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City Council Comments 050420 from Flathead County Water and Sewer District 1COMMENTS OF FLATHEAD COUNTY WATER & SEWER DISTRICT #1 – EVERGREEN SUBMITTED MAY 4, 2020 Dear Mayor Johnson and Members of the Kalispell City Council: Flathead County Water & Sewer District #1 – Evergreen (“the District”) has an Agreement with the City for treatment of wastewater and will be affected by the new rates and impact fees that the Council is considering for adoption at the meeting tonight. We have reviewed the latest rate analysis provided to us by Ms. Turner on April 9, 2020. On March 2, 2020, we provided public comments, and, by this letter, we request that those comments be re-entered into the public record along with these comments as they should apply to this latest proposal as well. We are also submitting a list of additional questions to Ms. Turner based on our review of the latest analysis. We have numerous concerns about the latest proposed rate structure. The new rate considers factors that were not a part of Evergreen’s original rate structure in 2015 and deviate from the manner that costs are calculated under our agreement. For example, we have raised questions about how the City proposes to assess strength-related charges to all customers, not just Evergreen. We also are waiting to receive a copy of the City’s Pretreatment Program to understand how those strength charges overlap or are separate from the strength charges anticipated in this new rate structure. After reviewing the HDR Report provided for the Council meeting tonight, we are also unclear whether the proposed rate analysis includes any costs that are not treatment related and should be allocated to the City’s sewer collection system. We had not been provided the report and will need additional time to review the matters covered therein that pertain to the wastewater treatment rate. Additionally, we are still trying to determine whether certain aspects of the proposed rate could result in double charges or charges that discriminate between how the District is charged versus how City customers are charged, which is not allowed under the agreement. Another concern we have identified pertains to the sewer-related impact fees that are proposed. Evergreen customers must pay treatment-related impact fees so that fee should be adopted separately from any sewer collection impact fees. If the fee is not separated, it could not be charged to Evergreen customers. We understand that the City must have latitude to determine the rates it charges City sewer customers, but our contract must also be honored. If the Council moves forward with adopting a change from the current rates, we request negotiations with the City about how to implement those rates with the District. We appreciate all the efforts of the City’s Public Works Director and Staff to provide Evergreen wastewater treatment services but must respectfully insist that our contract be followed or a revised agreement acceptable to both parties be put into place. Respectfully submitted, Cindy Murray, General Manager Flathead County Water & Sewer District #1 – Evergreen