2010-053 RES APPROVING AND AUTHORIZING EXECUTION OF AN AGREEMENT CONCERNING THE RELEASE OF THE DAISY FARM ACREAGE

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v. Within thirty (30) days after TCEQ's issuance of its order releasing the Property from the District's certificated service area, the District shall provide a copy of TCEQ's order to the City; and vi. After the Effective Date of this Agreement, the District shall not object to the City constructing a water line through the District's certificated service area and providing water utility service to Daisy Farms' Property. B. In consideration of the District's agreements contained herein, the City agrees as follows: i. The City will be responsible for all application fees imposed by TCEQ concerning the District's application for unconditional release of the Property from the District's certificated service area; ii. The City will install, operate and maintain a water line extended to the Daisy Farms Property; iii. The City will not sell treated water to any other customer from any water line extended to Daisy Farms' Property other than to potential customers located within the City's corporate city limits or extraterritorial jurisdiction ("ETJ") as provided for in Section 4.1 of the Wholesale Treated Water Contract executed May 8, 2006; iv. In the event Daisy Farms or its successors or assigns fails or ceases to do business at the Property, the City will release any claim to provide water utility service to the Daisy Farms Property and will not oppose the District's application to amend its CCN to restore the previously released Property into its Certificated Service Area; and v. In the event Daisy Farms or its successors or assigns fails or ceases to do business at the Property, the water line extended to Daisy Farms may be used by the City to provide treated water service to other customers within the corporate city limits and/or within the City's ETJ area. In the alternative, the City may offer to sell the water line to the District at Fair Market Value. 2. Agreement Related to the Term of Water Supnlv Contract with the District The initial term of the Contract will expire on May 8, 2026, with an option to extend the Contract for four additional 5-year terms upon mutual agreement between the Parties. The Texas Water Development Board ("TWDB") has approved the purchase of the District's 2009 Water System Revenue Bonds from the TWDB's Drinking Water Revolving Fund. This approval is contingent on the District obtaining a binding letter from the City addressed to the TWDB regarding the City's agreement with the District pertaining to the renewal or extension of the Page 13