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<br />SERVICE CONTRACT <br />FOR <br />WATER TREATMENT FACILITIES OPERATIONS <br />AND ASSET MANAGEMENT <br /> <br />THIS SERVICE CONTRACT FOR WATER TREATMENT FACILITIES OPERATIONS <br />AND ASSET MANAGEMENT ("Service Contract") is made and entered into as of this 20th day of <br />September, 2005 in Hays County, Texas between the City of San Marcos, Texas, a municipal <br />corporation organized and existing under the laws of the State of Texas (the "City"), and <br />Guadalupe-Blanco River Authority, a conservation and reclamation district and political <br />subdivision of the State of Texas created pursuant to Article XVI, Section 59 of the Texas <br />Constitution by special act of the Legislature, formerly compiled at Article 8280-106, Vernon's <br />Annotated Civil Statutes (the "Authority") . <br /> <br />RECITALS <br /> <br />(A) The City currently owns the City of San Marcos, Texas water treatment <br /> <br />system. <br /> <br />(B) The City IS responsible for the treatment and distribution of potable <br />water in the City's service area. <br />(C) The City's water treatment system consists of a surface water treatment <br />plant (the "Plant"), water wells, storage reservoirs, pipes, mains, valves, and treatment <br />equipment owned by the City. <br />(D) The Authority has operated and maintained the Plant since the time the <br />Plant first became operational, under a contract between the parties dated May 11, 1999, and <br />the Authority is familiar with the design, layout, operation and condition of the Plant. <br />[E] The City has determined that it is in the City's best interests to contract <br />with a third-party operator on a long-term basis to operate, maintain, repair, replace and <br />manage certain water treatment system assets and to meet the requirements of applicable law. <br />(F) The City issued a request for qualifications and expressions of interests <br />("RFQEI") to entities interested in providing water treatment system operations and asset <br />management services to the City. <br />(G) The City, based on the technical and fmancial qualifications set forth in <br />the RFQEI, determined Guadalupe-Blanco River Authority and OMI, Inc. to be qualified. <br />(H) The City issued a request for proposals on January 11, 2004 (the "RFP") <br />to the prequalified fIrms to provide water treatment system operations, and set forth in the RFP <br />the criteria for selection of the preferred proposer. Four addenda to the RFP were issued on <br />February 20, 2004, February 23, 2004, February 26, 2004, and March 3, 2004, respectively. <br />The City provided potential proposers with reasonable access to the water treatment system to <br />allow them the opportunity to review documentation and to conduct such inspections and <br />