11-13-89 S&W Comm MinutesAttendance: Chairman Nystul, Vice Chairman Hopkins, Councilman Furlong.
Others Present: Council President Saverud, Councilman Gunnerson, Mayor Kennedy,
DPW Hammer, S/W Supt. Van Dyke, Asst. S/W Supt. Allen, Chief WWTP Operator Olsen,
Scott Anderson of WQB, Dennis Carver of Carver Engineering, Jack Fallon of Evergreen
Water District, Bill Astle, Attorney, City residents Colin Wills, Bob Hafferman,
T. R. Flynn, and Howard Hammer, Dug Ellman of the Kalispell Weekly News, and Rick
Hull of The Daily Interlake.
EVERGREEN SEWER - EPA GRANT - ANNEXATION C. Nystul requested Mr. Anderson to
provide an update of the grant process, implications it may have on the city, and
requested Mr. Carver to give an update on the design status of the WWTP. C. Saverud
also has a statement to make before 5:00 P.M.
Mr. Anderson explained the construction grant program in 1990. Evergreen has been
allocated 3.873 million dollars of the requested 6.8 million dollars. There is more
demand for EPA funding than money available. EPA hopes to allocate an additional
1.6 million dollars out of the 1990 appropriations. They have met with the County
Commissioners regarding Evergreen's local share. Two conditions of the grant which
were imposed on Evergreen are as follows: 1.) Execution of an interlocal agreement
with the City of Kalispell. Mr. Anderson stated annexation is not an issue of EPA,
but is an issue between Kalispell and Evergreen. 2.) Development of a financial
plan for the local share. Evergreen is working aggressively on this and considering
an RSID process. The facility plan was approved based on the assumption that Evergreen
would connect to the City of Kalispell. A letter from Mayor Kennedy outlining City
conditions is included in the facility plan. EPA has accepted the conditions in
good faith as requirements of the City of Kalispell. EPA is waiting for Evergreen
and Kalispell to resolve issues in order to proceed with the process.
C. Furlong questioned when EPA agreed to the facility plan, which included the letter
by the Mayor stating conditions, was it an acceptable or reasonable plan? Mr. Anderson
responded yes, at that point it outlined a method by which the two jurisdictions could
come to agreement. It is recognized that additional negotiations have to take place,
but this is the basis for the grant condition.
C. Furlong questioned if this includes the requirement of annexation as stated in the
letter of the Mayor. Mr. Anderson stated understanding is that those are the terms
in which Kalispell will provide service to Evergreen. C. Furlong questioned if the
state believes this to be a reasonable position. Mr. Anderson stated EPA will not
pass judgement but annexation is not unusual and most cities in the state would
require the same.
C. Nystul questioned the time frame for Evergreen and Kalispell to reach agreement.
Mr. Anderson responded a condition in the grant states "in a timely manner", followed
up by a letter which states an agreement is expected to happen within one year of the
date of the letter.
C. Nystul questioned if it is the general philosophy of Water Quality and EPA that as
many would hook on to a plant as possible to eliminate some small plants. Mr. Anderson
responded yes, in terms of cost savings, regulatory standpoint, and treatment performance
standpoint.
C. Nystul questioned if it will be economical to Kalispell to process more gallonage
per day through the plant. Mr. Anderson responded if the fixed cost of expansion of
the plant remains the same with more users it will cost each user less, in general.
C. Hopkins questioned if there will be a requirement for substantial hook up. Mr. Anderson
responded it is a requirement of the program that the majority of connections be made.
Mr. Anderson stated grant eligibility is based on existing users connected to the system.
Typically the requirement should be met within one year of construction completion.
C. Gunnerson questioned what is considered to the be the majority. Mr.. Anderson responded
grant eligibility is based on all existing potential users hooking on. If a pipe
passes a home that home is a potential user.
C. Furlong stated the district has not yet been defined. Mr. Anderson stated Evergreen
is now working on boundaries within the confines of the planning area which was used
in the facility plan; i.e., 1,940 users.
C. Furlong stated one condition of the city states the boundary area must be decided
berfore the agreement is made. He questioned the required hook up percentage of the
defined boundary.
Mr. Fallon responded Evergreen has tentatively defined the boundary and is working on
assessor numbers and definition of land. Evergreen believes it is their responsibility
to provide a proposal to Kalispell that the City Council can review, and accept or
modify.
C. Furlong questioned the percentage requirement for hooking on within the defined
boundary.
Mr. Carver responded the boundary is close to the boundary as defined in the facility
planning document which was the Evergreen Water District boundary changed slightly to
include entire parcels of property. The grant condition specifically states that
all potential users will connect to the system within one year. If only 80I of
potential users hook on then 20% of the grant funding could be subject to reimbursement.
Mr. Anderson stated an incentive for hooking on exists through an RSID. The County
is willing to assist in obtaining compliance.
Mr. Astle stated a situation could not exist in the first phase for people who are
benefitted directly, assessed as an RSID, and be required to annex into Kalispell.
Since they have been taxed for the benefit they should not be required to annex.
C. Furlong stated waiver of protest of annexation is not synonymous with the annexation.
It is only a condition which may occur in the future.
Mr. Astle stated it is a condition in which Evergreen can say no. By virtue of their
being required any condition is a condition that the law says is not able to be placed
on them when they are being placed under a tax. The City Attorney is in agreement with
this.
C. Furlong expressed concern that the letter which was sent under signature of the Mayor
states a condition clearly spelled out regarding annexation and Evergreen signed the
grant agreement with this condition stated.
Mr. Fallon stated Evergreen's response to the May 4 letter was acceptance subject to
further negotiation. C. Furlong stated Evergreen is not negotiating if it is absolute
that Evergreen will not sign the waiver of protest of annexation.
Mr. Hafferman explained two developer extension agreements in which he was involved.
Both agreements; i.e., Bitney and Greenacres, include hook up fees. He expressed
concern as a tax payer that he does not want to pay any more taxes or lose city services
because of Evergreen. He believes all fees and charges per gallon should be equal
with Evergreen as is with Kalispell.
Mr. Hafferman stated in the Rules and Regulations it is stated that there is an increase
in rate that is charged whenever anyone exceeds the specified BOD limit and the TSS
limit. He explained the Evergreen area is not feasible for annexation into Kalispell
at this time. A cost feasibility study should be prepared before annexation is
decided.
C. Nystul at this time requested for time for C. Saverud to state his announcement.
C. Saverud informed the Councilmen present that C. Hopkins has to leave the meeting
and in order to coordinate with his schedule a Council Workshop has been set up
following the Sewer and Water Committee meeting on this day primarily for the purpose
of discussing the general operation of the Clerk -Treasurer Office with the Clerk -Treasurer
before Wednesday November 15, 1989, which is his final day. He invited any Council
people who can stay and anyone who can attend. Another workshop will be set up for
discussion of the transition of government. By law a special election date has to be
set within 20 days of the election just held. He also opened the meeting to the citizens
for effective government or anyone else interested in the transition process.
C. Furlong stated he would prefer the date of the election be set at the Council meeting
of Monday November 20, 1989. Persons unable to attend the meeting prior should make
their feelings known. C. Nystul concurred.
C. Hopkins stated the timing of the election sets the timing for everything else for
the City Manager transition. One suggestion is to have a workshop following the
regular Council meeting and set a special meeting to set the date of election.
C. Nystul requested those who meet this week provide minutes of the meeting to persons
unable to attend and Monday morening it can be read and understood what the issues
are and decide at the Monday evening meeting.
C. Saverud suggested to have a committee meeting this week and set a special committee
meeting of the whole at 6:30 P.M. Monday prior to the council meeting and a recommendation
could be made at this time. The Committee agreed.
Thursday November 16, 1989 at 7:30 P.M. a Committee of the Whole will meet. Monday
November 20, 1989 at 6:30 P.M. a Committee of the Whole will meet prior to the Council
meeting.
C. Nystul at this time reintroduced the Evergreen sewer issue stating the primary
purpose of the meeting today was to meet and ask questions of Scott Anderson.
Mayor Kennedy stated this is surely not the first time waiver of protest of annexation
has been required. Mr. Anderson responded the Waiver of the Right to Protest Annexation
is almost always required where a city has extended services to an area outside the
city limits. EPA has funded a number of projects with those conditions imposed; i.e.,
Billings and Missoula.
Mr. Astle stated other projects have been researched and none were similar to the
Evergreen/Kalispell project in which ownership will not be the city's. Most of the
agreements have always been between developers. He questioned if there is a way for
the council or water quality to address the fact that two attorneys, the city's and
Evergreen's, both agree that the grant condition would prohibit the parties from
entering into an interlocal agreement in which Evergreen would agree to require a
waiver of protest of its customers in Evergreen.
Mr. Anderson responded Mr. Astle has clearly pointed out that the district cannot
agree to signing the waiver. This is not to say that the city cannot impose that
condition on the users in the Evergreen district.
November 13, 1989 SEWER AND WATER COMMITTEE MINUTES Page 4
Mr. Astle stated if it were like Billings and Missoula the city could impose annexation.
Evergreen cannot provide the waiver because they are a utility providing its customers
in Evergreen. It is an impossibility. It is a condition imposed by WQB that hook ups
cannot be obstructed by requiring annexation of Evergreen customers under the EPA grant
to Evergreen.
Mr. Anderson stated there has to be a written agreement between the district and Kalispell
whereby the City of Kalispell provides wastewater treatment service to the district.
Mr. Astle agreed and stated this would have been simple, but, in addition, the district
was to come up with a financial plan of which they have chosen RSID as being the most
successful option. EPA is mandating Kalispell treatment under grant terms and requiring
hook up in Evergreen.
Mr. Anderson stated the district chose the RSID process, which might preclude the
interlocal agreement according to the terms the city might impose. This is the choice.
of Evergreen.
Mr. Astle questioned if Evergreen were to agree with the city in the interlocal agreement
that Evergreen as part of the agreement would require waiver of protest before any user
in Evergreen can hook on will this violate the terms of the grant if a user refuses
toa waive the right and cannot provide the hook up that the grant requires.
Mr. Anderson stated if this happens EPA will require the district to pay back the
grant. This is something which will jeopardize the grant. The last thing wanted in
the program is to build a facility that is not used.
C. Saverud questioned for clarification purposes if the Evergreen system is funded by
EPA and probably RSID what is the guarantee the city has if accepted that the city's
charges are going to be met if only 80% hook on and the district has to refund 20Z of
the grant? He questioned the mechanism for repayment of the difference.
Mr. Fallon responded the monthly user fee is the mechanism to pay the city for treatment.
The monthly user fee is based on the gallons that go through the system regardless of
how many people hook on. The city will be paid for what is treated because Evergreen
will be paid for what is being transported.
C. Saverud questioned the provision for bad debt or non-payment. Mr. Fallon responded
it will be between the city and Evergreen to work out a mechanism for delinquency.
C. Saverud questioned if Mr. Anderson is convinced that the design of Kalispell's
system and the design of Evergreen's system are compatible. Mr. Anderson responded
from a technical standpoint he sees no reason why the new facility cannot accept the
flow from Evergreen. C. Saverud questioned if the type of flow is compatible as well
as the gallonage. Mr. Anderson responded he does not see any reason why the treatment
process would be affected from the type of flow from Evergreen.
Mr. Flynn stated he has had conversation with Mr. Anderson and both were in agreement
that Evergreen should post bond for payment.
C. Nystul called for further questions from the Council to Mr. Anderson.
C. Furlong commented to Mr. Astle his concern is that one of the postures of negotiation
was the waiver of annexation. He believes this to be a fair requirement from the
City of Kalispell and is a requirement that the Evergreen Water and Sewer district
and the people of Evergreen have to handle on their own.
Mr. Astle stated he questioned Mr. Anderson that if the provision was drawn tonight;
i.e., signed waiver of protest would be a requirement as a condition in the interlocal
INUVemuer l3, I'10J JLWLK AIND WAILK UUMML'1TEE MINUTES Page 5
agreement and the users in Evergreen refuse to sign, would it violate the grant.
Mr. Anderson responded yes, it would violate the grant. Mr. Astle questioned that
if WQB is to require Evergreen hook ups and also require to utilize Kalispell's plant,
why did the grant not include the very simply requirement on the city that they would
not be able to receive their grant on the upgrade unless they allowed Evergreen in
without conditions?
Mr. Anderson respondedhe cannot answer the question and clarified that Kalispell
received a grant under old requirements. All potential new hook ups in the area
were considered when drawing the planning area, which included Evergreen. Under the
old rules in the grant program EPA can fund an unspecified plant capacity. In
addition, EPA is not requiring annexation. If the city requires the waiver of protest
of annexation the district will have to attempt to live with the requirements. He
questioned if Evergreen will choose to annul the grant if Kalispell passes the
annexation requirement.
Mr. Astle stated if EPA is saying the requirement is not a violation to the grant this
changes his argument to the city. Both Mr. Astle and City Attorney Neier have reviewed
the condition and both agree that the provision cannot be in the interlocal agreement
because it violates the grant. If the City Council states it is an absolute condition,
that there will not be a way for Evergreen to use the Kalispell plant without annexation,
Evergreen will annul the grant.
Mr. Anderson questioned what the district will do if this happens. Mr. Astle responded
the city is requiring Evergreen Sewer and Water to require annexation of its own
customers at the time of hook up. This is not like Billings and Missoula, whereas
the cities are taking on new customers directly. In this particular area a contract
will exist interlocally to not allow any hook ups in Evergreen unless a waiver of
protest is signed. Mr. Anderson questioned why the requirements could not be imposed
on the users in the Evergreen district.
C. Nystul stated the provision requiring substantial hook up is in the grant. If
Kalispell requires Evergreen have a signed waiver before hooking on, by Kalispell
and Evergreen entering into a interlocal agreement which states this Evergreen
and EPA's agreement, which says everyone shall hook on, is in violation.
Mr. Anderson clarified the federal share will be calculated according to the number of
hook ups.
C. Nystul stated Evergreen is, in good faith, entering into a grant with EPA and an
interlocal agreement with the city. The "bottom line" is that they have no ability
to enforce hook ups on the community because to hook up, the waiver of protest of
annexation is required. They cannot guarantee 100I hook up and at the same time
agree to the interlocal agreement.
Mr. Astle stated there is a good chance that many of the Evergreen residents will not
want to hook up. This condition historically has been rejected in the Evergreen area.
They will protest annexation and will use this to not hook up to the system. A conflict
exists with the Evergreen/EPA grant condition and the City of Kalispell's condition.
Mr. Anderson responded the conflict does not exist. The federal share will be paid
based upon the percentage of hook ups. An interlocal agreement is mandatory for
guaranteed treatment.
Mr. Astle stated if the condition exists it is an obstruction of the grant enforcement.
Mr. Gunnerson stated he is in full support the condition be eliminated in a sense that
if he were a property owner in the Evergreen area he would not want the City of Kalispell
'November 13, 1989 SEWER AND WATER COMMITTEE MINUTES Page b
or any other entity to force annexation. In the past the city has dealt with property
owners of a development, not individuals.
C. Furlong expressed disagreement.
Mr. Olsen stated he is a user who lives in the city who is opposed to the entire
project. The city has already wasted thousands of dollars. He questioned the benefit
to Kalispell in accepting Evergreen sewage.
DPW Hammer stated Mr. Astle has misstated three different times in commenting to Mr.
Anderson that the EPA grant's condition is forcing Evergreen to hook up to Kalispell's
sewer system. This statement is not correct. Evergreen has another option which was
to create their own treatment plant. The EPA and the WQB are not forcing Evergreen
to hook into Kalispell's system. It is Evergreen's choice because it is economically
feasible and a grant will not be given to Evergreen for more money to build their own
treatment plant.
Mr. Astle stated the grant reads that Evergreen must use Kalispell's system. EPA made
the terms of the grant, not Evergreen.
Mr. Anderson stated this is a result of the planning process. The district has agreed
to this. The district and their engineer approached the WQB with the engineering plan,
the cheapest and most desired option. They passed a resolution accepting the
recommendations of the plan. WQB then approved the plan, wrote an environmental
assessemnt, and provided a grant based on the recommendations in the facility plan.
If terms cannot be met with the city then a sewage treatment plant can be built,
but it will revert back to the planning stage, etc. There will not be any more
available grant money. The district will have to conduct their own feasibility
analysis for affordability. It is not ruled out. EPA did not dictate where the
sewage would be treated. All grant money is given only through specific planning
and environmental review processes. This grant is tied to the option of having the
sewage treated by Kalispell.
Mr. Astle stated there are a lot of other options. In Evergreen's dealings with the
city his advise is that Evergreen is dealing with a grant now obtained which has the
absolute condition to have sewage treated by Kalispell's plant.
C. Nystul called for further questions and expressed appreciation for remarks given
and also for Mr. Anderson being present.
C. Nystul questioned Mr. Carver if the topic of the WWTP design should be rescheduled
for another meeting. Mr. Carver responded he would prefer to schedule another meeting.
Mr. Flynn questioned if Evergreen has been presented with Kalispell's present rates
with the knowledge of increases and hook up fees, and, if so, does Evergreen agree
to proceed on this basis. If not, the issue should be closed.
C. Nystul responded the only communication with Evergreen is the letter sent, which
was the conceptual outline to enter into an interlocal agreement.
Mr. Flynn stated Evergreen has quoted their prospective users a rate and questioned
from where the rate was derived. He questioned hook up fees and how they will be paid.
Mr. Anderson stated in the proposal from Mayor Kennedy it was authored that the hook
up fee would be waived.
Mr. Flynn stated they were not waived and that the letter states that the hook up fees
will be in the rate.
°November 13, 1989 SEWER AND WATER COMMITTEE MINUTES Page 7
C. Furlong responded he believes it is all subject to negotiation. Annexation is the
issue at this time. All other issues are on the table awaiting discussion. Some
figures were given by Stahly in the facility plan and were not accepted.
Mr. Flynn stated the rates are established and are not subject to negotiation.
C. Furlong stated to his knowledge no figures have been accepted which include the 25%
surcharge and the hook up fee. A suggestion was made that perhaps the hook up fee
could be taken care of by paying for upgrading certain parts of Kalispell's system
to handle the sewage.
Mr. Flynn stated if the city begins deviating from the existing rates the city has
been told the city will be sued.
C. Nystul stated the city has told Mr. Flynn that if the city deviates from the rates
the city will follow the legal process to see if the users accept or decline. The
city, if adopting another rate, is well aware of the legal process of giving notice
and holding a hearing. If the annexation issue can be resolved and negotiations differ
from the rates currently on the books the legal process will be followed.
C. Gunnerson stated the entire Council agrees that if there is any alteration to the
existing rates a full rate case will occur. He stated the Committee is meeting at this
time to make a motion to the Council. C. Nystul agreed.
C. Nystul stated the motion is whether or not the waiver of protest of annexation will
be required of Evergreen. He suggested the motion state that in further discussions
with the Evergreen Water and Sewer District the city will or will not require the
waiver of protest of annexation as a condition for an interlocal agreement.
C. Gunnerson moved the Committee recommend to the Council that the requirement for
annexation be waived under this interlocal agreement.
C. Nystul called for a second. C. Nystul pointed out the Committee is meeting as a
whole and a recommendation should be made to Council.
C. Saverud seconded to bring a motion to the Council floor.
C. Nystul stated it has been moved and seconded that the Committee recommend that the
requirement for annexation be waived in an interlocal coop agreement with the Evergreen
Water District. He then called for discussion.
C. Furlong spoke against the motion in that it is not an absolute to annex Evergreen.
He firmly believes Evergreen will be sewered. Kalispell has 10,000 residents serving
an area population of 30,000 to 40,000 and has to look to grow ultimately. Kalispell
has to preserve and protect the right to annex at some future date. lie will oppose
any motion to sewering Evergreen without the requirement to obtain signed waivers
of protest of annexation.
C. Nystul called for further discussion.
C. Saverud stated he is almost as firm as C. Furlong on this subject. He expressed
concern not as much for the quantity of annexation in Evergreen but for Kalispell not
having this type of aggressive attitude and the precedent it may set for future
development in other directions in town. If he could be convinced this will not
set any precedents he may not be opposed. As this is not being presented lie will
rely on the annexation issue.
C. Nystul stated concern is well taken. The intention of the motion and any changes
_ _ _ —_ _� �. ..--.. +��� ++..++ •.aa i. +era vviu1111LL 1111YV LLa�J rage O
in the policy of the Council would have to apply strictly to the Evergreen district.
Kalispell is dealing with an existing community that the planners say should not
exist that has a failed septic system which is affecting the quality of the Flathead
Basin. He foresees this as applying to Evergreen and applying it to the planning
district boundaries as well as what the boundaries would be. The city would have to
concur with this.
C. Furlong stated the city can be precluded from looking at each proposal. There is
such a thing as legal precedent. The Committee is talking about sewering the people
of Evergreen, not the district. The district may be the instrument to bring the issue
about, but the people of Evergreen will be sewered. The people of Evergreen should
be willing to pay the same price under the same conditions as the people of Kalispell.
C. Gunnerson expressed disagreement.
C. Nystul called for further discussion from the Committee. There was none. He then
called for a vote. The voting result was 2 - 2 and will be reported to the Council
floor as same.
C. Furlong stated the motion does not have to be reported to the Council floor without
recommendation.
C. Nystul stated the Committee can offer the same motion to the floor. C. Furlong
stated the motion has died. The motion will not be offered to the Council because
it is parliamentary wrong. The motion died on a 2 - 2 vote and the Chairman already
voted and cannot break the tie.
C. Gunnerson stated it can be stated there is no recommendation, the Committee voted a
tie. C. Nystul agreed.
Adjourned: 6;00 P.M.
ss