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<br />City of San Marcos/Guadalupe-Blanco River Authority <br />Water Treatment Facilities <br /> <br />Service Contract <br />Recitals <br /> <br />reviews as they deemed necessary to become familiar with the water treatment system prior to <br />submission of the proposals. <br />(I) Proposals submitted in response to the RFP were received on March 11, <br />2004 from the Authority and OMI, Inc. <br />(J) A Request for Clarification was issued on September 21, 2004. Three <br />addenda to the Request for Clarification were issued on October 5, 2004, November 1, 2004 <br />and November 15, 2004, respectively. Proposal clarification submittals were received from <br />each of the proposers on November 29, 2004. <br />(K) Based on an evaluation utilizing the evaluation factors and selection <br />criteria and following the review and selection process identified in the RFP, the City selected <br />the proposal submitted by the Authority as the most advantageous proposal received in <br />response to the City's RFP with respect to water treatment system operations. <br />(L) In February 2005, the City initiated the contract negotiations with the <br />Authority which have concluded with this Service Contract. <br />(M) On September 20, 2005, the City Council adopted a resolution <br />authorizing the execution and delivery of this Service Contract. <br />[N] The water treatment system will continue to be owned by the City and <br />certain water assets will be operated, maintained, repaired, replaced and managed by the <br />Authority. <br /> <br />[0] The Authority owns and operates a delivery system that delivers Raw <br />Water to the Plant (the "San Marcos Raw Water Delivery System"). <br />[P] The Authority is in the process of constructing a treated water delivery <br />system that will transmit treated water from the Plant to customers of the City and the <br />Authority generally located between the City of San Marcos and the City of Buda (the "IH 35 <br />Project"). The IH-35 Project may result in a need to increase the capacity of the Plant. <br />[Q] The City and the Authority entered into an Agreement dated July 1, <br />1997, as amended by that certain letter agreement between the City and the Authority dated <br />December 9, 2003, that provides, among other things, for delivery of raw water to the Plant, for <br />potential expansion of the Plant for the City's and/or the Authority's use, and for delivery of <br />treated water from the Plant to City and Authority customers (the "Regional Agreement") and it <br />is the intent of the parties that this Service Contract does not modify or amend the rights and <br />obligations of the parties under the Regional Agreement or any other existing agreements, other <br />than the current operating contract between the parties dated May 11, 1999. <br />[R] The City desires to receive, and the Authority desires to provide water <br />treatment system operations and asset management services under the terms of this Service <br />Contract. <br /> <br />2 <br />