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HomeMy WebLinkAboutR2025-184 20251027RESOLUTION NO. R2025-184 A Resolution of the City Council of the City of Pearland, Texas, authorizing a First Supplement to a Water Supply Contract with the Gulf Coast Water Authority. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That certain First Supplement to a Water Supply Contract by and between the City of Pearland and Gulf Coast Water Authority, a copy of which is attached hereto as Exhibit “A” and made a part hereof for all purposes, is hereby authorized and approved. Section 2. That the City Manager or his designee is hereby authorized to execute and the City Secretary to attest a First Supplement to a Water Supply Contract with Gulf Coast Water Authority. PASSED, APPROVED and ADOPTED this the 27th day of October, A.D., 2025. ________________________________ J.KEVIN COLE MAYOR ATTEST: ________________________________ FRANCES AGUILAR, TRMC, MMC CITY SECRETARY APPROVED AS TO FORM: ________________________________ DARRIN M. COKER CITY ATTORNEY Docusign Envelope ID: DCA7CA99-4129-4F69-BCA7-34AFF48C842C Execution Version FIRST SUPPLEMENT TO WATER SUPPLY CONTRACT BETWEEN GULF COAST WATER AUTHORITY AND CITY OF PEARLAND, TEXAS ____________, 2025 Docusign Envelope ID: DCA7CA99-4129-4F69-BCA7-34AFF48C842C Execution Version FIRST SUPPLEMENT TO WATER SUPPLY CONTRACT BETWEEN GULF COAST WATER AUTHORITY AND CITY OF PEARLAND, TEXAS This FIRST SUPPLEMENT TO WATER SUPPLY CONTRACT BETWEEN GULF COAST WATER AUTHORITY AND CITY OF PEARLAND, TEXAS (this “First Supplement”), dated as of ____________, 2025, is by and between the GULF COAST WATER AUTHORITY, a conservation and reclamation district and political subdivision of the State of Texas the “Authority”), and the CITY OF PEARLAND, TEXAS, a municipal corporation and home rule municipality of the State of Texas (the “City”). RECITALS: WHEREAS, the City owns and operates a waterworks system supplying water to inhabitants of the City and adjacent areas; and WHEREAS, the Authority has the responsibility and authority to develop water supplies for agricultural, municipal, industrial and other uses in the Gulf Coast area; and WHEREAS, the Authority is one of the participants to the Plant Cost Sharing Agreement, pursuant to which the Authority has acquired, on behalf of the City and the City of League City, Texas (“League City”), capacity in the Plant; and WHEREAS, the City and the Authority have entered into that certain Water Supply Contract between the Gulf Coast Water Authority and the City of Pearland, Texas, dated as of June 29, 2007 (the “Agreement”), which, inter alia, governs the City’s obligation to pay the Authority its proportionate share of the payments charged to the Authority by the Managing Participant for the surface water from the Plant that is provided to the City through the Authority under the 2001 Cost Sharing Agreement, as amended by the 2007 Amendment (together, the 2001 Cost Sharing Agreement and the 2007 Amendment are referred to as the “Plant Cost Sharing Agreement”); and WHEREAS, Section 2.10 of the Agreement provides that all payments required to be made by the City to the Authority under the Agreement shall be payable from the revenues and income received by the City from the ownership and operation of its water system; and WHEREAS, the City and the Authority acknowledge that the payments made by the City to the Authority under the Agreement are the sole source of funds available to the Authority to meet its payment obligations for the City’s proportionate share of the payments due to the Managing Participant under the Plant Cost Sharing Agreement; and WHEREAS, in order to resolve a dispute about the proper calculation for the estimated raw water demand capacity cost, and thus the final amounts owed to the Managing Participant by Docusign Envelope ID: DCA7CA99-4129-4F69-BCA7-34AFF48C842C -2- the City of Friendswood, Texas (“Friendswood”), and the Authority therefor, under Exhibit “I” of the 2007 Amendment, and the proper method to calculate said amounts owed, the Authority, the Managing Participant and Friendswood have entered into that certain Settlement Agreement for Agreed Payment Amount and Payment Schedule under Amendment to Cost Sharing Agreement – Southeast Water Purification Plant (Restated and Amended) dated as of _______________, 2025 (the “Settlement Agreement”); and WHEREAS, pursuant to the Settlement Agreement, the Authority has agreed to make certain settlement payments to the Managing Participant on behalf of the City and League City in the total amount of $5,181,363.00 (the “Settlement Amount”) in full satisfaction of the payment obligations of the Authority under Exhibit “I” of the 2007 Amendment; and WHEREAS, the City and the Authority now desire to enter into this First Supplement providing for the City’s payment to the Authority of its proportionate share of the Settlement Amount as a separate line item component of the Operating Charges in accordance with and subject in all respects to the terms of the Agreement, the Settlement Agreement and the Plant Cost Sharing Agreement; and NOW, THEREFORE, in consideration of the premises, and for good and valuable consideration, the City and the Authority agree as follows: AGREEMENT Section 1. The recitals contained herein are hereby found to be true, and such recitals are hereby made a part of this First Supplement for all purposes. Section 2. All capitalized terms not defined herein shall have the meanings assigned to such terms in the Agreement. Section 3. The Agreement is hereby supplemented by this First Supplement, but the First Supplement does not change the terms thereof. Section 4. The City will pay the Authority the amount of $3,454,242.00, its proportionate share of the Settlement Amount, in ten (10) equal yearly installments of $345,424.20 that will then be divided monthly (each monthly installment, a “Settlement Charge”), beginning in the Managing Participant’s fiscal year 2027 (i.e., the fiscal year beginning July 1, 2026, and ending June 30, 2027). The Authority will bill the Settlement Charge to the City monthly as a separate line item component of the Operating Charges, which will be payable by the City in the same matter as all Operating Charges pursuant to Section 2.6 of the Agreement. When the City makes a payment of the Settlement Charges to the Authority, the Authority shall forward such payment to the Managing Participant in the same manner in which the Authority forwards payment to the Managing Participant of all Operating Charges as required by the Plant Cost Sharing Agreement. Docusign Envelope ID: DCA7CA99-4129-4F69-BCA7-34AFF48C842C -3- (Signature pages follow) Docusign Envelope ID: DCA7CA99-4129-4F69-BCA7-34AFF48C842C Execution Version AGREED TO THIS _____ day of _____________, 2025. CITY OF PEARLAND, TEXAS By: City Manager ATTEST: City Secretary (SEAL) Docusign Envelope ID: DCA7CA99-4129-4F69-BCA7-34AFF48C842C 27 10/28/2025 | 2:05 PM CDT GULF COAST WATER AUTHORITY By: President, Board of Directors ATTEST: Secretary, Board of Directors (SEAL) Docusign Envelope ID: DCA7CA99-4129-4F69-BCA7-34AFF48C842C