03/23/09 Developer Extension Agreement201 1" Avenue East, P.D. Box 1997, Kalispell, MT 59903 Phone (406)758-7720 — Fax (406)758-7831
www.kalispelt com
REPORT TO: Mayor and City Council
SUBJECT: Developer Extension Agreement for Silverbrook Subdivision
MEETING DATE: March 23, 2009
BACKGROUND: Development of the Silverbrook Subdivision required the developer, 93 and
Church LLC, to install water and sewer utilities north on US 93 from Reserve Drive to Church
Drive. The capacity of these improvements exceeds the requirements of the Silverbrook
Subdivision. Because of this, the developer has requested a Developer Extension Agreement to
allow for potential recovery of the extra cost of providing the extra capacity. The developer's
engineer has prepared the attached agreement. It follows the form of previous recent agreements
and has been reviewed by the City Attorney and Public Works Department to ensure the cost
basis for recovery is accurate and appropriate. The agreement (exhibit D) indicates the
reimbursement for water is $1,276.99 per residential unit (804 residential units of excess
capacity); the reimbursement for sewer is $947.33 per residential unit (2,240 residential units of
excess capacity).
The City's Extension of Services Plan specifies a maximum 10-year period for Developer
Extension Agreements. The developer has requested a 30-year period for this agreement. The
developer will present his basis for making this request at the appropriate point in this meeting.
City staff has no preference in this matter. The period of an agreement is discretionary with City
Council.
ACTION REQUESTED: AT CITY COUNCIL MEETING OF MARCH 23" , MOTION
TO APPROVE THE DEVELOPER EXTENSION AGREEMENT FOR SILVERBROOK
SUBDIVISION WITH 93 AND CHURCH LLC.
FISCAL EFFECTS: None.
ALTERNATIVES: As suggested by the City Council
�sz, rt ebb
Director of Public Wor / ity Engineer Interim City Manager
Attachment: Latecomer Agreement (exhibit A, record drawings not included)
U
AGREEMENT, made this 14th day of January, 2009, between 93 &, Church LLC,
("Developer") and the City of Kalispell, situated in Flathead County, Montana ("City").
WITNESSETH:
A. The City owns and operates municipal water and sewer systems within and
adjacent to its City limits; and
B. Developer has constructed, under agreement with the City, extensions to said
water and sewer systems (collectively the "Extensions"), as more particularly depicted on
Exhibit "A," attached hereto and incorporated herein by this reference, which Extensions are
capable of serving parcels now owned by the Developer and others; and
C. The Extensions are located within the City's existing municipal water and sewer
service area, and shall be subject to the City's public works standards for performance; and
D. The total project cost for design and construction of the Extensions amounted to
$4,465,522.81 as more specifically, itemized on Exhibit `B," attached hereto and incorporated
herein by this reference; and
E. The City and Developer desire and intend by this Agreement to provide for
collection of the fair pro rata share of the total project costs of the Extension from the owners of
the properties which benefit from the Extensions, but who did not contribute to the original cost
thereof.
F. The City has detennined and Developer has agreed that the fair pro rata share of
the total project costs of the Extensions, to be collected from the owners of properties who tap
onto, connect to or use the Extensions, shall be based upon the equivalent dwelling units
("EDU") associated with the expected use of the subject properties at the rates set forth in
Section 5 below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereafter
set forth, it is agreed by and between the parties hereto as follows:
1. All of the recitals set forth above are adopted by the parties as material elements
of this Agreement.
2. Developer shall transfer title, free and clear of all encumbrances, to the
Extensions, by a bill of sale to be executed and delivered by Developer to the City. Developer
LATECOMERS AGREEMENT P. I
shall assign easement deed for utilities from State of Montana to Developer (hereinafter referred
to as easement), to be executed and delivered by Developer to the City. In the event that any lien
or other claim against the Extensions are asserted after conveyance to the City, Developer shall
defend and save harmless the City from loss on account thereof. In the event the City shall be
put to any expense in defense of such claim or otherwise, then the City shall have a lien against
any funds then or thereafter deposited with it pursuant to this Agreement.
3. Developer warrants that it is the owner in title absolute of the Extensions, that it
has neither permitted nor suffered any person or other entity to tap onto, connect to or use the
Extensions prior to the date of this Agreement, except the real property owned by Developer as
identified on Exhibit "C," and as described in Section 8 below.
4. The City agrees to accept the Extensions for ownership and maintenance as part
of its facility by acceptance of the bill of sale and assignment of easement if the utilities are
constructed in accordance to City of Kalispell Standards for Design and Construction, July 2005.
Further, the City agrees to collect from owners of properties who have not heretofore contributed
to the project costs of the Extensions, and who subsequently tap onto, connect to or use the
Extensions, a fee equal to the fair pro rata share of the total project costs as set forth in Section 5
below ("Assessment Fees"). Such Assessment Fees shall not be collected by the City with
respect to the property by the Developer, as more particularly set forth on Exhibit "C," and as
described in Section 8 below.
5. The total project costs for the Extensions including costs eligible for
reimbursement under this Agreement are as itemized on Exhibit "B." Said eligible portion of the
total project costs includes costs for design engineering, surveying, construction, construction
inspection and construction contract administration incurred and paid by Developer. The
Assessment Fees for each of the properties who subsequently tap onto, connect to or use the
Extensions shall be based upon the estimated equivalent dwelling units ("EDUs") associated
with such properties in the amounts set forth in Section 5(a) and (b). The amounts set forth in
Sections 5(a) and (b) are based upon total capacity of 1396 EDUs for the municipal water system
extension and 2,832 EDUs for the sewer system extension, with 592 EDUs for the municipal
water system extension and 592 EDUs for the sewer system extension being allocated to the
property owned by Developer as described on Exhibit "C," for which no Assessment Fee shall be
charged and for which Developer shall not be entitled to reimbursement pursuant to this
Agreement.
(a) The Assessment Fee for owners of properties who subsequently tap onto,
connect to or use the municipal water system extension shall be $1,276.99 per EDU,
adjusted annually in accordance with Section 5(c) below. The maximum number of
EDUs for which Developer shall be entitled to reirnbursement for the municipal water
system extension shall be 804 EDUs.
(b) The Assessment Fee for owners of properties who subsequently tap onto,
connect to or use the sewer system extension shall be $947.33 per EDU, adjusted
annually in accordance with Section 5(c) below. The maximum number of EDUs for
which Developer shall be entitled to reimbursement for the sewer system extension shall
LATECOMERS AGREEMENTP. 2
be 2,240 EDUs.
(c) The per EDU Assessment Fees set forth in Sections 5(a) and (b) above
shall be increased annually, over the prior year's Assessment Fee, on the first day of
January each year, based upon the ten (10) year United States Treasury Note rate as of
the last day of the immediately preceding November, plus 1.5%.
6. The EDUs for purposes of computing the Assessment Fees to be collected
pursuant to this Agreement shall be determined by in accordance with Exhibit "D," attached
hereto and incorporated herein by this reference.
7. Notwithstanding anything to the contrary in this Agreement, the Assessment Fees
to be collected pursuant to this Agreement shall not be collected with respect to property owned
by Developer as described on Exhibit "C," attached hereto and incorporated herein by this
reference.
8. The City agrees not to allow any tapping into, connecting to or using of the
Extensions without the owners of properties to be benefited from said tapping or connecting
having first paid to the City the Assessment Fees and such other charges as set forth in Sections 4
and 5 above. During the term of this Agreement, the City shall not have the authority to waive
the Assessment Fees for tapping into, connecting to or using the Extensions, without the prior
written consent of Developer. To the extent that the City does waive any Assessment Fees, the
City shall be responsible for payment to Developer of the Assessment Fees that would have
otherwise been payable by the owner of such properties benefiting from tapping onto, connecting
to or using the Extensions.
9. Downstream Sewer Resources: Pursuant to MDEQ standards, and in agreement
with the City, the Developer constructed sewer facilities with capacity that is beyond the demand
required by the Developer's Project in order to meet anticipated future capacity demands in
proximity to the facilities. The City agrees that, as owner of the municipal sewer system, it is
responsible to anticipate, plan for and construct all downstream facilities to meet the capacity
needs of the Developer's Project as well as the additional demands of the excess capacity within
the sewer facilities constructed by the Developer. As the local government charged with this
responsibility, and,within the powers granted to it by state law, it is entirely within the discretion
of the City to determine the method that will be used to fund the expansion of downstream sewer
facilities. In this regard, the City may proportionately charge all development, including
Developer's Project, to the extent that the development makes demand upon and benefits from
expanded sewer facilities.
10. The City shall pay to Developer the sums agreed by it to be collected pursuant to
the provisions of this Agreement within sixty (60) days after receipt thereof at the address of
Developer as set forth hereinafter or at such other addresses as Developer shall provide to the
City.
11. In the event of the assignment or transfer of the rights of Developer voluntarily,
involuntarily or by operation of law, the City shall pay all benefits accruing hereunder, to the
LATECOMERS AGREEMENTP. 3
assignee or successor of the Developer after notice of the transfer has been given. In the event
conflicting demands are made upon the City for benefits accruing under this Agreement, the City
may, at its option, commence an action in interpleader joining any party claiming rights under
this contract, or other parties which the City believes to be necessary or proper, and the City shall
be discharged from further liability upon paying the person or persons whom any court having
jurisdiction of such interpleader action shall determine, and in such action the City shall be
entitled to recover its reasonable attorneys' fees and cost, which fees and costs shall constitute a
lien upon all funds accrued or accruing pursuant to this Agreement.
12. Nothing contained herein shall be construed to affect or impair in any manner the
right of the City to regulate the use of its municipal water system or sewer system, of which the
Extensions shall become a part under the terms of this Agreement, pursuant to the provisions of
any ordinance, resolution or policy now or hereafter in effect. The imposition by the City of any
such requirement shall not be deemed an impairment of this Agreement though it may be
imposed in such a manner as to refuse service to an owner or owners of a parcel in the benefited
area in order to secure compliance with any such requirement of the City.
13. This Agreement shall become operative as of the date first written above, and
shall remain in full force and effect for a period of thirty (30) years after the date first written
above, or until Developer, or its successors or assigns, shall have been fully reimbursed as
aforesaid, whichever event occurs earlier; provided, that in the event the Extensions, or any
portions thereof, shall during the term of this Agreement, be rendered useless by the redesign or
reconstruction of a portion of the Extension, or of the City's municipal water or sewer systems,
then the City's obligation to collect for Developer the Assessment Fees provided pursuant to this
Agreement shall cease.
14. An administrative fee of six (6) percent, in addition to the per EDU assessment
fees described previously in this Agreement, will be assessed by the City of Kalispell, Montana.
15. No waiver, alteration or modification of any of the provisions of this Agreement
shall be binding unless in writing and signed by a duly authorized representative of the City and
Developer.
16. All communications regarding this Agreement shall be sent to the parties at the
addresses listed below, unless notified to the contrary.
93 & Church LLC
Mr. Howard Mann
3430 US Highway 93 North
Kalispell, Montana 59901
City of Kalispell
Mr. Myrt Webb, City Manager
PO Box 1997
Kalispell, Montana 59903
17. All of the provisions, conditions, regulations and requirements of this Agreement
shall be binding upon the successors and assigns of Developer, as if they were specifically
mentioned herein.
18. This Agreement shall be construed in accordance with the laws of the State of
LATECOMERS AGREEMENT P. 4
Montana, and jurisdiction of any resulting dispute shall be in Flathead County, Montana. The
prevailing party in any legal action arising from this Agreement shall be entitled to all costs and
expenses, including attorneys' fees, expert witness fees or other witness fees and any such fees
and expenses incurred on appeal.
19. Any invalidity, in whole or in part, of any of the provisions of this Agreement
shall not affect the validity of any other of its provisions.
20. No term or provision herein shall be deemed waived and no breach excused unless
such waiver or consent shall be in writing and signed by the party claimed to have waived or
consented.
21. This Agreement, including its exhibits and all documents referenced herein,
constitutes the entire agreement between the City and Developer, and supersedes all proposals,
oral or written, between the parties on the subject.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year above
written.
93 & CHURCH LLC,
[NAME]
[TITLE]
DATE , 2008
CITY OF KALISPELL, MONTANA
BY:
[NAME]
[TITLE]
DATE .2008
NOTARY BLOCS
Exhibit A — Sewer and Water system extension drawings
LATECOMERS AGREEMENT P. 5
Exhibit B — Breakdown of Reimbursable Costs
Exhibit C — Legal Description of Silverbrook
Exhibit D — EDU determination
LATECOMERS AGREEMENT P. 6
EXHIBIT B
SYSTEM EXTENSIONS
ACTIVITY
WATER
SEWER
TOTAL
Design Engineering
Construction
General Construction Req.
Easement Costs
$173,813.85
$1,436,015.38
$172,845.11
$0.00
$260,607.38
$2,153,086.20
$259,154.89
$10,000.00
$434,421.23
$3,589,101,58
$432,000.00
$10,000.00
TOTAL COST
$1,782,674.34
$2,682,848.47
$4,465,522.81
LEGAL DESCRIPTION
The land referred to in this agreement is described as follows:
Tract 3 of Certificate of Survey No. 15896 in the North Half of the Northeast Quarter and
in the Northeast Quarter of the Northwest Quarter of Section 13, Township 29 North,
Range 22 West, P.M.M., Flathead County, Montana.
AND
Tract 4 of Certificate of Survey No. 15896 in the Southwest Quarter of the Northeast
Quarter and in the South Half of the Northwest Quarter of Section 13, Township 29
North, Range 22 West, P.M.M., Flathead County, Montana.
►m
Tract 5 of Certificate of Survey No. 15896 in the Southeast Quarter of the Northeast
Quarter and in the North Half of the Southeast Quarter and in the Northeast Quarter of
the Southwest Quarter of Section 13, Township 29 North, Range 22 West, P.M.M.,
Flathead County, Montana.
EXHIBIT D
COST PER EQUIVALENT DWELLING UNIT (EDU) DETERMINATION
The purpose of this exhibit is to document the methodology used to determine the cost
per Equivalent Dwelling Unit (EDU) for reimbursement to 93 & Church as referenced in
the Late Comers Agreement for Reimbursement for Municipal Water and Sewer System
Extensions between the 93 & Church and the City of Kalispell.
An equivalent dwelling unit is defined as a single family home. The water demand of an
EDU is defined as the maximum daily demand of a residential single family home. This
demand is calculated as follows:
Total people per home (EDU) = 2.50 (Ref. City of Kalispell Water Facility Plan)
Average Day Water Demand = 184 gallons per person per day (0.128 gallons per person
per minute) (Ref. City of Kalispell Water Facility Plan Update, August, 2007, Page 1-22)
Average Day/Maximum Day Peaking Factor = 2.7 (Ref. City of Kalispell Water,
Wastewater, and Storm Drainage Facility Plan, January, 2002, Page 3-6)
Maximum Day Demand per EDU = (2.50 people/EDU)x(0.128 GPM/person)x(2.7)=
0.864 GPM per EDU -
The 93 & Church water main has been oversized in accordance with the City of Kalispell
Water Facility Plan Upgrade, August, 2007 in order to serve future growth in the area.
Since capacity of a water main varies with pressure (and elevation), and since use of
capacity is how reimbursement will be based, it is necessary to establish a point on which
capacity for the Late Corners Agreement will be based. This point will be the entrance to
Silverbrook. It is important to note this flow establishes the base point for the
reimbursement to 93 & Church. However, this flow does not necessarily define the actual
capacity of the water main as capacity may change depending on the location along the
water main (e.g. capacity is greater at lower elevations).
Based on the design report for the 93 & Church water main, the capacity at Silverbrook is
2206 gallons per minute (GPM) at a residual pressure of 20.05 psi. It is assumed
Silverbrook and other residential developments in the area will require a minimum fire
flow of 1,000 GPM. Therefore, the leftover domestic capacity of the main is 1,206 GPM.
The maximum number of EDU's that can be serviced with this capacity is figured by
dividing this capacity by the Maximum Day Demand per EDU, which gives a total
number 1,396 EDU's that can be served by this main. It should be noted that all
development in the area will benefit from the 1,000 GPM fire flow required by
Silverbrook. Subtracting the 592 EDU's for the Silverbrook Subdivision leaves a total of
804 EDU's of leftover capacity in the main that are eligible for reimbursement to 93 &
Church.
The maximum daily demand for the 592 lots in Silverbrook is (592 EDU's) x (0.864
GPM/EDU) = 511.5 GPM. Subtracting the fire flow and domestic demands for
Silverbrook leaves 694.5 GPM of additional capacity in the water main not being used by
Silverbrook. Dividing the leftover capacity by the total domestic capacity gives (694.5
GPM/ 1206 GPM) equals 57.6%, which is the maximum percentage of reimbursement 93
& Church is entitled to.
Dividing the total project cost by the maximum number of EDU's the main can supply
results in a cost per EDU reimbursable to 93 & Church. With a total project cost of
$1,782,674.34 and the total EDU's served of 1,396, the cost per EDU is $1,276.99. With
the total leftover EDU's of 804, the maximum amount of reimbursement to 93 & Church
will be (804 EDU's x $1276.99/EDU) = $1,026,697.83 for the year 2009. Per Section
5.0 in the Late Comer's Agreement, the annual reimbursement fee will be increased
annually based on the U.S. Treasury Note Rate plus 1.5%. The following table
summarizes the yearly reimbursement costs per EDU based on a Treasury Note Rate of
4.5%, giving an annual interest rate of 6.0%:
Yearly Reimbursement Costs/EDU--Water
Reimbursement
Reimbursement Amount
Year
Factor
per EDU
2009
11.00
$1,276.99
2010
__.........
1.06
........ .._..... _..._..._._.........__........ _..................... ......._..... _...........
$1,353.61
...... ... .................-................................................_._........._.... ........... -...............
2011
1.12
$1,434.82
2012
..--
1.19 ._...........................................
$1,520.91
.................
.......
2013
..........-- _. _ -
1.26
..........-.._......................................................................... .....
$1,612.17
2014
... 1.34
..............
$1,708.90........
_.._.._.....................
2015
.... _..............__.._..._.__._....._..._.............................. ._.................
1.42
........................... ... ..............._................................._.......................
$1,811.43
2016
...........
....... 1.50 ................. _...
..... --------
$1,920.12
... ........................................................ ......_...._.......................................................
_........... _
2017
_... _....... _...........
1.59
$2,035.32
2018 __...._.......-
_1.69
... _.... _.._._.......__........ _....................
$2,157.44....
...._............................ .................................................................................
_.............
2019
............. ..... _.__
1.79
__......
$2,286.89
2020
1.90
$2,424.10
.......... _..................__.....__..... ..._-.........................................._.....I..............
..................... .........................
2021
............_..................... _._............_.............._...............
2.01
$2,569.55
2022
2.13
-- —.............. . ._.._................--
$2,723.72 ..........
-.._..._..._......... _........__....._._ ..._.........._._................... _.... .....................
2023
- -
2.26
$2,887.15
2024
---...._-.....-
2.40
.--... _..... ....... __--........... ........-............... ..................._...............................
$3,060.37
................. ................................................. ---..... .-
._
2025
.... _............
2.54
$3,244.00
2026
.......... -.
2.69
_--- —--------------- ....._._... ..................
--
$3,438.64
. ....... __................._._........-.__............ .... ..... _......... _............... -
2027
2.85
$3,644.95
2028
3.03
$3,863.65
2029
3.21
$4,095.47
2030
.........._......_
3.40
......................._........__....._.._...........__..............
$4,341.20
.........................................................................................
2031
3.60
$4,601.67
2032
............ .......
...... ................
3.82
........... .... _....... --......... ................ _.._.................__
$4,877.77
.......................... ......... .............. __............ ._....... ...........
2033
4.05
$5,170.44
2034
_...............................
4.29
_.............................._
$5,480.66
2035
................. ....._._........._......._......_....__...........................................................
4.55
.................. .....
$5,809.50
2036
4.82
..
$6,158.07
........................ .......................
2037
5.11
$6,527.56
2038
5.42
$6,919.21
The 93 and Church, LLC water main has also been oversized to provide fire flow in
excess of the 1,000 gpm minimum. The late comers fee for all projects that require a fire
flow in excess of 1,000 gpm shall be based on the following schedule:
Fire Flow Reimbursement Schedule
Fire Flow
Cost per Square Foot of
Structure.-
1,000 - 1,500
$2.00
1,501 -2,000
--------------------------
$2.50
------------------------------
2,001 - 2,500
$3.00
2,501 = 3,000
--------------------------
$3.50
------------------------------
31001 - 3,500
$4.00
3,501 - 4,000
--------------------------
$4.50
------------------------------
> 4,000 1
$5.00
Total reimbursement to 93 -and Church, LLC is based on the total number of ERUs that
can be sold (804). In order to keep track of the total number of ERUs sold the fire flow
fee that is paid to the developer will need to be converted to ERUs by dividing the total
fire flow fee by the $/ERU for the given year. For example, if a project in 2010 had a
$50,000 fire flow fee, the number of equivalent ERUs would be
$50,000/($1,353.61/ERU) = 36.9 ERUs.
MAMM
An equivalent dwelling unit for wastewater is also defined as a single family home. The
maximum wastewater flow per EDU will be defined as the peak hourly flow from a
residential single family home. This demand is calculated as follows:
Total people per home (EDU) = 2.50 (Ref. City of Kalispell Wastewater Facility Plan
Update, August 2007)
Average -Day Wastewater Demand = 129 gallons per person per day (0.0896 gallons per
person per minute) (Ref. City of Kalispell Wastewater Facility Plan Update, August,
2007)
Average-Day/Peak Hour Factor = 2.82 (Ref. Montana Department of Environmental
Quality, equation for peak hourly flow based on population; Population detennined by
the total build out to be served by the extension)
Maximum Peak Hour Flow per EDU = (2.50 people/EDU)x(0.0896
GPM/person)x(2.82)= 0.632 GPM/EDU.
The sewer main has been oversized in accordance with the City of Kalispell Wastewater
Facility Upgrade, August, 2007 in order to serve future growth in the area. Sewer Main
reimbursement costs are much easier to figure since the capacity of the sewer main is
dependent only on pipe diameter and slope. Based on the slope and pipe diameter, the
capacity of the sewer main is 1790 GPM. Using a Maximum Peak Hour flow of 0.632
GPM per EDU, the total number of EDU's that can be served is 2,832. Subtracting the
592 EDU's for Silverbrook Estates leaves a total of 2240 EDU's of leftover capacity
reimbursable to 93 & Church LLC.
The maximum peak flow Silverbrook Estates will have in the sewer main will be (0.632
GPM/EDU x 592 EDU) = 374.1 GPM. This leftover capacity is (1790 GPM — 374.1
GPM) = 1415.9 GPM. Dividing the leftover capacity by the total capacity of the sewer
main gives (1415.9 GPM/ 1790 GPM) equals 79.1%, which is the percentage of
reimbursement 93 & Church LLC is entitled to.
Dividing the total project cost by the maximum number of EDU's the sewer main can
supply results in a cost per EDU reimbursable to 93 & Church. With a total project cost
of $2,682,848.47 and the total EDU's served of 2,832, the cost per EDU is $947.33.
With the total leftover EDU's of 2,240, the maximum amount of reimbursement to 93 &
Church will be (2,240 EDU's x $947.33/EDU) = $2,122,027.04 for the year 2009. Per
Section 5.0 in the Late Comer's Agreement, the annual reimbursement fee will be
increased annually based on the U.S. Treasury Note Rate plus 1.5%. The following table
summarizes the yearly reimbursement costs per EDU based on a Treasury Note Rate of
4.5%, giving an annual interest rate of 6.0%:
Yearly Reimbursement Costs/EDU--Sewer
Reimbursement
Reimbursement Amount
Year
Factor
per EDU
2009
1.00
$947.33
2010
1.06
---
--_...._...__...._._...._$1,004.17
--
2011
--.._._...............-----....- _ - .
1.12
-... _._......_.._....._.... ...... ... _.....................
$1,064.42
2012
1.19
$1,128.29
2013
1.26
$1,195.99
2014
1.34
$1,267.75
_...........................
2015
.... .............. ..................................................
_...................... ...................
1.42
........ __... ....._....... _....... _....... ................................. ................_..... ........ ._.............
$1,343.81
2016
1.50
$1,424.44
--....._...._.................._.........__..........................................._............_.........
..............._
2017
.............._.__............................_...-_._._....._..........._..-...__.........
1.59
$1,509.91
2018
........... ..................
.............. 1.69 ..................... ...................................._.................._.........................__...................................................
$1,600.50
...
2019
................
................. ......................
1.79
$1,696.53
2020
............................................._..............._._..._......................................._.................
1.90
$1,798.32
_...................................................._............................._........................................
._
2021
2.01
$1,906.22
2022
2.13
............... $2,020.59 ... ... _.................
........... _..............................
2023
................................ ............................ ._....-..................
2.26
..............................._....................._._....................
$2,141.83
2024
2.40
$2,270.34
_...._
2025
.........................._...................-.............._.............................._.................._................._......._.....................__......................................................................
2.54
$2,406.56
2026
2.69 .................................
$2,550.95
...... ...................................._................................_........ .................. ......._...._._...._.
_..................... ._........
2027
.............._.........
..................... .._......................
2.85
$2,704.01
2028
3.03 _.... ........................
$2,866.25
...................._.......................-...............................................................................
-.... _..._................
2029
..... ..........................................................................
3.21
$3,038.23
2030
3.40 .................. ........................_.....................
$3,220.52
........................................................ ........... .... .......... ........ ..........
.._.._......_...........-................................._-_..................
............... .
2031
..
3.60
$3,413.75
2032
3.82
$3,618.58
............. ............................................... ..... -........... _..._.............. .....
-......._....._...._..........
2033
... ...............
......... .............................................................................................
4.05
$3,835.69
2034
4.29
..................
$4,065.83
............... ................_............................... ......._......................... ...............................
—-._......_.........................................
2035
-.....................................................
4.55
$4,309.78
2036
4.82
$4,568.37
.--......... _._.........................................................................................................................................................._..........................._................._....._..-.......__........
2037
5.11
$4,842.47
2038
5.42
$5,133.02
As with the water, if a project such as a commercial or industrial development were to
connect to the sewer, the reimbursement costs would be determined by taking the EDU
directly from the current impact fee calculation table. For example, if a new industry
were to connect with an estimated peak hourly flow of 250 GPM, the number of EDU's
would be figured by dividing the flow by the flow per dwelling unit. For this example,
the number of EDU's would be (250 GPM)/(0.632 GPM per dwelling unit) which would
equal 395 dwelling units.
alvffll.
RECORD DRAWINGS
LAW OFFICE
THORNTON o BYR-ON LLP
D. JOHN THORMON, PA
GREGORY A. BYRON, LL I, PA
TAX ® ESTATE PLANNING ® BUSINESS e WEALTH PRESERVATION
AMBER MYRICK BELEW, LLM, PA
KEVIN C. BREW, LLM, PA
RIVERFR ONT PLAZA
3101 W. MAtN, SuiTE 200
JOSEPH S. KOZLOWSKI, U.M.
Bom, IDAHO 83702-2099
RICHARD M. WEBER, JR., LLM
V4LLIAM S. RAMEY, LLM.
P.O. Box 7156
Bon, IDAHO 83707-1156
JUSTIN C. JONES, LLM, P.C.
TELEPHONE: 208-3448600
OF COUNSEL
FACSIMILE: 208-34+8720
LC'.FAt4m TO PRAC77CERV
IDAHO, CAUFORM/t COLORADO,
NEVADA, OREGOM, WASHNGTON
STRA MCC LEGAL ALIJANCLS
ARIZONA, WAH
iky, i.
Sent r email to
Mayor Kennedy and City Council
City of Kalispell
201 First Avenue East
Kalispell, Montana 59901
Re: Owl Corporation 1 Latecomers Agreement
Ladies and Gentlemen:
This letter is a follow-up to the letter from the undersigned dated February 13, 2009, with
respect to the lack of a policy to ensure satisfaction of the City of Kalispell's obligations under
latecomers agreements for sewer capacity. As indicated in the letter dated February 13, 2009, this
firm has been requested by Mark Owens to assist Owl Corporation with respect to certain issues
related to the Latecomers Agreement between the City of Kalispell and Owl Corporation ("West
View Latecomers Agreement").
The agenda for the City Council meeting scheduled for March 23, 2009, includes
Resolution 5339 - Preliminary Plat - Silverbrook Estates Phase 2, which was tabled from the
February 17, 2009, meeting. It is our understanding that the preliminary plat for Silverbrook
Estates Phase 2 will be allocated sewer capacity through the Grandview Lift Station that will be
made available through upgrades scheduled for completion in August 2009.
. I M
ligpi
Although we understand that following the upgrades there will be a small amount of
capacity at the Grandview Lift Station remaining in excess of what will be necessary for
Silverbrook Estates Phase 2, there will not be sufficient capacity remaining to fulfill the City of
Kalispell's obligations under the West View Latecomers Agreement.
The apparent "first -come, first -served" policy based solely upon preliminary plat approvals
completely ignores the obligation of the City of Kalispell under latecomer agreements such as the
West View Latecomers Agreement. The commitment of sewer capacity by the City of Kalispell
to Silverbrook Estates Phase 2, or any other project to be served though the Grandview Lift
Station, before a formal policy is adopted with respect to the priority of latecomer agreements is
not appropriate and will only serve to further compound the issues relating to the administration
of the West View Latecomers Agreement, as outlined in the December 29, 2008 letter to Mr.
Harball. Such approvals will prevent the City of Kalispell from fulfilling all of its obligations
under the West View Latecomers Agreement.
There is no justification for refusing to reserve capacity for latecomer agreements when
hundreds of thousands to mullions of dollar have already been spent to install the infrastructure,
while reserving capacity for three years for preliminary plat applications that are completely within
the discretion of the developer whether they are pursued or abandoned. Unlike preliminary plat
approvals which do not require the applicant to actually proceed and can be fairly easily modified,
your partners under latecomer agreements have no control or flexibility over their investment
because the infrastucture and the administration of the latecomer agreement has been turned over
to the City of Kalispell.
We understand through Charles Harbail, Esq. that an agreement between the City of
Kalispell Public Works and the Montana Department of Environmental Quality has been reached
regarding limitations on preliminary plat approvals in the absence of either available capacity or
a plan for creating capacity that is a condition of the approval. However, the understanding
reached with the Montana Department of Environmental Quality does not solve the issues relating
to allocating or reserving the capacity necessity to fulfill the City of Kalispell's obligations under
latecomer agreements.
For the reasons set forth above, until the City of Kalispell adopts a formal policy regarding
the administration of available capacity for infrastructure that is subject to latecomer agreements,
on behalf of Owl Corporation we are again requesting that the City Council not approve any
March 23, 2009
Page 3
preliminary plats to be served through the Grandview Lift Station, including, but not limited to,
the preliminary plat for Silverbrook Estates Phase 2.
Very yours,
Gre yro
GB/mka
cc: Mark G. Owens (markgoO00centurytel.net}
Myrt Webb (citvmanager&kalispell.com)
Charles Harball, Esq. (citvattornev kalispell.com)
LAW OFFICE
T+HORNTON YRON LLP
TAX . ESTATE PLANNING ® BUSINESS ® WEALTH PRESERVATION
PUVERFRONT PLAZA
3101 W. MAIN, SUITE 200
BoIsE, IDAHO 83702-2099
P.O. Box 7156
BoIsE, IDAHO 83707-1156
TELEPHONE 208-344--8600
FACSIMILE: 208-344-8720
Sent Via email to
CkcounciMkalispell. com
Mayor Kennedy and City Council
City of Kalispell
201 First Avenue East
Kalispell, Montana 59901
Re: Owl Corporation / Latecomers Agreement
Ladies and Gentlemen:
D. JOHN THORNTON, P.A.
GREGORY A. BYRON, LLM P.A.
AMBER MYRICK BELEW, LLM, P.A.
KEVIN C BELEW, LL M, P.A.
JOSEPH S. KOZLOWSKI, LL.M.
RICHARD M. WEBER, JR, LLM
WILLIAM S. RAMEY, LL.M.
JUSTIN C. JONES, LLM, P.C.
OF COUNSEL
LICENSED TO PPAC77CEIN
IDAHO, CALITORNDt COLORADO,
NEVADA, OREGON, WASHINGTON
STRATEGIC LEGAL ALL/ANCES-
ARJZONA, UTAH
This firm has been requested by Mark Owens to assist Owl Corporation with respect to
certain issues related to the Latecomers Agreement between the City of Kalispell and Owl
Corporation ("West View Latecomers Agreement"). We have had multiple discussions with
Charles Harball regarding the West View Latecomers Agreement, as more specifically outlined
in the attached letter to Mr. Harball dated December 29, 2008.
It is our understanding that the City Council meeting scheduled for February 17, 2009,
includes as an agenda item a request for approval of the preliminary plat for phase two of
Silverbrook subdivision. If this preliminary plat is approved, the subject property will be served
by a sewer line that flows into the same lift station that serves the sewer line constructed by Owl
Corporation in accordance with the West View Latecomers Agreement. If capacity at the lift
station is allocated to phase two of Silverbrook, the West View Latecomers Agreement will be
compromised due to insufficient remaining capacity to allow for connections to fund payment to
Owl Corporation, as anticipated when the West View Latecomers Agreement was entered into
with the City of Kalispell.
February 13, 2009
Page 2
We understand through Mr. Harball that he and Public Works are working on a
recommendation to City Council regarding the adoption of a formal policy for the administration
of available capacity associated with infrastructure that is subject to latecomers agreements. We
further understand that a workshop will be scheduled for February 23, 2009, to discuss the policy.
Consideration of the preliminary plat request for Siiverbrook phase two is premature due
to the outstanding issues relating to the City of Kalispell's policy regarding the administration of
capacity in the context of latecomers agreements. Approval of additional preliminary plats before
the adoption of a formal policy will only serve to further compound the issues relating to the
administration of the West View Latecomers Agreement, as outlined in the attached letter to Mr.
Harball. Such approvals will create expectations of availability of capacity, when in reality, there
will be insufficient capacity to satisfy both the West View Latecomers Agreement and Silverbrook
phase two.
For the reasons set forth above, until the City of Kalispell adopts a formal policy regarding
the administration of available capacity for infrastructure that is subject to latecomers agreements,
on behalf of Owl Corporation we are requesting that the City Council not approve any preliminary
plats, including, but not limited to, the preliminary plat for Siiverbrook phase two.
Very truly ours,
Gregory A. Myron
GB/gcr
Enclosure
cc: Mark G. Owens (markgo00CcZcep9Mtel.net)
Myrt Webb (citymanagerakalispell.com)
Charles Harball, Esq. (cityattorneylckalispell.com)
LAW OFFICE
HORNTOV YRON LLP
TAX • ESTATE PLANNING ® BUSINESS ® WEALTH PRESERVATION
R1vFAFRONT PLAZA
3101 W. MAIN, SurrE 200
Bom, IDAHO 83702-2099
P.O. Box 736
BctaE IDAHo 837071156
TELEPHONE: 208-344-8600
RcsIMILE 208-34+8720
Charles Harball, City Attorney
City of Kalispell
201 First Avenue Fast
Kalispell, Montana 59901
Re: Owl Corporation 1 Latecomers Agreement
Dear Mr. Harball:
D. JOHN THORNTON, P.A.
GREGORY A. BYRON, L JVI, PA
(06,
AMBER MYRICK Ba EW, U-K PA
KEVIN C. BELEW, U.K Nk
JOSEPH S. KOZLOWSKI, U.M.
RICHARD M. WEBEF JR, U.M.
WIU.1AM S. RAMEY, U-M.
JUSTIN C. JONES U.M, P.C.
OF COUNSEL
57XA7EG LEGALALL14NCES
AWONA, UTAH
Thank you for returning my telephone call on December 22, 2008, regarding the
Latecomers Agreement between the City of Kalispell and Owl Corporation ("Latecomers
Agreement"). As you are aware, my firm has been requested to consult with Owl Corporation
regarding the Latecomers Agreement, since we helped to coordinate the agreement in 2004.
Following our discussion, I spoke with Mark Owens regarding the remaining capacity of
the lift station into which the sewer lines flow that were extended by Owl Corporation. It is Mr.
Owens' understanding, based upon discussions with Paul Burnam in the Kalispell Public Works
office, that there is still some limited remaining capacity available at the bottlenecked lift station.
From Owl Corporation's perspective, the success of the Latecomers Agreement is
completely dependent upon both (a) the proper administration of the Latecomers Agreement by
the City of Kalispell and (b) the existence of capacity in the infrastructure which will allow users
to connect to the extended lines in order to generate fees to repay Owl Corporation for the cost
of improving the lines. If either or both of these issues fail, then Owl Corporation's ability to
recover its investment will be negatively impacted.
Although we understand that the City of Kalispell is pursuing a long-term solution to the
bottleneck that exists at the subject lift station, any solution will be complicated by the estimated
$12-15M costs of the required infrastructure. When the Latecomers Agreement was entered into,
Owl Corporation reasonably expected that growth and annexations in North Kalispell would be
managed consistent with the available infrastructure and reasonably did not anticipate having to
worry about whether there would be sufficient capacity to accommodate the connections required
for the recovery of its investment.
The most appropriate interim and long-term solution for the remaining capacity at the
bottlenecked lift station, and any additional capacity that becomes available through expiring
preliminary plats or otherwise, is to reserve the capacity for users who hook-up to the sewer line
that was constructed by Owl Corporation. Reserving the capacity to fulfill the Latecomers
Agreement will send a clear message to potential investors that the City of Kalispell will preserve
the expected benefits to those investors who expend their own funds to help the infrastructure
needs of the City of Kalispell. More significantly, preserving the capacity will avoid sending a
chilling message to potential investors regarding the anticipated cooperation from the City of
Kalispell as the guardian of their investment.
Preserving capacity for the Latecomers Agreement is consistent with the expectations of
both Owl Corporation and the City of Kalispell when the Latecomers Agreement was entered into,
and is consistent with the direction that the City Council has provided to Public Works regarding
not over committing the capacity of the infrastructure to potential users. The assessment of
capacity should not just focus on filed preliminary plat applications, but should also take into
account the capacity necessary to fulfill the City of Kalispell's obligations as guardian of the
Latecomers Agreement.
With respect to the delinquent payments owed for the prior hookups to the water line that
is subject to the Latecomers Agreement, we understand that you have requested written responses
from the users who were not originally assessed hookup fees, and that you anticipate bringing
declaratory actions in the near future regarding the fees. Please keep Owl Corporation informed
of the responses and the status of the declaratory actions.
Unlike other developers, Mark Owens, on behalf of Owl Corporation, has shown great
patience with the City of Kalispell regarding the administration of the Latecomers Agreement.
However, Mr. Owens cannot afford to allow the City of Kalispell to disregard its obligations
under the Latecomers Agreement and must ensure that Owl Corporation's rights are preserved.
As you can appreciate, the matters relating to the Latecomers Agreement and the remaining
capacity at the bottlenecked lift station need to be proactively addressed with the City Council and
Public Works as soon as possible. We look forward to receiving updates regarding your
I- •
recommendations to the City Council and Public Works concerning the remaining capacity and
the City's obligations with respect to the administration of the Latecomers Agreement.
Very tnil ours,
v ua'y ours, --G Grego
GB/gcr
cc: Mark G. Owems