E3. DEQ Contract Agreement-NONE 4111111311111
CITY OF
KALISPELL
MEMO
TO: Doug Russell, City Manager
FROM: Susie Turner, P.E., Public Works Director
SUBJECT: Contract Approval -City to Perform DEQ Plan Review as Authorized by §75-6-
121(1)(b), Montana Code Annotated (MCA) (2021)
MEETING: August 1, 2022
BACKGROUND: Montana Cities in collaboration with Montana League of Cities and State
Department of Environmental Quality (DEQ) have been working on establishing a Contract
whereas City Engineer Staff will provide State public water supply and sewage systems plan
reviews as authorized by §75-6-121(1)(b), Montana Code Annotated (MCA) (2021).
As part of the Contract the City agrees to partake in the following:
• Perform detailed plan and specification review of extensions and alterations of
community public water supply and sewage systems that involve 50 or fewer
connections (collectively referred to as "public systems") for compliance with the public
water supply laws.
• Perform reviews in compliance with §75-6, MCA, ARM 17.38, and DEQ Circulars 1 and
2.
• Record, track and document plan reviews and approvals.
• Ensure the reviews are performed by a qualified professional engineer.
FISCAL EFFECTS: In consideration of services rendered under this Contract, the State agrees
to reimburse City/Town, on a quarterly basis, 90% of the fees set out in the most current version
of ARM 17.38.106 for applications reviewed by City/Town, and for site evaluations and related
services. The current fee schedule is included as Attachment A to the Contract.
ACTION REQUESTED: Motion to authorize the City Manager to sign the Contract Agreement
between Department of Environmental Quality and the City of Kalispell for the purpose of the
City providing plan and specification review of extensions or alterations as authorized by §75-6-
121(1)(b), Montana Code Annotated (MCA) (2021).
ALTERNATIVES: As suggested and approved by the City Council.
ATTACHMENTS: Enclosed for your reference is the proposed draft Contract. The final
Contract may have minor language alterations from the provided draft as negotiated by the
League of Cities on behalf of Montana Cities.
City/Town of
DEQ Contract No.:223###
THIS CONTRACT is entered into between the State of Montana, Department of Environmental Quality,
(State), and City/Town/Town of [CITY/TOWN/TOWN NAME], (City/Town), collectively the Parties, for
the purpose of providing plan and specification review of extensions or alterations as authorized by
§75-6-121(1)(b), Montana Code Annotated (MCA) (2021) and implementing Administrative Rules of
Montana (ARM).
1. EFFECTIVE DATE, DURATION, AND RENEWAL
1.1. Contract Term. This Contract's initial term is from the date of contract execution, with
effective date being the date of the latter of two signatures, through insert date, unless
terminated earlier as provided in this Contract. This Contract is not binding on the State unless
the State's authorized representative, the Agency Procurement Officer for the Department of
Environmental Quality, or their designee, has signed it.
1.2. Contract Renewal. The State may renew this Contract under its then -existing terms and
conditions, subject to potential adjustments to fees described in paragraph 1.3, in 1-year
intervals, or any other interval that is advantageous to the State. This Contract, including any
renewals, may not exceed a total of 7 years
1.3. Cost increases under this Contract will be as determined under approved changes in ARM
17.38.106 as defined in Section 5.
2. SCOPE
2.1. This Contract constitutes delegation of review for extensions or alterations of existing
public water and sewer systems, as those terms are defined by §75-6-102, MCA, that involve 50
or fewer connections, as provided by §75-6-121(1)(b), MCA. This Contract may not be construed
as a delegation of any other authority, including review of small systems under §75-6-121(1)(a),
MCA, or of subdivision review under §76-4-104(3), MCA, or ARM 17.36.116.
2.2. An approval by City/Town under Section 3.6 of this Contract may be used to satisfy the
requirements of §76-4-131, MCA. However, nothing in this Contract may be construed as
altering or obviating the subdivision review processes established under §76-4, MCA, and the
associated administrative rules in ARM 17.36, including §§76-4-125(1)(d) and -127, MCA.
2.3. Review of extensions or alterations to community systems under this Contract shall be
limited to those parts of public water supply systems addressed in Chapters 6 and 8 of Circular
DEQ-1, and those parts of public sewage systems addressed in Chapters 30 and 40 of DEQ-2.
2.4. ARM 17.38.101(17) states that a public water supply review that is part of a subdivision
has to be reviewed under the subdivision rules. Specifically, reviews for extensions or alterations
of existing public water and sewer systems under this Contract must be conducted in accordance
with §76-4-121, MCA. Construction of water and sewer facilities to a property is not allowed
unless a Certificate of Subdivision Approval (COSA) has been issued (§76-4-114, MCA), an MFE
has been filed (§76-4-127, MCA), or the subdivision qualifies for an exemption under§76-4-125,
MCA. This provision also applies to a flushing device that needs to be located out of the Right of
Way.
3. REQUIRED SERVICES
3.1. City/Town agrees to perform detailed plan and specification review of extensions and
alterations of community public water supply and sewage systems that involve 50 or fewer
connections (collectively referred to as "public systems") for compliance with the public water
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supply laws as follows:
3.1.1. Perform plan and specification review for public systems described in 2.1 above
within the City/Town limits, except for public systems that have been designed by
City/Town or its agents. All reviews performed under this Contract must comply with the
following laws: §75-6, MCA, ARM 17.38, and DEQ Circulars 1 and 2. Based on availability
and agreement between the applicant and City/Town, electronic processing of plan and
specification reviews is acceptable.
3.1.2. Ensure that the proposed public system(s) plans and specifications are submitted
directly to City/Town for review. Upon receipt of each submittal, City/Town will contact
DEQ to obtain the required tracking number.
3.1.3. Develop and implement procedures to record and track all plans and
specifications submitted to City/Town for review and approval.
3.1.4. Maintain records as required in paragraph (2) of Section 6.5 of the Contract.
Records may include, as applicable, a checklist of specific design standards applied to each
review, calculations, notes, correspondence, documentation of the rationale for decisions,
and any other relevant information.
3.1.5. Provide a written report to the applicant within timeframes established in ARM
17.38.101. The report shall contain the results of the review and itemize any deficiencies
in the submittal, including references to relevant sections of the design standards.
3.1.6. Provide the State with written waiver or deviation requests whenever the
applicant requests a deviation pursuant to ARM 17.38.101(4)(j). All waiver or deviation
requests must be approved by the State in writing, prior to City/Town approval, and must
be submitted in the State's standard format, including supporting justification from the
applicant and a recommendation from the review engineer.
3.1.7. Provide the applicant with a written approval letter and a set of approved plans
and specifications when the proposed improvements comply with all applicable State
laws, rules, and design standards.
3.1.8. Ensure that approved plans and specifications are stamped as being approved
and signed and dated by the person issuing the approval.
3.1.9. Upon completion of the project, provide the State with a certification letter and
a complete set of certified "as -built" drawings as defined under ARM 17.38.101(14).
4. COMPETENCIES
4.1. The City/Town must ensure that all reviews are performed by a professional engineer (PE)
who has the following qualifications:
4.1.1. Is licensed in the State of Montana as defined by the Board of Professional
Engineers and Land Surveyors under §37-67-301, MCA;
4.1.2. Meets the education and experience requirements as described under §37-67-
323, MCA.
4.1.3. Is an employee of or contractor to the City/Town.
4.2. Has one year of relevant work experience in permitting, design, or review of engineering
plans and specifications with public water or wastewater systems. A professional engineer may
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not conduct the review of any application where the engineer completed the engineering design,
or had any contribution to the design, for the owner.
5. CONSIDERATION/PAYMENT
5.1. In consideration of services rendered under this Contract, the State agrees to reimburse
City/Town, on a quarterly basis, 90% of the fees set out in the most current version of ARM
17.38.106 for applications reviewed by City/Town, and for site evaluations and related services.
The State will not reimburse City/Town for any component of a review not performed by
City/Town. The current fee schedule is included as Attachment A to the contract. Any future
change in the ARM -defined fee will be updated through a written modification to the Contract
mutually agreed upon by the Parties.
5.2. The State understands and acknowledges that the City/Town is responsible for all costs of
administering the Required Services under this Contract, including staff salaries and benefits,
transportation costs, and internal administrative expenses and that the fees agreed to in
paragraph 5.1 for completing the required services under this Contract will be used to partially
offset those costs.
5.3. City/Town shall submit a billing statement listing all reviews completed under this
Contract on a quarterly basis at the end of March, June, September, and December throughout
the term of this contract and any modifications.
5.4. Under 17-8-242, MCA, the State shall reimburse City/Town within 30 days after receipt of
each billing statement, contingent upon the following:
5.4.1. Payment for questioned costs may be withheld pending resolution and may
require rebilling by City/Town or submittal of additional documentation, including any
records required to be kept by City/Town;
5.4.2. The State may withhold payment if City/Town has not performed the work as
defined under the Contract. Such withholding cannot be greater than the additional costs
to the State caused by City/Town lack of performance.
6. ACCOUNTING, AUDIT AND RETENTION OF RECORDS
6.1. City/Town shall maintain books, records, documents, and other evidence directly
pertinent to performance of work under this Contract, and current accounting for all funds
received and expended pursuant to this Contract consistent with generally accepted accounting
principles (GAAP). City/Town's accounting system must be able to allocate costs associated with
this Contract in a manner that keeps these costs separate from the costs of other contracts.
6.2. The State, the Legislative Auditor, the Legislative Fiscal Analyst, or their authorized
representatives, have the right of access to accounting records of City/Town for purposes of
inspections, audit, excerpts, or transcripts of funds received and expended by City/Town
pursuant to this Contract. City/Town shall maintain the records at the address of its liaison in
Section 16 and allow the entities in the preceding sentence to have access to them for review and
copying during normal business hours for as long as the City/Town retains the records under
paragraph 6.5. This Contract may be terminated by the State upon any refusal of City/Town to
allow access to such records.
6.3. City/Town shall disclose all information and reports resulting from access to the records
maintained in paragraph 6.1 to any of the agencies referred to in paragraph 6.2.
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6.4. Audits conducted under this section must be consistent with generally accepted auditing
standards as established by the American Institute of Certified Public Accountants and with
established procedures and guidelines of the reviewing or auditing agency.
6.5. All books, records, reports, accounting, and other documents maintained by City/Town
under this Contract must be retained for a period of eight years after either the completion date
of this Contract, or the conclusion of any litigation, claim, audit, or exception relating to this
Contract taken by the State or a third party, whichever is later. City/Town may not destroy any
records without first offering the records to the State.
6.6. If an audit shows that City/Town has not complied with federal or State laws and rules
concerning the handling and expenditure of the funds received under this Contract, including any
grant -related income, City/Town must correct the areas of non - compliance within six months
after the State receives the audit report.
7. ASSIGNMENT, TRANSFER
The Parties agree there will be no assignment or transfer of this Agreement, or of any interest in this
Agreement.
8. HOLD HARMLESS, INDEMNIFICATION, AND INSURANCE REQUIREMENTS
8.1. Each party shall be responsible and assume liability for its o n wron fullr negligent acts
or omissions, or those of its officers, agents, or employees to the full extent required by law, and
shall indemnify and hold the other party harmless from any such liability.
8.2. City/Town shall ensure professiontl a gineers are covered for professional liability to
cover errors and omissions related to their review of public water supply applications in the
amount of $1.5 million per occurrence to indemnify the State for City/Town's wrongful or
negligent acts or omissions, or those�ts Akers, agents, or employees.
8.3. Each pis aLl provide tree other party with a certificate of insurance upon request.
9. COMPLIANCE WITH WORKERS' COMPENSATION ACT
City/Town shall comply with the provisions of the Montana Workers' Compensation Act while
performing work for State of Montana consistent with Sections 39-71-401, 405, and 417, Montana
Code Annotated. Proof of compliance must be in the form of workers' compensation insurance, an
independent contractor's exemption, or documentation of corporate officer status. Neither City/Town
nor its employees are State employees. This insurance/exemption must be valid for the entire
Contract term and any renewal.
MIX419 ►] MU11riWL IMJ111iia1FAVII
City/Town shall, in performance of work under this Contract, fully comply with all applicable federal,
State, or local laws, rules, regulations, and executive orders including but not limited to, the Montana
Human Rights Act, the Equal Pay Act of 1963, the Civil Rights Act of 1964, the Age Discrimination Act of
1975 the Americans with Disabilities Act of 1990, and Section 504 of the Rehabilitation Act of 1973.
City/Town is the employer for the purpose of providing healthcare benefits and paying any applicable
penalties, fees and taxes under the Patient Protection and Affordable Care Act [P.1. 111-148, 124 Stat.
119]. Under 49-3-207, MCA, and Executive Order No. 04-2016 City/Town agrees that the hiring of
persons to perform this Contract will be made on the basis of merit and qualifications and there will be
no discrimination based on race, color, sex, pregnancy, childbirth or medical conditions related to
pregnancy or childbirth, political or religious affiliation or ideas, culture, creed, social origin or
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condition, genetic information, sexual orientation, gender identity or expression, national origin,
ancestry, age, disability, military service or veteran status, or marital status by the persons performing
this Contract.
11. RETIRED STATE EMPLOYEE REQUIRED EMPLOYER REPORTING
Under ARM 2.43.2114, State agencies are required to file employee reports with the Montana Public
Employee Retirement Administration (MPERA). The employee reports required under ARM 2.43.2114
include a working retiree report covering Montana's Public Employees' Retirement System (PERS)
retirees performing work in a PERS-covered position as an employee, an independent contractor, or
through an employee leasing arrangement, or a temporary service contractor. ARM 2.43.2114(6)(a)
requires the State to include the social security number of employees and workers in the employer
report. City/Town's staff assigned to perform work under this Contract will be asked to provide a social
security number. The purpose of collecting the social security number of an individual hired as an
independent contractor or through a professional employer arrangement, an employee leasing
agreement, or a temporary service contractor is to determine whether the individual is a retiree.
Determining an individual's status as a retiree will determine whether the State must make employer
contributions into the public employee retirement system for retirees who return to work in a PERS-
covered position as required by Section 19-3-1113, MCA.
12. CONFLICT OF INTEREST
12.1. For the purposes of the Montana Code of Ethics, City/Town and each of its employees and
subcontractors, is a "public employee" for the purposes of this Section. As such, City/Town and
each of its employees and subcontractors is subject to the requirements of Title 2, Chapter 2,
MCA, regarding conflicts of interest, including but not limited to Sections 2-2-104, 105, 121,131
and 201, Montana Code Annotated.
12.2. If the State discovers that an employee of City/Town or subcontractor is in violation of this
Section, the State may, after consulting with City/Town, terminate this Contract or take other
appropriate measures to address the conflict and City/Town shall reimburse the State for any
services the State requires be performed by another Contractor that duplicate the services
performed by the employee who violated this Section.
13. DISCLOSURE
13.1. City/Town shall notify the State of any actual, apparent, or potential conflict of interest
with regard to any individual working on a work assignment or having access to information
regarding a subcontract. Notification of any conflict of interest shall include both organizational
conflicts of interest and personal conflicts of interest (which are defined as the same types of
relationships as organizational conflicts of interest, but applicable to an individual). In the event
that a personal conflict of interest exists, the individual who is affected shall be disqualified from
taking part in any way in the performance of the assigned work that created the conflict of
interest situation.
City/Town certifies that it has identified all current employees and proposed subcontractor's
employees that will perform work under this Contract and that have worked for the State in the
last two years prior to submitting the solicitation request which resulted in the award of this
Contract. City/Town further certifies that no former employee of the State of Montana or local
government may work under this Contract for a period of twelve months after voluntary
termination of public employment, if by working under the Contract, the employee will take
direct advantage, unavailable to others, of matters with which the employee was directly
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involved during the employee's public employment. Pursuant to Section 2-2-201, MCA, a former
employee of the State or local government may not, within 6 months following the termination
of public employment, contract or be employed by an employer who contracts with the State of
Montana or any of its subdivisions involving matters with which the former public employee was
"directly involved", as defined in Section 2-2-201, MCA, during employment. City/Town further
certifies it shall identify any new employees hired during this Contract that will perform work
under this Contract and that have worked for the State of Montana in the last two years, prior to
the submission of the solicitation request, which resulted in the award of this Contract.
Disclosure in all cases shall include the name of the agency and the nature of work performed by
the employee.
14. CONTRACT TERMINATION
14.1. Termination for Cause with Notice to Cure Requirement. Either party may terminate this
Contract in whole or in part for failure of the other party to materially perform any of the
services, duties, terms, or conditions contained in this Contract after giving the other party a 60-
day written notice to cure and the demanded performance is not completed.
14.2. Reduction of Funding. Under Section 18-4-313(4), MCA, the State must terminate this
Contract if funds are not appropriated or otherwise made available to support the State's
continuation of performance of this Contract in a subsequent fiscal period. If the State or federal
government funds are not appropriated or otherwise made available through the State budgeting
process to support continued performance of this Contract (whether at an initial contract
payment level or any contract increases to that initial level) in subsequent fiscal periods, the State
shall terminate this Contract as required by law. The State shall provide City/Town the date the
State's termination shall take effect. The State shall not be liable to City/Town for any payment
that would have been payable had the Contract not been terminated under this provision. State
shall be liable to City/Town only for the payment, or prorated portion of that payment, owed to
City/Town up to the date the State's termination takes effect. This is City/Town's sole remedy.
The State shall not be liable to City/Town for any other payments or damages arising from
termination under this section, including but not limited to general, special, or consequential
damages such as lost profits or revenues.
14.3. Any termination of this Contract is subject to the exception that Section 4, relating to
retention of and access to records, remain in effect.
14.4. Event of Breach by City/Town. Anyone or more of the following City/Town acts or
omissions constitute an event of material breach under this Contract:
14.4.1. products or services furnished fail to conform to any requirement,
14.4.2. failure to submit any report required by this Contract,
14.4.3. failure to perform any of the other terms and conditions of this Contract
including, but not limited to beginning work under this Contract without prior State
approval and breaching Section 17.1 Technical or contractual Problems obligations; or
14.4.4. financial inability to perform its obligations under this Contract.
14.5. Event of Breach by State. The State's failure to perform any material terms or conditions
of this Contract constitutes an event of breach.
14.6. Actions in Event of Breach. Upon a material breach by either party, the non -breaching
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party must provide a notice to cure as described in section 12.1 and, if not cured within 60 days
may;
14.6.1. terminate this Contract as stated in section 12, and pursue any of its remedies
under this Contract, at law or in equity; or
14.6.2. treat this Contract as materially breached and, except as the remedy is limited in
this Contract, pursue any of its remedies under this Contract, at law or in equity.
15. FORCE MAJEURE
Neither party is responsible for failure to fulfill its obligations due to causes beyond its reasonable
control, including without limitation, acts or omissions of government or military authority, acts of
God, materials shortages, transportation delays, fires, floods, labor disturbances, riots, wars, terrorist
acts, or any other causes, directly or indirectly beyond the reasonable control of the nonperforming
party, so long as such party uses its best efforts to remedy such failure or delays.
A party affected by a force majeure condition shall provide written notice to the other party within a
reasonable time of the onset of the condition. In no event, however, shall the notice be provided later
than 5 working days after the onset. If the notice is not provided within the 5-day period, then a party
may not claim a force majeure event. A force majeure condition suspends a party's obligations under
this Contract, unless the parties mutually agree that the obligation is excused because of the condition.
16. WAIVER OF BREACH
Either Party's failure to enforce any contract provisions after any event of breach is not a waiver of its
right to enforce the provisions and exercise any appropriate remedies for any future breach. Neither
party may assert the defense of waiver in these situations.
17. CONFORMANCE WITH CONTRACT
No alteration of the terms, conditions, delivery, price, quality, quantities, or specifications of the
Contract shall be granted without the State's prior written consent. In DEQ's discretion, products or
services provided that do not conform to the Contract terms, conditions, and specifications may be
rejected and returned at City/Town's expense.
18. LIAISON AND SERVICE OF NOTICES
18.1. Contract Liaisons. All project management and coordination on behalf of the State shall
be through a single point of contact designated as the State's liaison. City/Town shall designate a
liaison that will provide the single point of contact for management and coordination of
City/Town's work. All work performed pursuant to this Contract shall be coordinated between
the State's liaison and the City/Town's liaison.
The PWS Section Supervisor will be the liaison for the State
Water Quality Division
PO Box 200901
Helena MT 59620-0901
Telephone: 406-755-8956
E-mail:DEQ-EOC@mt.gov
Name will be the liaisons for the City/Town
City/Town Name
Address
Telephone
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Email:
18.2. Notifications. The State and City/Town liaisons may be changed by written notice to the
other party. Any notices, requests, or complaints must first be directed to the liaisons of record in
writing. Written notifications may be sent by via certified/return receipt mail or email. All
notifications will be effective upon receipt; either by the date the certified mail is signed for or
the received date of the email.
19. MEETINGS
19.1. Technical or Contractual Problems. City/Town shall meet with the State's liaison, or other
personnel to resolve technical or contractual problems occurring during the Contract term or to
discuss the progress made by City/Town and the State in the performance of their respective
obligations, at no additional cost to the State. The State may request the meetings as problems
arise; such meetings will be coordinated by the State. For general status updates, the State shall
make every attempt to provide City/Town a minimum of three full working-day's-notice of
meeting date, time, location, and means (teleconference or virtual meeting). Meetings to discuss
urgent matters will be arranged on an as -needed basis. In DEQ's discretion, City/Town's
consistent failure to participate in problem resolution meetings, City/Town's missing or
rescheduling two consecutive meetings, or City/Town's failure to make a good faith effort to
resolve problems may result in termination of the Contract.
20. TRANSITION ASSISTANCE
If this Contract is not renewed at the end of the original term, if the Contract is otherwise terminated
before project completion, or if particular work on a project is terminated for any reason, City/Town
must provide transition assistance for a reasonable, mutually agreed period of time after the expiration
or termination of this Contract or particular work under this Contract. The purpose of this assistance is
to allow for the expired or terminated portion of the services to continue without interruption or
adverse effect, and to facilitate the orderly transfer of such services to the State or its designees. The
parties agree that such transition assistance is governed by the terms and conditions of this Contract,
except for those terms or conditions that do not reasonably apply to such transition assistance. The
State shall pay City/Town for any resources utilized in performing such transition assistance at the
most current contract rates. If there are no established Contract rates, then the rate must be mutually
agreed upon. If the State terminates a project, or this Contract for cause, then the State may offset the
cost of paying City/Town for the additional resources City/Town utilized in providing transition
assistance with any damages the State may have sustained as a result of City/Town's breach.
21. CHOICE OF LAW AND VENUE
Under Section 18-1-401, MCA, Montana law governs this Contract. If there is a dispute under this
Contract, the Parties will meet and attempt to resolve the dispute. If the dispute cannot be settled
through negotiation, the parties agree that before resorting to litigation, they will attempt to settle the
dispute by nonbinding mediation through a mutually agreed upon neutral mediator.
For any litigation regarding this Contract, both parties waive objection to personal jurisdiction. Venue
will only be in the First Judicial District in and for the County of Lewis and Clark, State of Montana.
Each party must pay its own costs and attorney fees.
22. SCOPE, ENTIRE AMENDMENT, AND INTERPRETATION
22.1. Contract. This Contract consists of 9 numbered pages and Attachment A.
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22.2. Entire Contract. These documents are the entire agreement of the parties. They
supersede all prior agreements, representations, and understandings. Any amendment or
modification must be in writing, signed by the parties.
23. WAIVER
The waiver or failure to enforce any provision of this contract will not operate as a waiver of any future
breach of that provision or any other provision.
24. EXECUTION
The parties through their authorized agents have executed this Contract on the dates set out below.
DATE
Approved as to Legal Content:
DATE
CITY/TOW N
W
NAME, Title
Address e
n
DEPARTMENT OF ENVIRONMENTAL QUALITY
?�VICKI AJWOODROW, Contracts Officer
M
Fiscal Services
Metcalf Building, Room 213
PO Box 200901
Helena, MT 59620-0901
DEQ Attorney
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