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.1 apply Sludge in accordance with its Texas Water Commission Wastewater Treatment Plant permit; be responsible for all necessary permits for Sludge application and Effluent irrigation and in the event necessary permits are_not issued after CITY has made diligent effort then this agreement may be partially or completely cancelled by agreement of the parties; and shall maintain its equipment in proper working order except that Property Owner shall be responsible for cost of repairing damage to equipment which results from negligence on the part of Property Owner or his representatives. CITY shall have access to.Application Site for the purpose of delivering and applying Sludge and maintaining equipment and shall be permitted to erect a small maintenance storage building if desired. CITY shall close gates when entering or leaving the Application Site. Sec. 3.2 - Farming of Application Site. Property Owner will develop Application Site in Coastal Bermuda grass for permanent pasture to be overseeded each Fall with winter forage crops, or develop a substitute vegetation plan after it has been approved by CITY, and owner will harvest the same at least monthly or in accordance with accepted farming practices. Any vegetation plan followed or proposed must provide adequate nutrient uptake rates and be otherwise compatible with sludge disposal requirements. CITY and Property Owner will cooperate in developing suitable Sludge application schedules and procedures to accommodate the required rate of Sludge disposal and the farming operations. CITY agrees to deliver all sludge produced up to approximately 135,000 pounds per month on a dry weight basis, plus or minus 25%, to which Property Owner has the exclusive right. Property Owner shall have all rights to crops or forage, except if Property Owner should discontinue farming the site to the detriment of the Sludge disposal operation CITY shall have -4-