COUNCIL CHAMBER 161256 August 10, 2016

WHEREAS, Water Utilities currently does not have wastewater facilities to provide wastewater services to the West Cell residential development; and,

WHEREAS, Dallas and Irving desire to enter into a Wastewater Service Contract for Irving to provide wastewater services to Dallas for the West Cell development; and,

WHEREAS, on June 17, 2015, by Resolution No. 15-1192, the City Council authorized an Interlocal Agreement with the City of Irving, after approval as to form by the City Attorney, which included, among other things, for the City of Irving to provide water and wastewater service for 22 acres of the West Cell development; and,

WHEREAS, Irving does not treat and dispose of its own wastewater but has a long-term contract with the Authority (TRA) for the transportation, treatment and disposal of its wastewater. Irving has determined that the wastewater services requested by Dallas can be provided by Irving and is not inconsistent with Irving’s agreement with TRA; and,

WHEREAS, the City of Irving currently purchases water treatment services and storage in Lake Lewisville from the City of Dallas, and Dallas currently provides water treatment services and storage in Lake Lewisville to Irving as set forth under the terms, covenants and conditions stated in a Water Treatment Services contract between the Cities of Dallas and Irving, dated January 8, 1998; and,

WHEREAS, the City of Irving currently purchases wholesale treated water from the City of Dallas, and Dallas currently delivers and sells wholesale treated water to Irving as set forth under the terms, covenants, and conditions stated in a Wholesale Treated Water Contract between the Cities of Dallas and Irving which includes a Reciprocal Water and/or Wastewater Service Agreement, dated January 22, 1998; and,

WHEREAS, the City of Dallas agrees to compensate the City of Irving for providing the wastewater services.

Now, Therefore,

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DALLAS:

Section 1. That the City Manager is hereby authorized to enter into a Wastewater Service Contract, approved as to form by the City Attorney, with the City of Irving to enable the City of Dallas to purchase wastewater services from the City of Irving for the West Cell Development. COUNCIL CHAMBER 161256 August 10, 2016

Section 2. That the Chief Financial Officer is hereby authorized to disburse funds in accordance with the terms and conditions of the contract as follows:

FUND DEPT UNIT OBJ ENCUMBRANCE AMOUNT VENDOR 0100 DWU 7320 3084 CTDWU7321C162O $14,878 242336

Section 3. That this resolution shall take effect immediately from and after its passage in accordance with the provisions of the Charter of the City of Dallas, and it is accordingly so resolved.

APPROVED BY CITY COUNCIL AUG 10 2016

/21 (-f j7) City Secretary :, .: RECIPROCAL WASTEWATER SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY OF DALLAS 12 RI 2:08

STATE OF § c r v r ‘iL . 2 COUNTY OF DALLAS §

THIS RECIPROCAL WASTEWATER SERVICE CONTRACT (“Contract”) is made and entered into by and between the CITY OF IRVING, a Texas home rule municipality (hereinafter called “Irving”), and the CITY OF DALLAS, a Texas home rule municipality (hereinafter called “Dallas”).

WHEREAS, Irving owns and operates Irving Water Utilities (hereinafter called “IWU”), and Dallas owns and operates Dallas Water Utilities (hereinafter called DWU); and

WHEREAS, Dallas currently has a Wholesale Treated Water Contract with living as approved and executed on January 22, 1998 (the “1998 Dallas-Irving WTWC”), as part of which Dallas and living also have a reciprocal agreement under which one of the cities may request the other to furnish water and/or wastewater service for areas of the requesting city along common boundary lines where only one city has facilities available (the “1998 Reciprocal Agreement”); and

WHEREAS, Dallas shares a corporate boundary with Irving near Northlake and would benefit from wastewater service provided by living to Dallas to serve the Dallas West Cell Area which is located near Northiake and identified in Exhibit A; and

WHEREAS, Dallas has requested that living provide directly to Dallas, wastewater service for the development of this certain area of Dallas near Northlake; and

WHEREAS, living has a long-term contract with the of Texas (“TRA”) for the transportation, treatment, and disposal of wastewater collected from within living’s service area, which was initially authorized by living Ordinance No. 2566 in 1973 and has subsequently been amended by the parties (the “living-TRA Wastewater Treatment Contract”); and

WHEREAS, living has determined that the wastewater service requested by Dallas for the Dallas West Cell Area is feasible and appropriate, and can be offered by living consistent with the terms and conditions of the living-TRA Wastewater Treatment Contract, without diminution of the level of service being provided to living’s other customers; and

WHEREAS, living and Dallas acknowledge that the parties have satisfied the requirements for approval of a request for wastewater service as contemplated under Section 3 and other provisions of the 1998 Reciprocal Agreement; and

WHEREAS, living and Dallas have determined that both cities desire to adjust their

RECIPROCAL WASTEWATER SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 1 OF DALLAS 161256 common city limit boundaries in order to establish clear demarcation lines to allow the efficient development of a proposed residential subdivision (the “West Cell South Area”) and delivery of city services to this area, which will benefit the health, welfare, and public safety of the citizens of Dallas and Irving; and

WHEREAS, Dallas, by Council Resolution 151179, on June 17, 2015, authorized the Dallas City Manager to enter into a boundary adjustment agreement with Irving with respect to the West Cell South Area, and the parties have negotiated the terms of that separate agreement; and

WHEREAS, Irving and Dallas have entered into a Reciprocal Treated Water Service Contract for service to the Dallas West Cell Area, also effective the same date as this Contract; and

WHEREAS, the terms and conditions of this Contract conform and comply with all of Irving’s rights and responsibilities, and other applicable requirements, under the Irving-TRA Wastewater Treatment Contract, and Irving has determined that no other contract or agreement would prohibit Irving from establishing and providing the wastewater service described in this Contract; and

WHEREAS, Irving will coordinate with TRA, with Dallas’ cooperation, to gain any necessary approvals to amend its current TRA points of entry to take into consideration the additional wastewater flows from the Dallas West Cell Area;

NOW, THEREFORE, Irving and Dallas, in consideration of the mutual terms, covenants, and conditions contained in this Contract, agree as follows:

1.0 DEFINITIONS

1.1 “BOD” (biochemical oxygen demand) means the quantity of oxygen by weight, expressed in mg/L, utilized in the biochemical oxidation of organic matter under standard laboratory conditions for five (5) days at a temperature of twenty (20) degrees Celsius.

1.2 “Calibration” means to check, adjust, or standardize instrumentation for accuracy using internal systems, specialized calibration equipment, or velocity tests.

1.3 “CRWS” or “TRA System” means the Central Regional Wastewater System owned and operated by TRA, through which system Irving discharges, and TRA receives, transports, treats and disposes of wastewater from the Irving System.

1.4 “Dallas’ Service Area” means the distinct area within Dallas’ incorporated limits, known as the Dallas West Cell Area, as set forth in Exhibit “A,” attached hereto and incorporated herein by reference.

1.5 “Dallas’ System” means the publicly-owned facilities of Dallas for collection and transportation of wastewater to the Point of Entry and any publicly-owned facilities of Dallas

RECIPROCAL WASThWATER SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY OF DALLAS 161256 used exclusively or primarily for the pre-treatment of Industrial Waste.

1.6 “Delivery Facilities” means all publicly-owned facilities of Dallas (transmission mains, pipelines, valves, manholes, and other similar facilities and appurtenances) necessary for transmission of Wastewater from within Dallas’ Service Area to the living System. The term includes facilities which are on the Dallas side of the Metering Facilities that are constructed specifically to allow Irving to serve Dallas under this Contract. The term excludes metering facilities.

1.7 “Director” or “fWU Director” means the Director of Irving Water Utilities or the Director’s designated representative.

1.8 “Inadmissible Discharges” means any pollutants, substances, or wastewater that are prohibited from being discharged into the living System or into Dallas’ System as listed in Section 4 1-29 of the Irving City Code as hereinafter amended and as similarly identified as a “Prohibited Substance” under Chapter 49 of the Dallas City Code as hereinafter amended, except that if more stringent and applicable pretreatment standards are promulgated for certain industrial users by the United States Environmental Protection Agency or the State of Texas, the more stringent Federal or State regulations shall apply to that class of sewer users.

1.9 “Incompatible Waste” means substances that are not amenable to the treatment processes and that will interfere with the operation of the Irving POTW, including interference with the use or disposal of municipal sludge, and pollutants that will pass through the treatment works unchanged by the treatment processes.

1.10 “Industrial Waste” means waste resulting from any process of industry, manufacturing, trade, business or from the development of a natural resource. This waste may be either separate or mixed with water or Normal Domestic Wastewater.

1.11 “Interference” means a discharge that, alone or in conjunction with a discharge or discharges from other sources, inhibits or disrupts the living POTW, its treatment processes or operations, or its sludge processes, use, or disposal, and therefore is a cause of a violation of TRA’s NPDES permit or of the prevention of sewage sludge use or disposal in compliance with any of the regulatory authorities identified in applicable provisions of Chapter 41 of the Irving City Code.

1.12 “Irving POTW” means the Publicly Owned Treatment Works owned and operated by TRA, for which TRA is the Control Authority and the NPDES permit holder, and through which TRA receives, treats and disposes of Wastewater from the Irving System.

1.13 “Irving System” means the various wastewater collection, pretreatment, and transportation facilities owned and operated by living in connection with Irving’s wastewater utility operations within its own service area and living’s transportation of Wastewater to its designated points of entry under the Irving-TRA Wastewater Treatment Contract.

1.14 “Metering Facilities” means the wastewater flow meter, meter vault, and all metering and

RECIPROCAL WASTEWATER SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 3 OF DALLAS 161256

telemetering equipment required to provide wastewater service to Dallas for Dallas’ Service Area at the Point of Entry.

1.15 “Normal Domestic Wastewater” means Wastewater excluding industrial wastewater, discharged by a person into sanitary sewers and in which the average concentration of Suspended Solids or BOD is not more than two hundred fifty (250) mg/L each.

1.16 “Point of Entry” means the location described in Section 2.1 below and set forth in Exhibit A, or other connection locations as may be requested by Dallas and approved by Irving from time to time, of the Metering Facilities where Wastewater leaves Dallas’ System and enters into the Irving System.

1.17 “Pretreatment Standards” means prohibited discharge standards, categorical pretreatment standards, and local limits, including but not limited to any of these set out in Chapter 41 of the Irving City Code, as amended, and Chapter 49 of the Dallas City Code, as amended.

1.18 “Regulations Governing Connections” means all terms of this Contract and federal, state, and local civil, administrative and criminal statutes, ordinances, rules and regulations, however adopted or enacted, which relate to the installation and connection to the connections, meters and laterals of a wastewater system.

1.19 “Significant Industrial User (SIU)” means a user as this term is defined in Section 41-1 of the Irving City Code in compliance with requirements of TRA, as those requirements may be amended from time to time.

1.20 “Suspended Solids” means solids, measured in mg/L, that either float on the surface of, or are suspended in, water, wastewater, or other liquids as determined by procedures specified in 40 CFR Part 136.

1.21 “TCEQ” means the Texas Commission on Environmental Quality or its successor agency.

1.22 “Wastewater” means a combination of the water-carried waste from residences, business buildings, institutions, and industrial or commercial establishments.

2.0 DELIVERY AND METERING FACILITIES

2.1 Point of Entry and Agreed Capacity for Dallas’ Service Area. Irving agrees to accept Wastewater from Dallas originating from Dallas’ Service Area at the Point of Entry shown in Exhibit A, attached to and made a part of this Contract, and at such additional points as may later be approved pursuant to Section 2.9 of this Contract. The Point of Entry (POE), more particularly identified in Exhibit A, is the POE 2 connection of the Dallas West Cell Area to Valley Ranch Basin, where Irving agrees to provide wastewater service for Dallas’ Service Area sufficient to serve a peak flow up to 0.18 MGD.

It shall be the sole responsibility of Dallas to collect and transport the Wastewater within

RECIPROCAL WASTEWATER SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 4 OF DALLAS 161256

Dallas’ Service Area from its connections to end users and to discharge that Wastewater, once collected from end users, into the Irving System through the Point of Entry. Furthermore, as part of Dallas’ obligations under Sections 2.2 and 7.2 below, Dallas agrees to upsize and relocate, as mutually agreed upon by the DWU Director and IWU Director, approximately three-hundred and thirty (330) linear feet of Irving’s 10-inch wastewater main to a 12-inch wastewater main, located north of Steinbeck Court (as shown in Exhibit A), prior to connection of POE 2 to Irving’s System.

2.2 Cost of Delivery Facilities and Metering Facilities. The cost of all Delivery Facilities and Metering Facilities necessary to convey Wastewater to the designated Point of Entry and connect Dallas’ System to the Irving System whether delineated in Exhibit A or requested by Dallas and approved by Irving at a later date, shall be borne by Dallas. Unless otherwise mutually agreed to by Irving and Dallas, Dallas shall be responsible for the design (according to Irving’s standard requirements), contracting, construction (according to Irving’s standard requirements), and financing of the Delivery Facilities and the Metering Facilities, and acquisition of any necessary rights-of-way.

2.3 Approval of Plans; Inspection. All designs, materials, and specifications for Delivery Facilities and Metering Facilities shall conform to Irving’s requirements and shall be submitted to the IWU Director for written approval prior to advertising for bids for such construction. Dallas agrees that Irving has the right to make periodic inspections during the construction phase of the Delivery Facilities and the Metering Facilities. Final acceptance of completed Delivery Facilities and Metering Facilities is subject to the written approval of the IWU Director. Irving agrees that any approval or consent of the 1WU Director required by this Section 2.3 shall not be unreasonably withheld or delayed.

2.4 Metering Facilities. As described above, Dallas is responsible for the design and construction of the Metering Facilities to be installed at the Point of Entry. Irving shall obtain power and telemetry service in connection therewith, if needed.

2.5 Property and Rights-of-Way. Dallas shall acquire all property, easements, or rights-of- way necessary for construction of Metering Facilities and any Delivery Facilities located on the Irving side of the Metering Facilities.

2.6 Conveyance of Metering Facilities to Irving. Dallas agrees that after final inspection and approval by the IWU Director of the completed Metering Facilities and any Delivery Facilities located on the Irving side of the Metering Facilities, Dallas shall convey title to those Metering Facilities and property, easements, or rights-of-way in conjunction therewith to Irving. Upon Dallas’ conveyance of title of the property and facilities by appropriate instrument and acceptance by Irving of the property and facilities, Irving shall be responsible for operation and maintenance of the Metering Facilities and any Delivery Facilities located on the Irving side of the Metering Facilities.

2.7 Scheduling of Pipeline Connections to Irving’s System. Dallas agrees, to the extent practicable, to schedule its pipeline connection activities during off-peak periods so as not to negatively affect the Irving System operations. As part of this effort, Dallas will provide Irving

RECIPROCAL WASTEWATER SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 5 OF DALLAS 161256 with notice, by e-mail and facsimile to the 1WU Director at least 72 hours prior, of its intended tie-in to the Irving System. The scheduling of these connection tie-ins is subject to the approval of the IWU Director, which will not be unreasonably withheld or delayed.

2.8 Title to Facilities Unchanged. Nothing in this Contract shall be construed as changing or adversely affecting either of the parties’ title to their respective existing facilities and easements or any existing ownership or leasehold interest(s) that may have been previously granted or conveyed.

2.9 Additional Points of Entry. Dallas may at any time during the term of this Contract request additional Points of Entry for wastewater service under this Contract. The additional Points of Entry are subject to approval by the IWU Director based on the IWU Director’s judgment that such additional Point(s) of Entry would not affect the overall capacity or operations of the Irving System. Any such additional Points of Entry, when so approved by the IWU Director and at Dallas’ sole expense, shall be deemed to be made a part of this Contract, thereby amending Exhibit A of this Contract without need for a further written supplemental agreement or further approval.

3.0 METER MAINTENANCE AND TESTING

3.1 Accuracy of Meters. It shall be the duty of either party to this Contract to notify the other party in the event that a meter is registering inaccurately or malfunctioning so that the meter can be promptly repaired. Either party shall have the right to test a meter. Notification of a proposed test shall be provided at least 24 hours prior to conduct of the test, except in the case of emergencies. Either party shall have the right to witness meter tests. If Dallas requires an independent testing service be used, Dallas shall pay the cost of the testing service upfront. If the results of the independent testing reveal the meter was not measuring within a generally accepted accuracy rate (+ or — 10%) of the existing reading, Irving shall reimburse Dallas for the cost of the testing service.

3.2 Meter Calibration. Irving shall calibrate and routinely service the meters no less than once during each six-month period or as recommended by the meter manufacturer. Calibration• shall be accomplished according to Irving’s standard methods. Dallas shall be notified of proposed calibrations and may observe if so desired.

3.3 Meter Registration. If, for any reason, any meter is out of service or inoperative, or if, upon any test, any meter is found to be inaccurate, registration thereof shall be corrected. Correction of inaccurate meter registration will normally be based on the most recent correct registration, if such is reasonably ascertainable. Alternatively, the DWU Director and the IWU Director may mutually agree to use previous or future meter registrations, or another methodology recognized by the industry (such as the average winter months water consumption for Dallas’ Service Area), as the basis for correction. If previous or future registrations, or some other methodology agreed upon by the DWU Director and the 1WU Director and also recognized by the industry, is to be used as a basis for correction, Irving shall be allowed to bill Dallas based on estimated amounts prior to rendering a corrected billing. In no event will corrected billings be made for periods in excess of three (3) billing periods prior to notification of meter

RECIPROCAL WASTEWATER SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 6 OF DALLAS 161256 inaccuracy.

3.4 Wastewater Check Meter. Dallas may, at its option and its own expense, if approved by Irving, install and operate a check meter to monitor the living meter, but the measurement of Wastewater flow delivered from Dallas’ Service Area to the living System for the purpose of this Contract shall be based solely on living’s meter, except as otherwise provided herein. Dallas’ installation of a check meter shall not interfere with operation of the living wastewater collection system or living metering equipment. Any such check meter shall be of standard make and shall be subject at all reasonable times to inspection and examination by any employee or agent of living. The reading, calibration and adjustment of the check meter shall be made only by Dallas, except during any period when a check meter may be used under specific written consent by living for measuring the amount of Wastewater delivered into the living System under this Contract, in which case the reading, calibration and adjustment thereof shall be made by living with like effect as if such check meter had been furnished or installed by living.

3.5 Applicability. The provisions of this Article 3 of this Contract apply to the wastewater flow meter installed by Dallas, and thereafter owned, operated and maintained by living, for the measurement of Wastewater from Dallas’ Service Area into the living System at the Point of Entry.

4.0 RATES AND PAYMENT

4.1 Setting of Charges by Irving Ordinance. Rates charged Dallas shall be established by ordinance of living, and Dallas shall be charged living’s current wastewater rate for industrial customers, set out in Chapters 4 land 52 of the living City Code, as that may be amended over time; provided, however, that Dallas shall be billed for wastewater service under this Contract based on the metered amounts of Wastewater discharged at the Point of Entry, or as otherwise provided under Sections 4.3 and 4.6 of this Contract. The capital costs contributed by Dallas for Delivery Facilities and Metering Facilities shall be excluded from the rate base.

4.2 Rate Setting Method; Notice of Change. Dallas understands that the living City Council has the right to change, by ordinance, living’s industrial user rates charged as needed to cover all reasonable, actual and expected costs, including any surcharge rates for excess strength industrial discharges addressed in Article 6 below, in a manner consistent with applicable law. Dallas also acknowledges that living’s rates charged to Dallas under this Contract must be sufficient to allow living’s compliance with applicable rate-setting requirements under the Irving-TRA Wastewater Treatment Contract. In order to provide Dallas with an opportunity to review a possible living rate change or adjustment that would affect this Contract, living agrees to provide the DWU Director with a copy of the rates proposed by living staff a minimum of thirty (30) days prior to living City Council consideration of any change in applicable rates, including documents supporting the proposed rate change upon Dallas’ request; provided, however, that Dallas acknowledges and agrees that the living City Council may adopt a rate change or adjustment that differs from that proposed and of which notice had been provided to Dallas.

Dallas understands and agrees that the Wastewater entering the living System emanating

RECIPROCAL WASTEWATER SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 7 OF DALLAS 161256 from any source whatsoever from Dallas’ Service Area must be given treatment and handling, whether or not its source is revenue producing for Dallas. Therefore, Dallas agrees to pay for infiltration and inflow in Dallas’ Service Area without abatement in the same manner and cost as other Wastewater.

4.3 Dallas Protest. Dallas agrees to give Irving a minimum of fifteen (15) days’ notice of its intent to protest rates, or any other condition of service, before the Public Utility Commission of Texas or any other applicable state agency; provided, however, that Dallas is not required to give a fifteen (15) day notice of intent to appear before living City Council to protest cost of service studies.

4.4 Monthly Invoice. Each month during the term of this Contract, living agrees to deliver to Dallas a statement of charges setting forth the metered amount of Wastewater delivered to living from Dallas’ Service Area for treatment for the period covered by the statement, along with any charges based on excess strength industrial discharges from Dallas’ Service Area, and any past due amounts carried over from prior invoices (including accrued interest) (“the Monthly Statement”). Payment is due upon receipt of the Monthly Statement. Dallas agrees to pay promptly.

4.5 Late Payment. Dallas agrees that a payment is deemed late if received by living more than 30 days after the date of the Monthly Statement. Late payments shall accrue interest at the interest rate authorized by Ch. 2251 of the Texas Government Code, as amended. If any money due and owing by Dallas to living is placed with an attorney for collection, Dallas agrees to pay to living, in addition to all other payments provided for by this Contract, including interest, living’s collection expenses, including court costs and reasonable attorney’s fees.

4.6 Malfunctioning Meter; Inaccurate Reads; Estimated Payments. In the event a meter is discovered to be malfunctioning or is not accurately measuring Wastewater flows or is incapable of accurately measuring Wastewater flows, in circumstances such as low flows or obstructions, the amount of Wastewater that has passed through the meter will be estimated for each day the meter was not functioning correctly or capable of functioning correctly. The last correctly measured monthly flow, or estimated flow, as set forth in Section 3.3 of this Contract, will be used as a basis for computing the amount of Wastewater treated on behalf of Dallas during the time the meter was not functioning correctly.

4.7 Disputed Charges. living and Dallas agree that any disputed charges on the Monthly Statement shall be protested and resolved in accordance with Texas Government Code Section 2251.042, as amended. Dallas agrees that in the event it disputes any portion of the charges on a Monthly Statement, Dallas will timely pay any undisputed amount in accordance with Section 4.4 above.

5.0 WASTEWATER OUALITY

5.1 Effect of Contract

living acknowledges that this Contract serves as the IWU Director’s written approval

RECIPROCAL WASTEWAThR SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 8 OF DALLAS 161256 required under Section 41-29(b)(21) of the Irving City Code for the discharge of wastewater or industrial waste generated or produced outside the City of Irving, and living has concluded that this Contract otherwise satisfies all applicable provisions of the Irving City Code. The parties mutually understand and agree that, for purposes of all provisions of the living City Code referenced and incorporated into this Contract by reference, Dallas is living’s customer under the rates and terms applicable to industrial users, and must ensure compliance with all Regulations Governing Connections, and therefore Dallas is responsible to enact and enforce any requirements of its end users within Dallas’ Service Area that may be necessary or appropriate to achieve Dallas’ compliance with the terms and conditions of this Contract so long as those requirements do not conflict with applicable state and federal standards. Dallas further acknowledges and agrees that it shall implement and enforce within Dallas’ Service Area all applicable regulations and standards implemented and enforced by Dallas for customers of Dallas’ System generally, including as those are designed to comply with Dallas’ separate contractual obligations with TRA.

5.2 Inadmissible Discharges

Dallas agrees that Irving has the responsibility and authority to establish:

(i) the types and quantities of discharges that are prohibited for entry into the Irving System;

(ii) the discharge prohibitions for certain substances, as may be amended from time to time; and

(iii) the pretreatment requirements for industries that discharge Inadmissible Discharges.

In addition to the general provisions of this Article 5 of this Contract, Dallas acknowledges and agrees that, in the event that TRA, acting in accordance with Section 4.03 of the living-TRA Wastewater Treatment Contract and only to the extent required to achieve compliance with that Section 4.03, requires that living prevent entry of the wastewater from a particular industrial user within Dallas’ Service Area into the living System and thus TRA’s System, living shall promptly inform Dallas of this restriction and thereafter Dallas shall be responsible to ensure that the industrial user’s wastewater flows do not enter the living System.

5.3 Pretreatment Regulations

Because Dallas has an established pretreatment program that is designed to comply with all applicable State and Federal regulations, as well as the requirements imposed by TRA on both Dallas and living in order to discharge wastewater into TRA’s System, living hereby approves Dallas’ established pretreatment program for the purposes of the implementation and enforcement within Dallas’ Service Area required under the terms and conditions of this Contract and the living-TRA Wastewater Treatment Contract. Dallas agrees to enact, prior to the in-service connection dates provided in Section 7.2 of this Contract, and to enforce rules or ordinances necessary or appropriate to require all end users within Dallas’ Service Area to

RECIPROCAL WASTEWATER SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 9 OF DALLAS 161256 comply with the provisions of all applicable State and Federal regulations, as amended, as well as those applicable portions of the Irving City Code, as amended, regarding wastewater discharged substances and prohibited discharges.

5.4 Required Industrial Waste Discharge Permits

Dallas shall require all Significant Industrial Users (SIUs) from within Dallas’ Service Area that ultimately discharge into the Irving System to obtain an industrial waste discharge permit pursuant to the applicable provisions of the Dallas City Code. The permit shall require the SRI to abate prohibited substances from its waste stream and pretreat wastewater and process wastewater where necessary as a condition of allowing the discharge of the wastewater into Dallas’ System. All such industrial waste discharge permits approved for SIUs within Dallas’ Service Area shall be subject to applicable provisions of the Dallas City Code governing amendment, enforcement, or revocation or other disposition of such permits.

Dallas shall provide the IWU Director with the following documents and information relating to SIUs within Dallas’ Service Area, within the timeframes identified below:

(a) a copy of each complete application for an industrial waste discharge permit, within thirty (30) days of Dallas’ acceptance of the application;

(b) a copy of each approved industrial waste discharge permit, within thirty (30) days after permit issuance; and

(c) copies of all semi-annual reports submitted to Dallas from SIU permittees within Dallas’ Service Area, within thirty (30) days after Dallas’ receipt.

As provided for under applicable provisions of the Dallas City Code, Dallas agrees to seek injunctive or other appropriate relief against industrial discharge sources whose discharge causes Interference, poses an imminent danger to public health, or when the specific industry is not making sufficient progress toward completing a required and approved pretreatment system. In the event that Dallas fails to obtain appropriate relief against such industrial discharge sources, which in the judgment of the IWU Director results in an imminent threat as provided under Article 8 of this Contract, Irving shall have the rights of restriction, limitation and termination set out in that Article 8.

5.5 Sampling and Testing

For the purpose of determining the type and strength of discharges, Dallas agrees that Irving shall have the right to sample wastewater discharges within Dallas’ Service Area at:

(i) the site of the discharge to the extent Dallas has authority to grant access to such site;

(ii) the point or points of entry of the discharge into Dallas’ System within Dallas’ Service Area;

RECIPROCAL WASTEWAThR SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 10 OF DALLAS 161256

(iii) the Point(s) of Entry of the discharge into the Irving System; and

(iv) other locations as required.

Dallas shall provide all possible assistance to Irving in obtaining access to sampling points.

Dallas agrees that any individual end user within Dallas’ Service Area found in violation of allowable discharges or any individual end user within Dallas’ Service Area who refuses access for the purpose of sampling shall be disconnected from Dallas’ System; provided however, that the violating individual end user shall be afforded the same rights, privileges of appeal, and deficiency cure periods as are other end users operating within Dallas boundaries and under authority of Dallas ordinances.

In addition to other samples taken and tests made on an as-required basis, Irving may periodically, at its sole discretion, take twenty-four (24) hour composite samples or grab samples of Wastewater discharges at the Point of Entry. Up to and including semiannual tests, or for any such test deemed necessary by Irving as the result of a prior test result showing a violation exceeding any local limits, the costs of this sampling and testing shall be borne by Dallas. If Irving otherwise decides to conduct such testing at the Point of Entry more frequently than semiannually, that additional sampling and testing shall be at Irving’s sole expense. Dallas may request that Irving perform other tests in addition to those tests required by Irving. Should Dallas request additional testing and Irving agrees to provide the additional testing, Dallas shall reimburse Irving for the cost of those tests.

Dallas shall be provided with a copy of each Wastewater sample test result performed under or at a location identified in Section 5.5 of this Contract within thirty (30) days after the date of taking of the sample.

All samples shall be analyzed in accordance with the latest edition of Standard Methods of Examination of Water and Wastewater, published by the American Public Health Association, Inc., or the U.S. EPA (40 CFR Part 136) approved methods.

6.0 RATES FOR EXCESS STRENGTH DISCHARGES

6.1 Additional Charge

If Dallas’ Wastewater discharge at the Point of Entry is determined to contain concentrations of BOD and/or Suspended Solids in excess of the allowable discharge strengths, Dallas shall be required to pay a wastewater surcharge fee in addition to the wastewater treatment fee assessed under Article 4 “RATES AND PAYMENT” of this Contract.

At the Effective Date of this Contract, the allowable discharge strength is 250 mg/l for BOD and 250 mg/l for Suspended Solids. Dallas agrees that the Irving City Council has the right to revise, by ordinance, the allowable discharge strengths.

RECIPROCAL WASThWAThR SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 11 OF DALLAS 161256

BOD and Suspended Solids strength determination will be based on a minimum of four (4) days of averaged lab data.

Dallas shall pay Irving for concentrations of BOD and Suspended Solids exceeding 250 mg/l based on the surcharge formula provided in Chapters 41 and 52 of the Irving City Code, subject to increase or decrease without formal amendment of this Contract, as said code provisions might be amended from time-to-time. The wastewater surcharge fee will be calculated every month based on the most recent available BOD and Suspended Solids lab test results. The surcharge fee will be assessed for the entire month in which Dallas’ BOD or Suspended Solids exceeded 250 mg/I.

6.2 Calculation of Additional Amounts Due for Excess Strength

The overstrength wastewater surcharge fee shall be calculated in accordance with Irving City Code Chapters 41 and 52. Any future ordinance changes related to the calculation of wastewater surcharges shall apply to this Contract as if in effect at the Effective Date of this Contract; provided, however, that the notice provisions in Section 4.2 of this Contract shall also apply to any Irving ordinance changes relating to such wastewater surcharge fees.

7.0 WASTEWATER DISCHARGED FROM DALLAS’ SERVICE AREA

7.1 Applicability of the Irving-TRA Wastewater Treatment Contract

Irving and Dallas acknowledge that their respective obligations under this Contract are also subject to, and drafted to conform and comply with, all of Irving’s rights and responsibilities, and other applicable requirements, under the Jiving-TRA Wastewater Treatment Contract. Dallas and Irving acknowledge and agree that Wastewater collected from Dallas’ Service Area and discharged into the Irving System pursuant to the terms of this Contract will be treated through TRA’s System under the terms of the Irving-TRA Wastewater Treatment Contract. For all relevant purposes under the Irving-TRA Wastewater Treatment Contract, including but not limited to Irving’s payment obligations to TRA, the Wastewater received by Irving from Dallas’ Service Area under this Contract shall be considered part of Irving’s wastewater discharged into TRA’s System and shall not be charged to Dallas under its separate contract with TRA.

In performance of its obligations under this Contract, Irving and its employees, contractors, and agents are acting also under all applicable terms and conditions of: (a) the Irving-TRA Wastewater Treatment Contract; and (b) all applicable provisions of the Irving City Code, including but not limited to Chapters 41 and 52 thereof, enacted in whole or in part in relation to Irving’s performance under the Irving-TRA Wastewater Treatment Contract. Except as may be expressly provided otherwise in this Contract, Irving shall be solely responsible to perform its obligations and exercise its rights under the Irving-TRA Wastewater Treatment Contract. Irving agrees that it will coordinate with TRA to finalize as promptly as practicable any arrangements in connection with the Irving-TRA Wastewater Treatment Contract that are necessary or appropriate for Irving to be able to perform its obligations for Dallas’ Service Area

RECIPROCAL WASTEWATER SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 12 OF DALLAS 161256 under this Contract, and that such arrangements, if necessary, will provide for the service date agreed by the parties under Section 7.2 below. Dallas agrees that it will cooperate with Irving and TRA, upon request by living, to facilitate any required facilities updates or modifications of living’s points of entry to TRA’s System necessary to accommodate the wastewater service for Dallas’ Service Area under this Contract.

7.2 Timing of Placing Wastewater Connections into Service

The parties agree that the initial agreed Point of Entry described in Section 2.1 and as shown and described in Exhibit A of this Contract will be placed into service by March 1, 2017, or by such other date as mutually agreed by the DWU Director and the 1WU Director; provided, however, that the timing of living’s obligation to place the Point of Entry into service is subject to (i) Dallas’ having completed and conveyed to living under the provisions of Article 2 of this Contract all Delivery Facilities and Metering Facilities, and Dallas’ having completed any other facilities, equipment, appurtenances and improvements, including but not limited to resolution to the satisfaction of the IWU Director of present issues affecting access to living’s wastewater main referenced in Section 2.1 above, necessary to connect the living System to Dallas’ System at the Point of Entry so that wastewater service to Dallas’ Service Area is possible; and (ii) Dallas’ having the wastewater flow meter for this connection properly installed. The 1WU Director will coordinate with the DWU Director for issuance of the permits required under Section 41-2 of the living City Code for authorized connection to the living System.

7.3 Quantity at Points of Entry

living represents that it has sufficient capacity within its wastewater system and its existing authorized points of entry for Wastewater discharge from the living System into TRA’ s System in order to receive, transport and discharge Wastewater flows from Dallas’ Service Area up to the agreed peak flow quantity set forth in Section 2.1 above.

Dallas agrees that it will endeavor, through its oversight of development within Dallas’ Service Area and with the metered flow data provided through each Monthly Statement, to not exceed the peak flow limit for the Point of Entry identified in Section 2.1 above or the limit for any additional point of entry later added pursuant to Section 2.9 above for a period of time greater than twenty-four (24) hours unless such flow exceedance is approved by the IWU Director. In the event of a flow exceedance, DWU will take immediate action (within 24 hours) to investigate and identify the cause of the flow exceedance and to take appropriate corrective action. It is understood that some repairs or other corrective action could take longer than 24 hours to resolve. The IWU Director agrees not to unreasonably withhold approval of a flow exceedance that is not anticipated to compromise the living System. The parties further agree that, in the event the metered flows from Dallas’ Service Area ever exceed the limits provided or approved under this Section 7.3 in a manner that the IWU Director deems to be an imminent threat as provided under Article 8 of this Contract, living shall have the rights of restriction, limitation and termination set out in that Article 8.

7.4 Control of Infiltration and Inflow

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It is understood and agreed that Irving and Dallas have an obligation to prevent entrance of infiltration and inflow into Dallas’ System within Dallas’ Service Area and thence into the living System. Dallas therefore agrees that all wastewater connections to Dallas’ System which ultimately bring the flow of Wastewater from Dallas’ Service Area into the Irving System will be constructed with a permanent type material, carefully bedded to prevent over-stressing of the material and utilizing a joint which will provide a permanent water-tight connection. Dallas agrees that each such installation shall pass an air test performed in accordance with applicable A.S.T.M. Standards and shall be done under the supervision of Dallas’ authorized representative at the time of installation. All such tests shall be at Dallas’ expense. Each building lateral which interconnects private property within Dallas’ Service Area to Dallas’ System shall be excluded from the air test requirements.

Dallas agrees that the physical connection of each service line within Dallas’ Service Area to Dallas’ System shall be the responsibility of Dallas and shall not be left to the discretion of the plumber or contractor unless the plumber or contractor is under the direct supervision of, or whose work is inspected by, Dallas’ authorized representative. Dallas further covenants that all future trunk wastewater lines added to Dallas’ System within Dallas’ Service Area which ultimately discharge into the Irving System shall be:

(i) built in accordance with appropriate State of Texas design criteria, including infiltration/exfiltration limitations; and

(ii) subjected, in representative sections of each new line, to an air test or infiltration or exfiltration test at the time of installation, at the option of Irving and at the sole expense of Dallas, to assure the State design criteria standards are met.

Dallas also covenants that it will maintain strict supervision and maintenance of Dallas’ System within Dallas’ Service Area to prevent connections such as all roof drains or any other means by which surface drainage can enter Dallas’ System and thence the Irving System.

8.0 PROTECTION OF WASTEWATER SYSTEM

Dallas will periodically assess and repair its System facilities within Dallas’ Service Area, as necessary or appropriate, to make sure that Wastewater flows entering the Irving System from the Point of Entry are consistent with the terms and conditions of this Contract, including but not limited to all requirements affecting the quantity or quality of Wastewater from Dallas’ Service Area being discharged into the Irving System.

It is mutually understood and agreed that only employees, agents, or contractors of Dallas shall be permitted to work on or make connections to those elements of Dallas’ System within Dallas’ Service Area which ultimately discharge into the Irving System. Only qualified plumbers licensed by the State of Texas shall be permitted to work on building laterals entering into those elements of Dallas’ System within Dallas’ Service Area which discharge into the Irving System. It is further mutually understood and agreed, however, that this provision shall be waived in the event that IWU personnel find it necessary to enter Dallas’ Service Area while performing their

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duties. Free access to Dallas’ Service Area shall be provided to those frying personnel in the pursuit of their duties.

It is mutually understood and agreed that Dallas will maintain a careful inspection of Dallas’ System within Dallas’ Service Area and will exercise diligence and care in the maintenance of Dallas’ System within Dallas’ Service Area and in the installation of connections and laterals that may be connected with Dallas’ System within Dallas’ Service Area in order that the living System not be burdened with excess discharge during rainy and wet weather. Dallas shall provide Irving with annual reports regarding implementation of the maintenance plan, as provided in Article 12 of this Contract, and copies of any reports required to be filed with a state or federal agency relating to Dallas’ System facilities within Dallas’ Service Area.

Laterals to private dwellings and public, commercial, or industrial buildings constructed in the wastewater drainage area of Dallas’ Service Area after the Effective Date of this Contract shall be of materials jointly approved by Irving and Dallas or acceptable under one or both parties’ respective plumbing codes. Each building lateral which interconnects private property within Dallas’ Service area to Dallas’ System shall pass a water test meeting minimum standards of TCEQ’s Rules (Chapter 217 - Design Criteria for Domestic Wastewater Systems, as amended) for wastewater collection systems.

Dallas understands, agrees and acknowledges that it has a continuing duty to provide for and enforce the Regulations Governing Connections, in all respects of Dallas’ operations in or affecting Dallas’ Service Area. Failure of Dallas to comply with this duty shall be sufficient grounds for Irving, at its sole option, to restrict, limit, or terminate receipt of Wastewater flow from Dallas’ Service Area to the extent living deems necessary in order to protect the Irving System from damage due to excessive flows or flows containing a high concentration of Incompatible Wastes. Irving shall provide written notice to Dallas outlining the specific violation(s) prior to such restriction, limitation or termination, and Dallas shall have thirty (30) days from the date of that notice within which to correct all such violations, unless immediate action is necessary as set forth below. In the event of an emergency that imminently threatens Interference or damage to any portion of the Irving System or TRA’s System, or otherwise imminently threatens Irving’s or TRA’s employees or the general public health and safety, Irving immediately may restrict, limit, or terminate Wastewater flow by telephone notice to Dallas. In the event of and for the duration of any restriction, limitation or termination properly exercised by living under this Article 8, Dallas shall not be entitled to any abatement, modification, or reimbursement of wastewater charges owed to Irving under the terms of this Contract.

9.0 LIABILITY FOR DAMAGES AND RESPONSIBILITY FOR TRANSPORTATION AND HANDLING OF WASTEWATER

Liability for damages arising from the reception, transportation, and delivery of all Wastewater discharged by Dallas from Dallas’ Service Area under this Contract shall remain with Dallas up to and through the Dallas side of the Points of Entry. With exception of Incompatible Wastes or Wastewater deemed to be a cause of Interference, upon passage through the Point of Entry into the Irving side, liability for damages and the handling of the Wastewater discharged by Dallas shall belong to Irving. As between the parties and to the extent allowed by

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law, without waiving any sovereign governmental immunity available to each party, Irving and Dallas agree to release, save, and hold the other party harmless from all claims, demands, and causes of action which may be asserted by any person on account of the reception, transportation and delivery while Wastewater is in the respective control of either Irving or Dallas. Irving takes the responsibility, as between the parties, for the proper reception, transportation, and discharge into TRA’s System for proper treatment of all Wastewater received by Irving from Dallas at the Point of Entry. The provisions of this Article 9 are solely for the benefit of the parties to this Contract and are not intended to create or grant any rights, contractual or otherwise, to any other person or entity.

10.0 ACCESS

10.1 Access to Dallas Facilities. Dallas agrees to provide ingress and egress to Dallas’ property located within Dallas’ Service Area for employees, contractors, and agents of Irving to install, operate, inspect, test, and maintain facilities and read meters owned or maintained by Irving; provided, however, Irving’s employees, contractors, and agents shall at all times comply with Dallas’ policies regarding security and safety as may be adopted from time to time by Dallas for the purpose of safeguarding Dallas’ System.

10.2 Access to Irving Facilities. Irving agrees to provide ingress and egress to Irving’s property located within Irving’s incorporated limits for employees, contractors, and agents of Dallas to install, operate, inspect, test, and maintain facilities and read meters owned or maintained by Dallas; provided, however, Dallas’ employees, contractors, and agents shall at all times comply with Irving’s policies regarding security and safety as may be adopted from time to time by Irving for the purpose of safeguarding the Irving System.

11.0 DALLAS TO PROVIDE DATA

11.1 Classification of Customers

Dallas shall provide the following data to Irving not later than July 1st of each year during the term of this Contract:

(A) Actual number of customer accounts from Dallas’ Service Area feeding into the Irving System.

(B) Classification, by number and percentage, of these accounts feeding into the Irving System according to the following:

(i) Residential;

(ii) Multi-family;

(iii) Business/Commercial (class and entity type shall be specified, e.g., restaurant etc.);

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(iv) Industrial (class and entity type shall be specified, e.g., chemical manufacturer, etc.); and

(v) Other.

11.2 Additional Data Requirements. Dallas agrees that it shall provide a written annual report to Irving, by July 1st of each year or another scheduled annual deadline mutually agreed by the IWU Director and the DWU Director, addressing the following issues of particular importance for operation of the Irving System:

a. Significant Industrial Users. Dallas shall report to Irving, for the prior year, a listing of all the SIUs located within Dallas’ Service Area and discharging Wastewater that enters the Irving System, including a description of any compliance issues or violations that Dallas has addressed with any of these SIUs during the prior year.

b. Grease and Grit Traps. Dallas shall report to Irving, for the prior year and to the extent known to Dallas, (i) the locations of any grease traps or grit traps that are installed at various end users’ facilities within Dallas’ Service Area, including but not limited to office buildings, restaurants, schools, and vehicle cleaning facilities; (ii) the cleaning schedules for each of those grease traps or grit traps; and (iii) whether the cleaning schedule has been followed during the prior year.

12.0 WASTEWATER MASTER AND MAINTENANCE PLANS

(A) Master Plan. Dallas agrees to provide a comprehensive wastewater master plan for Dallas’ Service Area to Irving within five (5) years of the Effective Date of this Contract as the development of Dallas’ Service Area progresses. The master plan shall include, but shall not be limited to, the following information as it pertains to Dallas’ Service Area:

(i) population data, present and projected;

(ii) geography and topography data;

(iii) current and proposed treatment processes;

(iv) treatment alternatives;

(v) existing and projected discharge flows into the Irving System;

(vi) existing and planned wastewater collection system maps in digital format;

(vii) existing and projected treated water usage for area which discharges into the Irving System;

(viii) existing and projected zoning (Residential, Industrial, Commercial) for area which discharges into the Irving System;

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(ix) future development plans; and

(x) other data or information as is deemed necessary by the DWU Director.

Dallas agrees that the initial plan shall be for a twenty-year (20) period. Dallas further agrees that the plan shall be reviewed jointly by living and Dallas and, if necessary, revised by Dallas at ten-year intervals.

(B) Maintenance Plan. Dallas agrees to provide a comprehensive wastewater operations and maintenance plan for Dallas’ Service Area to living within five (5) years of the Effective Date of this Contract as the development of Dallas’ Service Area progresses. The initial operations and maintenance plan will be submitted to the IWU Director at least six (6) months prior to Dallas’ initial connection to the living System, and must be updated as connections occur but not less than every five (5) years following submission of the initial plan, or as necessary to ensure compliance with the terms of this Contract. The operations and maintenance plan should be based on best management practices for capacity, management, operations and maintenance (CMOM) and may include the following for Dallas’ Service Area:

(i) Wastewater Collection System Map in digital format (ii) Wastewater Collection System Inventory and Identification of Physical Attributes (iii) Wastewater Collection System Condition Assessment (iv) Wastewater Collection System Capacity Evaluation under wet and dry weather flow conditions (v) Capital Improvement Program (CIP) Plan to repair, replace, rehabilitate and improve wastewater system components based on condition and performance (vi) Annual goals for TV inspection and cleaning efforts. (vii) Identification of the chemical(s) used for cleaning mains (viii) Description of public outreach program to reduce grease and illegal connections (ix) Description of program(s) to reduce inflow and infiltration (I/I) in Dallas’ system since Ill eventually outfalls to the living System (x) Description of program to identify illegal connections (e.g., roof and street drainage which is connected to the wastewater collection system) (xi) Pretreatment program to inspect the discharge of large industrial users.

13.0 PAYMENTS TO CONSTITUTE OPERATING EXPENSES BY DALLAS

Dallas represents and covenants that the services to be obtained pursuant to this Contract are essential and necessary to the operation of Dallas and its local wastewater facilities, and that all payments to be made hereunder by it will constitute reasonable and necessary “operating expenses” of Dallas’ waterworks and wastewater systems, within the meaning of Chapter 1502, Texas Government Code, and the provisions of all ordinances authorizing the issuance of all revenue bond issues of Dallas which are payable from revenues of Dallas’ waterworks and sewer

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systems. Dallas agrees throughout the term of this Contract to continuously operate and maintain its waterworks and sewer system and to fix and collect such rates and charges for wastewater services to be supplied by Dallas’ waterworks and sewer system as will produce revenues in an amount equal to at least (i) all of its payments under this Contract and (ii) all other amounts as required by the provisions of the ordinances or resolutions authorizing its revenue bonds or other obligations now or hereafter outstanding.

14.0 RIGHTS TO RETURN FLOWS

Both parties to this Contract understand, acknowledge, and agree that neither party shall acquire new water rights or title or right to the use, reuse, or recycling of Wastewater diverted, entering or delivered to the Irving System under this Contract; provided, however, that the parties acknowledge Irving’s existing, permitted right to its developed water supply from Lake Chapman, and the right to reuse the return flows from that Lake Chapman water supply (Certificate of Adjudication No. 03-4799C, as amended), which rights the parties agree are not modified or affected by the terms and conditions of this Contract or by the terms of any of the related agreements referenced in Article 20.0 below, regardless of whether Irving’s Lake Chapman water was used to supply Dallas’ Service Area pursuant to those agreements.

15.0 FORCE MAJEURE; INDEMNITY; REMEDIES; NO WARRANTIES

15.1 Force Majeure. Neither party shall be liable to the other party for any failure, delay, or interruption in the performance of any of the terms, covenants, or conditions of this Contract due to causes beyond their respective control or because of applicable law, including, but not limited to, war, nuclear disaster, strikes, boycotts, labor disputes, embargoes, acts of God, acts of the public enemy, acts of superior governmental authority, floods, riots, rebellion, sabotage, terrorism, or any other circumstance for which a party is not legally responsible or which is not reasonably within its power to control. The parties agree that, with respect to Irving’s performance of its obligations under this Contract, events of force majeure that trigger the provisions of this Section 15.1 may include events of force majeure defined under and delaying or preventing performance under the Irving-TRA Wastewater Treatment Contract. The affected party’s obligation shall be suspended during the continuance of the inability then claimed, but for no longer period. To the extent possible, the party shall endeavor to remove or overcome the inability claimed with all reasonable dispatch.

15.2 Indemnification. To the extent allowed by Texas law, Dallas and Irving (each, the “Indemnifying Party”) agree to defend, indemnify and hold harmless the other party (each, an “Indemnified Party”), its officers, agents and employees, from any liability in claims, administrative proceedings or lawsuits for judgments, penalties, fines, costs, expenses and attorney’s fees for personal injury (including death), property damage, or other harm for which recovery of damages is sought or suffered by any person or persons, or for violations of state or federal laws or regulations, that may arise out of or be occasioned by: (i) a breach of this Contract by the Indemnifying Party; (ii) the negligent act or omission of the Indemnifying Party in the performance of this Contract or in the Indemnifying Party’s day-to-day water or wastewater utility operations; or (iii) the conduct of the Indemnifying Party that constitutes a violation of state or federal laws or regulations. Provided, however, that the indemnity stated

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above shall not apply to any liability resulting from the Indemnified Party’s sole violation of a state or federal law or regulation or from the sole negligence of the Indemnified Party, its officers, agents, employees or separate contractors, and in the event of the joint and concurring responsibility of Dallas and Irving, responsibility and indemnity, if any, shall be apportioned comparatively in accordance with the laws of the State of Texas, without waiving governmental immunity or any other defenses of the parties under applicable Texas law. The provisions of this paragraph are solely for the benefit of the parties to this Contract and are not intended to create or grant any rights, contractual or otherwise, to any other person or entity. The provisions of this Section 15.2 shall survive termination of this Contract, as to events that arise prior to such termination.

15.3 Equitable Remedies. Recognizing that Irving’s and Dallas’ undertakings as provided in this Contract are obligations, the failure in the performance of which cannot be adequately compensated in money damages, Irving and Dallas agree that, in the event of any default, the other party shall have available to it the equitable remedy of specific performance in addition to other legal or equitable remedies which may be available to such party.

16.0 COMPLIANCE WITH LAWS AND REGULATIONS; REGULATORY BODIES

This Contract is entered into subject to and controlled by the applicable provisions of the Charter and ordinances of the City of Irving, applicable provisions of the Charter and ordinances of the City of Dallas, and all applicable laws, rules, and regulations of the State of Texas, including but not limited to rules, regulations and orders of the TCEQ, and the Government of the United States of America. Irving and Dallas shall, during the course of performance of this Contract, comply with all applicable State and Federal laws, rules and regulations, as may be hereafter amended.

Irving and Dallas fully intend that this Contract is an agreement for goods or services to be provided to Dallas by living pursuant to Texas Local Government Code, Section 271.151 et seq., and further that this Contract may be enforced by a court of competent jurisdiction in the event of breach according to the remedies provided in Texas Local Government Code, Section 271.15 1 etseq. and Section 15.3 of this Contract.

17.0 PUBLICATIONS, REFERENCE WORKS, GOVERNMENTAL REGULATIONS

In each instance herein where reference is made to a publication, reference work or Federal or State regulation, it is the intention of the parties that, at any given time, the then current edition of any such publication or reference work or Federal or State regulation shall apply. If a publication or reference work is discontinued or ceases to be the generally accepted work in its field or if conditions change or new methods or processes are implemented by living, new standards shall be adopted which are in compliance with State and Federal laws and any valid rules and regulations pursuant thereto.

18.0 REDUCTION IN DEMAND; TERMINATION

The parties recognize the possibility that Dallas could, at some time over the term of this

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Contract, as extended or amended, desire for whatever reason to partially or totally discontinue receiving wastewater service from living for Dallas’ Service Area under this Contract. Under those circumstances, the DWU Director shall give the IWU Director as much notice of such intended reduction or discontinuation of demand as reasonably practicable, but in no event shall the written notice be less than ninety (90) days prior to Dallas’ intended date of reduction or discontinuation. If at the time that Dallas provides such notice, living is then subject to payment terms under living’s then-current wastewater treatment contract with TRA by which living must pay demand level charges to TRA, and if Dallas’ intended reduction or discontinuation of demand under this Contract would result in living incurring additional expense for such charges, then the parties hereto agree that the IWU Director and DWU Director will negotiate in an attempt to determine a reasonable and mutually agreeable reimbursement from Dallas to the extent and for the duration of time that living was caused to incur demand level charges by TRA in direct proportion to the amount of wastewater received into the living System from Dallas’ Service Area. Provided, however, that living may agree to forego any such payment by Dallas in the event of nominal reductions based on Dallas’ plans if living has received prior notice of the plans as provided above and has concurred in the reduction. If the parties should agree in the future on any such reimbursement for living based on this provision of Article 18, Dallas further agrees to amend the parties’ other existing contracts as necessary to reflect this remedy for reduction of demand.

Notwithstanding any other contrary provision in this Contract, living shall have the right to terminate this Contract if Dallas is more than six (6) months delinquent in any payments required to be made to living under this Contract, or is in material breach of any obligation Dallas has under this Contract if such material breach is not cured by Dallas within sixty (60) days following living’s written notice of such material breach, or such additional time for cure determined in the IWU Director’s sole discretion.

19.0 TERM OF CONTRACT

This Contract shall remain in full force and effect for a term beginning on August 1, 2016 (the “Effective Date”) and coterminous with both the 1998 Dallas-living WTWC and Dallas’ Water Treatment Services Contract with living (approved and executed January 8, 1998), including as the term of both those 1998 agreements may be extended or otherwise amended by the parties, unless terminated earlier only as provided under this Contract. Notwithstanding any references in this Contract to the parties’ existing 1998 agreements, including the 1998 Reciprocal Agreement, living and Dallas intend that the term of wastewater service to be provided by living to Dallas under this Contract shall be governed by this Article 19 of this Contract.

20.0 RELATED AGREEMENTS

As referenced in this Contract, Dallas and Irving are also separately executing, contemporaneously with this Contract, the following related agreements: (i) boundary adjustment agreement for the West Cell South area; and (ii) Reciprocal Treated Water Service Contract Between City of living and the City of Dallas. The parties’ obligations under this Contract are contingent upon the execution of all of these enumerated related agreements. The

RECIPROCAL WASTEWATER SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 21 OF DALLAS 161256 parties further agree that, except as otherwise expressly provided herein, this Contract shall not be construed as an amendment to the 1998 Dallas-Irving WTWC (including its Reciprocal Agreement) or the 1998 Dallas-Irving Water Treatment Services Contract.

21.0 CONTRACT ADMINISTRATION

This Contract shall be administered on behalf of Irving by the IWU Director and on behalf of Dallas by the DWU Director.

22.0 INSPECTION OF BOOKS AND RECORDS

Each party agrees that the other party or its employees or agents may have access to and inspect the books and other non-privileged/confidential records of the party from whom such inspection of records is requested, relating to the delivery, treatment and disposal of Wastewater from Dallas’ Service Area pursuant to this Contract and the Irving-TRA Wastewater Treatment Contract, during reasonable business hours after reasonable prior written notice to the party from whom such inspection of records is requested. The parties further agree that the requesting party has the right to have copies made, at the sole expense of the requesting party, of any such records requested for inspection.

23.0 NOTICES

Except as otherwise provided in Section 24.0, any notice, payment, statement, or demand required or permitted to be given under this Contract by either party to the other may be effected by personal delivery in writing or by mail, postage prepaid, certified or registered, return receipt requested. Mailed notices shall be addressed to the parties at the addresses appearing below, but each party may change its address by written notice in accordance with this section. Mailed notices shall be deemed communicated as of three (3) days after mailing.

If to Dallas: If to Irving:

Director of Water Utilities Water Utilities Director City of Dallas City of Irving 1500 ManIla Street, Room 4/A/North 333 Valley View Lane Dallas, Texas 75201 living, Texas 75061 (214) 670-3154 (facsimile) (972) 721-2280 (facsimile)

24.0 NOTICE OF CONTRACT CLAIM

This Contract is subject to the provisions of Section 2-86 of the Dallas City Code, as amended, relating to requirements for filing a breach of contract claim against Dallas. Section 2-86 of the Dallas City Code, as amended, is expressly incorporated by reference and made a part of this Contract as if written word for word in this Contract. Irving agrees to comply with the requirements of this ordinance as a precondition of any claim relating to this Contract, in addition to all other requirements in this Contract related to claims and notice of claims.

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25.0 VENUE

The parties agree that their respective obligations under this Contract shall be performable in Dallas County, Texas, that this Contract shall be enforceable in Dallas County, Texas, and if legal action is necessary to enforce it, exclusive venue shall lie in Dallas County, Texas.

26.0 GOVERNING LAW

This Contract shall be governed by and construed in accordance with the laws and court decisions of the State of Texas, without regard to conflict of law or choice of law principles of any other state.

27.0 LEGAL CONSTRUCTION

In case any one or more of the provisions contained in this Contract shall for any reason be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Contract, and this Contract shall be considered as if such invalid, illegal, or unenforceable provision had never been contained in this Contract.

28.0 CONFLICT OF INTEREST

The following section of the Charter of the City of Dallas shall be one of the conditions, and a part of, the consideration of this Contract, to wit:

“CHAPTER XXII. Sec. 11. FiNANCIAL iNTEREST OF EMPLOYEE OR OFFICER

PROHIBITED --

(a) No officer or employee shall have any financial interest, direct or indirect, in any contract with the City or be financially interested, directly or indirectly, in the sale to the City of any land, materials, supplies or services, except on behalf of the City as an officer or employee. Any violation of this section shall constitute malfeasance in office, and any officer or employee guilty thereof shall thereby forfeit the officer’s or employee’s office or position with the City. Any violation of this section, with knowledge, express or implied, of the person or corporation contracting with the City shall render the contract involved voidable by the City Manager or the City Council.

(b) The alleged violations of this section shall be matters to be determined either by the Trial Board in the case of employees who have the right to appeal to the Trial Board, and by the City Council in the case of other employees.

(c) The prohibitions of this section shall not apply to the participation by City employees in federally-funded housing programs, to the extent permitted by applicable federal or state law.”

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For purposes of this Section 28.0, the word “City” means “City of Dallas.”

29.0 GIFT TO PUBLIC SERVANT

This Contract shall be subject to the following additional provisions:

(A) living may terminate this Contract immediately if Dallas has offered, or agreed to confer any benefit upon an living employee or official that the living employee or official is prohibited by law from accepting.

(B) Dallas may terminate this Contract immediately if living has offered, or agreed to confer any benefit upon a Dallas employee or official that the Dallas employee or official is prohibited by law from accepting.

(C) For purposes of this section, “benefit” means anything reasonably regarded as pecuniary gain or pecuniary advantage, including benefit to any other person in whose welfare the beneficiary has a direct or substantial interest, but does not include a contribution or expenditure made and reported in accordance with law.

(D) Notwithstanding any other legal remedies, living may require Dallas to remove any officer or employee of Dallas from the administration of this Contract or any role in the performance of this Contract who has violated the restrictions of this section or any similar state or federal law, and obtain reimbursement for any expenditures made as a result of the improper offer, agreement to confer, or conferring of a benefit to an living employee or official. Similarly, Dallas may require living to remove any officer or employee of living from the administration of this Contract or any role in the performance of this Contract who has violated the restrictions of this section or any similar state or federal law, and obtain reimbursement for any expenditures made as a result of the improper offer, agreement to confer, or conferring of a benefit to a Dallas employee or official.

30.0 COUNTERPARTS

This Contract may be executed in any number of counterparts, each of which shall be deemed an original and constitute one and the same instrument. If this Contract is executed in counterparts, then it shall become fully executed only as of the execution of the last such counterpart called for by the terms of this Contract to be executed.

31.0 CAPTIONS

The captions to the various clauses of this Contract are for informational purposes only and shall not alter the substance of the terms and conditions of this Contract.

32.0 SUCCESSORS AND ASSIGNS

This Contract shall be binding upon and inure to the benefit of the parties and their respective successors and, except as may otherwise be provided in this Contract, their permitted

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assigns. Neither party will assign or transfer any interest or any of its rights or responsibilities under this Contract without the prior written consent of the other party.

33.0 NO AGENCY OR JOINT VENTURE RELATIONSHIP; NO THIRD PARTY BENEFICIARIES

Dallas and Irving agree and acknowledge that each entity is not an agent of the other entity and that each entity is responsible in accordance with the laws of the State of Texas for its own acts, forbearance, negligence and deeds and for those of its officers, agents or employees in conjunction with the performance of work covered under this Contract. Nothing in this Contract will be construed as creating any form of partnership or joint venture relationship between the parties. Nothing in this Contract shall be construed to confer any right, privilege or benefit on, or to otherwise create any vested right or third party beneficiary relationship with, any person or entity not a party to this Contract.

34.0 AUTHORIZATION TO ACT

By their signature below, the representatives of Irving and Dallas state that they are authorized to enter into this Contract. Irving and Dallas shall each provide documentation that this Contract has been authorized by its respective governing body.

35.0 ENTIRE AGREEMENT; NO ORAL MODIFICATIONS

This Contract (with Exhibit A incorporated by reference) embodies the entire agreement of both parties, superseding all oral or written previous agreements between the parties relating to matters set forth in this Contract; provided, however, that the contemporaneously executed related agreements identified in Section 20.0 of this Contract are not superseded by this Contract. Except as otherwise provided elsewhere in this Contract, this Contract cannot be modified without a written supplemental agreement or amendment executed by both parties.

EXECUTED this the 1-day of (kr , 2016 by the City of Irving, signing by and through its Mayor, duly authorized to execute same by Resolution No.O c4. , adopted by the Irving City Council on PU4lAS 2016, and on the\C day Qf_s-c-*-, 2016 by the City of Dallas, signing by and through its City Manager, duly thorized to ecute same by Resolution No. adopted by the Dallas City Council t30l6.

APPROVED AS TO FORM: CITY OF IRVING KURUVILLA OOMMEN BETH VAN DUYNE City Attorney Mayor

BY______BY______City Attorney Mayor

ATTEST:

RECIPROCAL WASTEWATER SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 25 OF DALLAS 161256

Shanae Jennings City Secretary

APPROVED AS TO FORM: CITY OF DALLAS CHRISTOPHER D. BOWERS, A. C. GONZALEZ, Interim City Attorney City Manager

BY BY______/ Assistant City Attorney Assi’tant City Manager

RECIPROCAL WASTEWATER SERVICE CONTRACT BETWEEN THE CITY OF IRVING AND THE CITY 26 OF DALLAS 161256 Exhibit A Dallas’ Service Area