R98-71 11-23-98RESOLUTION NO. R98-71
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO
EXECUTE ANY DOCUMENTS NECESSARY TO COMPLETE THE TRANSFER
OF THE SOMERSETSHIRE CERTIFICATE OF CONVENIENCE AND
NECESSITY TO THE CITY OF PEARLAND.
WHEREAS, the City assumed operation of the Somersetshire Certificate of
Convenience and Necessity (the "Somersetshire CCN") on February 1, 1998; and
WHEREAS, on April 1, 1998, the City reached an agreement to purchase
Somersetshire's system from Claude and Diane Norman; and
WHEREAS, the City is in full compliance with Section 13.301(e) of the
Water Code and has been advised by the TNRCC that a public hearing is not required for
the transfer to occur; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. The City Manager or his designee is hereby authorized to execute any
documents necessary to complete the transfer of the Somersetshire CCN to the
City of Pearland.
PASSED, APPROVED and ADOPTED this the ~ r~ day of
A.D., 1998.
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
TOM REID
MAYOR
F'). v
Memo
To: Mayor and City Council
Through: Glen Erwin
From: Alan Mueller
Subject:
Date:
Somersetshire CCN
November 16, 1998
Background:
Somd'setshire is a predominantly mobile home subdivision on Miller Ranch Road (formerly CR
93) that was annexed into the City in February 1998. Water and sewer service is provided to the
subdivision by a stand-alone .water well and distribution system and a package wastewater
treatment plant. There are approximately 90 utility connections within the subdivision. The water
and sewer systems are owned by Claude and Diane Norman. They possess a CCN from the
TNRCC for the systems.
In January 1998, I was contacted by Mr. Norman regarding the water and sewer systems. He had
a contract with a private utility company (Walker Water Works) to operate the systems and to
purchase the systems from the Norroans. Mr. Norman stated that he was receiving inadequate
service and there were several disputes between the two parties regarding various contractual
issues. Mr. Norman stated that he was preparing to cancel his contract with Walker and asked if
the City would operate the system, work toward purchasing the systems, and work toward
transferring the CCN's to the City. Mr. Grohman authorized me to respond favorably because it
was consistent with the City's goal to acquire the private CCN's within the City and the request
coincided with annexation of the area.
The City began operation of the systems on February 1, 1998. An agreement to purchase the
systems for $20,000 was reached on April 1, 1998. David Smith, who has extensive experience
with similar systems, assisted with the negotiations. An application to transfer the CCN's to the
City was submitted to the TNRCC on August 6, 1998. The TNRCC approved the purchase of
the systems on October 23, 1998. The TNRCC will transfer the CCN's to us after the purchase is
complete.
Action Requested:
To complete this transaction, the TNRCC requires evidence of the City Council approving the
transaction. I have requested the City Attorney to prepare a resolution authorizing the City
Mayor and Ci.ty Cotmoil
Page 2
November 16, 1998
Manager to execute documents related to the transaction and CCN transfer for consideration by
the City Council on November 23, 1998.
Funding:
Originally, we had planned that the purchase would be expended from the Water and Sewer Fund.
However, as you know we are anticipating large expenditures related to the legal expenses for the
heating for the City's CCN expansion application. Consequently, if the Council approves this
purchase, I suggest the Certificates of Obligation be used for the purchase cost.
Other issues regarding this subject:
Attorney Genera!'s enforcement
There is a pending Attorney General's enforcement action pending against the system owners for
previous TNRCC violations. We have made it a condition of the CCN transfer that this
enforcement will not transfer to the City. The status of the enforcement action will be determined
prior to proceeding with the transaction.
Future Improvements
At some point, meters need to be installed within the subdivision. Currently, all customers pay a
flat fee. Additionally, there are other line improvements that should be made. Under TNRCC
rules, the well should also be improved, but we have requested an extension on this
requirement due to our plans described in the next section. Numerous improvements have already
been made to the water and wastewater plant systems to address TNRCC concerns. We are in
the process of renewing the wastewater discharge permit.
Future Plans
When adjacent property develops, the water distribution and sewer collection systems will be
connected to the overall City system. The water well and wastewater treatment plant will be
salvaged or sold. In-City MUD 17 is adjacent southeast of Sometsetshire; In-City MUD 19 is
directly west of Somersetshire. We have talked to both developers regarding oirersizing lines to
accommodate the flows to and from Somersetshire. Both of these developments appear to be
developing within one to two years.
CC: Danin Coker
Jerry Bums
Attachments
Batty R. McBee, Chairman
R. B. "Ralph" Marquez, Commissioner
John M. Baker, Commissioner
Jeffrey A. Saitas, Executive Director
TEXAS NATURAL RESOURCE CONSERVATION COMMISSION
Protecting Texas by Reducing and Preventing Pollution
October 23, 1998
Mr. Allan Mueller
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
Re:
Application Nos. 32266-S and 32267-S of City of Pearland to Transfer Water CCN No.
12555 and Sewer CCN No. 20712 from Somersetshire Estates in Brazoria County, Texas
We have reviewed the criteria in Section 13.301(e) of the Water Code to determine if a public hearing
on your proposed transaction should be scheduled. Based on that review, we have determined that a
public hearing will not be requested.
You may complete your proposed transaction as scheduled or at any time after you receive this
notification.
Your next step is to file a copy of the signed contract or bill of sale and documents supporting the
disposition of customer deposits with the Utility Rates and Services Section, Water Utilities Division
within 30 days after the effective date of the transaction.
The certificate cannot be issued to City of Pearland until the Commission receives evidence that the
transaction was completed. Furthermore, in order to comply with the requirements set in Section
13.301 (d) of the Water Code, the transaction needs to be completed after the issuance of this letter.
If you have any questions, please contact Victoria R. Harkins at 512/239-6960.
Sincerely,
;'i"~I)oug Holcomb, P. E.
Utility Rates and Services Section
Water Utilities Division, MC 153
DEH/VRH/bmd
cc: Somersetshire Estate~
TNRCC Region 12
P.O. Box 13087 * Austin, Texas 78711-3087 · 512/239-1000 · Internet address: www.tnrcc.state.tx us
plinted iin rcc}.clcd paper using sov-hased ink
30 July, 1998
Alan R. Muller
Project Coordinator
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
Mr. Muller:
Listed below are the terms of the CCN transfer, which we agreed upon:
1 The city will pay $ 20,000.00 for the CCN and all water and
sewer improvements free and clear of all encumbrances.
2 If the water and sewer plants are not removed from Lots # 15,31
and 32 within three years from the date of the agreement, the City
will purchase those lots, flee and clear of all encumbrances for
$18,000.00 each.
3. During the three year period or until the plant and well are
removed, whichever is earliest, the City will pay the taxes on
lots 15,31 and 32.
These are the items that were discussed and agreed upon regarding the sale
and transfer of the CCN during the April 1, 1998 meeting.
Please contact me if you should have any questions.
Sincerely,
Claude M. Norman
Somersetshire Estates
April 9, 1998
James R. Hunt
Attorney at Law
3648 FM 1960, Suite 107
Houston TX 77068
RE: Somersetshire water and sewer system
Mr. Hunt:
Thank you for meeting with the City staff on April I. Listed below are the terms of the CCN
transfer which I believe we agreed upon:
o
The City will pay $20,000 for the CCN and all water and sewer improvements, flee and
clear of all encumbrances.
If the water and sewer plants are not removed from Lots 15, 31, and 32 within three years,
the City will purchase those lots, free and clear of all encumbrances, from you for $18,000
each.
During the three year period or until the plants are removed, whichever is earliest, the City
will pay the taxes on Lots 15, 31, and 32.
If these items are not consistent with your recollection of the meeting, please let me know. We
didn't specifically discuss it, but I-assume that you will need to initiate the T-NRCC process to
transfer the CCN. We will assist in whatever way we can.
Please contact me if you have any questions. We look forward to completing the CCN transfer
and .sale of the facilities as soon as possible. Thank you.
Sincerely,
Alan R.. Mueiler
Projects Coordinator
::;1'# I II;I .I(TY I }I(IVI - I'1 .\1,'1 .\\51 1. I I 5'4. \'-/'/ ;'.1 · i ":il I IX"; ~.i
January 30, 1998
James R. Hunt
Attorney at Law
3648 FM 1960, Suite 107
Houston TX 77068
VIA FACSIMILE 281 537-9234
RE: Somersetshire water and sewer system
Mr. Hunt:
Based upon the requests of you and Mr. Norman, the City is agreeable to operating this system
beginning today on an interim basis until the transfer of the CCN can be completed. We
understand that Walker Water Works has ceased operations for you effective at noon on January
30, 1998.
Based on my conversations with Leela Fireside of the Attorney General's office, there are
outstanding enforcement issues pending against the CCN. The City obviously can not be
responsible for prior or pending actions against the CCN, and is assuming responsibility for
operation of the system only from the date of this letter forward. After inspecting the system and
reviewing various inspection reports, the system contains certain equipment and facilities that do
not meet TNRCC standards. The City can not accept responsibility for violations due to failure of
equipment or substandard equipment. The City's agreement to operate the system is conditioned
upon the CCN owner's indemnification of the City for issues beyond the City's control. In
addition, the lift station #2 reconstruction project is not complete, obvious overflows at lift station
#1 that will require structural or pump modifications to correct, electrical connections at both lift
stations that do not meet code, and the blower at the wastewater plant is not operating. We will
proceed to rectify these problems, however we will need to discuss the cost allocations fbr these
repairs.
Mr. Rhodes has provided to the City a copy of his January 28 letter to you. As we have discussed
previously, all issues relating to your previous agreement with Mr. Rhodes are issues in which the
City is not a party. Prior to transference of the CCN to the City all outstanding contractual issues
or liens must be resolved.
We are happy that we have the opportunity to work with you as an operator and to work toward
a mutually agreeable transfer of the CCN to the City to provide water and sewer service to
residents of this area.
'~ql'~ I.IIHI(IY I)l.~lVli o I'I':AI~I,i\NI ), t t\,\~ 77:,.'ii ° !:~.~1115~,-2.'111 o www.ci,l~c.H'l.md.lxm,
James Hunt
January 30, 1998
Page 2
Please contact me so that we can continue the transfer of information and continue working
toward resolution of this issue.
Sincerely,
Alan R. Mueller
Projects Coordinator
C~
Paul Grohman, City Manager
Amy McCullough, City Attorney
Robert Tobin, Water Production & Wastewater Treatment Superintendent
Claude Norman, Somersetshire Estates (fax 303 426-7884)
Leela Fireside, Attorney General's Office (fax 512 320-0052)