SECTION F.      DEVELOPER, SUBDIVISION, AND NON-STANDARD SERVICE REQUIREMENTS

1.        Corporation’s Limitations.  All Applicants shall recognize that the Corporation must comply with local, state, and federal rules and regulations as promulgated from time to time, and by covenants of current indebtedness.  The Corporation is not required to extend retail utility service to an Applicant in subdivision where the responsible party (Applicant/Developer) of the applicable property (subdivision) has failed to comply with the terms of this policy.  13.2502 of the Texas Water Code requires that notice be given herein or by publication or by alternative means to the Developers/Applicants.

2.        Purpose.  It is the purpose of this Section to define the process by which the specific terms and conditions for service to subdivisions are determined including the Developer’s and Corporation’s respective costs.

3.        Application of Rules.  This Section is applicable to subdivisions, additions to subdivisions, developments, or whenever additional service facilities are required.  For the purposes of this Tariff, Applications subject to this Section shall be defined as Non-Standard.  This Section may be altered or suspended for planned facility expansions when the Corporation extends its indebtedness.  The Board of Directors of the Corporation shall interpret on an individual basis whether or not the Applicant’s service request shall be subject to all or part of the conditions of this Section.

4.        Non-Standard Service Application.  The Applicant shall meet the following requirements prior to the initiation of a Service Contract by the Corporation:

a.        The Applicant shall provide the Corporation a completed Service Application and Agreement giving special attention to the item on SPECIAL SERVICE NEEDS OF THE APPLICANT.

b.       A final plat approved by the Corporation must accompany the Application showing the Applicant’s requested service area.  The plat must be approved by all governmental authorities exercising jurisdiction over lot sizes, sewage control, drainage, right-of-way, and other service facilities.  Plans, specifications, and special requirements of such governmental authorities shall be submitted with the plat.  Applicants for single taps involving extension or upsizing of facilities shall be required to submit maps or plans detailing the location of the requested extension and details of demand requirements.

c.        At the time the Applicant submits the Application, a Non-Standard Service Investigation Fee (See Section G) to cover initial administrative, legal, and engineering fees shall be paid to the Corporation.  The balance of actual expenses incurred as a result of efforts by the Corporation to study service requirements of the Applicant shall be refunded to the Applicant and the Applicant shall pay any additional expenses.

d.       If after the service investigation has been completed, the Corporation determines that the Applicant’s service request is for property outside the area dedicated in the Corporation’s Certificate of Convenience and Necessity, service may be extended provided that:

                                                 1)      The service location is contiguous to or within one-fourth (1/4) mile of the Corporation’s Certificated Service Area;

                                                 2)      The Service location is not in an area receiving similar service from another utility; and

                                                 3)      The service location is not within another utility’s Certificate of Convenience and Necessity.

                                                 4)      If the Corporation extends service under these conditions, the Applicant shall fully support any subsequent efforts by the Corporation to amend its Certificate of Convenience and Necessity to include the Applicant’s property within the service area.

5.        Design.  The Corporation shall study the design requirements of the Applicant’s required facilities prior to initiation of a Service Agreement by adopting the following schedule:

a.        The Corporation’s Consulting Engineer shall design all service facilities for the Applicant’s requested service within the Corporation’s specifications or within certain codes and specifications of neighboring municipalities for all Non-Standard Service Applications which lie within the enforced extra territorial jurisdiction of a municipality.

b.       The Engineer’s fees shall be paid out of the Non-Standard Service Investigation Fee, provided the actual costs of the Engineer’s services do not exceed the amount of the Non-Standard Service Investigation Fee allotted for engineering services.  If the fee for the Engineer’s services exceeds the allotted fee, the Applicant shall pay the balance of engineering fees prior to commencing with the service investigation.

c.        The Consulting Engineer shall submit to the Corporation a set of detailed plans, specifications, and cost estimates for the project.

d.       If no governmental authority imposes other design criteria on the Applicant’s service request, the Corporation’s Engineer shall design all facilities for any Applicant to meet the demand for service as platted and/or requested in the plans or plat submitted in application for service.  The Corporation reserves the right to upgrade design of service facilities to meet future demands, provided however, that the Corporation shall pay the expense of such upgrading in excess of the Applicant’s facility requirements.

6.        Non-Standard Service Contract.  All Applicants requesting or requiring Non-Standard Service shall enter into a written contract, drawn up by the Corporation’s Attorney, in addition to submitting the Corporation’s Service Application and Agreement.  Said contract shall define the terms of service prior to construction of required service facilities.  Guidelines for the service contract may include, but are not limited to:

a.        All costs associated with required administration, design, construction, and inspection of facilities for water service to the Applicant’s service area and terms by which these costs are to be paid.

b.       Procedures by which the Applicant shall accept or deny a contractor’s bid, thereby committing to continue or discontinue the project.

c.        Equity Buy In Fee (Front-end Capital Contributions) required by the Corporation in addition to the other costs required under this Section.

d.       Monthly Reserved Service Charges as applicable to the service request.

e.        Terms by which reserved service shall be provided to the Applicant and duration of reserved service with respect to the impact the Applicant’s service request will have upon the Corporation’s system capability to meet other service requests.

f.         Terms by which the Applicant shall be reimbursed or compensated for fees duplicated in assessments for monthly rates and Equity Buy-In Fees.

g.       Terms by which the Corporation shall administer the Applicant’s project with respect to:

                                                 1)      Design of the Applicant’s service facilities;

                                                 2)      Securing and qualifying bids;

                                                 3)      Execution of the Service Agreement;

                                                 4)      Selection of qualified bidder for construction;

                                                 5)      Dispensing advanced funds for construction of facilities required for the Applicant’s service;

                                                 6)      Inspecting construction of facilities; and

                                                 7)      Testing facilities and closing the project.

h.       Terms by which the Applicant shall indemnify the Corporation from all third party claims or lawsuit in connection with the project contemplated.

i.         Terms by which the Applicant shall deed all constructed facilities to the Corporation and by which the Corporation shall assume operation and maintenance responsibility, including any enforcement of warranties in connection with construction of the Applicant’s project.

j.         Terms by which the Applicant shall grant title or easement for right-of-ways, constructed facilities, and facility sites and/of terms by which the Applicant shall provide for the securing of required right-of-ways and sites.

k.        Terms by which the Board of Directors shall review and approve the Service Contract pursuant to current rules, regulations, and bylaws.

7.        Property and Right-of-Way Acquisition.  With regard to construction of facilities, the Corporation shall require private right-of-way easements or private property as per the following conditions:

a.        If the Corporation determines that right-of-way easements or facility sites outside the Applicant’s property are required, the Corporation shall require the Applicant make good faith efforts to secure easements or title to facility sites in behalf of the Corporation.  All right-of-way easements and property titles shall be researched, validated, and filed by the Corporation at the expense of the Applicant.

b.       All facilities required to be installed in public right-of-ways in behalf of the Applicant, due to inability to secure private right-of-way easements, shall be subject to costs equal to the original cost of facility installation for those facilities in public right-of-ways, plus the estimated cost of future relocation to private right-of-ways, or subject to the cost of installation under condemnation procedures, whichever is most desired by the Applicant.

c.        The Corporation shall require an exclusive dedicated right-of-way on the Applicant’s property (as required by the size of the planned facilities and as determined by the Corporation) and title to property required for other on-site facilities.

d.       Easements and facilities sites shall be prepared for the construction of the Corporation’s pipeline and facility installations in accordance with the Corporation’s requirements and at the expense of the Applicant.

8.        Bids For Construction.  The Corporation’s Consulting Engineer shall advertise for bids for the construction of the Applicant’s proposed facilities in accordance with generally accepted practices.  Plans and specifications shall be made available, with or without charge, to prospective bidders.  Although the Corporation reserves the right to reject any bid or contractor, the Corporation shall generally award the contract to the lowest and best bidder in accordance with the following criteria:

a.        The Applicant shall sign the Service Contract noting willingness to proceed with the project and shall pay all costs in advance of construction associated with the project;

b.       The Contractor shall provide an adequate bid bond under terms acceptable to the Corporation;

c.        The Contractor shall secure adequate performance and payment bonding for the project under terms acceptable to the Corporation;

d.       The Contractor shall supply favorable references acceptable to the Corporation;

e.        The Contractor shall qualify with the Corporation as competent to complete the work; and

f.         The Contractor shall provide adequate certificates of insurance as required by the Corporation.

9.        Pre-Payment For Construction And Service.  After the Applicant has executed the Service Agreement, the Applicant shall pay to the Corporation all costs necessary for completion of the project prior to construction and in accordance with the terms of the Service Contract.

10.     Construction.

a.        All roadwork pursuant to state, county and/or municipal standards (if applicable) shall be completed prior to facility construction to avoid future problems resulting from road right-of-way completion and excavation.  Subject to approval of the requisite authority, road sleeves may be installed prior to road construction to avoid road damage during construction of Applicant’s facilities.

b.       The Corporation shall, at the expense of the Applicant, inspect the facilities to ensure that Corporation standards are achieved.

c.        Construction plans and specifications shall be strictly adhered to, but the Corporation reserves the right to change-order any specifications, due to unforeseen circumstances during the design phase, to better facilitate operation of the Applicant’s facility.  All change-order amounts shall be charged to the Applicant.

11.     Service Within Subdivisions.  The Corporation’s objective to provide service to any customer located within a subdivision governed by this section is strictly limited to the non-standard service specified by the Applicant.  The purchasers of any lots who do not receive service because this service has not been specified or paid for by the Applicant shall have no recourse to the Corporation but may have recourse to the Applicant/Developer.