Loading...
6. Resolution 4778 - Transfer of Assets - Village County Sewer DistrictCharles A. Harball City Attorney City of Kalispell Office of City Attorney 312 First Avenue East P.O. Box 1997 Kalispell, MT 59903-1997 MEMORANDUM TO: Mayor Pamela B. Kennedy and Kalispell City Council FROM: Charles Harball, City Attorney Chris Kukulski, City Manager Tel 406.758.7708 Fax 406.758.7771 charball@kalispell.com SUBJECT: Transfer of Assets of Village County Sewer District MEETING DATE: March 17, 2003 BACKGROUND: Since 1982 the Village County Sewer District, a Rural Improvement District, (previously known as the North Village Sewer District) has been in existence. The City agreed in 1982 to accept sewerage from the District into its system. In 1991 the City entered into an agreement with the District in which the City shared certain functions of operations and administration of the system with the District. This was in anticipation of the time in which the District would be able to retire its debt, transfer its assets over to the City and then dissolve. We have been notified by the District that the debt has now been entirely retired and it is now electing to transfer its assets to the City. An independent audit is being conducted and the elements of transfer will be identified as of March 31, 2003. RECOMMENDATION: The Counsel should accept the assets of the District as of March 31, 2003, pursuant to its agreement with the District. FISCAL EFFECTS: From March 31, 2003 forward all revenues including hook-up fees within the area of the District will be collected and maintained by the City. Respectfully sub 'tted, Charles Harball, City Attorney .C2�-b Chris Kukulski, City Manager RESOLUTION NO.4778 A RESOLUTION TO ACCEPT THE TRANSFER OF OWNERSHIP OF THE PHYSICAL PLANT AND OTHER ASSETS OF THE VILLAGE COUNTY SEWER DISTRICT AND TO ASSUME ALL RIGHTS AND OBLIGATIONS OF THE SEWER DISTRICT. WHEREAS, in 1982 the North Village Sewer District, a Rural Improvement District, and predecessor of the Village County Sewer District, entered into a Sewer District Connection Agreement with the City of Kalispell in which the City agreed to accept sewerage from the District into the City's Sanitary Sewerage Collection System; and WHEREAS, in 1991 the City and the Village County Sewer District, successor of the North Village Sewer District, entered into an agreement in which the operations and administration of the District's system was shared with the City and in which it was agreed that the District would continue to have title ownership to the physical plant of the District sewer system until such time as all bonded indebtedness and other indebtedness of the District was paid in full; and WHEREAS, the District has notified the City that all of its bonded indebtedness and all other indebtedness has been paid in full and it now elects, pursuant to its agreement with the City, to transfer the balance of its assets over to the City with the intention to dissolve the District pursuant to Montana law; and WHEREAS, the District has engaged an independent audit of its assets and obligations which audit shall specifically identify the elements of transfer as of March 31, 2003. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION I. The City shall accept transfer of ownership of all remaining assets of the Village County Sewer District as set forth by the independent auditor and shall assume all rights and obligations of the District as of 12:00 midnight, March 31, 2003. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, THIS 17th day of March, 2003. Pamela B. Kennedy Mayor ATTEST: Theresa White City Clerk SEWER DISTRICT CONNECTION AGREEMENT N THIS AGREEMENT, made and entered into this day of , 1982, by and between the City of Kalispell, hereinafter referred to as City, and the North Village Sewer District, a Rural Improvement District, hereinafter referred to as District. W I T N E S S E T H: WHEREAS, the District deems it necessary to construct and has provided for the construction of a Sanitary Sewerage Collection System within the North Valley County Sewer District to provide sanitary sewerage facilities for the District area and in order to reach an outlet and discharge said sanitary sewerage, it is necessary to connect the Sanitary Sewerage System, hereinafter referred to as the District Sanitary Sewerage System, to the City's Sanitary Sewerage Collection System; and WHEREAS, the District has by its authorized agents negotiated with the City as to the size, place of receipt, necessary easements, construction standards, volume of flow, rate of payment, hook-up fees, annexation, assessment, boundaries and S.I.D.s; and WHEREAS, the City is willing to permit said District to connect with the City's Sanitary Sewerage Collection System; and WHEREAS, it is to the mutual benefit of the City and the District to provide for a Sanitary Sewerage Collection System within the area of the District as described in Paragraph 13 of this Agreement; and WHEREAS, inasmuch as the proposed Sanitary Sewerage System connection would be solely beneficial to the District, the District should bear the entire expense associated with the connection to the City's existing Sanitary Sewerage Collection System. NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties do hereby agree as follows: 1. The City shall accept sewerage from the District into the City's Sanitary Sewerage Collection System at a point located at the intersection of Main Street and Arizona Street, and the City shall transport to its Treatment Plant said sewerage received from the District at said point of reception. 2. The City shall grant easements across City property for the installation, operation and maintenance of the District improvements and the City may connect City owned facilities in Lawrence Park to the force main, at no charge to the City for connecting when said facilities are constructed. 3. The sewerage received by the City shall be non -septic and shall not be of a quality less than the sewage inflow to the Wastewater Treatment Plant of July 1, 1981. 4. When the volume of flow from the District exceeds 0.145 million gallons per day, District shall be required to discharge during off-peak flow hours. 5. It is understood and agreed between the parties that off-peak flow hours shall be between 10:00 p.m. and 6:00 a.m., and volume of peak flow and off-peak flow hours shall only be modified by written agreement between the City and the District. 6. The District shall pay to the City for sewerage received by the City from the District, at a rate based on the amount of the metered flow, with metering to be provided by the District. 7. The usage rate charge by the City to the District shall be the same rate charged by the City to its residential users located outside the City, based on the rate charged for the first 20,000 gallons of bi-monthly usage. 8. It is understood that the District may charge its users a legal hook-up fee, based solely upon the amount needed by the District for debt retirement, maintenance and operation, and the City shall not be entitled to any hook-up fee prior to annexation. 9. If any portion of the District is annexed to the City, the District shall continue to retire all outstanding indebtedness of that portion of the District annexed and the City shall assume the maintenance of any sewer mains, appurtenances within the annexed area, at which time the City's established rate for service and hook-up shall apply. It is further agreed that upon annexation the District shall dedicate all sewerage improvements, with necessary easements to the City. 10. It is agreed between the parties that when property within the City served by the Sewerage System are assessed for improvements, modifications and/or enlargements of the City Sewerage System, properties within the District shall also be assessed; said assessment to be pro -rated based on the total volume of waste water recorded at the Treatment Plant to the volume recorded from the District. 11. The District by this agreement waives the right to protest annexation to the City of Kalispell, on all or any part of the District, provided, however, that the City shall not initiate annexation procedures under Section 7-2-4312 until development within the portion to be annexed reaches 80% of the approved plan development of the area to be annexed. 12. The improvements constructed by the District shall be approved by the Montana State Department of Health and Environmental Sciences and the City, and be constructed in accordance with City standards. 13. The District boundary covered by this Agreement shall be within the total area between Whitefish Stage Road and the Stillwater River, lying south of Reserve Drive and between Whitefish Stage Road and the Whitefish River, lying south of Reserve Drive and north of Evergreen Drive, said total area to be increased or decreased only by written agreement between the District and the City. 14. The maximum capacity of any of the District discharge shall be limited to the capacity of the existing 12" sewerage line in First Alley East, said capacity is hereby determined and agreed to be twelve hundred gallons per minute at peak flow rate. 15. The City shall construct a 12" sewer line from the intersection of Main and Arizona Streets to the 12" main existing on January 1, 1981, on First Alley East or any other main within the City which will allow the District the same rate of flow with the cost of said construction being borne by the City. All other necessary improvements required for the transmission of District sewerage to the Main and Arizona Street intersection shall be borne by the District. 16. The construction of water systems, roads, walkways, and storm drainage shall also be constructed in accordance with City standards. 17. The District hereby waives the right to protest S.I.D., after annexation, for the construction of curbs, sidewalks, sewage storm drains and street lighting, if the majority of occupied properties so request, or it is deemed, by the City, to be necessary for the health, safety and/or welfare of the citizens of the annexed area. This waiver shall attach to said lots and parcels of land in the District and is binding upon the heirs, devisees and assigns of the District. 18. No owner of any parcel of land within the District shall be allowed to hook-up to, or to contribute to the flow of the sewer main connected to the City's Sewerage Treatment System unless and until said owner has furnished to the City a waiver of right to protest annexation to the City and a waiver of right to protest the creation of Special Improvement District for the sewerage improvements, water system, roads, walkways and sewer storm drains and street lighting and a waiver of right to protest annexation in accordance with this Agreement. CITY OF KALISPELL B Mayor i� Attest: NORTH VILLAGE SEWER DISTRICT 2er Z. Dua a A. Bitney, Director Velva Bruyer, Directo M. Dean Jelli c n, Dire AGREEMENT The City of Kalispell (hereafter "the City") and Village County Sewer District (hereafter "the District") hereby agree as follows: 1. INTRODUCTION AND DEFINITIONS 1.1. The District is a county sewer district, organized and operating for the purpose of providing sanitary sewer services to property owners within the territory as generally shown on Exhibit A annexed hereto. Such territory has properly been included "in the District' either by original inclusion in the territory of the District at its formation, or by later annexation in the manner provided by Montana law. Currently the District is supplying services to property owners within the territory of the District as set forth on Exhibit A. - 1.2. On July 15, 1991, the City Council voted to annex into the City, certain territory within the District and being served by the District. The effective date of such annexation was August 15, 1991. 1.3. The District has incurred a bonded indebtedness for the construction of sewer lines, pumping facilities, and other equipment related to the operation of the Sewer District. 1.4. The parties enter into this agreement for the purpose of providing for the maintenance and operation of existing and future lines and equipment which the District may use from time to time to supply sanitary sewer services to properties. The parties further intend that nothing in this agreement shall interfere with the Districts ability to repay its bonded indebtedness or other reasonable expenses of operation. 1.5. This agreement will set forth the parties' respective rights and obligations for maintenance and operation of the sewer system, and for administration of the District and its operations. Certain expenses will be the responsibility of the City only. Certain expenses will be the responsibility of the District only. 1.6 For purposes of this agreement, "physical plant' shall mean the main collection system (excluding service lines and connections), lift stations, and force mains, as shown on the record drawings of Fairway Boulevard Townhouses, River View Greens, Glacier Village Greens, Edgerton School, and Whitefish Stage Interceptor, as of the date of this agreement, all of which drawings are annexed hereto as Exhibit B. It is the intention of this definition to include all of the physical sewer plant operated by the District prior to this agreement, and any additions to such existing physical sewer plant system, constructed by the District after the date of this agreement, pursuant to this agreement. 2. OPERATIONS AND ADMINISTRATION 2.1. Effective on October 1, 1991, the City shall assume specified obligations in the operation, maintenance, and repairs of the physical plant and administration of the District, including the payment of costs of such operations and administration as follows: (a) The energy costs, including electricity, gasoline, diesel, natural gas, etc., of operation of the physical plant, shall be paid by the City. (b) The City shall provide, and pay the expenses of, the staff and labor to operate and maintain the physical plant, and the staff and labor to effectuate any repairs or replacement to the physical plant which may become necessary or advisable from time to time. (c) The City shall pay the cost of consumables (such as lubricants, filters, etc.) and replacement parts or units of the physical plant which shall be reasonably required to be replaced from time to time. (d) The City shall pay the cost of administering the operation and maintenance of the physical plant, including, but not limited to, general overhead costs for managing the City's employees, bookkeeping, tax filing, etc.. The City shall specifically prepare from time to time, at the request of the District, an accounting of the fees collected by the City and of the disbursements made to the. District as they relate to this agreement. (e) The City shall assume the obligation and pay the costs (including litigation costs and attorney fees when necessary) of collecting funds from users of the District sewer system, as set forth below, whether those users are in or outside of the District, or in or outside the City limits. On behalf of the District, the City shall specifically assume the following administrative obligations and associated costs: 1) The City shall collect all hook-up fees for new residences and other facilities, in amounts determined by the District board from time to time. The parties anticipate that such collection of hook-up fees shall occur as part of the administration of the City's building permit authority. All such hook- up fees shall be transferred to the District as soon as practicable after collection. The District shall be responsible for providing reasonable notice to the City of the amount of hook-up fees to be charged to respective residences and other facilities from time to time. 2) Beginning January 1, 1992, the City shall collect and retain all periodic usage fees as follows: a) As to properties within the District, and within the City, the City shall charge a usage fee equal to the usage fee which the City charges to other similar users within the City. b) As to properties within the District (or served by the District), but outside the City, the City shall charge a usage fee at no higher rate than the City charges to any other similar users outside the City. To the extent that the District has billed for or collected any periodic usage fees after October 1, 1991, and before January 1, 1992, the District shall deliver to the City as soon as practicable, all such collected fees and any receivables accrued during such period. 2.2. The City shall have the authority to determine what service needs, repairs, or replacements of portions of the physical plant are reasonably necessary or advisable from time to time. The City shall be responsible for the payment of all such service needs, repairs, and replacements incurred after the date of this agreement. 2 2.3 The District shall be responsible for the cost of construction of additions or ' expansions to the present physical plant, such as but not limited to, installing additional or larger capacity main lines and installing holding tanks (as opposed to repair or replacements, which are the obligation of the City under Paragraph 2.2, above) which are reasonably necessary to serve properties then within the District in a reasonably cost efficient manner. By way of example, the District shall be responsible for the cost of construction of holding tanks in the event that such are required to comply with the off-peak discharge requirements set forth in the 1982 agreement between the parties. The City shall be consulted prior to beginning any design or construction anticipated by this paragraph, and the design and construction recommendations of the City shall be respected, so long as those recommendations are also in the best interests of the District. All construction anticipated by this agreement shall be in accord with all applicable City ordinances and any other governmental requirement then in effect. 3. LIABILITY LIMITATIONS 3.1. Both the City and the District shall be liable to the public and to each other, only in regard to the respective responsibilities which each assumes under this agreement. Neither the City nor the District shall be liable to the public or to others for the acts of the other. Both the City and the District shall have the right, but not the obligation, to carry liability insurance. Nothing in this agreement is intended to restrict any rights or restrict any immunities from liability which either may have under Montana law from time to time. 4. DISTRICT REVENUES 4.1. The District shall continue to collect all assessments taxed to properties within the District, as determined by the District board to be necessary from time to time. All such assessments collected shall be the property of the District. All costs associated with such assessments shall continue to be the obligation of the District. 4.2. The District shall continue to pay all costs of retiring the bonded indebtedness, including principal, interest, and administrative expenses incurred for the purpose of repaying such bonds. 4.3. The District is currently engaged in litigation for collection of payments allegedly owing to the District. All costs, including attorney fees and court costs, of continuing with such current litigation shall be paid by the District. Any revenues to the District resulting from such litigation shall belong to the District. 4.4. Nothing in this agreement shall prevent the District from assessing property within the District, or charging hook-up fees, or otherwise generating revenue as allowed under Montana law, for the purpose of paying any accrued or accruing debt of the District, including, but not limited to, any debt which may result from a judgment of liability against the District in current or future litigation in which the District may be a party. 4.5. The District generates revenue, for repayment of bonded indebtedness and for operational and administrative costs, from the following sources: (a) Hook-up fees from both within and outside the District. (b) Tax assessments. 3 Under no circumstances during the course of this agreement shall the City take any action which will interfere with the right of the District to assess hook-up fees or tax assessments in amounts determined by the Board of the District; whether or not any of the properties affected by such hook- up fees or tax assessments are within the territory of the City of Kalispell. . 5. EXPANSION OF THE DISTRICT 5.1. The District shall not expand its boundaries or provide service to any properties outside its boundaries without the express written permission of the City. Otherwise, the District (and not the City) shall have the exclusive right to expand the boundaries of the District, pursuant to Montana law. Included in that right shall be the right of the District to set conditions on such annexation, including, but not limited to, the payment of fees to the District by the property owners seeking annexation of their property into the District. The District has already made a commitment by its board to expand the boundaries of the District to include the Nazarene church and adjoining property described on Exhibit C. The City hereby consents to such annexation into the District, so. long as the Exhibit C property owner waives the right to protest annexation into the City. 5.2. Nothing in this agreement shall allow the District to expand its boundaries if doing so would constitute a violation of any laws or regulations of the United States government or its political subdivisions, or the State of Montana or its political subdivisions; or if doing so would violate any contractual agreements of which the District, or the City, or both, are parties. 6. DISTRICT DEBT 6.1. Except as otherwise specifically provided for below, the District shall not incur any further bonded indebtedness without the express prior written consent of the City. (a) Nothing in this agreement shall prevent the District from refinancing existing debt obligations so long as doing so does not extend the term of payoff of such existing obligations, and so long as such obligations are amortized and paid as rapidly as existing indebtedness. (b) Nothing in this agreement shall prohibit the District from incurring further bonded indebtedness to finance and build additions or expansions to the present physical plant (as opposed to repair or replacements, which are the obligation of the City under Paragraph 2.2, above) which are reasonably necessary to serve properties then within the District in a reasonably cost efficient manner. In such event, the City shall be consulted prior to incurring such bonded indebtedness, and the recommendations of the City shall be respected, so long as those recommendations are also in the best interests of the District. 7: TRANSFER OF OWNERSHIP OF PHYSICAL PLANT TO THE CITY 7.1. The District shall continue to have title ownership to the physical plant of the District sewer system until such time as all bonded indebtedness and other indebtedness of the District is paid in full. Thereafter, upon request by the City, or upon its own initiative, the District shall transfer all title ownership to the physical plant to the City, and the City shall accept such ownership. Thereafter, the District shall be dissolved pursuant to Montana law then in effect. 4 8. EARLIER AGREEMENTS 8.1. To the extent that this agreement is contrary to any pre-existing agreement between the parties, then this agreement shall be considered an amendment to such earlier agreement. To the extent that the 1982 "Sewer District Connection Agreement" is not necessarily superceded by this agreement, then such 1982 agreement shall remain in full force and effect. Such agreement is annexed hereto as Exhibit D. 9. ABSTRACT OF AGREEMENT 9.1 Either party may file of record an abstract of this agreement. Such abstract shall consist of the agreement itself without the annexed exhibits. The City shall supply copies of this full agreement and its exhibits upon request of any person or entity, and upon payment of reasonable copy charges. 10. APPROVAL BY RESPECTIVE GOVERNMENT BODIES 10.1. The undersigned hereby acknowledge that this agreement was voted upon and approved by the City Council of the City of Kalispell on December 16, 1991, and as voted u n and approved by the Board of Directors of the Village County Sewer District on k , 199•, Copies of the City and District resolutions are annexed hereto as Exhibits E and A, respectively. THE CITY OF KALISPELL Dated: 1OZCSQLW�� 1991. By: Dougl D. Rauthe, Mayor of the City of Kalispell ATTEST: Amy H. Kobinson, Finance Director for the City of Kalispell VILLAGE COUNTY SEWER DISTRICT Dated: mar �) a� By: G Presi 2"'SiT, S ret ry STATE OF MONTANA : ss. County of Flathead ) On this day of , 199/, before me, the undersigned, a Notary Public for the State aforesaid, personally appeared Douglas D. Rauthe, Mayor of the City of Kalispell, and Amy 11. Robertson, Finance Director for the City of Kalispell, known to me to be the persons whose names are subscribed to the foregoing instrument, and acknowledged to me that they executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal the day and year in this certificate last above written. Notary ublic for t e State of Montana Residing ati My Commission expires6$-W/ iff'i STATE OF MONTANA . ss. County of Flathead ) On this LI:!\-day of �� , 1992. befo e , t e undersigned, a Notary Public for the State aforesaid, personally appear and , the President and Secretary, respectively, of Village County Sewe'rVstflct, known to me to be the persons whose names are subscribed to "the foregoing instrument, and acknowledged to me that they executed the same on behalf of such corporation. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal the day and year in this certificate last above written. Notary Public for the State of na ' '. Residing at Kalispell, Montana f My Commission expires L