HCID1-USIBWC MOA_ 20160926.pdf

A Kirby Cavin akcavinqratl ashall.com (956)632-8214

Din:CI line

ATLAS, HALL & RODRIGUEZ, LLP

ATTORNEYS AT LAW

I' 0. BOX 37?5 (71150 2-3725)

818 W. PECAN BLVD. (78501-2418)

McALLEN. TEXAS nL (956) 682-5501 FAX1956) 6116 -6!09

ATLASUAU..CO\I

September 26, 20I 6

FEDERAL EXPRESS AIR BILL:

7773 1793 3857

The International Boundary and Water Commission

Attention: Matthew Myers

R4171 North Mesa, Suite C-100

El Paso, Texas 79902

Re: HCID I IBWC

Dear Matt:

Enclosed please find three originals of the Memorandum of Agreement Between Hidalgo

County Irrigation District No. One and The International Boundary and Water Commission, United States and Mexico, United States Section all of which have been executed by the

President of Hidalgo County Irrigation District No. One.

Please have two fully executed originals returned to our office.

Please let us know that sufficient funds have been appropriated by the IBWC and that the

IBWC will be able to reimburse the District for the construction costs pursuant to the MOA.

I appreciated working with you and the IBWC staff on this project.

Please let me know if you have any questions.

Thanks, Atlas, Hall & Rodriguez, LLP

By:

AKC/km cc: Jose A. Nunez

Rusty McDaniel

Raul Sesin

Steve Crain

A. avin

ACSTINOmcE

119 0JOLLYVILLE llD.Sl:ITE 11S,S

AUSTIN, TX 78759,23 9

TEL (512>583-0579

FAX (51212,91)909

BAO\l S\'ILLE OFFICE

P.O. Box 6369(78523-63691

SOW !ORRISON RD.,STE A

DROWNS\'ILLE, TE'<,IS 78SW-?262

TEL (956) 574-93)3

1,:VM, 1)£ OFFICE

124 N EASTSTREET

UVALDE, TE'<AS 78801-SJ12

TEL (830) 278-3100

FAX (844f 272-1209

MEMORANDUM OF AGREEMENT

BETWEEN

HIDALGO COUNTY IRRIGATION DISTRICT NO. ONE

AND

THE INTERNATIONAL BOUNDARY AND WATER COMMISSION,

UNITED STATES AND MEXICO, UNITED STATES SECTION

REGARDING

PENITAS LEVEE IMPROVEMENT PROJECT IN HIDALGO COUNTY, TEXAS

This Memorandum of Agreement ("MOA") constitutes an agreement between Hidalgo

County Irrigation District No. One ("HCIDl ") acting herein by and through its Board of

Directors, as represented by the President of HCIDI, and the International Boundary and Water

Commission, United States and Mexico, United States Section ("USIBWC"), as represented by the Commissioner of the USIBWC in El Paso, Texas, collectively referred to as the "Parties" to this agreement.

WHEREAS, HCIDl is a quasi-governmental authority organized in and subject to the laws of the State of Texas, responsible for the delivery of untreated water for irrigation and such other functions as are incidental to the accomplishment of such limited purpose;

WHEREAS, HCID1 owns and operates the pump house and pump facility (the "Penitas pump house") in or near Penitas, Texas, in Hidalgo County, in an intake channel of the Rio

Grande River;

WHEREAS, the Penitas pump house was constructed in the 1920s and provides untreated water for irrigation and also provides untreated water to numerous municipalities for treatment by such municipalities and is one of seventeen (17) pumping plants along the Rio Grande, according to "The Report of the Board of Engineers on the Lower Rio Grande Valley Water

Problems" (Feb. 1939);

WHEREAS, USIBWC is a federal governmental agency and the U.S. component of the

International Boundary and Water Commission which applies the boundary and water treaties of the United States and Mexico;

WHEREAS, USIBWC has the jurisdiction and authority to construct flood control projects in the limitrophe parts of the Rio Grande in accordance with Article 2 of the Utilization of Waters of the Colorado and Tijuana Rivers and of the Rio Grande Treaty Between the United

States and Mexico, U.S. - Mex., Feb 3, 1944, T.S. 994 ("1944 Treaty") and 22 United States

Code (USC) sections 277 and 277a-c;

WHEREAS, USIBWC is authorized to construct, operate and maintain any project or works projected by the United States of America within the Lower Rio Grande Flood Control

Project (hereinafter referred to as ''LRGFCP"), as authorized by the Act of the 74 th

Congress, SESS. I CH. 561 [H.R.6453] approved August 19, 1935 (49 Stat.660), and codified at 22 U.S.C.

section 277, 277a, 227b, 277c, and Acts amendatory thereof and supplementary thereto;

NOTICE: THIS AGREEMENT CONTAINS PROVISIONS FOR BINDING ARBITRATION

WHEREAS, the construction, operation and maintenance of LRGFCP works are in furtherance of the provisions of Minutes 196, 212, 238, and 285 of the International Boundary and Water Commission, United States and Mexico regarding improvement of international flood control works on the lower Rio Grande;

WHEREAS, pursuant to 22 U.S.C. sections 277b and 277c the USIBWC is authorized to enter into agreements in connection with the acquisition of lands and construction, operation and maintenance of any flood control project or works on the LRGFCP with state and local political subdivisions within which such project or works may be in whole or in part situated upon;

WHEREAS, pursuant to 44 CFR Section 65.10 FEMA (as herein defined) will only recognize in its flood hazard and risk mapping effort those levee systems that meet, and continue to meet, minimum design, operation and maintenance standards;

WHEREAS, USIBWC has a responsibility to operate and maintain the features and works of the LRGFCP in order to provide flood control; and

WHEREAS, the Penitas pump house lies in an intake channel where a flood control project must be completed to protect downstream lives and property from potential floods.

NOW THEREFORE, BE IT RESOLVED that the Parties hereby agree as follows:

ARTICLE I: PURPOSE/OBJECTIVE OF PROJECT

The overall purpose or objective of the Project is to rehabilitate the levee across the waterway at the location of the Penitas pump house and to renovate the Penitas pump house to permit levee accreditation by the U.S. Federal Emergency Management Agency ("FEMA") (the ''Project").

The Project will be executed in three phases.

Phase 1: The first phase of the Project is for HCIDI to renovate the Penitas pump house to withstand potential flood waters to the level of the design flood (which is based on Hurricane

Beulah). The renovations of the Penitas pump house will include: raising the walls and roof of the Penitas pump house, increasing the durability of the sides of the Penitas pump house, constructing 30 linear feet of floodwall on each side of the pump house, and any other renovations necessary to permit levee accreditation by FEMA, using plans submitted by HCID1.

This work shall be referred to as the ..HCIDI Project." The USIBWC will reimburse HCIDI for the cost of this work on the HCIDI Project, as addressed below.

Phase 2: The second phase of this Project will be the rehabilitation of the levee by the USBIWC on each side of the Penitas pump house. Once the Penitas pump house has been renovated and floodwalls constructed by HCID1, the USIBWC will tie-in to the newly constructed floodwalls on either side of the Penitas pump house using plans submitted by USIBWC and designed by

URS Group, Inc. This work shall be referred to as the "USIBWC Project.'' USIBWC will contract for the work associated with the USIBWC Project.

Phase 3: After the levee system has been completed in the vicinity of the Penitas pump house, the border fence of the Department of Homeland Security ("DHS") may be constructed across the levee system in the vicinity of the Penitas pump house, if DHS decides to pursue this phase of the Project. The design, construction, funding, and all other aspects of this phase are the responsibility of DHS.

ARTICLE II: RESPONSIBILITIES

A. HCID1 commits to the following:

(1) HCID1 has provided design documents, including the relevant plans and specifications (the "Plans and Specifications") for the rehabilitation of the Penitas pump house and the floodwall to the USIBWC for review and comment. These documents shall henceforth be referred to as "design deliverables." The Plans and

Specifications shall only include such rehabilitation of the Penitas pump house and attached floodwalls necessary to permit levee accreditation by FEMA. The

USIBWC has provided comments to the design deliverables and the USIBWC will provide comments to any additional design deliverables submitted by HCIDl within twenty-one (21) calendar days from receipt of the same. HCIDl prepared and submitted the Plans and Specifications at no cost to the United States Government.

(2) HCIDl has designed the renovations to the Penitas pump house in accordance with

USIBWC requirements. HCIDl has also designed thirty (30) linear foot floodwalls that attach the pump house to the renovated levee segments on either side of the pump house. The design for the Penitas pump house and attached floodwalls shall only include renovations that will permit levee accreditation by FEMA.

(3) HCIDl shall complete and submit the following to the USIBWC, at no cost to the

United States Government:

a. Structural analysis of the Penitas pump house and attached floodwalls in hard copy and electronic format at each design phase. Geotechnical analysis and/or reference to appropriate geotechnical report as well as design assumptions based on this report for both the Penitas pump house and floodwalls;

b. Following completion of the construction of the renovated Penitas pump house and attached floodwalls, final as-built drawings in electronic format (both pdf and AutoCAD);

c. Letter certifying that the renovation of the Penitas pump house and attached floodwalls has been designed and was constructed to meet the 44 Code of

Federal Regulations 65.10 FEMA Levee Certification Requirements; and

d. Final Plans and Specifications of the renovation of the Penitas pump house and attached floodwalls in hard copy and electronic format. Electronic format of plans to be both in pdf and AutoCAD.

e. Once final Plans and Specifications have been approved by both HCIDl and

USIBWC but prior to the solicitation for bids, HCID1 will submit such Plans and Specifications to FEMA for comments and (if possible) pre-construction approval.

f. Following the HCID1 and USIBWC construction projects, USIBWC will submit documentation to FEMA to seek levee accreditation. HCIDl will provide assistance in addressing review comments from FEMA for the HCID1 portion of the project.

(4) HCIDl shall construct the portion of the Project associated with the Penitas pump house and attached floodwalls in accordance with the Plans and Specifications approved by the USIBWC. No deviations shall be implemented during construction without written approval by both HCIDl and by USIBWC.

(5) HCIDl shall complete the renovation of the Penitas pump house and attached floodwalls (as agreed to by USIBWC).

(6) HCIDl has provided rights of way or easements for construction and maintenance of the new USIBWC levee system in the vicinity of the Penitas pump house at no cost to the USIBWC or U.S. Government. HCIDI will provide the USIBWC with a right of entry (an unexecuted copy of which being attached hereto as Exhibit "A" and made a part hereof for all purposes) within ten (10) calendar days of the full execution of this MOA.

(7) HCID1 shall provide a solicitation schedule for the proposed solicitation of the renovations of the Penitas pump house within 30 calendar days after this MOA is fully executed. HCIDl shall issue the solicitation in accordance with the Federal

Acquisition Regulations and utilize USIBWC's local clauses where appropriate.

(8) HCID1 shall be responsible for coordination with any required regulatory agencies, mitigation, and required permits prior to initiating the renovation of the Penitas pump house. All costs associated with this coordination shall be absorbed by HCID1 and shall not be reimbursed by the USIBWC.

(9) Subsequent to the completion of the rehabilitation of the Penitas pump house as provided herein, HCID1 shall be responsible for maintenance and repair (together with all costs associated with such) of the Penitas pump house.

(10) HCID1 will determine the anticipated cost of the renovation of the Penitas pump house and attached floodwalls and will provide that information to the USIBWC.

(11) HCID1 will determine the anticipated cost of the construction materials testing for the renovation of the Penitas pump house and attached floodwalls project and will provide that information to the USIBWC.

(12) HCIDI shall allow USIBWC's Construction Contractor for Phase 2 to have temporary use of portions of HCIDl 's property to be used as a right of way for a temporary construction and work area before and during the rehabilitation of the dlico Highlight levee structures that will tie-in to the floodwalls constructed by HCID1. HCIDl shall expedite approval of access once USIBWC's Construction Contractor has submitted coverage required under Article 11.8(9).

(13) During the solicitation of Phase 1, HCID1 shall coordinate the time and date of the pre-bid meeting with the USIBWC representatives. USIBWC shall be allowed to review the front end documents before the solicitation is issued to ensure compliance with Federal Acquisition Regulations.

(14) HCIDl shall enter into a construction contract (the "Construction Contract") with a qualified contractor for the renovation of the all the work associated with the HCIDl

Project. USIBWC shall not be held financially responsible for any damages caused to any of the Penitas pump house equipment during the Construction Contract.

(15) During the construction phase of Phase 1, HCIDl shall provide or acquire construction management for the project. HCID1 shall provide for a qualified construction inspector to provide quality assurance during the construction of the renovations of the Penitas pump house and attached floodwalls. HCIDl shall assure that the construction contractor complies with the awarded contract, plans, and specifications designed by Lloyd Engineering and as approved by HCID1 and

USIBWC.

(16) HCID 1 shall award and administer the construction contract consistent with Federal

Acquisition Regulations.

(17) Once construction commences, the HCIDl shall inform the USIBWC of the regularly scheduled construction progress meetings for USIBWC's participation.

(18) HCIDl shall coordinate all dates and times for formal substantial completion and final acceptance inspections of the construction under Phase 1 with USIBWC.

(19) Once Substantial Completion has been achieved as agreed upon by all parties, HCID1 shall submit the Certificate of Substantial Completion signed by both

HCIDl 's Construction Contractor and HCIDl for USIBWC's records. The

Certificate of Substantial Completion shall be submitted within 30 calendar days of achieving substantial completion.

(20) HCIDl shall be responsible for removing the berm erected in 2010 behind the pump station at no cost to the USIBWC.

(21) Since the primary purpose of the Penitas pump house is to supply water for irrigation and water to nearby communities, ownership of the pump house, including all components and the attached floodwalls constructed in Phase 1 of the project by

HCIDl shall remain with the HCIDJ. Furthermore, maintenance, repair, and subsequent rehabilitation of the HCID1 Project shall be the responsibility of HCID1.

B. The USIBWC commits to the following:

(l) Once the requirements of the USIBWC are satisfied, USIBWC shall issue approval, permit, or license for the HCIDJ to renovate the Penitas pump house. The USIBWC will not assess a permit or license fee.

(2) The USIBWC shall continue to provide written comments to the HCIDl on all design deliverables within twenty-one (21) calendar days from its receipt of the design deliverables.

(3) The USIBWC shall provide a qualified representative that will serve as a liaison during construction of the Project. This representative shall be available to attend construction meetings and shall attend all formal inspections of the Project. The

USJBWC also reserves the right to perform random inspections of the site to ensure that the renovation of the Penitas pump house is being performed in conformance with the approved Plans and Specifications.

(4) The USJBWC shall provide responses to all questions and concerns, including

Requests for Information (44 RFI"), during construction within ten (10) calendar days.

Any question, concern, or RFI received after 2:00 pm Central Time, shall be considered to be received the following day.

(5) USIBWC shall complete the rehabilitation of the levee on both sides of the Penitas pump house, including tying the renovated levee segments into the thirty (30) linear foot floodwalls on either side of the pump house constructed by HCIDI under Phase

1.

(6) USIBWC shall use its best efforts to ensure that the Project under Phase 2 will be completed in a timely manner once the contracts are awarded to complete this work.

The solicitation and award of Phase 2 shall be based on the availability of funds.

(7) Maintenance, repair, and rehabilitation of the rehabilitated levee segments including the tie in segments on either side of the Penitas pump house shall be the responsibility of USIBWC.

(8) Once the Penitas pump house has been rehabilitated along with construction of the thirty (30) linear feet of floodwall on either side of the Penitas pump house by HCID

1, the USIBWC shall tie-in to these floodwalls on either side of the Penitas pump house. The work to "tie-in" the USIBWC portion of the work (Phase 2) with

HCIDl 's portion of the work (Phase I) segments shall be completed in accordance with the Plans and Specifications approved by USIBWC.

(9) Prior to commencing construction of Phase 2, USBIWC shall assure that its

Construction Contractor attains and maintains (for the duration of the construction contract) a minimum comprehensive general liability insurance for working with

HCIDI property. Such policy or policies shall specifically state that coverage as it pertains to HCID1 shall be primary regardless of any other coverage which may be dlico Highlight dlico Highlight available to HCIDl. Coverage shall be on an occurrence rather than a claims-made basis. Each insurance policy shall state that the insurance company or companies shall agree to investigate and defend the insured against all claims for damages, even if groundless. USIBWC's Construction Contractor shall maintain insurance providing a total combined single limit of Two Million and No/100th Dollars

($2,000,000.00), primary and umbrella coverage combined, for all damages arising out of bodily injuries to or death of all persons in all accidents or occurrences and out of injury to or destruction of property during the policy period. In addition, USIBWC shall assure that its Construction Contractor shall obtain and maintain workers' compensation insurance in such amount as may be required by law. In conjunction with the above, the USIBWC's Construction Contractor shall provide to

HCIDl a certified and endorsed copy of such insurance policies together with all endorsements.

(10) Following the HCIDI and USIBWC construction projects, USIBWC will submit documentation to FEMA to seek levee accreditation. HCID I will assist in addressing review comments from FEMA for the HCIDI Project.

ARTICLE III: REIMBURSEMENT FROM USIBWC TO HCIDl

A. On or about one hundred (100) calendar days prior to the award of HCID1 construction contract for all work associated with the HCID1 Project (the ''Construction Contract"), HCIDI will notify (the "Notice") USIBWC of the bid amount of the lowest responsible bid for the Construction Contract and response to the Construction Materials Testing (CMT)

RFQ (collectively the "Bid Amount"). If USIBWC does not provide written certification to

HCIDl by sixty (60) calendar days after USIBWC's receipt of HCIDI 's Notice of USIBWC funds obligated for payment of the Bid Amount by USIBWC, HCID1 will not award the

Construction Contract and CMT Contract and performance of this MOA by HCID l shall be suspended until such time as USIBWC shall certify to HCIDl funds are obligated by

USIBWC for reimbursement to HCIDI of the Bid Amount. If such certification of funds from the USIBWC is received after the expiration of such sixty (60) calendar days by

HCIDl, HCIDl may commence bidding procedures for another construction and CMT contract for the HCIDl Project.

B. USIBWC shall reimburse HCID l for the full awarded construction costs of Phase 1, subject to the availability of funds. Construction costs reimbursable to HCID1 from USIBWC shall mean for the purposes of this MOA, the amount of (i) the Construction Contract; and (ii) the amount of the construction materials testing contract. All other costs associated with

HCIDl 's management and administration of the Construction Contract shall not be reimbursable from USIBWC. Non-reimbursable costs include but not limited to construction management and construction inspection costs.

C. The Construction Contract and CMT Contract must be competed for award by HCID1 in order for the costs to be reimbursable from USIBWC. This is a requirement given that the contracts shall be federally funded.

D. HCIDI 's Construction Contract and CMT Contract shall provide that HCIDI 's contractors will submit periodic (but not more often than monthly) requests for progress payments. The

Construction Contract and CMT Contract shall require that prior to submission of the formal pay request to HCID1, HCIDl 's Contractor shall submit a draft pay request and Schedule of

Values (only for Construction Contract) for review and approval by HCIDI (or HCIDl 's construction manager) and USIBWC. Agreement by all parties on amount/percentages /units shall be reached prior to submission.

E. HCIDl 's contractors shall then submit the formal pay request to HCIDl. HCIDl will promptly pay or cause the prompt payment of such requests for progress payments. HCIDl will submit periodic (but not more often than monthly) requests for reimbursement to the

USIBWC. The request for reimbursement to USIBWC shall at a minimum include:

( l) Cover letter from HCID1 requesting reimbursement that references this MOA by number and name and includes total amount of request.

(2) HCIDI 's construction contractor's pay request as approved by HCIDI to include

Schedule of Values agreed to in the field by all parties.

(3) For construction contract, updated progress schedule.

(4) For construction contract, confirmation that payrolls are being submitted by

HCIDI 's Contractor on a weekly basis and have been checked by HCIDI and are in conformance with Davis-Bacon. If there are any outstanding issues that are being addressed, HCIDI shall submit a list of the itemized issues.

F. Upon receipt of the above-described periodic requests for reimbursement from HCIDl, USIBWC shall reimburse HCIDl for one hundred percent (100%) of such construction progress payments within forty-five (45) calendar days from receipt of each request for reimbursement.

G. If the need for a modification arises that HCIDI would like reimbursement from USIBWC, HCIDl shall submit a write-up to USIBWC providing justification of the proposed change as well as an independent estimate generated by HCIDl (or HCIDl 's construction manager).

USIBWC shall review the proposed change and provide a final determination on reimbursement to HCIDl. This determination will be based on proposed change and availability of funding.

H. If reimbursement from USIBWC on a proposed modification is not approved, HCIDl may proceed with the proposed change to the Construction Contract or CMT Contract but shall not be reimbursed for this modification from USIBWC.

I. If reimbursement from USIBWC on a proposed modification is approved, HCIDl shall submit the following items to USIBWC in order to increase the amount of funding tied to this

MOA:

(1) Final negotiated amount.

(2) Analysis from HCIDl (or HCIDI 's construction manager) on HCIDI 's Contractor's cost proposal and final negotiation objective for HCIDl (which is to be completed prior to negotiations with HCID1's contractor).

(3) HCIDI 's Contractor's cost proposal.

J. Reimbursement for any approved reimbursable modifications shall not be sought by HCIDI until the change has been approved by USIBWC.

K. Prior to the final reimbursement request, HCID1 shall provide the following:

(1) Written confirmation that the renovation of the Penitas pump house and thirty (30) linear foot walls on either side of the tloodwalls were construction in accordance with the USIBWC approved plans, specifications, and modifications;

(2) Letter certifying that the design and construction meet 44 Code of Federal

Regulations 65.10 FEMA Levee Certification Requirements as required under Article

II.A.(3)c.

(3) Record drawings as required under Article 11.A.(3)b.

(4) Copies of all final test reports sealed by a professional engineer licensed in the State ofTexas.

L. Approval of final reimbursement from the USIBWC constitutes acceptance of the construction project and final deliverables from USIBWC.

M. Reimbursements from USIBWC to HCID1 shall be for the HCID1 Project which is solely for flood protection, as defined above, and shall not include any costs associated with repairs, maintenance, upgrades or other expenditures relating to the pump and related appurtenances.

ARTICLE IV: COMMUNICATIONS BETWEEN THE PARTIES

A. To provide for consistent and effective communication between both Parties, the Parties will immediately designate representatives to serve as the points of contact on all matters relating to this MOA. Each Party will advise the other Party in writing of the names and telephone numbers of the representatives designated.

B. The designated representatives of HCID I and the USIBWC will participate in monthly meetings, on mutually acceptable times, to discuss progress of ongoing construction activities.

C. Each Party shall be responsible for keeping the other Party abreast of significant issues that may or will result in changes, delays, or may affect the completion of the renovated Penitas pump house, the renovated levees and the tie-in between each renovated levee and the

Penitas pump house.

D. During Phase 1, HCIDI shall provide USIBWC with monthly updates regarding, contractor's schedules and other relevant information regarding the progress of the work to renovate the

Penitas pump house.

E. During Phase 2, USIBWC shall provide HCIDl with monthly updates regarding contractor's schedules and other relevant information regarding the progress of the work to renovate the levee segments on either side of the Penitas pump house and the tie-in.

F. All notices required or provided for under this MOA shall be in writing and shall be deemed given to a party when: (i) delivered to the appropriate address by hand against a written receipt or by nationally recognized overnight courier service (costs prepaid); (ii) delivered by certified mail, return receipt requested; or (iii) received or rejected by the addressee, if sent by certified mail, return receipt requested at the following addresses (or at such other address as the parties may identify in writing during the term of this MOA):

If to HCID1: Hidalgo County Irrigation District No. 1

Attention: President

P.O. Box 870

Edinburg, Texas 78540

With a copy to: Atlas, Hall & Rodriguez, LLP

Attention: A. Kirby Cavin

P.O. Box 3725

McAllen, Texas 78502

Hidalgo County Drainage District No. 1

Attention: Chairman of the Board

902 N. Doolittle Road

Edinburg, Texas 78542

Atlas, Hall & Rodriguez, LLP

Attention: Stephen L. Crain

P.O. Box 3725

McAllen, Texas 78502

Hidalgo County Drainage District No. 1

Attention: Raul E. Sesin, PE

902 N. Doolittle Road

Edinburg, Texas 78542

If to USIBWC: The United States Section, International Boundary and Water Commission, United States and Mexico.

Attention: Lanisa McCollum

4171 North Mesa, Suite C-100

With a copy to: The United States Section, International Boundary and Water Commission, United States and Mexico.

Attention: Chief Counsel

The United States Section, International Boundary and Water Commission, United States and Mexico

Attention: Jose A. Nufiez

ARTICLE VI: RESOLUTION OF DISAGREEMENTS

The Parties shall attempt in good faith to promptly resolve any dispute arising out of or relating to this MOA by negotiation between those executives who have direct responsibility for administration of this MOA. Any dispute arising under this MOA, which is not disposed of by agreement of executives of the Parties, shall be submitted jointly to the organizational heads of the Parties: the Commissioner of the USIBWC and the Board of Directors of HCID1. A joint decision of the organizational heads of the Parties shall be the disposition of such dispute. If the dispute has not been resolved by a joint decision of the organizational heads of the Parties, the

Parties shall endeavor to settle the dispute by mediation. Pending the resolution of any dispute or claim pursuant to this article, the Parties agree that performance of all obligations contained in this MOA shall be diligently pursued.

ARTICLE VII: ARBITRATION

In the event a dispute between the Parties remains unresolved for sixty (60) calendar days, the

Parties agree to submit the dispute to binding arbitration as follows:

A. Except to the extent prohibited by law, upon the request of any Party hereto, whether made before or after the institution of any legal proceeding, any action, dispute, claim or controversy of any kind (e.g., whether in contract or in tort, statutory or common law, legal or equitable, or otherwise), now existing or hereafter arising between the Parties involving this transaction, shall be resolved by binding arbitration in accordance with the terms of this agreement. The foregoing matters shall be collectively referred to as "Disputes." Any Party hereto may, by summary proceedings, bring an action in court to compel arbitration of any

Disputes. All Disputes shall be resolved by binding arbitration. Any arbitration hereunder shall be administered in accordance with the terms of this MOA, the International Institute for

Conflict Prevention and Resolution (''CPR") Rules for Non-Administered Arbitration (the

"Rules"), and to the maximum extent applicable, the Federal Arbitration Act (Title 9 of the

United States Code). The Parties hereto acknowledge and agree that the relationship between the

Parties, including the transaction contemplated herein, involves interstate commerce. If it is determined that the Federal Arbitration Act is inapplicable, Disputes shall be resolved in accordance with the provisions of the Texas General Arbitration Act. In the event of any inconsistency between this MOA and such statutes and rules, this MOA shall control.

B. Either Party may initiate arbitration herein by giving the other Party notice of the Dispute and such Party's intent to resolve the Dispute by arbitration. The demand for arbitration shall identify and describe all the claims asserted, the facts upon which such claims are based and the relief or remedy sought. Each Party shalt select one arbitrator within fifteen (15) days from the date the Party initiating the arbitration gave notice hereunder. The arbitrators selected by the

Parties shall choose one additional arbitrator and these three shall make up the arbitration panel.

In the event the two arbitrators fail to agree upon and appoint a third arbitrator within ten (10) days from the last date the two arbitrators were appointed, the third arbitrator shall be selected by

CPR pursuant to the Rules.

C. Judgment upon the award rendered by the arbitrators shall be entered in any court having jurisdiction. The arbitrators shall render a written decision and make specific written findings of fact and conclusions of law. To the maximum extent practicable, an arbitration proceeding brought hereunder shall be concluded within one hundred eighty (180) calendar days of the date of notice of the Dispute and intent to arbitrate. Arbitration proceedings hereunder shall be conducted at a location in Hidalgo County, Texas, agreed to in writing by the Parties, or, in the absence of such an agreement, selected by the arbitrators. Arbitrators shall be empowered to impose sanctions and to take such other actions as the arbitrators deem necessary to the same extent as a judge would be allowed pursuant to the Federal Rules of Civil Procedure, the Texas

Rules of Civil Procedure and applicable law. Each Party in the arbitration proceeding shall have the right to be represented in the proceeding by counsel. Each Party shall be responsible for paying its own costs and attorney's fees, if any. To the extent permitted by applicable law, the arbitrators shall have the power to award and allocate recovery of all costs and fees (including attorneys' fees, administrative fees and arbitrators' fees) between the Parties. The arbitrators shall have the discretion to order limited discovery between the Parties pursuant to rules to be adopted by the arbitrators. The arbitrators may award injunctive relief or any other remedy that would have been available to the Parties had the matter been heard in court. All statutes of limitation that would apply in court shall apply in the arbitration proceeding. The arbitrators are not authorized to award damages in excess of compensatory damages, and the Parties hereby irrevocably waive any right to punitive, exemplary or similar damages with regard to all

Disputes resolved by arbitration unless a governing statute requires that compensatory damages be increased in a specified manner. The arbitrators shall apply the substantive law of the State of

Texas. For claims arising under federal law, the arbitrators shall follow the substantive law applicable to the United States Courts for the Southern District of Texas. While the arbitrators shall have the power to hear all claims that constitute Disputes between the Parties, the arbitrators shall not consolidate claims of different people into one proceeding. The arbitrators shall not have the power to hear any arbitration under this paragraph as a class action.

D. Each Party agrees to keep strictly confidential any aspect of an arbitration proceeding hereunder to the extent that it involves trade secrets, methods of doing business or financial information. With respect to such matters to be kept confidential, no disclosure of such material may be made to a witness or expert unless such witness or expert has signed a confidentiality agreement acceptable to the Parties. All settlement negotiations and the results thereof shall be confidential.

E. The provisions of this paragraph shall survive any termination, amendment or expiration of this MOA, unless the Parties otherwise expressly agree in writing. This paragraph may be amended, changed or modified only by the express provisions of a writing which specifically refers to this paragraph and which is signed by all of the Parties hereto.

ARTICLE VIII: LIABILITY

A. Parties shall retain all applicable legal responsibility for their respective personnel or contractors working pursuant to this MOA with respect to, inter alia, pay, personnel benefits, injuries, accidents, losses, damages, and civil liability. This MOA is not intended to change in any way the individual employee status or the liability or responsibility of any Party under federal law.

B. Notwithstanding the above, this MOA does not confer any liability on the HCID I that is legally attributable to the USIBWC under the Federal Tort Claims Act nor does this confer liability on the USIBWC that is legally attributable to the HCIDl under the Texas

Tort Claims Act. Provided further that nothing in this MOA is intended or will be construed to create any rights or remedies for any third party and no third party is intended to be a beneficiary of this MOA.

ARTICLE IX: EFFECT AND DURATION

This MOA is effective on the date signed by both Parties and remains in effect until final completion of the Project to include any warranty period. All activities carried out pursuant to this MOA are subject to the treaties, laws, and regulations applicable to each Party.

IN WITNESS WHEREOF, the Parties hereto execute this instrument to be effective when signed by both Parties

[Signature Page Follows]

Dia'a.fmti

NOTICE: THIS AGREEMENT CONTAINS PROVISIONS FOR BINDING ARBITRATION

HIDALGO COUNTY IRRIGATION DISTRICT NO. ONE:

By: Robert L. Bell

Its: President

Date

UNITED STATES SECTION, INTERNATIONAL BOUNDARY AND WATER

COMMISSION:

Ewcl d Dnsi na ' - Commissioner, USIBWC

Lanisa Mccollum Contracting Officer, Acquisition Division

Principal Engineer, Engineering Department

Chief Administration Officer, Administration Department