Fannin County, Texas -- The regular meeting of Fannin County Commissioners Court was a marathon session lasting more that 3 1/2 hours, highlighted by the long-awaited approval of the contract between Fannin County and North Texas Municipal Water District (NTMWD) regarding the construction of a proposed 16,526-acre reservoir on Bois d'Arc Creek.

North Texas Municipal Water District was created by the state legislature in 1951 with Farmersville, Forney, Garland, McKinney, Mesquite, Plano, Princeton, Rockwall, Royse City and Wylie as the water district's 10 member cities. Richardson, Allen and Frisco were subsequently added as members and NTMWD now supplies water and provides wastewater services to 1.6 million residents of the rapidly growing North Texas region.

While most of the details of the contract have been discussed at public meetings in recent years as planning for this $1.2 - $1.4 billion project proceeded through necessary stages, the meeting Tuesday came with a couple of surprises. Fannin County Judge Spanky Carter announced that the county had negotiated for, and received, a commitment of $1 million from NTMWD, in addition to more than $1.8 million for county roads and a lump sum for increased law enforcement that will eventually be needed as a result of the reservoir.

Another surprise came with the announcement that Fannin County may have the deciding role when the reservoir is officially named. Lower Bois d'Arc Creek Reservoir could turn out to be the "working title" for the first reservoir of this size to be built in Texas in the past 30 years.

NTMWD has also committed to spend approximately $2 million to construct a multipurpose facility near the reservoir that can serve double duty as an educational center as well as a command center for inevitable search and rescue operations on the large body of water. The county and water district will determine the location of the multipurpose facility.

NTMWD will continue to ensure that all taxing entities will continue to be made "whole" by compensating the entities for any lost revenue due to land being purchased for the reservoir.

Fannin County is responsible for implementing zoning regulations within 5000 feet of where the shoreline of the Lower Bois d'Arc Creek Reservoir would be if the reservoir were filled to its storage capacity, although NTMWD hired consulting firm Freese and Nichols to guide the county in an effort to ensure water quality and enhance economic development.

NTMWD will pay for, develop and construct three recreational areas and associated facilities at strategic locations near the reservoir. Facilities are generally described as boat docks, picnic areas and restrooms. The county and water district will coordinate the placement of the three recreational areas. 

Outdoorsmen will take note that NTMWD will work with the county in an attempt to provide public access to Red River at the 15,000-acre Riverby Ranch when the sprawling ranch transitions into mitigation land set aside for habitat conservation.

NTMWD will replace CR1396 by building FM 897 and corresponding bridge to span the reservoir.

NMWD will compensate Fannin County for the negative impact heavy equipment will have on county roads during construction. The county will receive a lump sum of $871,263, as well as $1 million to be paid out in 10 annual installment payments of $100,000, for a total of $1,871,263.

The county will pay the customer rate for water.

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AGREEMENT BETWEEN NORTH TEXAS MUNICIPAL WATER DISTRICT AND FANNIN COUNTY, TEXAS CONCERNING WATER SUPPLY AND DEVELOPMENT OF THE LOWER BOIS D'ARC CREEK RESERVOIR PROJECT

COUNTY OF FANNIN §

This AGREEMENT BETWEEN NORTH TEXAS MUNICIPAL WATER DISTRICT AND FANNIN COUNTY, TEXAS CONCERNING WATER SUPPLY AND DEVELOPMENT OF THE LOWER BOIS D'ARC CREEK RESERVOIR PROJECT (the"Agreement") is made and entered into as of the day of 2017 ("Agreement Date"), by and between NORTH TEXAS MUNICIPAL WATER DISTRICT, (the "District"), a conservation and reclamation district created pursuant to Article XVI, Section 59 of the Constitution of the State of Texas, and governed by the provisions of Article 8280-141, Vernon's Revised Civil Statues, as amended, and FANNIN COUNTY, TEXAS, a political subdivision of the State (herein referred to as "Fannin County" or the "County"). The District and the County are individually referred to herein as a "Party" and are collectively referred to herein as the "Parties."

WHEREAS, the District and the County are authorized to enter into this Agreement pursuant to Chapter 791 of the Texas Government Code, (the "Interlocal Cooperation Act") and other applicable laws; and

WHEREAS, the District was created, among other things, to serve the water needs of its Member Cities, as defined in TEX. REV. Civ. STAT. ART. 8280-141; and

WHEREAS, the District supplies water to cities, towns and utilities who provide water service to retail customers in Denton, Collin, Hopkins, Hunt, Raines, Rockwall, Dallas, Kaufman, Fannin, and Grayson Counties; and

WHEREAS, both the District and the County are located in the Region C Regional Water Planning Group area pursuant to designations made by the Texas Water Development Board to implement the provisions of Senate Bill 1, an act of the Legislature that requires all regions of the state and all water supply agencies within such regions to develop viable water supply plans over a fifty (50) year planning cycle; and

WHEREAS, Fannin County and the District desire to cooperate in the development of a surface water supply reservoir in Fannin County on Bois d'Arc Creek in the Red River Basin; and

WHEREAS, the Region C Water Plan and the State Water Plan each include a reservoir on Bois d'Arc Creek in Fannin County as a recommended water management strategy for the District, and this proposed reservoir is referred to as the Lower Bois d'Arc Creek Reservoir (the "Reservoir"); and

WHEREAS, the location of the proposed dam to create the impoundment for the Reservoir is on Bois d'Arc Creek, approximately 2.7 miles downstream of the FM 1396 bridge over Bois d'Arc Creek; and

WHEREAS, when the Reservoir is referred to herein, it is mutually agreed that said term shall refer to the body of water to be impounded, including any associated lands reasonably required for safe and reliable operation of such a water supply source, and any lands the District may designate to be part of the project for development, mitigation and operation of the Reservoir; and

WHEREAS, the District has evaluated the feasibility of the proposed Reservoir and has been issued a water rights permit by the Texas Commission on Environmental Quality ("TCEQ") to appropriate, store and divert state water, and has also filed a Clean Water Act Section 404 permit application with U.S. Army Corps of Engineers ("USAGE") to construct the proposed Reservoir; and

WHEREAS, to enable the Reservoir's primary use as a dependable water supply, the level of water in the Reservoir will fluctuate due to variable rainfall and runoff into the Reservoir, and due to withdrawal of water from the Reservoir for its intended beneficial use as a water supply, and therefore the Reservoir cannot be maintained at a constant level; and

WHEREAS, the District's goal is to develop a lake that will produce a water supply of approximately 108 million gallons per day ("MOD") on a firm yield basis for the District and its members and customers, including customers located in Fannin County; and

WHEREAS, the District intends to develop the Reservoir giving due regard to environmental considerations and to the protection of water quality in the Reservoir, and enabling economic development in the vicinity of the Reservoir, all in a mutually beneficial manner and in the spirit of partnership with Fannin County; and

WHEREAS, Fannin County and the District agree that the Reservoir will provide major benefits for the citizens of Fannin County, for the local economy, and for the environment; and

WHEREAS, the Parties desire to cooperate in development of the Reservoir to assure realization of the potential for a vital new water supply, for the environmental benefits, and to enable economic development of high quality in the vicinity of the Reservoir; and

WHEREAS, Fannin County has adopted resolutions supporting the proposed Reservoir, and construction of same and the desire to regulate the orderly development of lands within the vicinity of the Reservoir; and

WHEREAS, the District has expressed its intention to provide a water supply to customers within Fannin County, which service would enable a long-term dependable local water supply for the County; and

WHEREAS, Fannin County desires to take a leadership role in attracting and facilitating economic development in the vicinity of the Reservoir; and accordingly, has taken legislative steps to provide for the County to have a role in zoning for unincorporated areas in the vicinity of the Reservoir; and

WHEREAS, the County and the District desire to support an orderly process for acquisition of the real property needed for the Reservoir, and both Parties desire that all property owners be fully and fairly compensated for any property to be acquired for development of the Reservoir; and

WHEREAS, except for the activities set forth in this Agreement or as may be provided by law or other agreement, Fannin County will have no financial responsibility for development of the Reservoir; rather, the District will be responsible for development of the Reservoir pursuant to the applicable state and federal permits; and, the Reservoir will be owned and operated by die District; and

WHEREAS, the District will be responsible for acquiring or providing the funds needed for development of the Reservoir.

NOW, THEREFORE, for good and valuable consideration, the adequacy and sufficiency of which is evidenced by the Parties' respective execution of this Agreement, the District and Fannin County agree, as follows:

Section 1. Purpose. The purpose of this Agreement is to establish the respective responsibilities of the Parties in general terms concerning development of the Reservoir, and in light of the matters stated in the recitals, which such recitals are incorporated herein for all purposes. After a thorough review of the District's proposal to develop the Reservoir, the need for water, and the local benefits to be realized to Fannin County and its citizens as a result of the construction of the Reservoir, the District and Fannin County do hereby express their mutual desire to work in a spirit of partnership and cooperation to develop Lower Bois d'Arc Creek Reservoir as a strategic water resource for Fannin County and as an important asset to Fannin County and its citizens. The Parties agree that the Reservoir will provide major benefits for the citizens of Fannin County and the members and customers of the District, for the local economy, and for the environment in the area of Bois d'Arc Creek. The Parties also recognize that the overriding purpose of the Reservoir is to provide a reliable water supply, protected from pollution, and to provide for future water supply needs of the District and Fannin County. Fannin County agrees to provide its full support for the proposed Reservoir and the associated improvements. Accordingly, on its own motion, and as may be requested from time to time by the District, the County agrees to provide supportive statements or testimony concerning the Reservoir for appropriate forums, including public meetings and hearings, Fannin County Commissioners' Court, TCEQ, USAGE, and before any other local, state or federal agencies.

Section 2. Reservoir Land Acquisition and Maintenance of Tax Revenues. Fannin County and the District hereby express their desire to cooperate in the District's acquisition of land for the development of the Reservoir and to avoid any significant loss of revenues, including ad valorem tax receipts, to local taxing entities, including the County, that may be associated with the District's acquisition of real property necessary for development of the Reservoir.

Section 3. Controlling and Managing Reservoir Development. The Parties agree that the Lower Bois d'Arc Creek Reservoir is expected to enhance economic development in Fannin County, given the quality of the Reservoir and its proximity to the Dallas-Fort Worth metropolitan area. To that end, the County desires to take a leadership role in economic development activities, including the implementation of zoning for unincorporated areas in the vicinity of the Reservoir. The Parties agree that the pace and the quality of development in the vicinity of the Reservoir will be subject to many factors, including the general economy of the nation and region, governmental policies, zoning, availability of public services, and other factors beyond the control of the Parties. If Fannin County wishes to take specific steps to promote economic development, the District agrees to play an appropriate supportive role, in light of the purpose of the Reservoir, which is to maintain a reliable public water supply, with protection of water quality in the area of the Reservoir and its tributary streams. Further, the Parties agree that the promotion of economic development must take into account the public duty to provide an assurance of safety for people and property on, at, and around the Reservoir.

a. County Zoning. Fannin County agrees to assist in the development of the Reservoir through the promulgation and implementation of zoning regulations around the Reservoir in accordance with Subchapter G, Chapter 231 of the Texas Local Government Code ("LGC").

Specifically, the County agrees to take a lead role in zoning regulations for the area located within 5000 feet of where the shoreline of the Lower Bois d'Arc Creek Reservoir would be if the reservoir were filled to its storage capacity (referred to hereafter as the "Reservoir Zoning Area"), in accordance with Section 231.132(a)(5) of the LGC. Attached as Exhibit 1 is a map identifying the area that may be subject to County zoning regulations.

The District agrees to assist Fannin County in its promulgation and implementation of zoning regulations for the Reservoir Zoning Area by retaining a land use planning and zoning consultant (the "Zoning Consultant") to develop for the County the zoning regulations. The District and the County shall collaborate on the selection of the Zoning Consultant, but the District shall have the sole discretion in the final selection of the Zoning Consultant. The District and the County have collaborated on a scope of work to be completed by the Zoning Consultant and the proposed budget for the completion of such work. The District shall have the sole responsibility to pay the consulting fees of the Zoning Consultant for work associated with the development of zoning regulations for the Reservoir Zoning Area. A copy of the scope of work to be completed by the Zoning Consultant is attached as Exhibit 2. The Zoning Consultant has completed Phase 1 of the scope of work regarding the development of the Comprehensive Plan as described in Exhibit 2.

b. Wastewater Systems. To protect the Reseivoir and to encourage quality real estate development around the Reservoir, it is the intent of the Parties to support County zoning regulations and District rules and regulations that will protect water quality in the Reservoir and its tributaries. Accordingly, the Parties mutually agree to promote and implement regulations, rules, and policies that encourage future subdivision projects near the Reservoir to be served by community wastewater collection systems rather than by onsite wastewater treatment facilities operated by individual owners. The Parties recognize, however, that a community wastewater collection system may not be feasible in all circumstances.

Therefore, the County may allow for exceptions for individually owned facilities by homeowners who do not have community wastewater collection systems available, but only to the extent that such proposed onsite facilities will comply with applicable construction and operational standards as provided in Subchapter D, Chapter 285 of Title 30, Texas Administrative Code so as to prevent pollution of water and the environment.

f. Transportation Infrastructure. The District will coordinate with both Fannin County and the Texas Department of Transportation ("TxDOT") concerning reasonable and necessary adjustments in the existing road system in the area of the Reservoir so as to accommodate the development of the Reservoir. The Parties mutually agree to work together to assure that all such adjustments to transportation infrastructure are compatible with the Reservoir, and with the remaining road system in the County. The District agrees that any County roads or bridges to be constructed or modified as part of the Reservoir's development will be built to standards that are equal to or better than the existing standards of such County roads or bridges as of the Agreement Date. Attached as Exhibit 3 is a map of the transportation plan for the Reservoir.

i. Replacement of FM 1396. The primary road that will be impacted by Reservoir construction is FM 1396. As provided in the District's May 2011 Transportation Plan (the "Transportation Plan"), the current recommendation regarding offsetting the impact to FM 1396 is to replace it with a new FM 897 from US 82 to FM 1396, including a new bridge over the Reservoir. The proposed extension of FM 897 and the new bridge would be constructed in accordance with TxDOT standards.

ii. Impacts to County Roads. Twenty-seven (27) County road crossings were identified as being impacted by the Reservoir in the Transportation Plan. The current recommendation regarding these road crossings as agreed to by the County and the District is to convert one (1) county road crossing into a private driveway, close five (5) county road crossings, leave thirteen (13) county road crossings in place, and to reconstruct eight (8) road crossings using the TxDOT Bridge Project Development Manual for low-volume off-system bridges and the TxDOT Roadway Design Manual for 2-lane rural roads. Included as Exhibit 4 is a map that identifies the location of county road crossings that are being closed and reconstructed.

iii. Payment for Impacts to County Roads. The District recognizes that the use of large vehicles and construction equipment during constmction of the Reservoir may impact and/or damage County roads. To address this, the District agrees to conduct an assessment of all County roads to be utilized during constmction of the Reservoir, both before and after construction of the Reservoir. Based on these assessments, the District agrees to pay all reasonable costs, as mutually agreed upon by the Parties, associated with making any necessary repairs to such County roads that have been identified in the assessments as being impacted and/or damaged due to Reservoir construction activities.

iv. Payment for Impacts from Increased Traffic. The District recognizes that following the deliberate impoundment of water in the Reservoir traffic may increase within the County due to increased development and recreational use of the Reservoir. Such increases in traffic may negatively impact County roads. As a result, the District has conducted an assessment, which the County has reviewed and agrees with, of potentially impacted County roads. Based on this assessment, and as due consideration for these and other potential impacts to the County, the District agrees to provide payments to Fannin County in accordance with the following payment schedule, with the first payment in Year 1 being made to Fannin County within thirty (30) days of commencement of construction of the Reservoir, and the second payment in Year 2 being made to the County the following calendar year on November 1, and then annually on November 1 for 8 years:

v. Road Maintenance Facility. Under terms and conditions mutually agreeable to the Parties, the District agrees to pay for, develop, and construct a County-owned and operated road maintenance facility to be used for housing any County equipment and vehicles necessary for making County road repairs. The road maintenance facility will generally be located on approximately 5 to 10 acres of land on the north side of the Reservoir surrounded by a 6-foot chain link fence (or other similar fencing material) with access to the facility paved with a rock-base material (or other similar paving material). The County and District will work together to determine the location, placement, development, and construction of this facility.

j. Existing Wastewater Treatment Plants. The Parties understand that the construction of the Reservoir may result in more stringent effluent limits for existing public wastewater treatment plants ("WWTPs") discharging directly or indirectly to Bois d'Arc Creek due to the higher water quality standards that will be established for the Reservoir by TCEQ. The District agrees to work with the owners of existing public WWTPs, permitted and operating as of the commencement of construction of the Reservoir, to ensure these WWTPs achieve compliance with the more stringent effluent limits. The District shall have no obligation to provide any assistance regarding any WWTP improvements not required directly as a result of the construction of the Reservoir. The District shall not be required to provide for improvement to or maintenance of existing WWTPs for any purpose if such improvements or maintenance is identified after five (5) years from the initiation of deliberate impoundment of water in the Reservoir.

Section 4. Potable Water Supplies. The Parties acknowledge that the primary reason for developing Lower Bois d'Arc Creek Reservoir is to provide a dependable public water supply for the District, the District's members and customers, and Fannin County, including any customers in Fannin County. To assist with meeting local needs for water supply in Fannin County, the District agrees to enter into wholesale potable water supply contracts with local entities that supply water for domestic and municipal purposes in Fannin County, under terms and conditions mutually agreeable to such parties.

Section 5. Official Name of Reservoir. The District agrees, upon the initiation of deliberate impoundment of water in the Reservoir, to consider using any such name(s) proposed by the County for the official name of the Reservoir.

Section 6. Indemnification. To the extent authorized by law, the District and Fannin County agree to save and hold each other harmless from all claims, demands, and causes of action that may be asserted by anyone on account of the planning, design, construction, maintenance, and operation of the Reservoir, and the transportation and delivery of water. Both the County and the District agree to be responsible for their own respective negligent acts.

Section 7. Term and Expiration. The term of this Agreement shall be for an initial period of ten (10) years from the Agreement Date (the date first above written) and may be renewed by mutual written agreement as to terms and conditions for an additional period of five (5) years. The Agreement may be terminated by the District without recourse by the County or other parties if, in the sole opinion of the District, any final state and federal penults necessary to enable construction and operation of the Reservoir are not timely received by the District for any reason, including, but not limited to, delays in permitting or litigation associated with the Reservoir.

Section 8. Other Contracts. The Parties agree that the District reserves to itself the sole discretion to enter into contracts with others for participation in the Reservoir or for water supply therefrom. Whether or not others participate in the Reservoir, the District will be solely responsible for developing (planning, regulatory permits, design, construction, operation, etc.) the Reservoir.

Section 9. Coordination of Parties. After this Agreement is fully executed, the Patties agree to continue to regularly communicate and coordinate regarding the Reservoir and the implementation of the provisions of this Agreement. The Parties agree to execute, acknowledge, and deliver or cause to be executed, acknowledged, and delivered, such instruments and take such other action as may be necessary, advisable, or convenient to carry out their obligations under this Agreement and under any document, certificate, or other instrument delivered pursuant hereto or required by law. The Parties further acknowledge that it is difficult to anticipate all of the activities, situations, and other factors which may be relevant to them in satisfying their respective obligations under this Agreement.

Section 10. Addresses and Notice. Unless otherwise provided herein, any notice, communication, request, reply or advice (herein severally and collectively, for convenience, called "Notice") herein provided or permitted to be given, made or accepted by any party to any other party must be in writing and may be given or be served by depositing the same in the United States mail postpaid and registered or certified and addressed to the party to be notified, with return receipt requested, or by delivering the same to an officer of such party, or by electronic mail, addressed to the party to be notified at the email address provided below. Notice deposited in the mail in the manner described above shall be conclusively deemed to be effective, unless otherwise stated herein, from and after the expiration of three (3) days after it is so deposited. Notice given in any other manner shall be effective only if and when received by the party to be notified. For the purposes of notice, the contact information of the Parties shall, until changed as hereinafter provided, be as follows:

Section 11. State or Federal Laws. Rules. Orders or Regulations. This Agreement is subject to all applicable state and federal laws and any applicable permits, ordinances, rules, orders and regulations of any local, state or federal governmental authority having or asserting jurisdiction; but, nothing contained herein shall be construed as a waiver of any right to question or contest any such law, ordinance, order, rule or regulation in any forum having jurisdiction.

Section 12. Venue. It is specifically agreed among the Parties to this Agreement that Fannin County, Texas, is the place of performance of this Agreement; and in the event that any legal proceeding is brought to enforce this Agreement or any provision hereof, the same shall be brought in Fannin County, Texas.

Section 13. Adoption of Preamble. All of the matters stated in the preamble of this Agreement are true and correct and are hereby incorporated into the body of this Agreement as though fully set forth in their entirety herein.