07/11/90 SP City Council Minutes271
A SPECIAL MEETING OF THE KALISPELL CITY COUNCIL WAS HELD AT 5:30
P.M. WEDNESDAY.. JULY 11, 1990, IN THE COUNCIL CHAMBERS AT CITY
HALL. MAYOR HOPKINS PRESIDED. COUNCILMEN ATKINSON AND
GUNNERSON WERE ABSENT. ALL OTHER COUNCILMEMBERS WERE PRESENT.
Mayor Hopkins called the meeting to order and led the Pledge of
Allegiance.
ADDRESSING THE COUNCIL
Elna Darrow, Bigfork, Vice President of the Flathead Lakers, an
organization of about 1000, who all live around the lake, said
the organization has been around for about 25 years, and has
been concerned about the unsewered Evergreen and they are so
happy the City is about to reach a resolution to the problem. She
thanked the City for the Laker's and for the lake.
Jack Fallon, Evergreen Sewer District, said there were three
minor points he wanted to present. 1. He referred to Page 12,
Appendix C, on the Surcharge, that Evergreen will face a
surcharge if the sewage that comes out of their forced main at
the end of the forced main at the treatment plant, if that hits
the maximum limit, they recognize they are hit with something
there and then we go back and try to determine where that is ,
but we are trying to understand how that Appendix C would apply
to us. Because we notice it was just taken right out of the code
and not necessarily applicable to us. We view it that if our
sewage violates those perameters, Then it comes out of the forced
main at the treatment plant, then at that point in time the City
and the District works on going to try and determine where that
user is within our system, but we don't think that appendix is
applicable to a user out in our system right now because we are
going to have to pretreat our sewage before it gets transported
to the City and if we have to pretreat it , then we are thinking
we should get that money to pretreat it as opposed to the City.
We need to know who the user is, is it the district or the
landowner, and then at what point in time does that come into
play. Our thoughts are it would come into play if the
concentrations that come out of our forced main into the
treatment plant violate the parameters as opposed to the
discharge into our system and violating the perameters. So if
the wording could be structured to indicate it that way, we would
not have any problem.
2. On page 11, Appendix B, it talks about the replacement fund
being one of the components of the rate. EPA ordinance
guidelines requires that a replacement fund is paid by use and
not by lump sum. So that needs to be calculated into the rate as
part 1 is. (Just needs to follow EPA guidelines there)
3. Page 7, Surety Fund, request would be, because of the
potential rate structure and lack of EPA funds, the cost of the
project is increasing quite a bit and anything we have to set
aside is going to tax the people even more and I would like to
request a reduction in the amount of the Surety. Whether it
would be 3 months payments or 3 years or $50,000 or the estimated
incremental cost to treat Evergreen sewage. We would like to
request that be reduced due to our financial obligations.
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SEWER & WATER
REVIEW EVERGREEN SEWER AGREEMENT
Granmo moved the City Attorney be authorized to write and the
Mayor be authorized to sign a Letter of Understanding with
Flathead County Water & Sewer District No. 1, Evergreen,
incorporating the features of interlocal agreement reviewed by
the City Council on the llth day of July, 1990. The interlocal
agreement shall only be executed by the Mayor upon completion of
required prerequisites, including consent of annexation and
creation of the RSID, withdrawal from the rural fire district and
all other predetermined prerequisites Councilman Nystul
seconded the motion.
Furlong questioned the Council authorizing a Letter of
Understanding on a document that is being reviewed, after just
having input from Jack Fallon on three items. He said he assumed
that the Council will take them under advisement. He said there
are differences in this draft and the draft of 7/3/90. He asked
if final form is expected at this meeting?
Granmo stated with amendments, he would expect to get this in
final form tonight.
Granmo asked City Attorney Neier if "approve" would be a better
word to use than "review", in the motion?
Neier stated if this is going to be amended and approved, then it
should be changed. He said he thought it was going to be
reviewed and actually write a letter of intent incorporating
basic features of this document and wait for Evergreen to look at
it, but since they are here, and all these changes can be
incorporated, we can approve the agreement and write a letter of
understanding with Evergreen and send it to them tomorrow for
their approval tomorrow night.
Nystul asked if it was the intent of the motion and the intent of
the Council that what we are doing tonight is approving what we
anticipate as the final draft of the document? Realizing that
the City Attorney and Attorney for the District have yet to go
through this and dot the is and cross the t's, that the Water
Quality Bureau has yet to look at the document, that D.A.
Davidson, a potential bond underwriter and Dorsey Law firm, who
will likely do a legal opinion on the document, that those folks
all have to look at this thing to see if there is something we
have missed. So is it our intent that we are doing as a final
draft, subject to those reviews?
Neier said it has to be.
Nystul said this is not going to be in concrete.
Granmo said he would like to have this in as final a form as we
can make it, modified by Council action.
Nystul said if the City Attorney and the Attorney for the
District need to change a whereas to a therefore, is that going
to cause us any problem?
Granmo said the City Attorney says reviewed is a better word.
Nystul asked Neier is this in final legal form?
Neier said it is not, it couldn't be signed at this time.
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Neier said it also needs to be submitted to the Attorney
General's office, EPA will want to look at it, the Dorsey Law
firm, bond council will want to look at it.. My reason for using
the term reviewed is that I didn't think we were really going to
approve this agreement and it was going to not be in some way
amended at a later date. I knew there were some things in here
that probably, like the rate on the replacement fund, changes
necessary. 1 thought this is the document that we were basically
going to give to the Evergreen Sewer District and they were going
to approve or accept, with some minor changes , then we would
write a Letter of Understanding incorporating both that ,the
final agreement would only be executed after everything was in
order including creation of the RSID , which means the bond
people are going to have to look at it and I should have put in
there the Attorney General's approval and consent of the
annexation requirement. That's what I thought we were doing
tonight. That way we can make some changes in it here , Tom Flynn
has offered 3 changes and Evergreen has offered 3 suggestions and
we could make those changes tonight and redo it. That would be
what we approve or reviewed and send it to Evergreen, for other
parties to take a look at.
Evergreen needs the Letter of Understanding so that the County
Commissioners can get started on the RSID. They won't start on
the RSID until we get some kind of letter with Evergreen saying
yes we have the basis of an agreement. This document is the
basis of an agreement. May be some problems in it as to who the
user is, and fairly easy to handle, don't think I can write the
language now, but shouldn't be too difficult. There may be some
other minor changes.
I don't think we should approve this as a final agreement
because we don't need to have the final agreement approved until
one day before September 1, 1990.
Hopkins said he did not think we approve the agreement until they
are ready to open the flood gates. No not that day, but more
towards that day.
Fallon stated they requested clarification from the Water Quality
Bureau and they said that we need to have an interlocal agreement
signed by Sept. 1. He said the County Commissioners want to know
that we are going to have something signed, any additional
appropriations that we can get, they want to see something
signed before they proceed on it. We don't see any, aside from
the changes I mentioned, we don't see any problems and we have a
regularly scheduled Board meeting tomorrow night and I can't
speak for everybody, the attorney, the engineer and myself are in
agreement with what is written in the document and we will
present it to the Board that way, as taking favorable action on
it. That is what we are urging, as far as EPA review. The EPA
won't review the document because one of their grant conditions
is that anything that they require supersedes any contractual
agreements between any entities. As far as bond councils, that is
correct. They will review it. We need something signed .before
we can continue, that's what we got from the Water Quality Board
just the other day.
Furlong said it seems that we have a basis of understanding or we
have an agreement in principal.
Furlong asked if we have received a consent to annexation and
consent to withdraw from rural fire district of 51% of the
properties adjacent to Hwy 2 and Hwy 35?
Hopkins said we would not ask for that until we have an
interlocal agreement. That contingency of the Board or the
Dis:trict10roviding those -to the City is based upon approval of
this agreement. He said the Letter of Understanding' is a way to
move this along more quickly 'without having to: sign the
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interlocal agreement but what I am hearing is that the letter of
understanding does not mean anything. We may as well work on the
interlocal agreement if the Water Quality Bureau is saying they
have to have it by Sept. 1.
Fallon said you can put a memorandum of understanding attached to
it saying that this does not go into effect until these
conditions have been met. So the interlocal agreement signed,
that satisfies the Water Quality Bureau but there is this letter
that is also a contract that says this is not effective until
these conditions have been met.
County Commissioners just want to know if the City is going to
treat the sewage.
Evergreen's Attorney, Bill Astle said that this letter of
understanding, substantial agreement or agreement in substance,
is saying we have come a long way, in concept.
Astle said this letter of agreement is enough for us to begin
and we can rely that there will be no substantial changes in
substance. He said he thought the Commissioners would accept the
go ahead with Glen and my opinion. We have a binding
substantial letter of agreement, subject to a whole lot of
conditions subsequent.
Mayor Hopkins stated Tom Flynn's concerns would be addressed.
Furlong stated on Page 3, the first full paragraph, beginning
with the whereas, he wanted to know if the "agreement" is an
agreement, an interlocal agreement or is there a difference?
Hopkins stated he felt it was the interlocal agreement, because
we are asking for Attorney General review.
Furlong stated an interlocal agreement, under chapters of state
law made reference to their requirement of a committee and when
that was a no -no, we dropped that idea. Are there any conditions
attached to an interlocal agreement that we are not aware of?
Neier stated this agreement essentially complies with the state
law, there was a previously drafted agreement that had a joint
board established, the draft looked at about the 3rd week in
June, we had a Board of Sewer review that would establish the
rates, subsequent to some meetings, the state law states there
shall be a board or administrator to govern the interlocal
agreement authorized to carry out the interlocal agreement. In
there we have inserted "pursuant to that section of Montana law
the parties hereto agree that the administrator responsible for
administrating the operation, maintenance, modification and
expansion of the treatment plant shall be the City of Kalispell.
And the city shall have sole exclusive authority in so far as
matters involving the treatment of sewage and disposal".
He said that change was made at the request of the Sewer & Water
Committee to get us out of the joint board situation and into the
City being the administrator of the treatment plant rather than
have a joint board administrator. If Evergreen agrees with it,
then it should be submitted that way.
Hopkins asked if in the state statues there are items that need
to be addressed in interlocal agreements and are not addressed
in here that the Attorney General will bring it to our attention?
Neier stated that is the only provision of the state requirements
of.''"an interlocal agreement that may even be in question.
Everything else that is supposed to be in an interlocal
agreemenV.," i'w'p'in therd.-
�. } 7 F.
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Furlong suggested everywhere in the agreement that it states
"interlocal agreement", strike "interlocal" and have agreement
only, then there would be no question.
Furlong said on Page 4,"quantity of sewage to be treated", .682
was adopted as opposed to 22%, but now it is, what happens 15-20
years down the road if Evergreen's needs are greater than .682 or
the reserve capacity.
Hopkins stated he thought that would come up under "duration and
term", and that this agreement could be renegotiated at any time
that both parties are willing.
Nystul stated the forced main will be designed for a given
capacity, and the given capacity will be 682 gallons per day or
whatever the quantity the board chooses. Once you are at that
capacity, you have a problem, because you cannot pump anymore
without redoing the main. If you reach capacity, you have to
figure out how to get the excess to the plant.
Buck stated that if that was incorporated on Page 3, the service
area would also have to be incorporated into the quantity of
sewage to be treated.
Furlong stated on Page 6, of the last draft, 5 lines up from the
bottom, it was his understanding that there would be a period
after "engineer" and the remainder of that would be dropped.
Hopkins stated he had the same question and saw the redraft and
noticed that was still in there. That would be taken out. It is
on Page 8 of the last draft.
Hopkins stated it has raised a question, at what time if the City
does elect to agree to upgrade the force main, at what time do
we offer payment to the district that is undergoing the
construction.
Fallon stated that refers to your election as to having a forced
main increased to that size, so that would be at the time of bid
and then the question would become when you have construction and
we have to make our payment, do we pay the full amount and then
you not pay your share, or do you pay it at the same time we pay
ours?
Furlong said on Page 7, under "odor abatement", what happens if
we do add on to the force main, at that point, whose odor does it
become?
Engineer, Dennis Carver said the odor control is going to take
place in probably 3 locations, part of it will occur away from
the lift station in Evergreen, part of it will occur in the force
main, away from that station, and that may take care of it. If
not, something may need to be taken care of at the plant.
Furlong said Fallon had stated some concerns with replacement,
but when we talk about monthly charges, particularly on the bonds
or capitalization, does that include, in everyone's opinion, also
the interest, the carrying charges with that bond?
Fallon stated the annual payment on the bond is principal and
interest.
Furlong stated on the top of Page 8, "in the event the district
is in default of any payment to the City for any 30 day period",
then it goes on to say "the City upon 10 days notice". Why isn't
the 30 days long enough? Why not change the 30 to 40 days?
Hopes ' stated -,'it will, Neiso'lhot'dd.
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Furlong said on Page 10, Appendix A, at the top it says "the
approximate boundary". When will it be specific?
Fallon stated the boundary is specific right now, as far as the
map associated with the RSID, and will be specific in the
agreement.
Nystul stated on Page 6, the last full paragraph, says "an
engineering firm as approved by the City and the District known
hereafter as the engineer shall notify the City. He said the
engineering firm selected by the District isn't going to be
approved by the City as far as he knew. They will pick their
own engineer to do their design, so it seems the words "as
approved by the City" are not correct.
Fallon stated the entire line could be struck and just say the
District's engineer.
Nystul said under Surety Fund, the $100,000.00, the last draft
had $50,000.00. And he said on Page 11, the replacement costs,
the $31,000.00 that is there is what's established under the
present EPA for what we just got built, so it should be
understood, the replacement cost is a requirement of the EPA
Grant and what we're accumulating on a per gallon basis for
extent of users.
Hopkins stated, Fallon, in order to test the validity of the
formula, has presented in this agreement, requested that the
numbers that were stricken from prior draft, be presented to him
again, so that the formula could be tested. He said he requested
the Public Works Coordinator to prepare the numbers and forwarded
them to Fallon, with the understanding that the numbers will not
become a part of this agreement at this time, but that the only
way that the validity of the formula and of this document could
be tested, was that the District have the availability of the
numbers. The Council specifically requested that the numbers not
be in the document.
Furlong stated he felt Fallon should let us know the results of
the study.
Fallon said they had already looked at the numbers, and if we
were hooked on, the City would be paying $2.00 per thousand
gallons, just for the treatment plant, not the collection system.
If we sent the City 200,000 gallons of sewage, we would be paying
approximately $2.15. If we sent the City 300,000 gallons, we
would be paying $1.74 because of the lump sum capital debt that
we would be paying on a monthly basis. He said if we sent
400,000, it would be down to about $1.50. Those are higher than
anything that has been represented in the past, but we don't know
what our options are right now.
Furlong stated he would like the motion reread.
Granmo said the City Attorney is authorized to write and the
Mayor is authorized to sign a Letter of understanding with the
Flathead County Water and Sewer District No. l(Evergreen),
incorporating the features of interlocal agreement reviewed by
the City Council on the llth day of July, 1990. The interlocal
agreement shall only be executed by the Mayor upon proper
completion of required prerequisites including consent of
annexation and creation of the RSID and any other requirement.
Furlong asked if we will see this letter of understanding before
it is signed?
Hopkins stated it will be available the afternoon of July 12, and
if theme aria.'no comments;' itwill besigned by'5:00 p:m., Friday,
July :113t1h A �s'
Upon roll call vote, the motion carried unanimously.
ADJOURN
The meeting was adjourned at 6:50 p.m. i1
ATTEST:
Amy H. Robertson, Clerk -Treasurer
Debbie Liverman, Recording Secretary
Approved as presented August 8, 1990
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