City of Houston, Texas, Ordinance No

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1 ORD-Chapter 47 Rates City of Houston, Texas, Ordinance No ORDINANCE RELATING TO CHARGES AND TERMS OF SERVICE FOR WATER AND WASTEWATER SERVICE ; AMENDING CHAPTER 47 OF THE CODE OF ORDINANCES, HOUSTON, TEXAS, AND CONTAINING FINDINGS AND OTHER PROVISIONS RELATING TO THE FOREGOING SUBJECT; AUTHORIZING DEVELOPMENT OF A WATER CONSERVATION INCENTIVE PROGRAM ; PROVIDING A REPEALING CLAUSE ; CONTAINING A SAVINGS CLAUSE ; PROVIDING FOR SEVERABILITY ; AND DECLARING AN EMERGENCY. WHEREAS, the City of Houston (the "City") operates a combined utility system (the "System") for the purpose of providing water and sewer service to its residents and other governmental and private entities pursuant to Texas Government Code Chapter 1502, the City's Charter and its Code of Ordinances ; WHEREAS, sound business principles require that the City generate revenue sufficient to cover a Capital Improvement Plan with an annual cost of $370 million in 2010 dollars ; WHEREAS, the City issues revenue bonds to pay the capital cost of repairs, replacements and extensions of the System (collectively "System Bonds") pursuant to Ordinance No (the "Master Ordinance") and various Supplemental Ordinances, as defined in the Master Ordinance ; WHEREAS, the Master Ordinance provides that all revenue and income derived or received by the City from the operation and ownership of the System are "Gross Revenues" and provides for the use of Gross Revenues to pay the cost of operating, maintaining, and repairing the System (the "Cost"), debt service on the System Bonds and other obligations of the System ; WHEREAS, the Cost has increased due to increases in the City's population, increases in the cost of chemicals and other supplies at a rate greater than the rate of inflation, increased State and Federal regulatory requirements, and needed replacement of System infrastructure ; WHEREAS, the System has increased the water and sewer rates and charges for operation, maintenance, and repair of the System (the "Rates") annually beginning in fiscal year 2006 based on increases in the Consumer Price Index since January 1, 2005 ; WHEREAS, Article IX, Section 20 of the City Charter allows City Council to adjust Rates, as required by bond covenants, based on the rate of inflation and the rate of growth in the City's population ;

2 WHEREAS, Section 5.2 of the Master Ordinance recognizes the authority of City Council to provide for the automatic adjustment of the Rates based upon the percentage change to the Consumer Price Index and other appropriate indexes in the preceding calendar year ; WHEREAS, Section 5.2 of the Master Ordinance includes a bond covenant requiring the City to fix, charge, and collect sufficient rates and charges for the use and services of the System to produce Net Revenues in Fiscal Year 2011 at least equal to 120% of the combined Debt Service Requirements scheduled to occur in such Fiscal Year on all Previous Ordinance Bonds and First lien Bonds then Outstanding ; WHEREAS, Section 7.3 of the Master Ordinance includes a bond covenant that for so long as any System Bonds or other obligations are outstanding, the City shall maintain the System in good condition and working order and will operate the same in an efficient and economical manner at a reasonable cost and in accordance with sound business principles ; WHEREAS, the Texas State Data Center provides annual population index estimates for the Houston Metropolitan Area (the "Houston Population Index") based on published estimates of the U.S. Census Bureau ; WHEREAS, the Houston Population Index conforms to the requirement for use of U.S. Census Bureau estimates stated in Article III, Section 1(a) of the City Charter ; WHEREAS, the seasonally adjusted Producers Price Index for all commodities (the "Producers Price Index") as reported by the Bureau of Labor Statistics more accurately reflects the Cost than the Consumer Price Index ; WHEREAS, the population of the City has increased approximately 9.92% from January 1, 2005 to January 1, 2010, but the City Council has approved increases in the Rates of only 1.79% based on such population growth ; WHEREAS, it is necessary to construct additional surface water facilities to lessen dependence on groundwater production that causes land subsidence in the Houston area ; WHEREAS, rehabilitation, expansion and construction of sewer facilities are necessary to comply with the Texas Water Code and the Federal Clean Water Act ; WHEREAS, the continued ability of the City of Houston to distribute surface water requires that the financial integrity of the System be protected ; WHEREAS, the continued development of the System is essential to the health, safety and welfare of the people ;

3 WHEREAS, the increases in Rates contemplated in this Ordinance are necessary and sufficient to pay increases A the Cost, provide service for the City's increased population, protect the financial integrity of the System, and comply with Texas Government Code Chapter 1502 and the City's covenants contained in the Master Ordinance with respect to the System's Bonds ; WHEREAS, this Ordinance provides for the imposition of increased Rates to pay the increased Cost, and the enforcement of remedies relating to the imposition of such Rates ; WHEREAS, the City authorizes the Director of the City Public Works and Engineering Department (the "Director") to develop a water conservation incentive in accordance with the state and federal law; WHEREAS, the System Bonds are "public securities" under Chapter 1205 of the Texas Government Code ("Chapter 1205") and this Ordinance is a "public securities authorization" tinder Chapter 1205 ; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HOUSTON, TEXAS: Section 1. That the findings contained in the preamble of this Ordinance are determined to be true and correct and are hereby adopted as a part of this Ordinance. Section 2. That Section of the Code of Ordinances, Houston, Texas, is hereby amended to read as follows : "Sec Charges for treated water service generally. (a) Generally. Except as otherwise specifically provided for in this chapter and as further defined below, the charge for treated water service furnished by the city in any given month to any given customer shall include all water that passes through the customer's meter and shall be the monthly water charge applicable to such customer, plus any applicable miscellaneous charges accruing in accordance with this chapter or the appendices of this Code. (b) Definitions. As used in articles I and 11 of this chapter, the following terms shall have the meanings set out below, unless the context clearly indicates that another meaning is intended : Additional quantity means the customer's monthly water usage over a gross quantity with a defined charge. The charge for

4 additional quantity shall be computed for each month using the applicable incremental rate. Average usage means the customer's average monthly water usage as determined by the utility official on the basis of historical usage and other relevant factors. Basic service means fire protection, metering, administrative, billing, and other services related to water service that the customer receives and pays for regardless of the customer's usage. Fire protection included in basic service does not include metered or unmetered fire lines. Commercial fire line service means service to a water supply system that has been installed for the sole purpose of fire protection and does not register any usage except as needed for fire protection or standard maintenance and testing as required by NFPA 25 Standards. Contract treated water customer means a customer who has contracted with the city to receive treated water under subsection (f) below. Customer means any person who has applied for or contracted with the city for water service or who resides at the address where the city provides the water service at the time the Customer incurs the monthly charges. A customer may have more than one meter and more than one property with water service, but each meter will have a separate account number. Disabled veteran means a veteran of the armed forces entitled to receive compensation for service connected disability under the laws of the United States. Emergency means a mechanical, electrical, or systemic failure of the waterworks system of an EBS customer, such that the failure significantly affects the EBS customer's ability to supply water to its own water customers. An emergency shall not mean a water shortage or a greater than expected water use by the EBS customer's own water customers, nor shall it mean a circumstance or condition caused by ordinary wear and tear of the EBS customer's facilities. Emergency backup service customer or EBS customer means any customer who (i) would otherwise be a resale customer

5 or contract treated water customer, (ii) has submitted an application for emergency backup service approved by the utility official, (iii) has installed and conveyed an EBS system to the city in accordance with this Code ; and (iv) has not had the EBS terminated by the utility official. Exempt senior customer means any customer who (i) is at least 60 years old ; (ii) is a residential customer occupying the entire premises for which exempt senior customer status is requested ; (iii) has filed with the department a request for exempt senior customer status ; and (iv) provides all necessary information as requested by the utility official. Gross quantity means the total quantity of water actually delivered to a customer's meter during a month. Incremental rate means the rate charged to a customer for monthly water usage that is not included in a defined charge. Industrial customer or commercial customer means any non-residential customer with retail water service that the utility official determines is not a transient customer, EBS customer, or an outdoor customer. Month means the billing period for each customer and consists of approximately 30 days. A billing period begins on the date that a customer's measuring equipment is read (or the date as of which the customer's gross quantity is estimated) and ends when the next such reading (or estimation) occurs. There shall be 12 such readings (or estimations) per customer per calendar year, and the date of the most recent reading (or estimation) is usually shown on each water bill. Monthly water charge means charges to a customer in a given month for water services that include defined charges and charges for additional quantities. Monthly water usage means services a customer receives including the total gross quantity in increments of 1,000 gallons of treated water attributable to a customer's meter for a given month. Monthly water usage includes basic service and all gross quantity not previously included in the customer's monthly water charge.

6 Multifamily residential customer means a residential customer whose meter is connected to, or serves exclusively, a residential establishment with more than one unit. Non-residential customer means a retail customer who (i) has a meter that does not serve a residential establishment and (ii) is not a contract water customer. Outdoor customer means a customer whose meter is connected to and serves only one of the following : (1) A device or system for irrigation or distributing water to any area not enclosed within a permanent roofed structure ; or (2) One or more spigots, hydrants or outlets for water wholly located outside of a permanent, roofed structure. No connection or water flow to a city or private sewer is permitted for outdoor customers. If a connection or flow into the sewer is found, the customer's account shall be changed to include water and sewer charges and the department shall bill the customer for all wastewater usage, including any arrearage. Per-unit gross quantity means the gross quantity for a multifamily residential customer divided by the number of units in the residential establishment of that customer. In the event a person owning a multifamily residential establishment served by more than one meter has established an umbrella account, the gross quantity shall be the total amount of water as measured by all meters serving the establishment during the billing period. Otherwise, a person owning a multifamily residential establishment served by more than one meter shall be considered a separate customer for each meter for the purpose of determining the per-unit gross quantity. If a multifamily residential customer that has not established an umbrella account maintains a water distribution system in which a unit is served by more than one meter, such unit shall be prorated between or among such meters for the purpose of determining the per-unit gross quantity in accordance with the following formula : Per unit gross quantity per meter = W U

7 Where: W = is the total water delivered through such meter during a bill period. U = is the sum of the units served by the meter, except where a unit is served by x meters such unit shall be counted only as 1/x unit. In no event shall the sum of units used for the calculation of the 'per-unit gross quantities' exceed the actual number of units located at the multifamily residential establishment. Person means any legally competent individual, business entity, governmental entity, or any combination of individuals or entities legally bound together. Person with disability has the meaning ascribed in section of this Code. Resale customer means any customer (other than a contract treated water customer, an EBS customer or a transient meter customer) owning or operating for compensation equipment or facilities for transmitting, storing, distributing, selling or furnishing potable water to the public or for resale to the public for any use; provided that the term shall not include any customer that furnishes water only to itself, its employees or tenants as an incident of such employee service or tenants when such water is not resold to or used by others. Residential customer means any customer whose meter exclusively serves a residential establishment. Residential customers do not include commercial customers, contract treated water customers, EBS customers, industrial customers, outdoor customers, resale customers, or transient customers. Residential establishment means any structure or group of structures within which at least 75 percent of the floor space (excluding corridors) is occupied or intended for occupancy as living quarters. Residential establishment does not include hotels, motels, inns, lodging houses or any similar establishment in which lodging is furnished for consideration and in which permanent residents occupy less than 80 percent of the accommodations. Residential establishment does not include group quarters. Group quarters are living arrangements for other than ordinary household

8 life, such as dormitories, military barracks, hospitals, assisted care facilities and prisons. Single-family residential customer means a residential customer whose meter is connected to, or serves exclusively, a residential establishment with one unit. Transient meter customer means a non-residential customer that has obtained a transient meter from the department for purposes approved by and in accordance with procedures adopted by the utility official. Umbrella account means a customer account established under section of this Code. Unit means a house, an apartment, a town house, a manufactured home, a group of rooms, or a single room occupied or intended for occupancy as separate living quarters. Separate living quarters are those in which the occupants do not live and eat with any other persons in the structure and which quarters have either : (1) Direct access from the outside of the structure or through a common hall : or (2) Complete kitchen facilities for the exclusive use of the occupants. The occupants may be a single family, one person living alone, two or more families living together, or any other group of related or nonrelated persons who share living arrangements. (c) Residential Water Service. Each residential customer shall incur monthly charges for water for each meter serving the customer's premises. Multifamily residential customer meters under umbrella accounts may be exempt from certain basic service charges (1) Single Family Residential Customers. Each single family residential customer's monthly water charge shall be calculated using the total of the applicable defined charge and charge for additional quantities set forth below: a. Defined Charge. The customer's defined charge shall be calculated using the chart below, referencing the

9 customer's monthly water usage and meter size, measured by diameter in inches : Monthly Water Usage Single Family Basic Service 5/8 or 3/4 inch 1.0 inch 1.5 inch 2.0 or 3.0 inch $3.70 $4.58 $6.94 $ ,000 gallons $3.80 $4.68 $7.04 $8.27 2,000 gallons $8.66 $9.54 $11.90 $ ,000 gallons $8.95 $9.83 $12.19 $ ,000 gallons $16.93 $17.81 $20.17 $ ,000 gallons $20.29 $21.17 $23.53 $ ,000 gallons $23.65 $24.53 $26.89 $28.12 Charge for Additional Quantities. The customer's charge for additional quantities shall be calculated using customer's monthly water usage multiplied by the applicable incremental rates below : Monthly Water Usage Incremental rate for all single family residential meters Over 6,000 gallons Over 12,000 gallons $3.65 for every 1,000 gallons over 6,000 gallons up to 12,000 gallons $6.01 for every 1,000 gallons over 12,000 gallons (2) Multifamily Residential Customers. Each multifamily residential customer's monthly water charge shall be the total of the defined charge and the charge for additional quantities as set forth below : a. Defined Charge. The customer's defined charge shall be calculated using the chart below, referencing the customer's meter size, measured by diameter in inches : Customer's Meter Size Defined Charge for Basic Service 5/8 inch $4.51 3/4 inch $ inch $ inch $ inch $ inch $ inch $ inch $61.58

10 8.0 inch $ b. Charge for Additional Quantities. The customer's charge for additional quantities shall be calculated using customer's monthly water usage multiplied by the incremental rate below: Monthly Water Usage Any Amount Incremental rate for all multi-family residential meters $3.47 for every 1,000 gallons (d) Non-Residential Water Service. Non-residential customers shall incur monthly water charges for each meter based upon customer classification that are the total of the defined charges and charges for additional quantities as further defined below. (1) Defined Additional Quantity. Different incremental rates shall apply to each classification of non-residential customer. Incremental rates may vary for monthly water usage within a defined additional quantity and for monthly water usage over the defined additional quantity. The defined additional quantity for non-residential customers shall vary by meter size as described below : Customer's Meter Size Defined Additional Quantity 518 inch Not applicable 314 inch Not applicable 1.0 inch Not applicable 1.5 inch 1,000 gallons to 10,000 gallons 2.0 inch 1,000 gallons to 16,000 gallons 3.0 inch 1,000 gallons to 35,000 gallons 4.0 inch 1,000 gallons to 60,000 gallons 6.0 inch 1,000 gallons to 125,000 gallons 8.0 inch and above 1,000 gallons to 180,000 gallons (2) Resale Customers. Each resale customer's monthly water charge shall be the total of the defined charge and the charge for additional quantities as set forth below : a. Defined Charge. The customer's defined charge shall be calculated using the chart below, referencing the customer's meter size, measured by diameter in inches : 10

11 Customer's Meter Size Defined Charge for Basic Service 5/8 inch $ /4 inch $ inch $ inch $ inch $ inch $ inch $ inch_ $ inch $ b. Charge for Additional Quantities. The customer's charge for additional quantities shall be calculated using customer's monthly water usage multiplied by the applicable incremental rates below : Monthly Water Usage I Incremental rate for resale meters $4 Any amount.27 for every 1,000 gallons (3) Outdoor Customers. Each outdoor customer's monthly water charge shall be the total of the defined charge and the charge for additional quantities as set forth below: a. Defined Charge. The customer's defined charge shall be calculated using the charts below, referencing the customer's monthly water usage and meter size, measured by diameter in inches : Customer's Meter Size Defined Charge for Basic Service 5/8 inch $ /4 inch $ inch $ inch $ inch $ inch $ inch $ inch $ inch $1, Charge for Additional Quantities. The customer's charge for additional quantities shall be calculated using customer's monthly water usage multiplied by the applicable incremental rates below :

12 Monthly Water Usage Incremental rate for outdoor meters Within defined additional quantity $2.61 for every 1,000 gallons up to maximum defined quantity Over defined additional $6.01 for every 1,000 gallons quantity (4) Commercial and Industrial Customers. Each commercial customer's monthly water charge and each industrial customer's monthly water charge shall be the total of the defined charge and the charge for additional quantities as set forth below : a. Defined Charge. The customer's defined charge shall be calculated using the charts below, referencing the customer's monthly water usage and meter size, measured by diameter in inches : Customer's Meter Size Defined Charge for Basic Service 5/8 inch $4.51 3/4 inch $ inch $ inch $ inch $ inch $ inch $ inch $ inch $ Charge for Additional Quantities. The customer's charge for additional quantities shall be calculated using customer's monthly water usage multiplied by the applicable incremental rates below : Monthly Water Usage Any Amount Incremental rate for all multi-family residential meters $3.56 for every 1,000 gallons c. A customer with a metered fire connection shall be billed as an industrial customer. (5) Emergency Backup Service Customer. Each EBS customer's monthly water charge shall be the total of the defined charge and the charge for additional quantities as set forth below : 1 2

13 a. Defined Charge. The customer's defined charge shall be calculated using the charts below, referencing the customer's monthly water usage and meter size, measured by diameter in inches : Customer's Meter Size Defined Charge for Basic Service 5/8 inch $6.47 3/4 inch $ inch $ inch $ inch $ inch $ inch $ inch $ inch $ inch $ b. Charge for Additional Quantities. The customer's charge for additional quantities shall be calculated using customer's monthly water usage multiplied by the applicable incremental rates below : Monthly Water Usage I Incremental rate for EBS meters Any amount 1 $6.60 for every 1,000 gallons (6) Transient Meter Customers. Each transient meter customer's monthly water charge shall be the total of the defined charge and the charge for additional quantities as set forth below : a. Defined Charge. The customer's defined charge shall be calculated using the charts below, referencing the customer's monthly water usage and meter size, measured by diameter in inches : Customer's Meter Size Defined Charge for Basic Service I 1.0 inch $ inch _ $ inch $25.07 b. Charge for Additional Quantities. The customer's charge for additional quantities shall be calculated using customer's monthly water usage multiplied by the applicable incremental rates below : 1 3

14 Monthly Water Usage Incremental rate for commercial ~ meters Any amount 1 $3.99 for every 1,000 gallons (e) Emergency backup service. (1) Eligibility and applications. Any person desiring to become an EBS customer must apply to the director. Each EBS application must : a. Be made in a form prescribed by the director; and b. Include engineering drawings and detailed specifications of the applicant's proposed installation of EBS equipment. (2) Action upon applications. The director shall examine each EBS application. An application shall be approved if the director determines that : a. The applicant can qualify as an EBS customer ; b. c. The requested EBS service is practical and sound from an engineering point of view ; The proposed installation of EBS equipment meets city standards ; and d. The application otherwise complies with this Code. The director shall allow an applicant to modify its application or its proposed installation of EBS equipment so as to meet any requirements for approval. (3) EBS equipment. a. All installations of EBS equipment shall include measuring equipment, valves, backflow prevention devices, a locking mechanism, a proper vault and such other items as are necessary in the judgment of the director. All such installations shall conform to city standards as to location, materials and workmanship. 14

15 b. When the director has approved an application, the applicant shall furnish, deliver and install the EBS equipment at its own expense in strict compliance with this Code and the plans and specifications approved by the director. The applicant shall provide reasonable opportunities for the director to inspect the work as it progresses and shall so notify the director at appropriate times. When the completed installation has been inspected and approved by the director, the applicant shall : 1. Convey to the city the complete installation (excluding back flow prevention devices) free and clear of liens and encumbrances by written documents approved by the director. 2. Deliver all keys to the locking mechanism to the director. To the extent an existing, cityowned installation is to be used for the applicant's EBS installation, the foregoing provisions may be modified by the director. (4) Rates and charges. Rates and charges for each EBS customer begin to accrue on the day its installation is conveyed to the city. (5) Opening and closing connections. In the event of an emergency, the EBS customer may notify the director of the emergency and request that the EBS connection be unlocked and opened. If the director determines that an emergency exists, the city shall unlock and open the EBS connection. Under no circumstances shall the EBS customer unlock or open the connection or otherwise operate or tamper with the installation. When the emergency has ceased or is deemed to have ceased, the city shall close and lock the EBS connection. The emergency shall be deemed to have ceased when the EBS customer so notifies the director or when 30 days have elapsed after the date of EBS customer notified the director of the emergency, whichever first occurs. If the director determines that an extension of time will not cause undue hardship to the other customers of the city, the director may extend the time the EBS connection is open upon written request of the EBS customer and a showing by that customer that an emergency still exists and that all practicable steps are being 1 5

16 taken to correct the circumstances causing the emergency. However, if at any time the director determines that an emergency has actually ceased and consults with the EBS customer, the director may close and lock the connection. (6) Termination of service. Service to an EBS customer shall be terminated, after reasonable notice to the customer and an opportunity to be heard, if the customer fails to pay any rates or charges within the time allowed or if the customer fails to comply with the other terms of service applicable to such customer. Upon such termination, the connection shall be permanently closed, locked and disconnected, and the rates and charges shall cease accruing. (f) Contract treated water service. (1) Eligibility and applications. Applications for contract treated water service shall be made on forms prescribed by the director. Each application shall include a nonrefundable processing fee equal to $ Any customer or potential customer is eligible for contract treated water service under this subsection if : a. The customer is a municipality or conservation and reclamation district organized under article XVI, section 59 of the Texas Constitution that proposes to resell water purchased from the city ; The customer would otherwise be a commercial customer and has minimum water consumption equal to at least 150,000,000 gallons per month ; c. The customer is a private utility company holding a certificate of convenience and necessity from the state that (i) resells water to single family or multi family dwellings only and (ii) maintains a water distribution system in public rights-of-way or public easements ; or The customer would otherwise be a commercial customer and is in compliance with a conservation plan pursuant to chapters 288 and 295 of title 30 Texas Administrative Code to reduce its minimum water consumption from 150,000,000 or more gallons 1 6

17 per month while continuing to provide the same or higher levels of production or services. (2) Contract requirements. Upon receipt of a completed application, the department shall determine water availability and, if sufficient water is available for the customer, shall secure a written agreement from the applicant, which shall include : a. The term of the agreement ; b. The minimum monthly quantity of water to be taken by the customer. This minimum for customers other than those described under items (1)a, (1)c and (1)d of this subsection shall be 150,000,000 gallons per month. Customers defined under items (1)a, (1)c and (1)d of this subsection shall be permitted to change the minimum monthly quantity only in accordance with the terms of their contracts ; c. The designation of the point or points of delivery ; d. Rates as described in subsection (f)(3) of this section ; and e. Any special requirements regarding metering or facilities desired by the parties. No agreement for contract treated water service shall be valid unless approved by the city council. (3) Rates and charges. For contract treated water customers, the monthly charge shall equal : PxR plus (P-M) x $0.612 Where : P = the total water delivery to such customer during the month expressed in units of 1,000 gallons, except if the minimum monthly amount of water specified in the customer's contract is greater than P, P shall equal M ; 1 7

18 the minimum monthly amount of water specified in the customer's contract expressed in units of 1,000 gallons; and R $2.190 if there is an airgap between the water systems of the city and the contract treated water customer, and $2.190 if there is no airgap between the systems of the city and the customer. An airgap shall be required of every customer unless the director determines that this requirement be waived because of prior conditions, excessive pressure, or health and safety concerns. In the event a billing period is longer or shorter than 30 days, a daily charge shall be determined using the formula specified above, but with P defined as average daily amount of water delivered during the billing period and M defined as the monthly minimum divided by 30. Such daily charge shall then be multiplied by the number of days in the billing period." Section 3. That Section of the Code of Ordinances, Houston, Texas, is hereby amended to read as follows : "Sec Service charges for unmetered connection for fire sprinkling systems. (a) Each person with an unmetered connection serving a fire sprinkler system under the provisions of subsection (b) of section 47-4 of this Code shall pay the following monthly service charge for the corresponding size of the diameter of each unmetered sprinkler service line connected to the city's water main. The charge for a fire line with a city approved backflow prevention device with a bypass meter will be the same as for unmetered fire lines : Customer's Meter Size Defined Charge for Basic Service 51 inch $ inch $425 to inch $ inch $8.49 W inch $916 (b) Billing for charges made under this section shall be made on a monthly basis. Payment shall be due and made in accordance with the 18

19 provisions of this Code, and payment of such charges shall be enforced by any and all means available to the city under other provisions of this Code, including termination of service. (c) The department may supply water for private fire suppression systems if in the opinion of the utility official the connection will not cause appreciable reduction in the pressure of the city's water system. The director shall determine all conditions necessary for connecting such private fire protection to the city's water system to ensure the safety of the public water system. The cost for a city employee to participate in or witness any test of a fire suppression system as required by this Code or any other ordinance of the city shall be $75.00." Section 4. That Sections and of the Code of Ordinances, Houston, Texas, are hereby amended to read as follows : "Sec Statement of policy ; standard untreated water rates. (a) Application. by the city. This division applies to all sales of untreated water (b) Contracts. The policy of the city is that the provisions of this division shall be deemed a part of every city contract for sale of untreated water for industrial, municipal, or agricultural use. (c) No warranty. It is the city's policy that no guarantees or warranties of any sort shall be made with respect to continued service, water quality, prices, quantity, pressure or any other matter relating to the furnishing of untreated water, unless such guarantee or warranty is contained in a written contract approved by city council. (d) Standard rates. When no contract is in effect, there are no warranties or guarantees of any sort, nor shall there be any minimum monthly quantity, and any water taken by any such customer in the absence of a water supply contract shall be paid for at the following rates per month: (1) First 10,000,000 gallons, $ per 1,000 gallons. (2) Next 10,000,000 gallons, $ per 1,000 gallons. (3) Next 30,000,000 gallons, $ per 1,000 gallons. (4) Next 100,000,000 gallons, $ per 1,000 gallons. 1 9

20 (5) Amount in excess of 150,000,000 gallons, $ per 1,000 gallons. Sec Contract rates and terms of service. Subject to variations as provided in section of this Code, sales of untreated water under written contracts for industrial and municipal use shall be made in consideration of the requirement that the buyer agrees to purchase at least ninety percent of all its untreated water requirements from the city; however, the buyer shall not be required to purchase a minimum quantity during each month. Untreated water contracts shall include provisions limiting the city's obligation to deliver water to a stated contract quantity, and the buyer shall be required to pay a surcharge equal to five percent of the otherwise applicable cost for the portion of the water delivered to the buyer which exceeds the contract quantity whenever the amount actually delivered exceeds the contract quantity by ten percent or more. The rate for untreated water sold pursuant to this subsection is $ per 1,000 gallons." Section 5. That Section of the Code of Ordinances, Houston, Texas, is hereby amended to read as follows : "Sec Rates and terms for sale of untreated water for agricultural use. (a) Definitions. The words, terms, and phrases used but not defined in this section shall have their plain meaning or the same meaning as attributed elsewhere in this chapter, unless such meaning is clearly inconsistent with the intent of passage : Agricultural customer shall mean a customer with a contract (i) with the city for untreated water supply for agricultural use and (ii) that is subject to the this Code. Agricultural use means a lawful and intentional diversion of water for use on land or in tanks dedicated to production of crops or live stock. The utility official may apply the definition in Texas Tax Code to further limit 'agricultural use.' Contracted land means a certain area of land described in a contract between the customer and the city. Contracted land shall generally be described in acres and apply to rice production only. 20

21 (b) Rates for Agricultural Use. (1) General Agricultural Use Rate. Unless entitled to a different rate authorized under this Code, each agricultural customer shall pay for water according to usage recorded by a meter at a rate of $ per million gallons. (2) Rice Irrigation Rate. Each agricultural customer that diverts water onto contracted land for rice production shall pay rates as described below : a. b. The customer shall pay for the first watering at a rate of $ per acre of contracted land or, if diverted through a meter on the canal or conveyance system, per million gallons actually used ; and The customer shall pay for each additional watering during the annual term of the contract at the rate of $20.96 per acre of contracted land or, if diverted through a meter on the canal or conveyance system, per million gallons actually used. (c) Agricultural Use Application. All persons desiring to purchase untreated water for agricultural use purposes shall apply to the director for such purchases. (1) Each application must : a. Be in a form specified by the director ; b. c. Be filed with the director on or before April 1 of a year for a purchase during that year (the director may extend the deadline at his discretion) ; Contain the complete legal name of the person applying for purchase of untreated water for agricultural use (the 'applicant') and the applicant's business address and telephone number ; Contain a description of the property on which the water shall be used, such that the property may be located with ease and certainty ; e. Contain the number of acres to be irrigated to the nearest tenth of an acre ; 2 1

22 f. State whether the applicant will use gravity or a pump to convey untreated water to the land described in the application, and if one or more pumps are used, state the make, model, age, size, condition and location of all pumps and self-reading (or self-recording) meters ; g. Contain an agreement by the applicant to be bound and abide by the provisions set out in this section ; and Be signed by the applicant, or by a person authorized to bind the applicant to contracts and agreements. (2) The director shall examine each application for purchase of untreated water for agricultural use. An application shall be approved if the director determines that : a. The city reasonably anticipates a surplus of untreated water after filling the needs of its domestic, commercial and industrial customers such that it may serve irrigation customers ; The applicant's pumps, meters and other facilities are satisfactory ; c. The applicant is not in arrears for water previously taken for irrigation purposes ; and d. The application complies with this Code. (d) Irrigation Requirements. The following provisions shall apply to all sales of untreated water sold for irrigation purposes : (1) Water shall be taken only from a point approved by the director. (2) Water may be taken only when the director determines that a surplus of water remains after the needs of domestic, commercial and industrial customers are fully met. (3) If water is to be taken through a self-reading or selfrecording meter, the applicant shall have the obligation to install and maintain the meter at the applicant's own expense and shall have the meter tested for accuracy whenever 22

23 requested by the director. If any test results indicate that the meter is inaccurately measuring the water by two percent or more, the applicant shall recalibrate the meter or replace it. (4) The applicant shall have full responsibility with respect to any damages to persons or property caused by the water after it leaves the canal and shall indemnify the city for any such damages. (5) The city shall not be liable for any damages caused by failure to furnish water to the applicant for any reason. (6) The applicant shall construct all canals, levees, banks, ditches and other improvements reasonably deemed necessary by the director to receive water and to prevent the waste thereof. (7) The applicant shall not sell or otherwise make available to other parties any water delivered for irrigation purposes. (8) The city shall have a lien on crops produced on the irrigated land until all sums owing are paid in full or until the director releases said lien in whole or part. (9) No warranties or representations are made by the city with respect to the quality of water sold, or its suitability for crop irrigation purposes, and it shall be the applicant's responsibility to determine whether the water is suitable for irrigation purposes. (e) Agricultural Customer Payment. Each agricultural customer shall pay for the applicable amount for water on a monthly basis or, for rice irrigation only on before November 1 of that year, and before December 1 of that year for any additional amount of watering. Payment shall be made to the city water division at such place as the director may specify. Interest shall accrue on any unpaid balance at the rate of ten percent per annum until paid." Section 6. That Sections , and of the Code of Ordinances, Houston, Texas, are hereby amended to read as follows :

24 "Sec Definitions. (a) The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning : Average usage means the user's average monthly sanitary usage as determined by the utility official on the basis of historical usage and other relevant factors. Basic service means metering, administrative, billing, and other services related to sanitary service that the user receives and pays for regardless of the user's usage. City sanitary sewer system means the sanitary sewer and waste disposal system owned, maintained and operated by or on behalf of the city in order to furnish sanitary sewer and waste disposal services, including, but not limited to waste treatment facilities, such as fertilizer plants, plants, disposal fields, lagoons and areas devoted to sanitary landfills for purposes of treating, neutralizing, stabilizing or disposing of waste, and sewer systems including pipelines, conduits, canals, pumping stations, force mains, and all other constructions, devices and appurtenant appliances used to transport waste, as such system may be now constituted or as it may be hereafter improved, enlarged or extended by construction, reconstruction, acquisition, annexation or otherwise. Commercial user means any business or establishment that is not an industrial user as identified in the 1987 Edition of the Standard Industrial Classification Manual. Duplex residence means a residential equipped for sanitary service for two users. establishment Effluent means the raw sewage actually passing through a user's sanitary sewer meter during a month. When an effluent meter is used, charges shall be based on the usage registering on the meter when the meter is operating within manufacturers' standards. (This may not be the right location for this, but it needs to be in the ordinance.) Industrial user means any business or establishment that discharges industrial waste as defined in Article V of this chapter. 24

25 Monthly volume means the total effluent in increments of 1,000 gallons attributable to a user's meter for a given month. Monthly volume includes all effluent not previously included in the user's monthly sanitary charge. Monthly sanitary charge means the charge in a given month for city sanitary sewer services that includes applicable charges for basic service and volume charges. Multiple-dwelling units means one or more buildings, each equipped for occupancy by three or more families and used as a permanent residence by those families. Person with disability has the meaning ascribed in section of this Code. Residential user means any user whose meter exclusively serves a residential establishment. Residential users do not include commercial users, contract treated water users, EBS users, industrial users, outdoor users, resale users, or transient users. Single-family residence means a residential establishment serving a single family, or household, which may not include separate living quarters. In those instances where there is no meter on the water supply to the principal household, separate living quarters shall be considered as a separate residence and a separate sewer service charge shall be applied. User means any person who has applied for or contracted with the city for sanitary sewer service, including any person who resides at the address to which sanitary sewer service is provided under that application or contract at the time monthly charges are incurred. A user may have more than one meter and more than one property with sewer service, but each meter will have a separate account number. (b) The following words, terms, and phrases used but not defined in this section shall have the same meaning as defined in section of this Code : month, monthly water usage, person, residential establishment, and unit. Words, terms, and phrases in this section shall be generally construed to have the same meaning as other words, terms, or phrases used in other parts of this chapter, unless the context clearly indicates another meaning. 25

26 Sec Rates for users taking city water. (a) Residential users. Each residential user shall incur monthly sanitary charges for each meter serving the user's premises, except certain multifamily residential users with umbrella accounts authorized to receive different basic service charges as set forth in section of this Code. (1) Single Family Residential User. Each single family residential user's monthly sanitary charge shall be calculated using the total of the applicable basic service charge and volume charge set forth below: a. Basic Service Charge. The user's basic service charge shall be based on meter size, measured by meter diameter in inches, as set forth in the chart below : Basic Service 5/8, 3/4 1.0 inch 1.5 inch 2.0 inch 3.0 inch inch Single Family Basic Service $7'86 $8.26 $9.57 $9.97 $17.86 b. Volume Charge. The user's volume charge, regardless of meter size, shall be calculated using the user's monthly water usage as set forth in the chart below : Monthly Water Usage Volume Charge for all single family residential meters 1,000 gallons $0.13 2,000 gallons $0.39 3,000 gallons $0.60 4,000 gallons $ ,000 gallons $15.48 Over 5,000 gallons $15.48 plus $5.75 for every 1,000 gallons over 5,000 gallons (2) Multifamily Residential User. Each multifamily residential user's monthly sanitary charge shall be calculated using the total of the applicable basic service charge and volume charge set forth below : a. Basic Service Charge. The user's basic service charge shall be based on meter size, measured by 26

27 meter diameter in inches, as set forth in the chart below : Customer's Meter Size Basic Service Charge 5/8 inch $7.93 3/4 inch $ inch $ inch $ inch $ inch $ inch $ inch $ inch $ inch $86.10 b. Volume Charge. The user's volume charge, regardless of meter size, shall be the user's monthly water usage multiplied by $5.04 for each 1,000 gallon increment. (b) Non-residential Users. Each non-residential user shall incur monthly sanitary charges for each meter serving the user's premises. (1) Commercial User. Each commercial user's monthly sanitary charge shall be calculated using the total of the applicable basic service charge and volume charge set forth below : a. Basic Service Charge. The user's basic service charge shall be based on meter size, measured by diameter in inches, as set forth in the chart below : Customer's Meter Size Basic Service Charge 5/8 inch $7.93 3/4 inch $ inch $ inch $ inch $ inch -- $ inch $ inch $ inch $ inch $

28 b. Volume Charge. The user's volume charge, regardless of meter size, shall be the user's monthly water usage multiplied by $5.04 for each 1,000 gallon increment. (2) Industrial User. In additional to any applicable charges under section of this Code, each industrial user's monthly sanitary charge shall be calculated using the total of the applicable basic service charge and volume charge set forth below : a. Basic Service Charge. The user's basic service charge shall be based on meter size as set forth in the chart below: Customer's Meter Size Basic Service Charge 5/8 inch $ inch $ inch $ inch $ inch $ inch $ inch $ inch $ inch $70.84 IaO inch $8110 Volume Charge. The user's volume charge shall be calculated based upon the user's meter size and monthly water usage as set forth in the chart below : Monthly Water Usage Volume charge for industrial meters 1,000 gallons $110 2,000 gallons $620 Over 2 00 gallons $120 plus $512 for every 1,000 gallons over 2,000 gallons Sec Rates for users not receiving water from city. The monthly sanitary sewer service charge for each user who has a private water supply or receives water from a source other than the city's water system and whose water supply is not self-metered and billed as provided in section of this Code shall be as follows : 28

29 (1) Single family residence: $19.39 per month. (2) Duplex residence: $48.25 per month. (3) Multiple dwelling units, per single family unit: $28.22 per month. (4) Commercial user rate, per commercial equivalent: $53.25 per month. Each commercial user shall pay the cost of a single commercial equivalent unless such commercial user requires additional commercial equivalents of service as determined by the table in section of this Code. (5) Industrial user rate, per commercial equivalent: $53.23 per month. Each industrial user shall pay the cost of a single commercial equivalent unless such industrial user requires additional commercial equivalents of service as determined by the table in section of this Code." Section 7. That Section of the Code of Ordinances, Houston, Texas, is hereby amended to read as follows : "Sec Wholesale wastewater service rates for municipalities and conservation and reclamation districts. (a) Wholesale contracts. Municipalities and conservation and reclamation districts ('municipalities') may purchase wholesale wastewater service from the city at rates established herein. In case of conflict between this section and a wholesale contract entered into before the effective date hereof, the provisions of the wholesale contract prevail. (b) Rate for municipalities that have made capital contributions. The rate established in this subsection is applicable only for wholesale wastewater services the city provides to municipalities that meet the following requirements : (1) The municipality discharges directly into a city treatment plant ; (2) The municipality has purchased permanent treatment capacity in the city's wastewater treatment system ; and 29