents submitted to EMMA must be in word-searchable portable document format (PDF)
files that permit the document to be saved, viewed, printed, and retransmitted by electronic means
and the series of obligations to which such continuing disclosure documents relate must be
identified by CUSIP number or numbers.
Financial information and operating data to be provided pursuant to this Section may be
set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document) available to the public
through EMMA or filed with the SEC.
Section 3. Authorized Officials of the City will review and approve the Application.
Information appearing in the Application concerning the City (including, particularly, the
description of the Undertaking and Appendices D and E thereto), as of its date, were and are true
and correct in all material respects. Insofar as the City and its affairs, including its financial
affairs, are concerned, such Application did not and does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
Insofar as the descriptions and statements, including financial data, of or pertaining to entities,
other than the City, and their activities contained in such Application are concerned, such
statements and data have been obtained from sources which the City believes to be reliable, and
the City has no reason to believe that they are untrue in any material respect.
Section 4. The recitals contained in the preamble hereof are hereby found to be true,
and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a
part of the judgment and findings of the City Council.
41884843.2 -5-
Section 5. All ordinances and resolutions, or parts thereof, which are in conflict or
inconsistent with any provision of this Resolution are hereby repealed to the extent of such
conflict, and the provisions of this Resolution shall be and remain controlling as to the matters
resolved herein.
Section 6. This Resolution shall be construed and enforced in accordance with the
laws of the State of Texas and the United States of America.
Section 7. If any provision of this Resolution or the application thereof to any person
or circumstance shall be held to be invalid, the remainder of this Resolution and the application of
such provision to other persons and circumstances shall nevertheless be valid, and the City
Council hereby declares that this Resolution would have been enacted without such invalid
provision.
Section 8. It is officially found, determined, and declared that the meeting at which
this Resolution is adopted was open to the public and public notice of the time, place, and subject
matter of the public business to be considered at such meeting, including this Resolution, was
given, all as required by Chapter 551, as amended, Texas Government Code.
Section 9. This Resolution shall be in force and effect from and after the date of its
adoption, and it is so resolved.
[The remainder of this page intentionally left blank.]
41884843.2 -6-
APPROVED THIS THE 27'DAY OF OCTOBER, 2015.
ATTEST:
City Secretary
41884843.2 -7-
EXHIBIT A
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 52 of the Authority's Bond Resolution.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided annually
in accordance with such Section are as specified (and included in the Appendix or under the headings
of the Private Placement Memorandum referred to) below:
The City's audited financial statements for the most recently concluded Fiscal
Year or to the extent these audited financial statements are not available, the
portions of the unaudited financial statements of the City referenced in the Private
Placement Memorandum, but for the most recently concluded Fiscal Year.
Accounting Principles
The accounting principles referred to in such Section are generally accepted accounting
principles for governmental units as prescribed by the Government Accounting Standards Board from
time to time.
41884843.2 A-1
CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS §
COUNTY OF GUADALUPE §
CITY OF CIBOLO §
THE UNDERSIGNED HEREBY CERTIFIES that:
1. On the 27th day of October 2015, the City Council (the Council) of the City of
Cibolo, Texas (the City) convened in regular session at its regular meeting place in the City Hall
of the City(the Meeting), the duly constituted members of the Council being as follows:
Vacant Mayor
Jay Hogue Mayor Pro Tem, District 6
Jennifer Schultes Councilmember, District I
Verlin Garrett Councilmember, District 2
Marchell Gebhardt Councilmember, District 3
James Doty Councilmember, District 4
Jim Russell Councilmember, District 5
Glenn Weber Councilmember, District 7
and all of such persons were present at the Meeting, except the following: N�q
thus constituting a quorum. Among other business considered at the Meeting, the attached
resolution (the Resolution) entitled:
RESOLUTION APPROVING A BOND RESOLUTION PREVIOUSLY
ADOPTED BY THE BOARD OF TRUSTEES OF THE CANYON REGIONAL
WATER AUTHORITY AUTHORIZING THE ISSUANCE OF "CANYON
REGIONAL WATER AUTHORITY TAX-EXEMPT CONTRACT REVENUE
BONDS (WELLS RANCH PROJECT 11), SERIES 2015 (TEXAS WATER
DEVELOPMENT BOARD SWIRFT PROJECT FINANCING)"; PROVIDING
FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THESE
OBLIGATIONS AS PROVIDED HEREIN; PROVIDING THE TERMS AND
CONDITIONS OF SUCH BONDS AND RESOLVING OTHER MATTERS
INCIDENT AND RELATING TO THE ISSUANCE, PAYMENT, SECURITY,
SALE, AND DELIVERY OF SUCH BONDS, INCLUDING THE APPROVAL
OF AN APPLICATION TO THE TEXAS WATER DEVELOPMENT BOARD
AND A PRIVATE PLACEMENT MEMORANDUM PERTAINING TO THE
BONDS; AUTHORIZING THE EXECUTION OF A PAYING
AGENT/REGISTRAR AGREEMENT, AN ESCROW AGREEMENT, AND A
NEW WATER SUPPLY CONTRACT; COMPLYING WITH THE
REQUIREMENTS OF THE DEPOSITORY TRUST COMPANY'S LETTER OF
REPRESENTATIONS; COMPLYING WITH THE REGULATIONS
PROMULGATED BY THE TEXAS WATER DEVELOPMENT BOARD; AND
PROVIDING AN EFFECTIVE DATE
41884670.1
was introduced and submitted to the Council. After presentation and due consideration of the
Resolution, a motion was made by Councilmember 'Do4y that the Resolution be
finally passed and adopted in accordance with the City's Home Rule Charter. The motion was
seconded by Councilmember 6aarnc41 and carried by the following vote:
6 voted"For" -0—voted"Against" 426 abstained
all as shown in the official Minutes of the Council for the Meeting.
2. The attached Resolution is a true and correct copy of the original on file in the
official records of the City; the duly qualified and acting members of the Council on the date of
the Meeting are those persons shown above, and, according to the records of my office, each
member of the Council was given actual notice of the time, place, and purpose of the Meeting
and had actual notice that the Resolution would be considered; and the Meeting and deliberation
of the aforesaid public business, was open to the public and written notice of said meeting,
including the subject of the Resolution, was posted and given in advance thereof in compliance
with the provisions of Chapter 551, as amended, Texas Government Code.
IN WITNESS WHEREOF, I have signed my name officially and affixed the seal of the
City,this 27th day of October, 2015.
/�c-•� -7
City Secretary
City of Cibolo, Texas
(SEAL)
FINAL
NEW WATER SUPPLY CONTRACT
October 19, 2015
between
CANYON REGIONAL WATER AUTHORITY
and
CITY OF CIBOLO,TEXAS,
CITY OF CONVERSE, TEXAS,
CITY OF MARION, TEXAS,
CRYSTAL CLEAR SPECIAL UTILITY DISTRICT,
EAST CENTRAL SPECIAL UTILITY DISTRICT, and
GREEN VALLEY SPECIAL UTILITY DISTRICT
WELLS RANCH PROJECT II
40733336.9
TABLE OF CONTENTS
Page
ARTICLE I Definitions................... 3
...............................................................
Section1.01 Definitions..........................................................................................3
Section 1.02 Construction...............................
ARTICLE II Representations and Warranties...............................................................
Section 2.01 Representations and Warranties of Authority....................................7
Section 2.02 Representations and Warranties of Participating Members...............7
ARTICLE III Construction of Project and Issuance of Bonds.............................................7
Section 3.01 Construction of Project......................................................................7
Section 3.02 Issuance of Bonds..............................................................................8
Section3.03 Liens...................................................................................................8
Section 3.04 Tax-Exempt Bonds............................................................................9
Section 3.05 Payment to Rebate Fund....................................................................9
Section 3.06 Sale and Offering Documents............................................................9
Section 3.07 Authority's Rights Assigned to Trustee..........:..................................9
ARTICLE IV Sale and Purchase of Treated Water; Operating Requirements...................10
Section 4.01 Water Conveyance; Option to Purchase..........................................10
Section 4.02 Points of Delivery............................................................................10
Section4.03 Resale...............................................................................................l l
Section 4.04 Other Contracts................................................................................11
Section4.05 Quality..............................................................................................l l
Section 4.06 Metering Equipment........................................................................12
Section 4.07 Pressure, Backflow, Maximum Rate of Flow..................................12
Section 4.08 Cross-Utilization of Lines................................................................13
ARTICLE V Fiscal Provisions..........................................................................................13
Section 5.01 Annual Requirement........................................................................ 13
Section 5.02 Annual Budget.................................................................................14
Section 5.03 Payments by Participating Members ...............................................15
Section 5.04 Unconditional Payments..................................................................16
Section 5.05 Continuing Right to Treated Water..................................................17
ARTICLE VI Additional Participating Members...............................................................17
Section 6.01 Additional Participating Members...................................................17
ARTICLE VII Special Conditions.......................................................................................18
Section 7.01 Operation and Maintenance of the Project.......................................18
Section 7.02 Project Schedule...............................................................................18
Section 7.03 Permits, Financing, and Applicable Laws .......................................18
Section 7.04 Title to Water; Indemnification .......................................................19
Section 7.05 Payments Solely From Revenues.....................................................19
40733336.9 -i-
TABLE OF CONTENTS
(continued)
Page
Section 7.06 Operating Expenses ......................................................................... 19
Section 7.07 Rates for Water................................................................................ 19
Section 7.08 Use of Funds and System.................................................................20
Section7.09 Rights-of-Way..................................................................................20
Section7.10 Insurance........................................................... .......................20
Section 7.11 Additional Special Provisions...............................
ARTICLE VIII Continuing Disclosure .............................................................. ..21
.................
Section 8.01 Annual Reports ................................................................................21
Section 8.02 Material Event Notices ....................................................................21
Section 8.03 Limitations, Disclaimers, and Amendments....................................22
Section 8.04 Information Format—Incorporation by Reference..........................23
Section 8.05 Allocation of Water During Drought...............................................24
Section 8.06 Conservation....................................................................................24
Section 8.07 Term of Contract..............................................................................24
Section 8.08 Approval and Consent......................................................................24
Section 8.09 Modification and Amendment.........................................................24
Section 8.10 Addresses and Notice.......................................................................25
Section 8.11 State or Federal Laws, Rules, Orders, or Regulations.....................26
Section 8.12 Remedies Upon Default...................................................................26
Section8.13 Severability......................................................................................27
Section8.14 Venue...............................................................................................27
Section8.15 Assignment ......................................................................................27
Section 8.16 Entire Agreement.............................................................................27
Section 8.17 Applicable Law........................................................
Section 8.18 No Sale, Lease, or Other Transfer of Participating Members'
UtilitySystem..................................................................................28
Section 8.19 Counterparts.....................................................................................28
Section 8.20 Goods and Services; Waiver of Sovereign Immunity;
Limitation on Damages....................................................................28
40733336.9 -11-
WATER SUPPLY CONTRACT
THIS NEW WATER SUPPLY CONTRACT(this "Contract") dated as of the October 19, 2015
(the "Contract Date") is between the CANYON REGIONAL WATER AUTHORITY, a regional water
authority created under and essential to accomplish the purposes of Article XVI, Section 59 of the
Constitution of the State of Texas (the "Authority"), and the CRYSTAL CLEAR SPECIAL UTILITY
DISTRICT, a special utility district created by a special act of the Texas Legislature, the EAST
CENTRAL SPECIAL UTILITY DISTRICT and the GREEN VALLEY SPECIAL UTILITY
DISTRICT, each a special utility district created under Chapter 65, as amended, Texas Water Code, the
CITIES OF CONVERSE and CIBOLO, TEXAS, each a home rule municipality, AND the CITY OF
MARION, TEXAS, a Type A general law municipality (as the "Original Participating Members",
which, together with any Additional Participating Members as hereinafter defined, are collectively or
individually referred to herein as"Participating Members").
PREAMBLE AND WITNESSETH:
WHEREAS, the Authority was created to purchase, own, hold, lease, and otherwise acquire
sources of a potable water supply to supplement water from the Edwards Aquifer; to build, operate, and
maintain facilities for the treatment and transportation of water; to sell potable water to local
governments, water supply corporations, and other persons in the State of Texas; and to protect,
preserve, and restore the purity and sanitary condition to water in the Authority; and
WHEREAS, the Authority's boundaries currently include all of the territory located in the
service area of its members as provided in their respective certificates of convenience and necessity
issued by the Texas Commission on Environmental Quality(the"Commission"); and
WHEREAS, each of the Authority's members currently provides potable water utility service to
its customers; and
WHEREAS, in the pursuit of its purposes, the Authority has entered into contracts and has and
anticipates entering into additional contracts to acquire rights to purchase raw water for treatment and
resale to the Participating Members; and
WHEREAS, the Authority previously issued three series of contract revenue bonds to finance
the original project and these contract revenue bonds are supported by a separate take-or-pay contract by
the contracting entities to that contract, as amended, and this new water supply contract will finance an
expansion of the original project with different entities executing this new take-or-pay contract to secure
the issuance of a new series of tax-exempt contract revenue bonds to be issued in 2015; and
WHEREAS, the Authority plans to build, expand, improve, renovate, equip, operate, and
maintain a water treatment facility known as Wells Ranch water treatment facility and certain related
transmission lines, including the use of certain Participating Members existing transmission lines and
related facilities (the "Project") for the purpose of receiving, treating, and transmitting certain of the
water purchased pursuant to certain contracts now in force or to be entered into in the future; and
WHEREAS, the Participating Members hold and may acquire additional rights to raw water
from other sources for treatment pursuant to the provisions of this Contract and thereafter to supply,
redeliver, or sell this treated water in accordance with the provisions of this Contract; and
40733336.9 -1-
WHEREAS, the Participating Members hold and may acquire additional rights to raw water
from other sources for treatment pursuant to the provisions of this Contract and thereafter to supply,
redeliver, or sell this treated water in accordance with the provisions of this Contract; and
WHEREAS, the Authority intends to build, operate, and maintain (i) an expanded water
treatment facility and (ii) certain related transmission lines and storage facilities including the use of
certain Participating Members existing transmission lines and related facilities, for the purpose of
receiving,treating, storing, and transmitting certain water purchased pursuant to certain contracts now in
force or to be entered into in the future; and
WHEREAS, to finance the costs of the acquisition, construction, and equipping of the Project,
the Authority intends to issue one or more series of its contract revenue bonds or other debt obligations
(the "Bonds") to the Texas Water Development Board or other entity (including a public or negotiated
sale), to be secured by and payable from revenues received by the Authority pursuant to this Contract;
and
WHEREAS, for and in consideration of the Authority acquiring the right to purchase raw water
for treatment and resale as provided herein, the Participating Members are willing and have agreed to
contract with the Authority as hereinafter provided to acquire treated water from the Project and to pay
the costs of the Project by assisting in the amortization of the principal of and interest on the Bonds and
paying the Authority's Operation and Maintenance Expenses (hereinafter defined); and
WHEREAS, the Authority and the Participating Members are authorized to enter into this
Contract pursuant to the Authority's enabling statute, Chapter 670,Acts of the 71 st Legislature, Regular
Session, 1989, as amended (the "Act"), and Chapter 791, Texas Government Code, as amended (the
"Interlocal Cooperation Act"), and other applicable laws; and
WHEREAS, the Authority agrees that the Participating Members shall continue to own their
respective Certificates of Convenience and Necessity issued by the Commission, shall continue to own
and operate their respective water pumping, storage, and distribution facilities, and any respective water
treatment facilities currently owned by each of the Participating Members; and
WHEREAS, the Authority's Board of Trustees has directed that a portion of the raw water
under this Contract be made available (following treatment by the Authority) on a firm basis to parties
who contract with the Authority pursuant to this Contract; and
WHEREAS, each of the Participating Members under this Contract proposes to pay its share of
costs of the Project and the Bonds based upon a rate methodology to be developed by the Authority or
in proportion to the respective amounts of treated water each has agreed to purchase under this Contract;
and
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and subject to the terms and conditions hereinafter set forth, the Authority and each of the
Participating Members agree and contract as follows:
40733336.9 -2-
ARTICLE I
Definitions
Section 1.01 Definitions.
The following terms and expressions as used in this Contract, unless the context clearly shows
otherwise, shall have the following meanings:
(1) "Act" means Chapter 670, Acts of the 71st Legislature, Regular Session, 1989, as
amended.
(2) "Additional Participating Member(s)" means any entity or entities hereafter agreeing
pursuant to Section 6.01 of this Contract to be bound by the terms of this Contract, as it may be
amended from time to time.
(3) "Adjusted Annual Payment" means the Annual Payment as adjusted by the Board
during or after an Annual Payment Period, as provided by this Contract.
(4) "Annual Payment" means the amount of money to be paid to the Authority by each
Participating Member during each Annual Payment Period as its share of the Annual Requirement.
(5) "Annual Payment Period"means the Authority's Fiscal Year,which currently begins on
October 1 of each calendar year and ends on September 30 of the next following calendar year, but
which may be any twelve consecutive month period fixed by the Authority.
(6) "Annual Requirement" means, during an Annual Payment Period, the total amount
required to pay all Operation and Maintenance Expenses of the Authority and the Project and all costs
and payments due and payable for the amortization of the Bonds.
(7) "Authority" means the Canyon Regional Water Authority, a regional water authority
created under and essential to accomplish the purposes of Article XVI, Section 59 of the Constitution of
the State of Texas created in accordance with the Act. Except as otherwise noted herein, actions
required or permitted to be taken by the Board under this Contract may be taken by the General
Manager on behalf of the Board.
(8) "Board"means the governing body of the Authority.
(9) `Boardmembers"means a member or members of the Board.
(10) "Bond Resolution"means any resolution or other financing documents of the Authority
which authorizes any Bonds.
(11) "Bonds"means all bonds, notes, or other debt obligations payable from and secured, in
whole or in part, from the payments to the Authority under this Contract, and the interest thereon,
hereafter issued by the Authority to finance the costs to acquire, construct, expand, renovate, improve,
and equip the Project, and/or all bonds, notes, or other obligations issued subsequently to finance costs
to improve and extend the Project, and any bonds or other obligations issued to refund any other bonds,
notes, or other obligations to refund any other refunding bonds or other obligations.
(12) "Code" means the Internal Revenue Code of 1986, and any amendments thereto, as in
force and effect on the date of delivery of any series of Bonds.
(13) "Commission" means the Texas Commission on Environmental Quality or any
successor entity thereto.
40733336.9 -3-
(14) "Contract" means this new Water Supply Contract, as initially executed and as it may
be amended from time to time.
(15) "Credit Agreement" means any credit agreement, as defined in and authorized by the
provisions of Chapter 1371, as amended, Texas Government Code which the Authority enters into
relating to its obligations with respect to the Bonds.
(16) "EMMA" means the MSRB's Electronic Municipal Market Access system, accessible
by the general public, without charge, on the internet through the uniform resource locator (URL)
http://www.ernina.msrb.org.
(17) "Fiscal Year"means the Authority's fiscal year, which currently begins on October 1 of
each year and ends on September 30 of the following year, as it may be changed from time to time by
the Authority with notice to the Participating Members.
(18) "Force Majeure"means such term only as it is defined in Section 5.04 of this Contract.
(19) "General Manager"means the general manager of the Authority's operations, including
any party or entity that the Authority enters into a management contract to provide these services.
(20) "Land Interests" means the easements, right-of-way, and other interests in real property
necessary for the acquisition, construction, and operation of the Project.
duties. (21) "MSRB" means the Municipal Securities Rulemaking Board and any successor to its
(22) "Operation and Maintenance Expenses" means, during an Annual Payment Period, all
direct costs and expenses incurred and paid by the Authority for the operation and maintenance of the
Project, including (for greater certainty but without limiting the generality of the foregoing) amounts
payable under any contract with any federal, state, or local agency for the construction, operation,
and/or water storage rights or other interests in water from any source of raw water, any contribution or
payment in lieu of taxes or any fee or charge by any government authority relating to the Authority's
sale of treated water hereunder, the costs of utilities, supervision, engineering, accounting, auditing,
legal services, insurance premiums, supplies, services, and administration of the Project, Overhead
Expenses, and costs of operating, repairing, maintaining, and replacing equipment for proper operation
and maintenance of the Project. The term "Operation and Maintenance Expenses" does not include
depreciation charges or such portion of the above-described costs to the extent such costs are paid
pursuant to an agreement other than this Contract.
(23) "Original Participating Members" means Crystal Clear Special Utility District, East
Central Special Utility District, Green Valley Special Utility District, and the Cities of Cibolo,
Converse, and Marion,Texas.
(24) "Overhead Expenses"means the reasonable and necessary costs and expenses incurred
and paid by the Authority which are directly related to the issuance and servicing of the Bonds; the
acquisition of Land Interests required for the Project, if any; the design, permitting, financing,
acquisition, construction, and ownership of the Project; and any other activities required of or involving
the Authority directly in connection with or attributable to the Project or the Bonds, including, but not
limited to:
(a) per diem and reimbursable expenses incurred by the Board for special meetings
of the Board related solely to the Project, or a portion of such expenses if a special meeting
relates to other Board matters in addition to the Project;
40733336.9 -4-
(b) services of the professional, technical skilled and unskilled persons and firms
engaged by or associated with the Authority, other than Authority staff personnel, together with
the reimbursable expenses of such persons and firms paid by the Authority;
(c) salaries of the Authority's staff attributable to the Project or the Bonds based on
time expended, as documented or reasonably estimated by the General Manager of the
Authority, times an overhead factor of two (2), which factor shall be subject to adjustment by
the Authority from time to time in response to actual or reasonably projected overhead expenses
of the Authority;
(d) the costs of preparing applications for and obtaining all approvals and
authorizations required for the Project or the Bonds from the regulatory authorities having
jurisdiction;
(e) the cost of property casualty and public liability insurance; including any
insurance deductible charged to or required to be paid by the Authority;
(fl all costs incurred in litigation involving or relating to the Project; and
(g) any and all other costs and expenses, including out-of-pocket expenses,
incurred by the Authority attributable to the Project or the Bonds, whether enumerated above or
not and whether or not included in the definition or as a part of Project Costs.
(25) "Participating Member(s)"means certain of the Original Participating Members and all
Additional Participating Members from time to time subject to this Contract.
(26) "Permitted Liens"means:
(a) Minor irregularities, charges, liens, encumbrances, defects, easements, licenses,
rights-of-way, servitudes, restrictions, mineral rights, and clouds on title which, in the opinion
of counsel to the Authority, do not materially impair the use of the Project for the purposes for
which it is designed.
(b) Easements for roads (as used in this Contract, the term "roads" shall include,
without limitation, streets, curbs, gutters, drains, ditches, sewers, conduits, canals, mains,
aqueducts, aerators, connections, ramps, docks, viaducts, alleys, driveways, parking areas,
walkways, and trackage), utilities (which for purposes of this Contact shall include, without
limitation, water, sewer, electricity, gas, telephone, pipeline, railroad, and other collection,
transportation, light,heat, power, and communication systems) and similar easements and other
easements, rights-of-way, rights of flowage, flooding, diversion or outfall, licenses, restrictions,
and obligations relating to the operation of the Project which, in the opinion of counsel to the
Authority, do not materially impair the use of the Project for the purposes for which it is
designed.
(c) Rights of the United States or any state or political subdivision thereof, or other
public or governmental authority or agency or any other entity vested with the power of eminent
domain to take or control property or to terminate any right, power, franchise, grant, license, or
permit previously in force.
(27) "Point(s) of Delivery"means the point or points designated in Exhibit B to this Contract
or by subsequent agreement where water will be delivered by the Authority to Participating Members
from the Project.
(28) "Project" means the "Project" as defined in the preamble of this Contract and reflects
the expansion of the original project and commonly known as Wells Ranch Project II.
40733336.9 -5-
(29) "Project Costs"means and includes, without limitation, the following costs incurred for
the Project by or on behalf of the Authority:
(a) the cost of acquisition of the Land Interests, including appraisals, closing costs
and title insurance policies;
(b) the cost of acquisition, construction, repair, replacement, or improvement of
any structure, item of equipment, or other item,used for, or in connection with, the Project;
(c) the cost of site preparation of the Land Interests, including demolition or
removal of structures and improvements as necessary or incident to accomplishing the Project;
(d) the cost of engineering,legal, architectural or other related services;
(e) the preparation cost of plans, specifications, studies, surveys, cost estimates,
and other expenses necessary or incident to planning,providing, or financing the Project;
(0 the cost of machinery, equipment, furnishings, and facilities necessary or
incident to placing the Project in operation;
(g) finance charges and interest before, during, and after construction;
(h) costs incurred in connection with financing the Project, including, without
limitation:
a. financing, legal, accounting, financial advisory, rating agency, and
auditing fees,expenses and disbursements;
b. the costs of a Credit Agreement;
C. the cost of printing, engraving, and reproduction services; and
d. the cost of a trustee's or paying agent's initial or acceptance fee and
subsequent fees.
(i) all costs,fees and expenses of litigation of all kinds;
(j) the cost of property casualty and public liability insurance;
(k) the Authority's Overhead Expenses; and
(1) other costs generally recognized as a part of project construction costs.
(30) "Rule"means SEC Rule 15c2-12, as amended from time to time.
(31) "SEC" means the United States Securities and Exchange Commission and any
successor to its duties.
(32) "Sale and Offering Documents" means any official notice of sale, official bid form,
preliminary official statement, official statement, application to the Texas Water Development Board, or
other offering document for the Bonds.
(33) "State"means the State of Texas.
(34) "System" means all properties, facilities and plants (including the Project) currently
owned, operated, and maintained by the Authority for the supply, treatment, and transmission of treated
potable water, together will all future extensions, improvements, replacements and additions thereto,
whether situated within or without the limits of the Authority; provided, however, that notwithstanding
the foregoing, and to the extent now or hereafter authorized or permitted by law, the term System shall
40733336.9 -6-
not mean to include facilities of any kind which are declared not to be a part of the System and which
are acquired or constructed by or on behalf of the Authority with the proceeds from the issuance of
Special Facilities Bonds,which are hereby defined as being special revenue obligations of the Authority
which are not payable from revenues of the System but which are payable from and equally and ratably
secured by other liens on and pledges of any revenues, sources or payments, not pledged to the payment
of the Bonds including, but not limited to, special contract revenues or payments received from any
other legal entity in connection with such facilities.
Section 1.02 Construction.
Unless the context requires otherwise, words of the masculine gender shall be construed to
include correlative words of the feminine and neuter genders and vice versa, and words of the singular
number shall be construed to include correlative words of the plural number and vice versa. This
Contract and all the terms and provisions hereof shall be constructed to effectuate the purposes set forth
herein and to sustain the validity of this Contract.
ARTICLE 11
Representations and Warranties
Section 2.01 Representations and Warranties of Authority.
The Authority hereby represents and warrants that it has full power and authority to sell or
otherwise convey treated water to the Participating Members in accordance with the terms of this
Contract and the execution and delivery of this Contract by the Authority and the performance by the
Authority of the provisions hereof do not and will not conflict with or constitute on the part of the
Authority a breach or a default of any provision of any other contract or agreement of the Authority.
Section 2.02 Representations and Warranties of Participating Members.
Each of the Participating Members hereby represents and warrants that it has full power and
authority to purchase treated water from the Authority in accordance with the terms of this Contract; and
the execution and delivery of this Contract by each Participating Member and the performance of the
provisions hereof by each Participating Member do not and will not conflict with or constitute on the
part of such Participating Member a breach or a default of any provision of any other contract or
agreement of such Participating Member.
ARTICLE III
Construction of Project and Issuance of Bonds
Section 3.01 Construction of Project.
The Authority agrees that the acquisition, construction, and improvement of the Project by the
Authority will be accomplished in accordance with generally accepted engineering practices and,
subject to the issuance of the Bonds pursuant to Section 3.02 to provide a source of funds, with all
practical dispatch.
40733336.9 -7-
Section 3.02 Issuance of Bonds.
A. The Authority may issue its Bonds,payable from and secured by a pledge of the Annual
Payments from this Contract to finance the costs of acquiring, constructing, extending, enlarging,
repairing,renovating, equipping, and otherwise improving the Project.
B. Each Bond Resolution of the Authority shall specify the exact principal amount of the
Bonds to be issued thereunder,which Bonds shall mature within the maximum allowable period or such
shorter period as determined by the Authority and shall bear interest not exceeding the maximum
allowable rates, all as permitted by law, and each Bond Resolution shall contain such other terms and
provisions pertaining to the security and payment of Bonds and the operation and maintenance of the
Project as may be necessary for the marketing and sale of the Bonds. The Authority may from time to
time issue its Bonds in such amounts as are within its judgment and discretion sufficient to achieve full
implementation of the Project.
C. Prior to the final adoption of a Bond Resolution or any amendment of a Bond
Resolution by the Authority's Board of Trustees, a draft of the proposed Bond Resolution, and the Sale
and Offering Documents shall be presented to the Participating Member for review and approval. The
Participating Members shall adopt a resolution approving the issuance of Bonds and delegate to an
authorized representative the approval of the final terms and provisions of the Bonds, including the
principal amount, as reflected in the final Bond Resolution.
D. Upon the Participating Member approval of(i) each form of Bond Resolution hereafter
adopted by the Authority, (ii) any amendments to any Bond Resolution, and (iii) the Sale and Offering
Documents and the delivery to the Authority of a certification signed by the authorized representative of
the Participating Member to the effect that the Bond Resolution and the Sale and Offering Documents
comply with this Contract, then upon the adoption and approval of the Bond Resolution in such final
form by the Authority's Board of Trustees, the execution of an approval certificate by the authorized
representatives of each of the Participating Members approving the final terms and provisions of the
Bonds and the Bond Resolution, and the issuance and delivery of the Bonds to the purchaser thereof,the
Bond Resolution shall for all purposes be considered approved by the Authority and deemed to be in
compliance with this Contract in all respects, and the Bonds issued thereunder will constitute Bonds as
defined in this Contract for all purposes. Any owner of Bonds is entitled to rely fully and
unconditionally on any such approval.
E. All covenants and provisions in the Bond Resolution affecting, or purporting to bind,
the Participating Member, shall, upon the delivery of the Bonds, become absolute, unconditional, valid,
and binding covenants and obligations of the Participating Member so long as said Bonds and interest
thereon are outstanding and unpaid, and may be enforced as provided in this Contract and the Bond
Resolution. Particularly, the obligation of the Participating Member to make, promptly when due, all
Annual Payments specified in this Contract and all payments described in Section 5.03 hereof shall be
absolute and unconditional, and said obligation may be enforced as provided in this Contract. In
addition, subject to the approval of the Participating Member, the Authority may enter into Credit
Agreements, to the extent permitted by law, for the purpose of achieving the lowest financing costs for
the Project.
Section 3.03 Liens. Neither the Participating Members nor the Authority will create or
permit or suffer to exist any lien, encumbrance, or charge upon the Project or any interest therein at any
time, except Permitted Liens.
40733336.9 -$-
Section 3.04 Tax-Exempt Bonds. The parties hereto understand and agree that the Authority
will use its best efforts to provide for, but will not be liable for a failure to produce, the lowest overall
debt service cost for the Bonds to be issued for the Project. In connection therewith, the parties intend
that the Authority will issue Bonds the interest on which is excludable from the gross income of the
owners thereof for federal income tax purposes. The parties hereto acknowledge their understanding
that the federal income tax laws impose certain restrictions on the use and investment of proceeds of
such tax-exempt bonds and on the use of the property financed therewith and the output produced
therefrom. Accordingly, the parties agree and covenant that if the Bonds are offered to investors with
the understanding that the interest will be exempt from federal income taxation, then the parties, their
assigns and agents, will take such action to assure, and refrain from such action which will adversely
affect the treatment of such Bonds as obligations described in section 103 of the Code. Should either
party fail to comply with such covenant, the effect of which being that the Bonds no longer qualify as
obligations described in the Code, such defaulting party shall be liable for all costs resulting from the
loss of the tax-exempt status of the Bonds. The parties hereby agree and covenant to comply with all of
the representations and covenants relating to such exemption which are set out in any Bond Resolution.
The parties further agree and covenant that in the event the Bonds issued are to be tax-exempt, they will
modify such agreements,make such filings, restrict the yield on investments, and take such other action
necessary to fulfill the applicable provisions of the Code. For these purposes, the parties may rely on
the respective opinion of any firm of nationally-recognized bond attorneys selected by them. In the
event that a conflict arises in the opinions of the respective firms of each of the parties, the parties will
identify a different firm, that is mutually acceptable to both parties, in order to resolve the conflict of
opinion.
Section 3.05 Payment to Rebate Fund. In the event that tax-exempt Bonds are issued as
provided in Section 3.04, the Authority hereby covenants and agrees to make the determinations and to
pay any deficiency into a rebate fund, at the times and as described in the Bond Resolution to comply
with the provisions of section 148(0)(2) of the Code. In any event, if the amount of cash held in the
rebate fund shall be insufficient to permit the trustee or paying agent to make payment to the United
States of America of any amount due on any date under section 148(f)(2) of the Code, the Authority
forthwith shall pay the amount of such insufficiency on such date to the trustee or paying agent in
immediately available funds for such purpose.
Section 3.06 Sale and Offering Documents. At the request of the Authority, the Participating
Members shall provide to the Authority current and historical information concerning their respective
utility systems, general fund information, the financial conditions results, and prospects of the
Participating Members, and such other information concerning the Participating Members as the
Authority shall deem advisable for inclusion in the Sale and Offering Documents for the Bonds of each
series and shall certify to the Authority and the underwriters of any offering of Bonds to be made by
means of such Sale and Offering Documents when and if the Participating Members deem such Sale and
Offering Documents to be complete and final for purposes of the Rule. The Participating Members
represent and warrant that all statements concerning the Participating Members (including, without
limitation,their financial condition,results, and prospects, their utility system, and any demographic and
economic information concerning the area served by their utility system) that are contained in any Sale
and Offering Document shall be true in all material respects and shall not omit to state any material fact
necessary to make the statements made in such Sale and Offering Document, in the light of the
circumstances in which they are made,not misleading.
Section 3.07 Authority's Rights Assigned to Trustee. The Participating Members are
advised and recognize that as security for the payment of the Bonds, the Authority may assign to a
trustee, pursuant to one or more trust indentures to be authorized by.the Bond Resolution, the
40733336.9 -9-
Authority's rights under this Contract, including the right to receive the Annual Payments hereunder and
the amounts described in Section 5.03 hereof. The Participating Members herewith assent to such
assignment and will make the Annual Payments and the payments described in Section 5.03 hereof
directly to the trustee without defense or set-off by reason of any dispute between the Participating
Members and the Authority or the trustee. All rights against the Participating Members arising under
this Contract or the Bond Resolution and assigned to the trustee may be enforced by the trustee, or the
owners of the Bonds,to the extent provided in the Bond Resolution, and the trustee, or the owners of the
Bonds, shall be entitled to bring any suit, action, or proceeding against the Participating Members,to the
extent provided in the Bond Resolution, for the enforcement of this Contract, and it shall not be
necessary in any such suit, action, or proceeding to make the Authority a party thereto.
ARTICLE IV
Sale and Purchase of Treated Water; Operating Requirements
Section 4.01 Water Conveyance, Option to Purchase.
A. The Participating Members hereby agree to pay for the right to receive from the
Authority and the Authority hereby agrees to sell to the Participating Members all of the treated water
produced by the Authority through the Project subject to the terms and provisions of this Contract or
other contracts which generate System revenues; provided, however, the Authority shall have the right
to purchase, and the Participating Members hereby each agree to relinquish their right to purchase,
treated water produced by the Project upon reduction, on a proportionate basis, of the Participating
Members' share of their Annual Payments under this Contract as provided in Section 5.04 hereof. It is
expressly recognized that the treated water delivered to each Participating Member as disclosed in
Exhibit A shall be owned by such Participating Member and may be sold or otherwise conveyed by
such Participating Member in accordance with applicable law; provided, however, before any
Participating Member enters into a contract or other agreement to transfer, sell, or convey any treated
water received from the Authority pursuant to the terms of this Contract, such Participating Member
shall afford the Authority the right of first refusal for a period of 90 days to obtain such treated water
for redistribution to other Participating Members.
B. Each of the Participating Members shall be entitled to receive from the Authority the
quantities of treated water identified in Exhibit A attached hereto in accordance with this Contract. To
the extent the Authority has acquired additional water from some other source, or to the extent any
Participating Member does not request all of its allotted treated water as set forth on Exhibit A, or to the
extent the Authority acquires a percentage share of the treated water produced by the Project pursuant to
Paragraph A of this Section, the Authority may sell or otherwise use the allotted treated water not
requested or the share of treated water produced by the Project and acquired by the Authority to supply
treated water or spot water sales to other Participating Members, to retail customers, if any, of the
Authority, or on a spot basis. The Authority agrees to utilize the revenues from this potential sale of
water pursuant to this Paragraph B to benefit all Participating Members as these revenues will be
accounted for and disclosed in the Authority's next succeeding budget.
Section 4.02 Points of Delivery.
Each Participating Member agrees to take treated water at the Point(s) of Delivery for such
Participating Member set forth in Exhibit B hereto. Modification of such Points of Delivery may be
mutually agreed to in writing between each Participating Member, respectively, and the Authority. The
Authority will maintain ownership of the connection (being any device, including welded pipe
40733336.9 -10-
connections, water installations, valves, meter vaults, or similar devices) between the Authority's
System and the utility system of the Participating Members.
Section 4.03 Resale.
Participating Members hereby agree not to sell treated water purchased from the Authority
under this Contract to any person or entity outside such Participating Member's boundaries or
prescribed service area (as the boundaries or prescribed service area may be adjusted by the
Participating Member in its sole discretion and as approved by any regulatory authority with jurisdiction
from time to time) unless the Participating Member has received prior written approval from the Board
and are subject to compliance with Section 4.01A above. Approval to make retail sales of treated water
to individual customers outside such boundaries or prescribed service area may be granted by the
General Manager of the Authority. Approval to make wholesale sales of treated water pursuant to this
Contract outside the Participating Member's boundaries or prescribed service area shall require the
specific prior approval of the Board and are subject to compliance with Section 4.01A above.
Notwithstanding any provision in this Section to the contrary, each Participating Member shall have the
right and authority to continue to sell treated water on a retail or wholesale basis to all existing
customers situated outside its corporate boundaries or prescribed service area and without the approval
or consent of the Board or General Manager. Additionally, the Participating Members shall have the
right and authority to sell treated water received from other sources other than the Authority on a
wholesale basis or otherwise without any limitation imposed by this Contract or approval by the Board
or General Manager.
Section 4.04 Other Contracts.
A. If the Authority exercises its right to water under this Contract pursuant to Section 4.01,
the Authority reserves the right to supply treated water from the Project to others on wholesale or retail
basis. Each such contract with other entities shall be limited to the Authority's share of treated water
covered by this Contract and shall not contain any provision which would adversely affect the
Participating Members' percentage share of treated water covered by this Contract, except as permitted
by Section 4.01. In addition, the Authority shall not sell treated water(or such sales will be suspended)
pursuant to this Section 4.04 to any entity other than a Participating Member when a condition of
drought or other water conservation measure exists which resulted in all Participating Members having
their allocation of treated water reduced on a pro rata basis.
B. The parties hereto recognize and acknowledge that the Authority shall have the right
and authority to contract or make other arrangements with respect to its percentage share of water from
the Project without limitation or approval of any Participating Member.
Section 4.05 Qualit .
A. The water to be delivered by the Authority and received by each Participating Member
shall be treated water from the Project of a quality sufficient to meet the requirements for potable water
established by the Commission and the United States Environmental Protection Agency.
The Authority shall not be responsible for maintaining any particular amount of chlorine
residuals at any point in any Participating Member's utility system.
B. The Authority shall periodically and at a minimum, no less than as may be required by
any regulatory authority having jurisdiction, collect samples of treated water delivered to Participating
40733336.9 -11-
Members and other customers and cause same to be analyzed consistent with guidelines established by
the Commission using the then-current edition of Standard Methods for Examination of Water and
Wastewater as published by the American Water Works Association("AWWA") and others.
C. The Authority shall cooperate with any Participating Member in responding to any
regulatory or legal inquiry related to the quality of water delivered under this Contract.
Section 4.06 Metering Equjpment.
A. The Authority will furnish, install, operate, and maintain at its expense the necessary
equipment and devices (including a meter house or pit) of standard type required for measuring the
quantity of water delivered under this Contract from the Project to each Participating Member's Point or
Points of Delivery. Such meters and other equipment so installed shall be the property of the Authority.
The Authority shall inspect, calibrate, and adjust its meters at least annually as necessary to maintain
accurate measurements of the quantity of water being delivered. Each Participating Member shall have
access to the metering equipment at all reasonable times for inspection and examination, but the
reading, calibration, and adjustment thereof shall be done only by employees or agents of the Authority.
The Authority will notify each Participating Member of any scheduled reading, inspection, calibration,
or adjustment at least three (3) business days in advance of the scheduled date. If a Participating
Member so requests, the Participating Member may observe such reading, inspection, calibration, and
adjustment of meters. Any measuring device which fails to function or which functions incorrectly shall
promptly be adjusted, repaired, or replaced by the Authority, Replacement shall be by a like device
having the required accuracy. A meter registering not more than five percent (5%) above or below the
test results shall be deemed to be accurate. The previous readings of any meter disclosed by tests to be
inaccurate shall be corrected for a period equal to one-half(1/2) the time elapsed since the date of the
immediately preceding meter test at which no inaccuracy was discovered, but in no event will a period
of correction exceed six (6) months, in accordance with the percentage of inaccuracy found by such
tests. If any meter fails to register for any period, the amount of water furnished during such period
shall be deemed to be the amount of water delivered in the corresponding period immediately prior to
the failure, unless the Authority and the Participating Member shall agree upon a different amount. All
readings of meters will be entered upon proper books of record maintained by the Authority. Any
Participating Member may have access to said record books during the Authority's normal business
hours.
B. Notwithstanding the requirements for other notices provided in this Contract, any
notice, communication, request, reply, or advice from the Authority to a Participating Member, or vice
versa, relating to the activities described in Subsection A above, or any other communication relating to
the devices for metering of water, may be by electronic or telephone communication, provided receipt
of the notice is confirmed by the intended recipient.
Section 4.07 Pressure,Backflow,Maximum Rate of Flow.
A. The Authority shall deliver treated water to the Point(s) of Delivery for each
Participating Member(subject to the provisions of Section 4.08) at a pressure of not less than 35 psi or
at such other pressure agreed upon by the Authority and the Participating Member. If a Participating
Member requires a greater or lesser pressure, such Participating Member shall bear all of the costs of
providing such greater or lesser pressure. Pressure failure due to supply line breaks, power failures,
flood, fire, earthquakes, other catastrophes, or use of water to fight fires, or any other cause beyond the
reasonable control of the Authority shall relieve the Authority from compliance with this provision for
such reasonable period of time as may be necessary to restore pressure.
40733336.9 -12-
B. The Authority shall install and maintain at its sole expense at each Point of Delivery a
backflow preventor of AWWA-approved quality. Each Participating Member shall have the right to
inspect the backflow preventor at each of its Points of Delivery at such reasonable times at such
Participating Member in its discretion may determine are required.
C. The maximum rate of flow per day that may be provided to each Participating Member
by the Authority is established in Exhibit A hereto and incorporated by reference for all purposes to this
Contract.
Section 4.08 Cross-Utilization of Lines.
A. Each Participating Member acknowledges that it may be necessary for certain of its
transmission lines to be utilized in order for the Authority to transmit treated water to another
Participating Member and such Participating Member hereby agrees to permit the Authority to so utilize
its transmission lines in accordance with Section 7.09. In such case, the Participating Members
involved agree to inform the Authority of any special requirements with respect to pressure or other
matters relating to the transmitting Participating Member's lines.
B. The Authority will furnish, install, operate, and maintain at its expense meters at the
point of exit from a Participating Member's lines to maintain accurate measurements of the quantity of
water being delivered by the Authority to a Participating Member through the lines of another
Participating Member. Such meters shall be subject to inspection and examination by both Participating
Members in accordance with the provisions of Section 4.06,
C. In the event that repairs are required to be made to any lines of a Participating Member
which are utilized for the transmission of treated water to another Participating Member, the receiving
Participating Member shall participate in the cost of such repairs as may be agreed from time to time.
ARTICLE V
Fiscal Provisions
Section 5.01 Annual Requirement.
Subject to the terms and provisions of this Contract, the Authority will provide and pay for the
cost of the Project through the issuance of the Bonds. It is acknowledged and agreed that payments by
the Participating Members to the Authority under this Contract will be the sole or primary source of
funds available to the Authority to provide the Annual Requirement. Each Participating Member shall
be obligated to pay the full amount of its Annual Requirement notwithstanding that it may elect not to
receive the full amount of treated water available to it under this Contract. In compliance with the
Authority's duty to fix and from time to time to revise the rates and charges for services rendered under
this Contract, the Annual Requirement may change from time to time. Each such Annual Requirement
shall be allocated among the Participating Members and the Authority based upon a rate methodology to
be developed by the Authority or according to their respective percentage shares of treated water
covered by this Contract, and the Annual Requirement for each Annual Payment Period shall be
identified in each annual budget and shall at all times be not less than an amount sufficient to pay or
provide for the payment of the following:
A. all Operation and Maintenance Expenses; and
40733336.9 -13-
B. an amount to fund a special reserve for the Operation and Maintenance Expenses or for
additional capital improvements to the Project; the total amount to be accumulated
annually (subject to replenishment) for such operating and additional capital
improvements reserve shall not exceed 25% of the annual Operation and Maintenance
Expenses (estimated to be approximately three(3)months' expenses); and
C. when the Authority and the Participating Members agree to issue Bonds to finance the
costs of the Project, a capital component,including principal, interest,premium,reserve
funds, and other funds established or required by any Bond Resolution and to pay the
principal of and interest on the Bonds.
Section 5.02 Annual Budget.
Each annual budget for the acquisition and/or operation and maintenance of the Project shall
always provide for amounts sufficient to pay the Annual Requirement. Each Participating Member will
be furnished a copy of such annual budget, and each Participating Member hereby acknowledges its
ability to pay its share of the Annual Requirement from available funds budgeted therefor. On or before
July 15 of each year thereafter commencing July 15, [2015], the Authority shall furnish to each
Participating Member a preliminary estimate of the Annual Payment required from each Participating
Member for the next following Annual Payment Period.
Not less than 60 days before the commencement of each Annual Payment Period beginning in
Fiscal Year [2015-2016], the Authority (i) shall cause to be prepared a preliminary budget for the
Project for the next ensuing Annual Payment Period and (ii) shall provide a copy of such preliminary
budget to each Participating Member. A Participating Member who disputes any information in the
preliminary budget shall submit written comments, questions, or requests for clarification about the
preliminary budget directly to the Authority,with copy to each member of the Board,not less than thirty
(30) days before the commencement of the Annual Payment Period. The Board may adopt the
preliminary budget or make such amendments thereof as to it may seem proper; provided, however, no
change or amendment to the preliminary budget will be made by the Board after such preliminary
budget has been submitted to the Participating Members which change or amendment would in effect
increase the Annual Requirement without resubmitting such amended preliminary budget to the
Participating Members not less than 10 days prior to the date of the Board meeting scheduled for
approval of the annual budget. The Board shall thereupon approve the annual budget. With respect to
budgetary matters, the Participating Members shall have the right only to comment on the preliminary
budget; their approval of the preliminary or final annual budget shall not be required. The annual
budget thus approved by the Board shall be the annual budget for the next ensuing Annual Payment
Period. The annual budget, including the first annual budget, may be amended by the Authority at any
time to transfer funds from one account or fund to another account or fund, provided such transfer will
not increase the total budget and the transfer of funds is attributable to the costs of the Project or to the
Project's maintenance and operation. Subject to notification to the Participating Members, the amount
for any account or fund, or the amount for any purpose, in the annual budget may be increased through
formal action by the Board even though such action might cause the total amount of the annual budget
for the Project to be exceeded; provided, however, such action shall be taken only in the event of an
emergency or special circumstances which shall be clearly stated in the notice to the Participating
Members and in the resolution at the time such action is taken by the Board.
Notwithstanding anything herein to the contrary, no failure of the Authority to estimate, and no
mistake by the Authority in any estimate of, the amount of or schedule for Annual Payments due from
the Participating Members in any Fiscal Year shall relieve the Participating Members from (or allow
40733336.9 -14-
them to defer) their absolute and unconditional obligation to make all Annual Payments in full when
due.
Section 5.03 Payments by Participating Members.
A. Subject to Sections 4.06 and 4.07B, each Participating Member agrees to pay a
connection fee for each Point of Delivery equal to the total cost of material, labor, and equipment
required to implement such connection.
B. For the treated water available to the Participating Members under this Contract
(whether or not the Participating Members elect to receive such water), each of the Participating
Members agrees to pay, at the time and in the manner hereinafter provided, its share of the Annual
Requirement. Each of the Participating Members shall pay its part of the Annual Requirement for each
Annual Payment Period directly to the Authority (or its assigns), in monthly installments in accordance
with the schedule of payments furnished by the Authority, as hereinafter provided.
C. Each Participating Member shall pay a proportionate share of the Annual Requirement
according to a rate methodology to be developed by the Authority or based upon the relative amount of
water available to each Participating Member and set forth on Exhibit A, as amended from time to time.
The Authority shall charge each Participating Member its share of pumping costs according to the
volume of water actually delivered.
D. Each Participating Member's allocated share of the Annual Requirement for each
Annual Payment Period shall be made in accordance with a written schedule of payments for the
appropriate Annual Payment Period which will be supplied to each of the Participating Members by the
Authority.
E. Notwithstanding the foregoing, the Annual Requirement, and each Participating
Member's share thereof, shall be redetermined, after consultation with each of the Participating
Members, at any time during any Annual Payment Period, to the extent deemed necessary or advisable
by the Authority, if-
(1)
f(1) the Authority exercises its option to acquire treated water pursuant to Section 4.01;
(2) unusual, extraordinary, or unexpected Operation and Maintenance Expenses are
required which are not provided for in the Authority's annual budget or reserves for the Project;
(3) Operation and Maintenance Expenses of the Project are substantially less than
estimated;
(4) a Participating Member's interest under this Contract is terminated as provided herein
or Additional Participating Members become subject to this Contract;
(5) the Authority issues Bonds for the Project; or
(6) the Authority receives either substantially more or substantially less revenues or other
amounts than those anticipated by the Authority at the time a Participating Member elects to execute
this Contract or at the time any annual Preliminary Budget is distributed by the Authority.
"Substantially" in this subsection (6) means by an amount of 15% or greater, determined in accordance
with generally accepted accounting practices.
F. Each Participating Member hereby agrees that it will make payments to the Authority
required by this Contract at the Authority's offices within thirty(30) days of the date a bill for service is
40733336.9 -15-
deposited in the United States mail. If any Participating Member at any time disputes the amount to be
paid by it to the Authority, such complaining party shall nevertheless promptly make such payment or
payments; but if it is subsequently determined by agreement or by appropriate administrative, board,
agency, or court decision that such disputed payments should have been less, or more, the Authority
shall promptly revise and reallocate the charges in such manner that the Participating Member will
recover its overpayment or the Authority will recover the amount due it. All amounts due and owing to
the Authority by each Participating Member or due and owing to any Participating Member by the
Authority shall, if not paid when due, bear interest at the maximum lawful nonusurious rate of interest
per annum from the date when due until paid.
G. The Authority shall, to the extent permitted by law, suspend the delivery of services or
water from the Project to any Participating Member which remains delinquent in any payments due
under the preceding paragraph for a period of forty-five (45) days, and shall not resume delivery of
services or water while such Participating Member is so delinquent. The Authority also retains the right
to charge a reconnection fee or other appropriate charges prior to commencing utility service to the
delinquent Participating Member. It is further provided and agreed that if any Participating Member
should remain delinquent in any payments due hereunder for a period of one hundred twenty days, and
if such delinquency continues during any period thereafter, such Participating Member's minimum
amount specified in Exhibit A, shall be deemed to have been zero gallons during all periods of such
delinquency, for the purpose of calculating and redetermining the percentage of each Annual Payment
to be paid by the non-delinquent Participating Members and the Authority, and the Authority shall
redetermine such percentage on that basis in such event so that the non-delinquent Participating
Members and the Authority collectively shall be required to pay all of the Annual Requirement.
However, the Authority shall pursue all legal remedies against any such delinquent Participating
Member to enforce and protect the rights of the Authority, the other Participating Members, and the
holders of the Bonds, if Bonds have been issued or incurred. The delinquent Participating Member shall
not be relieved of the liability to the Authority for the payment of all amounts which would have been
due hereunder had no default occurred or the percentage had not been redetermined as provided in this
Section. It is understood that the foregoing provisions are for the benefit of the Authority and holders of
the Authority's Bonds, if Bonds have been issued or incurred, so as to insure that all of the Annual
Requirement will be paid by the non-delinquent Participating Members and the Authority during each
Annual Payment Period regardless of the delinquency of a particular Participating Member. If any
amount due and owing the Authority by any Participating Member is placed with an attorney for
collection, such Participating Member shall pay to the Authority all attorneys' fees, in addition to all
other payments provided for herein, including interest.
H. If, during any Annual Payment Period, any Participating Member's Annual Payment is
redetermined in any manner as provided or required in this Section, the Authority will promptly furnish
such Participating Member with an updated schedule of monthly payments reflecting such
redetermination.
Section 5.04 Unconditional Payments.
A. Notwithstanding any provision of this Contract to the contrary, while this Contract
remains in effect each of the Participating Members agrees to pay its share of the total cost of the
Project and the Bonds. If the Authority elects to exercise its option to acquire a percentage share of the
treated water covered by this Contract as provided in Section 4.01, the Annual Payment of each
Participating Member shall be reduced to the proportion that each Participating Member's amount of
water identified in Exhibit A bears to the total amount of water available from the Project. Initially, the
Participating Members agree to pay 100% of the Annual Requirement,but, if the Authority exercises its
40733336.9 -16-
option to acquire treated water from the Project pursuant to Section 4.01,the Participating Members and
the Authority shall share the cost of the Project and the Bonds in proportion to quantities of treated
water each is entitled to take from the Project pursuant to this Contract.
B. Recognizing that the Participating Members urgently require the facilities and services
of the Project, and that such facilities and services are essential and necessary for actual use and for
standby purposes, and further recognizing the fact that the Authority will use payments received from
the Participating Members to pay and secure the Bonds, it is hereby agreed that each of the Participating
Members shall be unconditionally obligated to pay, without offset or counterclaim, its share of the
Annual Requirement, as provided and determined in this Contract, regardless of whether or not the
Authority actually acquires, constructs, or completes the Project or is actually delivering water from the
Project to any Participating Member hereunder, or whether or not any Participating Member actually
receives or uses water from the Project whether due to Force Majeure or any other reason whatsoever,
regardless of any other provisions of this or any other contract or agreement between any of the parties
hereto. This covenant by the Participating Members shall be for the benefit of and enforceable by the
holders of the Bonds as well as the Authority.
C. If by reason of Force Majeure a Participating Member or the Authority shall be
rendered unable wholly or in part to carry out its obligations under this Contract, other than the
obligation of each Participating Member to make the payments required under Section 5.03 of this
Contract,then if such party shall give notice and full particulars of such Force Majeure in writing to the
other Participating Members and/or the Authority, as appropriate, within a reasonable time after
occurrence of the event or cause relied on, the obligation of the Participating Member or the Authority
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 such Participating Member or
the Authority shall endeavor to remove or overcome such inability with all reasonable dispatch. The
term "Force Majeure" as employed herein shall mean acts of God, strikes, lockouts or other industrial
disturbances, acts of public enemy, orders of any kind of the Government of the United States or the
State of Texas, or any civil or military authority, insurrection, riots, epidemics, landslides, lightning,
earthquake, fires, hurricanes, storms, floods, washouts, droughts, arrests, restraint of government and
people, civil disturbances, explosions,breakage or accidents to machinery, pipelines or canals,partial or
entire failure of water supply, or on account of any other causes not reasonable within the control of the
party claiming such inability.
Section 5.05 Continuing Right to Treated Water.
For and in consideration of agreeing to the unconditional payments to be made under this
Contract, each Participating Member is entitled to a firm right to treated water from the Project in the
amounts indicated in Exhibit A, as such amount may be modified from time to time by the terms of this
Contract. That right shall continue for the term of this Contract and any renewals thereof.
ARTICLE VI
Additional Participating Members
Section 6.01 Additional Participating Members.
If water is available,the Authority and the Original Participating Members agree that additional
entities may become subject to the provisions of this Contract as Additional Participating Members by
providing the following to the Authority and the then Participating Members:
40733336.9 -17-
A. an executed signature page to this Contract in form satisfactory to the Authority;
B. to the extent any representation contained in this Contract relating to Participating
Members does not correctly describe such entity, a revision of such representations satisfactory in form
and content to the Authority in the Authority's sole discretion to be included on Exhibit C to this
Contract;
C. a revised Exhibit A to this Contract satisfactory to the Authority and all then
Participating Members;
D. a revised Exhibit B to this Contract setting forth the Point(s) of Delivery for such entity
which shall be satisfactory to the Authority;
E. a completed Exhibit C to this Contract to the extent applicable to such entity and in
form satisfactory to the Authority; and
F. such other certifications and information as may be reasonably requested by the
Authority and the then Participating Members.
ARTICLE VII
Special Conditions
Section 7.01 Operation and Maintenance of the Project.
The Authority will continuously operate and maintain the Project in an efficient manner and in
accordance with good business and engineering practices, and at reasonable cost and expense. The
Authority recognizes its right and duty to operate the Project in the most prudent and economical
manner for the benefit of all Participating Members.
Section 7.02 Project Schedule.
It is the intent of the parties that the Project be placed in operation as soon as practicable, and
the Authority agrees to proceed diligently with the evaluation of feasibility, the securing of regulatory
permits, and the design and construction of the Project to meet such schedule, subject to the other terms
and conditions in this Contract.
Section 7.03 Permits,Financing, and Applicable Laws.
Any obligations on the part of the Authority to acquire, construct, and complete the Project and
related facilities and to provide treated water from the Project to the Participating Members shall be (i)
conditioned upon the Authority's ability to obtain all necessary permits, material, labor, and equipment;
(ii) subject to the Authority's final determination of feasibility of transportation of the treated water
from the Project; (iii) conditioned upon the ability of the Authority to finance the cost of the Project
through the sale of the Bonds; and (iv) subject to all present and future valid laws, orders, rules, and
regulations of the United States of America, the State of Texas, the Commission, and any regulatory
body having jurisdiction.
40733336.9 -1$-
Section 7.04 Title to Water, Indemnification.
Title to all water supplied to each Participating Member shall be in the Authority up to the Point
of Delivery for such Participating Member, at which point title shall pass to the receiving Participating
Member. Title to treated water transmitted through the lines of a Participating Member pursuant to
Section 4.08 for the use of another Participating Member shall remain in the Authority until it reaches
the Point(s) of Delivery of the receiving Participating Member. The Authority and each of the
Participating Members shall, to the extent permitted by law, save and hold each other harmless from all
claims, demands, and causes of action which may be asserted by anyone on account of the
transportation and delivery of said water while title remains in such party.
Section 7.05 Payments Solely From Revenues.
The Authority shall never have the right to demand payment by any Participating Member of
any obligations assumed by it or imposed on it under and by virtue of this Contract from funds raised or
to be raised by taxes, and the obligations under this Contract shall never be construed to be a debt of
such kind as to require any of the Participating Members to levy and collect a tax to discharge such
obligation. Nonetheless, any Participating Member may make payments from its utility system
revenues, or from any other lawful source, including ad valorem taxes, if lawfully available to such
Participating Member.
Section 7.06 Operating Expenses.
Each of the Participating Members represents and covenants that, to the extent payments under
this Contract are made with utility system revenues, such payments shall constitute reasonable and
necessary "operating expenses" of its utility system, as defined in Chapter 1502, as amended, Texas
Government Code, and that all such payments will be made from the revenues of its utility system or
any other lawful source. Each Participating Member represents and has determined that the treated
water supply to be obtained from the Project is absolutely necessary and essential to the present and
future operation of its utility system and that the Project represents a long-term source of supply of
treated water to meet current and projected water needs of the Participating Member's utility system and
facilities, and, accordingly, all payments required by this Contract to be made by each Participating
Member shall constitute reasonable and necessary operating expenses of its utility system as described
above, with the effect that such payments from revenues of such systems shall be deducted from gross
revenues of the system in the same manner as other system operating and maintenance expenses for
purposes of determining net revenues available to pay bonds or other similar obligations heretofore or
hereafter issued by such Participating Member, which obligations are payable from and secured by a
pledge of the revenues of the system or facilities after deduction of maintenance and operating expenses.
Section 7.07 Rates for Water.
Each of the Participating Members agrees throughout the term of this Contract to continuously
operate and maintain its utility system and to fix and collect such rates and charges for utility services to
be supplied by its system as aforesaid as will produce revenues in an amount equal to at least (i) all of
the expenses of operation and maintenance expenses of such system, including specifically, its Annual
Payment under this Contract, and (ii) all other amounts as required by law and the provisions of the
ordinance or resolutions authorizing its revenue bonds or other obligations now or hereafter outstanding,
including the amounts required to pay all principal of and interest on such bonds and other obligations.
40733336.9 -19-
Section 7.08 Use of Funds and S stem.
The Authority covenants and agrees that neither the proceeds from the sale of the Bonds, nor
the money paid it pursuant to this Contract, nor any earnings from the investment of any of the
foregoing, will be used for any purposes, except those directly relating to the Project and the Bonds as
provided in this Contract.
Section 7.09 Rights-of-Way.
A. Each Participating Member hereby grants to the Authority without additional cost to the
Authority, the use of the streets, easements, rights-of-way, and pipelines under its control for the
construction, emergency repairs, operation, and maintenance of the Project and the provision and
transmission of treated water hereunder; provided, however, such grant of the use of streets, easements,
rights-of-way, and pipelines to the Authority is subject to and conditioned on the Authority (i)
complying with all applicable policies, practices, and regulations of the Participating Members
governing and regulating such use of the streets, easements, rights-of-way, and pipelines and(ii)paying
all costs, if any, of restoring such streets, easements, rights-of-way, and pipelines to substantially the
same state of condition that existed prior to the Authority's use.
B. To the extent they have such ownership authority, each Participating Member agrees
that, without prior written approval, the Authority may use streets, alleys, and public rights-of-way
within the Participating Member's boundaries for pipeline purposes.
Section 7.10 Insurance.
The Authority agrees to carry and arrange for fire, casualty, public liability, and/or other
insurance, including self-insurance, on the Project for purposes and in amounts which, as determined by
the Authority, ordinarily would be carried by a privately owned utility company owning and operating
such facilities, except that the Authority shall not be required to provide liability insurance except to
insure itself against risk of loss due to claims for which it can, in the opinion of the Authority's legal
counsel, be liable under the Texas Tort Claims Act or any similar law or judicial decision. Such
insurance will provide, to the extent feasible and practicable, for the restoration of damaged or
destroyed properties and equipment, to minimize the interruption of the services of such facilities.
Premiums for such insurance that relate directly to the Project or, under generally accepted cost
accounting practices, is allocable to the Project, shall constitute an Operation and Maintenance Expense.
Section 7.11 Additional Special Provisions.
The parties hereto acknowledge and agree to the Special Provisions, if any, which are set forth
in Exhibit C hereto. The Special Provisions for this Contract reflect circumstances or issues for specific
Participating Members which may be different from those of other Participating Members and therefore
constitute a modification of or requirement in addition to the standard provisions otherwise contained in
this Contract. To the extent of any conflict between any Special Provision and any other provision of
this Contract,the Special Provision shall control.
40733336.9 -20-
ARTICLE VIII
Continuing Disclosure
Section 8.01 Annual Reports.
The Authority (and each Participating Member if required by the Rule in its Approval
Certificate for any series of Bonds) shall file annually with the MSRB, (1) within six months after the
end of each Fiscal Year of the Authority ending in or after 2015, financial information and operating
data with respect to the Authority of the general type included in the Sale and Offering Documents
authorized by Section 33 of the Bond Resolution, being the information described in Exhibit D to the
Bond Resolution, and (2) if not provided as part of such financial information and operating data,
audited financial statements of the Authority, when and if available. Any financial statements so to be
provided shall be(i)prepared in accordance with the accounting principles described in Exhibit D to the
Bond Resolution, or such other accounting principles as the Authority may be required to employ from
time to time pursuant to state law or regulation, and (ii) audited, if the Authority commissions an audit
of such financial statements and the audit is completed within the period during which they must be
provided. If the audit of such financial statements is not complete within such period, then the
Authority shall file unaudited financial statements within such period and audited financial statements
for the applicable Fiscal Year to the MSRB, when and if the audit report on such financial statements
becomes available. The Authority must have its records and accounts audited annually and shall have
an annual financial statement prepared based on the audit. The annual financial statement, including the
auditor's opinion on the statement, shall be filed in the office of the Secretary, Board of Trustees, within
180 days after the last day of the Authority's Fiscal Year. Additionally,upon the filing of this financial
statement and the annual audit, these documents are subject to the Texas Open Records Act, as
amended,Texas Government Code,Chapter 552.
If the Authority changes its Fiscal Year, it will file notice of such change (and of the date of the
new Fiscal Year end) with the MSRB prior to the next date by which the Authority otherwise would be
required to provide financial information and operating data pursuant to this Section.
Section 8.02 Material Event Notices.
The Authority shall file notice of any of the following events with respect to the Bonds to the
MSRB in a timely manner and not more than 10 business days after occurrence of the event:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final
determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other
material notices or determinations with respect to the tax status of the Bonds, or other
material events affecting the tax status of the Bonds;
40733336.9 -21-
(7) Modifications to rights of holders of the Bonds, if material;
(8) Bond calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Bonds, if material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership, or similar event of the Authority, which shall
occur as described below;
(13) The consummation of a merger, consolidation, or acquisition involving the Authority or
the sale of all or substantially all of its assets, other than in the ordinary course of
business, the entry into of a definitive agreement to undertake such an action or the
termination of a definitive agreement relating to any such actions, other than pursuant to
its terms, if material; and
(14) Appointment of a successor or additional paying agent/registrar or the change of name
of a paying agent/registrar, if material.
For these purposes, any event described in the immediately preceding paragraph (12) is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or
similar officer for the Authority in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has assumed
jurisdiction over substantially all of the assets or business of the Authority, or if such jurisdiction has
been assumed by leaving the existing governing body and officials or officers in possession but subject
to the supervision and orders of a court or governmental authority, or the entry of an order confirming a
plan of reorganization, arrangement, or liquidation by a court or governmental authority having
supervision or jurisdiction over substantially all of the assets or business of the Authority.
The Authority shall file notice with the MSRB, in a timely manner, of any failure by the
Authority to provide financial information or operating data in accordance with this Section by the time
required by this Section.
Section 8.03 Limitations Disclaimers, and Amendments.
The Authority shall be obligated to observe and perform the covenants specified in this Section
for so long as, but only for so long as, the Authority remains an "obligated person" with respect to the
Bonds within the meaning of the Rule, except that the Authority in any event will give notice of any
deposit that causes the Bonds to be no longer Outstanding.
The provisions of this Section are for the sole benefit of the holders and beneficial owners of the
Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable
right, remedy, or claim hereunder to any other person. The Authority undertakes to provide only the
financial information, operating data, financial statements, and notices which it has expressly agreed to
provide pursuant to this Section and does not hereby undertake to provide any other information that
may be relevant or material to a complete presentation of the Authority's financial results, condition, or
prospects or hereby undertake to update any information provided in accordance with this Section or
40733336.9 -22-
otherwise, except as expressly provided herein. The Authority does not make any representation or
warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any
future date.
UNDER NO CIRCUMSTANCES SHALL THE AUTHORITY BE LIABLE TO THE
HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT
OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE AUTHORITY,WHETHER NEGLIGENT OR WITH OR WITHOUT FAULT ON ITS PART, OF
ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY
SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH
SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the Authority in observing or performing its obligations under this Section shall
constitute a breach of or default under this Contract for purposes of any other provision of this Contract.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties
of the Authority under federal and state securities laws.
The provisions of this Section may be amended by the Authority from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a change in
the identity, nature, status, or type of operations of the Authority, but only if(1)the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary
offering of the Bonds in compliance with the Rule, taking into account any amendments or
interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and
(2) either(a) the holders of a majority in aggregate principal amount (or any greater amount required by
any other provision of this Contract that authorizes such an amendment) of the Outstanding Bonds
consent to such amendment or (b) a person that is unaffiliated with the Authority (such as nationally
recognized bond counsel) determines that such amendment will not materially impair the interests of the
holders and beneficial owners of the Bonds. The Authority may also repeal or amend the provisions of
this Section if the SEC amends or repeals the applicable provisions of the Rule or any court of final
jurisdiction enters judgment that such provisions of the Rule are invalid, and the Authority also may
amend the provisions of this Section in its discretion in any other manner or circumstance, but in either
case only if and to the extent that the provisions of this sentence would not have prevented an
underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds, giving
effect to (a) such provisions as so amended and (b) any amendments or interpretations of the Rule. If
the Authority so amends the provisions of this Section, the Authority shall include with any amended
financial information or operating data next provided in accordance with this Section an explanation, in
narrative form, of the reasons for the amendment and of the impact of any change in the type of
financial information or operating data so provided.
Section 8.04 Information Format—Incorporation by Reference.
The Authority information required under this Section shall be filed with the MSRB through
EMMA in such format and accompanied by such identifying information as may be specified from time
to time thereby. Under the current rules of the MSRB, continuing disclosure documents submitted to
EMMA must be in word-searchable portable document format (PDF) files that permit the document to
be saved, viewed, printed, and retransmitted by electronic means and the series of obligations to which
such continuing disclosure documents relate must be identified by CUS1P number or numbers.
40733336.9 -23-
Financial information and operating data to be provided pursuant to this Section may be set forth in full
in one or more documents or may be included by specific reference to any document (including an
official statement or other offering document) available to the public through EMMA or filed with the
SEC.
Section 8.05 Allocation of Water During Drought.
During drought conditions or in any other condition when water cannot be supplied to meet the
demands of all customers, the water to be distributed shall be divided among all customers of stored
water pro rata, according to the amount each may be entitled to, subject to reasonable conservation and
drought management plans and requirements based on particular purposes of use of the water, so that
preference is given to no one and everyone suffers alike.
Section 8.06 Conservation.
The Authority and Participating Member each agree to provide to the maximum extent
practicable for the conservation of water, and each agrees that it will operate and maintain its facilities
in a manner that will prevent waste of water. Participating Members further agree to implement water
conservation and drought management plans applicable to the use of treated water from the Project that
are consistent in purpose, provisions and application with those implemented by other Participating
Members to the extent practicable considering any differences in the legal authority of Participating
Members and other Participating Members to institute those plans.
Section 8.07 Term of Contract.
This Contract shall be effective on and from the Contract Date, and shall continue in force and
effect for forty(40) years; provided, however, the term of this Contract and the expiration date may be
extended for succeeding five(5) year periods at the option of one or more of the Participating Members
for as long as an agreement providing an adequate source of raw water remains in effect. It is
understood and agreed by the Authority and each Participating Member that the right to receive treated
water hereunder shall continue throughout any renewals or extension of this Contract. The Authority's
obligation to provide treated water services hereunder shall commence from the date the Project
becomes operational and functional as certified by the consulting engineers for the Project or on such
other date that one or more of the Participating Members receives treated water by virtue of or in
exchange for treated water from the Project. This Contract constitutes the sole agreement between the
parties hereto with respect to the Project.
Section 8.08 Approval and Consent.
Unless otherwise provided herein, any approval or consent required by the provisions of this
Contract by a Participating Member or the Authority shall be evidenced by a written resolution adopted
by the governing body of the party giving such approval or consent (or by the General Manager on
behalf of the Authority when permitted). Upon receipt of such written resolution duly certified by the
appropriate party, the Authority or the Participating Member can conclusively act on the matter
requiring such approval.
Section 8.09 Modification and Amendment.
A. No change, amendment, or modification of this Contract shall be made or be effective
which will affect adversely the prompt payment when due of all money required to be paid by any
40733336.9 -24-
Participating Member under this Contract or any similar contract, and no such change, amendment, or
modification shall be made or be effective which would cause a violation of any provisions of any Bond
Resolution.
B. This Contract may be amended upon the written consent of the Authority and all then
Participating Members; provided, however,no amendment to this Contract shall impair the rights of any
holder of any of the Authority's Bonds.
Section 8.10 Addresses and Notice.
Unless otherwise provided herein, any notice, communication, request, reply, or advice (herein
severally and collectively, for convenience, called "Notice") herein provided or permitted to be given,
made or accepted by any party to any other party must be in writing and may be given or be served by
depositing the same in the United States mail postpaid and registered or certified and addressed to the
party to be notified, with return receipt requested, or by delivering the same to an officer of such party,
or by prepaid telegram when appropriate, addressed to the party to be notified. Notice deposited in the
mail in the manner hereinabove described shall be conclusively deemed to be effective,unless otherwise
stated herein, from and after the expiration of three days after it is so deposited. Notice given in any
other manner shall be effective only if and when received by the party to be notified. For the purposes
of notice,the addresses of the parties hereto shall,until changed as hereinafter provided, be as follows:
A. If to the Authority,to:
Canyon Regional Water Authority
850 Lakeside Pass
New Braunfels,Texas 78130
B. If to the Crystal Clear Special Utility District to:
Crystal Clear Special Utility District
2370 FM 1979
San Marcos,Texas 78666
C. If to the East Central Special Utility District to:
East Central Special Utility District
5520 F.M. 1628
Adkins,Texas 78101
D. If to Green Valley Special Utility District,to:
Green Valley Special Utility District
Post Office Box 99
Marion,Texas 78124
40733336.9 -25-
E. If to the City of Cibolo,Texas to:
City of Cibolo,Texas
200 South Main Street
Post Office Box 826
Cibolo,Texas 78108
F. If to the City of Converse,Texas to:
City of Converse,Texas
403 South Seguin Road
Converse,Texas 78109
G. If to the City of Marion,Texas to:
City of Marion,Texas
Post Office Box 158
Marion,Texas 78124-0158
The parties hereto shall have the right from time to time and at any time to change their
respective addresses and each shall have the right to specify as its address any other address by at least
fifteen(15) days' written notice to the other parties hereto.
Section 8.11 State or Federal Laws Rules Orders, or Regulations.
This Contract is subject to all applicable federal and state laws and any applicable permits,
ordinances,rules, orders, and regulations of any local, state, or federal governmental authority having or
asserting jurisdiction, but nothing contained herein shall be construed as a waiver of any right to
question or contest any such law, ordinance, order,rule, or regulation in any forum having jurisdiction.
Section 8.12 Remedies Upon Default.
It is not intended hereby to specify (and this Contract shall not be considered as specifying) an
exclusive remedy for any default,but all such other remedies (other than termination) existing at law or
in equity may be availed of by any party hereto and shall be cumulative. Recognizing, however,that the
Authority's undertaking to provide and maintain the Project is an obligation, failure in the performance
of which cannot be adequately compensated in money damages alone,the Authority agrees, in the event
of any default on its part,that each Participating Member shall have available to it the equitable remedy
of mandamus and specific performance in addition to any other legal or equitable remedies (other than
termination) which may also be available. Recognizing that failure in the performance of any
Participating Member's obligations hereunder could not be adequately compensated in money damages
alone, each Participating Member agrees in the event of any default on its part that the Authority shall
have available to it the equitable remedy of mandamus and specific performance in addition to any other
legal or equitable remedies (other than termination) which may also be available to the Authority.
Notwithstanding anything to the contrary contained in this Contract, any right or remedy or any default
hereunder, except the right of the Authority to receive the Annual Payment which shall never be
determined to be waived, shall be deemed to be conclusively waived unless asserted by a proper
proceeding at law or in equity within two (2)years plus one (1) day after the occurrence of such default.
No waiver or waivers of any breach or default (or any breaches or defaults) by any party hereto or of
40733336.9 -26-
performance by any other party of any duty or obligation hereunder shall be deemed a waiver thereof in
the future, nor shall any such waiver or waivers be deemed or construed to be a waiver of subsequent
breaches or defaults of any kind, character,or description,under any circumstance.
Section 8.13 Severability.
The parties hereto specifically agree that in case any one or more of the sections, subsections,
provisions, clauses, or words of this Contract or the application of such sections, subsections,
provisions, clauses, or words to any situation or circumstance should be, or should be held to be, for any
reason, invalid or unconstitutional, under the laws of the State or the United States of America, or in
contravention of any such laws, such invalidity,unconstitutionality, or contravention shall not affect any
other sections, subsections, provisions, clauses, or words of this Contract or the application of such
sections, subsections, provisions, clauses, or words to any other situation or circumstance, and it is
intended that this Contract shall be severable and shall be construed and applied as if any such invalid or
unconstitutional section, subsection, provision, clause or word had not been included herein, and the
rights and obligations of the parties hereto shall be construed and remain in force accordingly.
Section 8.14 Venue.
All amounts due under this Contract, including, but not limited to, payments due under this
Contract or damages for the breach of this Contract, shall be paid and be due in Guadalupe County,
Texas, which is the County in which the principal administrative offices of the Authority are located. It
is specifically agreed among the parties to this Contract that Guadalupe County, Texas, is the place of
performance of this Contract; and in the event that any legal proceeding is brought to enforce this
Contract or any provision hereof, the same shall be brought in Guadalupe County,Texas.
Section 8.15 Assignment.
Neither the Authority nor any Participating Member may assign any interest it may have under
this Contract without the prior written consent of the other parties hereto; provided, however, the
foregoing restriction shall not prevent the Authority from taking any action in connection with the
issuance of the Bonds to secure the payment of the Bonds with amounts to be received by the Authority
under this Contract.
Section 8.16 Entire Agreement.
This Contract constitutes the entire agreement among the parties with respect to the sale of
treated water by the Authority to the Participating Members.
Section 8.17 Applicable Law.
This Contract shall be governed by and construed in accordance with the laws of the State, and
the obligations, rights, and remedies of the parties hereunder shall be determined in accordance with
such laws without reference to the laws of any other state or jurisdiction, except for applicable federal
laws,rules, and regulations.
40733336.9 -27-
Section 8.18 No Sale, Lease or Other Transfer of Participating Members' Utility System.
Pursuant to the terms of this Contract, a Participating Member, to the extent permitted by law,
shall not sell, lease, or otherwise transfer any interest in such Participating Member's utility system
without the written consent of the Authority.
Section 8.19 Counterparts.
This Contract may be executed in several counterparts, each of which shall be an original and
all of which shall constitute but one and the same instrument.
Section 8.20 Goods and Services; Waiver of Sovereign Immunity• Limitation on Damages.
The Participating Members under the Contract agree that the mutual commitment stated in the
Contract to provide water, emergency water service, water treatment services, and funding for utility
system improvements constitute an agreement by each party for providing goods and services to the
other parties, and that the Contract, as amended, is subject to Chapter 271, Subchapter I, of the Texas
Local Government Code.
[The remainder of this page intentionally left blank.]
40733336.9 -28-
IN WITNESS WHEREOF, the parties hereto acting under authority of their respective
governing bodies have caused this Contract to be duly executed as of the day and year first above
written.
CANYON REGIONAL WATER
AUTHORITY
By:
Chairman,Board of Trustees
ATTEST:
Secretary,Board of Trustees
(AUTHORITY SEAL)
40733336.9 S-1
CRYSTAL CLEAR SPECIAL UTILITY
DISTRICT
By:
Mike Taylor, General Manager
(SEAL)
40733336.9 S-2
EAST CENTRAL SPECIAL UTILITY
DISTRICT
By:
President,Board of Directors
ATTEST:
Secretary,Board of Directors
(SEAL)
40733336.9 S-3
GREEN VALLEY SPECIAL UTILITY
DISTRICT
By:
President,Board of Directors
ATTEST:
Secretary,Board of Directors
(SEAL)
40733336.9 S-q.
CITY OF CIBOL XAS
By:
J ze a
ATTEST:
Peggy Cimics,City Secretary
(CITY SEAL)
40733336.9 S-$
CITY OF CONVERSE,TEXAS
By:
Mayor
ATTEST:
City Secretary
(CITY SEAL)
40733336.9 S-(
CITY OF MARION, TEXAS
By:
Mayor
ATTEST:
City Secretary
(CITY SEAL)
40733336.9 S-7
Exhibit A
Allocations and Maximum Rate of Flow
Plant Capacity Percent of
Entity in A/F Ownership (%)
Crystal Clear Special Utility District 492.39 6.29
East Central Special Utility District 500.00 6.39
Green Valley Special Utility District 4,955.68 63.30
City of Cibolo 1,280.93 16.36
City of Converse 500.00 6.39
City of Marion 100.00 1.27
Totals 7,829.00 100.00%
40733336.9 A-1
Exhibit B
Points of Delivery
Crystal Clear Special Utility District Crystal Clear Meter/Windmill/FM 758
East Central Special Utility District IH-10/East Central Meter Station
Green Valley Special Utility District 1518 Elevated Tank
Haeckerville Road Meter Station
Wagner Booster Station
Hardy Road Meter Station
Leissner Road Meter Station
Dunlap Plant Meter Station
City of Cibolo Cibolo Meter Station Haeckerville Road
Wagner Booster Station
City of Marion Marion Meter Station
City of Converse Lower Seguin Road
40733336.9 B-1
Exhibit C
Special Provisions
None
40733336.9 C-1
GENERAL CERTIFICATE OF THE CITY
THE STATE OF TEXAS §
COUNTY OF GUADALUPE §
CITY OF CIBOLO §
We, the undersigned Mayor Pro Tem and City Manager of the City of Cibolo, Texas (the
"City"), DO HEREBY CERTIFY as follows:
1. Relative to Incorporation. The City is duly incorporated under the general laws of
the State of Texas, is a home rule municipality and is operating pursuant to Article XI, Section 5
of the Texas Constitution.
2. Relative to No-Default. Exhibit A reflects all of the bonds and other obligations
of the City. The City is not in default as to any covenant, condition or obligation contained in
the ordinances authorizing the issuance of the outstanding bonds of the City shown on
Exhibit A, and it has made, and intends to make, its required payments under the Contract; and
there is on hand in the special funds created for the payment and security of the aforesaid
obligations the amounts now required to be on deposit therein.
3. Relative to Rate and Charges. The rates now being charged by the City for utility
services provided by the City's System are as shown on Exhibit B.
4. Relative to City Officials. The duly qualified and acting officials of the City are
as follows:
Vacant Mayor
Jay Hogue Mayor Pro Tem, District 6
Jennifer Schultes Councilmember, District 1
Verlin Garrett Councilmember,District 2
Marchell Gebhardt Councilmember,District 3
James Doty Councilmember, District 4
Jim Russell Councilmember,District 5
Glenn Weber Councilmember, District 7
Robert T. Herrera City Manager
Peggy Cimics City Secretary
5. Relative to Utility System. A schedule of the gross revenues, operating expenses
and net revenues of the City's Utility System for the years stated is shown on Exhibit C.
6. Relative to Debt Service Requirements and Sufficiency of Rates. The average
annual debt service requirement for the City's obligations with respect to the Bonds (as defined
in the Contract) is shown on Exhibit D ("Debt Service"). The City has covenanted in the
Contract to establish, assess, and collect rates sufficient to make contract payments sufficient to
make the "Annual Payments" to pay the City's Debt Service on the Bonds. To the extent the
41424878.2
amount available for debt service (as shown on Exhibit C-"Available for Debt Service") is
insufficient to cover the Debt Service and the City's existing contractual obligations, the City
covenants to increase its rates in an amount sufficient to pay the difference.
7. Relative to the Contract. The New Water Supply Contract, dated October 19,
2015 (the "Contract"), between the Canyon Regional Water Authority (the "Authority") and the
City has been duly authorized and is in compliance with any applicable statutory requirements.
The Contract, as submitted to the Attorney General of Texas, is still in full force and effect and
has not otherwise been amended or has not been rescinded. No litigation is pending or
threatened concerning the title or authority of the officers or concerning the Contract. The Bond
Resolution (as defined in the Contract) and the Sale and Offering Documents (as defined in the
Contract) comply with the Contract. The City has approved the Bond Resolution authorizing the
issuance of $42,000,000 Canyon Regional Water Authority Tax-Exempt Contract Revenue
Bonds (Wells Ranch Project Il), Series 2015 (Texas Water Development Board SWIRFT Project
Financing)" and acknowledges that the payment of principal of and interest on such bonds is
payable from the Annual Payments to be made by the Authority under and pursuant to the
Contract.
8. Relative to Signature Identification. Appearing below are the true and correct
signatures of the persons holding the offices of Mayor and City Manager. By his signature
hereon, the Mayor certifies that the signature of the City Manager appearing hereon is his
genuine signature and by his signature hereon,the City Manager certifies that the signature of the
Mayor appearing hereon is his genuine signature.
Authorization of Attorney General to Date Certificate
9. This certificate is submitted pursuant to Title 1, Chapter 53, Texas Administrative
Code. Upon the approval of the Bonds by the Attorney General of the State of Texas, he is
authorized to date this certificate as of the date of such approval. If any litigation should
develop, or if any other event should occur which should make this certificate inaccurate before
the Attorney General's approval of the Bonds, we will notify the Attorney General at once by
both telephone and facsimile transmission. With this assurance, the Attorney General is entitled
to rely on the accuracy of this certificate at the time of approval of the Bonds unless we advise
him otherwise.
[The remainder of this page intentionally left blank.]
41424878.2 2
WITNESS MY HAND AND SEAL of the City this
M
y Ci of
(City Seal)
City Manager
City of Cibolo
41424878.2 3
EXHIBIT A
OUTSTANDING OBLIGATIONS OF THE CITY
1. Utility System Revenue Bonds, Series 2006 $1,900,000.00
2. Utility System Revenue Bonds, Series 2012 6,660.000.00
TOTAL $8,560,000.00
41424878.2 A-1
EXHIBIT B
UTILITY RATES
Ciboio, Texas
Residential Rates
Rates
Water
UM gallons or less $11.013
(Base Rate)92200
1.201 lo 3,000 gallons
Addit=,tial 3 4.72 per 1.000
3,001 to 7,OOD ga5om gds
Additicnal 3 5.90 per 1.0W
7,001 to 12,000 gallons gals
Addi lienal 3 7.00 per 1.0W
12,001 to 15.000 gallons gallons
Addbonal3 8.27 per 1,000
15.001 to 20,000 gallons Olons
110.16 per 1.000
20.001 to 30.00 gallons gallms
Additional 517.71 per 1.000
30,001 to 50.000 gallons gallons
Addtionai 325.98 per 1.000
50.001 and up gds
$4.00
Water Aogdsition Fee
41424878.2 g-1
EXHIBIT C
SCHEDULE OF GROSS REVENUES, OPERATING
EXPENSES &NET REVENUES
41424878.2 Exhibit C
WELTS RANCH PROSECT-PARTNERS
6REEA VALM SPIM tMUtT WSTRICT
2014 2613 2032 2011
TotalRevenue S 0491645 $ 7,529.943 $ 6,699,436 S 5,698,730
Total£lpendtuns Riau:Depreciation,Rnterest Expense and Contract Raw 4 MS34 4,625,339 4.170.9" 5,130,.12fi
Av2i4bk For Exiatin6 Debt and Contract Revenue Payment: S 3,360.529 2,9",401 S 2.526,45.2 S 766,604
Lass:Ghtin8 Dcbt S 492,341
Lear.Eahtin6Cartnct Revenue Payment(CRWA,NBU,G6RA,RWRDG ani 1,130,IA7
Total Edsdn4 Ob6pd-a 1,621,4"
Available tar Name Obl:ptions $ 73:,011
Maxine.HCPUA and WRP SWIFT Payment S 1,142,119
Caverap 0.3411
CRT ON C16O10
2014 2013 Mit IO71
Total R—ue S &130= $ 719".434 S 7,A28,193 S 7,529,627
Total Expendium(kat:Depreciation,Fntereat Expense and Contract Raw 453;8" 6,561.724 6.140.645 6,263,633
Awdable for Eoadn6 Debt and Contract Rewnea Payment g 1.93LOM pd—MY1+ 1,247.SU S 1,306,1"
less.Es6thg Debt $ 734,997
Luc Exstin8 Contact Revenue Payment(CRWAR 2240,240
Total Urstin8 Option 2,995,237
Avaitbkior New Obliptiona S 636,401
Ma bnom WAP SWIFT"ent S 531.111
Lo'c'ale 1.201
41424878.2 C-1
WEIISRANCN PROJECT-PARTNERS
CRT Of COAYERSE
2014 2013 2012 2011
Total Revenue $ S.622,W $ 5,262.230 $ 5,729,235 $ 5,616,517
That Espendiwren(ka:Depredation and Interest Eapcnae) 4911.966 5,033,236 4,929.543 4,379.962
A-AW.I-fsisting Debt and Contract Revenue Papnenu S 903,262 ��_ig.sg4 79g,i92 $ 1,436,535
Ins:to tl s Debs $ _
Lesr.EdstingComract Revenue Hym (CRWA)
Trial 1"ing Obiptiens
Av ihb4 for Nem O1,6VO.s $ 903,162
M.4—WRP SWIFT Hymens S 207,44S
Coverage 4360.
EWFCRK MMAL SPECIAL VTLLRT DMICT
2014 2013 2012 2011
Tmai Mlcverwe S 46!1.530 $ 4350,171 $ 4A32S,242 S 4315,703
Teal fgmnditures(Isa;Depredation and plWA Hy-4 732.649 3,972.792 3,542A33 3,711,602
Anibble for Eais Debt and Contract Revenue Paymenu xm."l s 377X9 $ Sg3,22q $ 674.101
tsar.Esi d g Debt S 156.064
Lest Eabting Cor&aat Revenue Payments(C1WA) L911.0p
Teul Ualn2 Obiptiom 2A1A132
Available ForfkWObliptiana s US"29
M.4—WRP SWIFT Hymens S 207,445
Coverage IL92X
41424878.2 C-2
WEBS RANIM PROJECT-PARTNERS
CUTTAL CLAN WAIU SUPPLY CORPORATION
2014 2013 2012 2011
Total Aewwr S 3,344/44 $ 4,630,676 S 4,914,327 S 41463.135
Total Eapenslitures(lass:Dq—ci.tinn,ktuest C.pens.and Concoct Rex SAM" 2,670,946 3146p9" 4766,745
Avm*bbk for[aiatin6 Debt and Contract Revenue Payments S 2,325,246 S 1.959,730 S 1.453,333 S 1,676,390
Lean:Elating Debt S 452,909 —
Le :Existing C nvrata 111 . e Paym.nts{CAWA) 3/3.361
Total[aistk66bliptions 936,792
Av.'Ubk for Nem Obliptians S 1,466,454
Mai.num NCPUA and WR►SWIFT Payment S 344.822
C—orap 431X
CRT a MAMM
Total 9eveeu. $ 6SAa0/ S 416,373 $ Sli,/M $ 62A,3"
Tobi Gpen6tura pur.Depredation,kterest up-aa and Cenenet 4x Sii,91/ "3,196 f49,LW 649,117
Available for 9outing Debt and Centrad Raven..Payments S 3w93 5 (",6211 S (69.1%) S (24,909)
Lar Exiatint Debt $
Las:Caistin6 Cemract Revenue Fsyanerds(CRWA) 272,012
Total9aisWS Obiptlone 271.012
AvaAable fw Netr Obliptiena $ M.lri
Maaim mWAP SWIF7►ay—m S 41,334
Coverap LOU
41424878.2 C-3
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