16. Addendum to Interlocal Agreement/City and Evergreen Water Districti
To: Mayor & City Council
From: Al Thelen, Interim City Manager
Date: June 6, 1996
Re.: Evergreen/Sewage Treatment Rates
The staff has reached an agreement with the Evergreen Sewer
District representatives regarding the fee to be charged by the
City and paid by the District for the treatment of sewage at the
Wastewater Treatment Plant in accordance with the Interlocal
Agreement between the two entities. The two significant points of
difference between the City and the District have been the
administrative and support service charges and the interpretation
of the provision in the rate regarding replacement cost. You have
previously acted on the elimination of billing costs from charges
made to ,the District. We have agreed to the reduction. of some
other administrative charges and a different approach to
replacement costs.
Major elements of the accord are:
1. Replacement costs will be set at $300,000 per year rather
than the $335,000 that has been used since the Evergreen
District has been connected to the Kalispell plant. The two
agencies will share this cost based on flows as specified in
the agreement. The City will withdraw $70,000 from the
replacement amount for the plant for the difference between
Mayor and City Council
Page 2
June 6, 1996
the $335,000 and $300,000 annual contribution and place these
monies in the general sewer operating account. Evergreen will
receive a credit of $16,331.12 for the replacement payments
they have made based on the $335,000 figure and other
negotiated adjustments relating to administration since 1994.
The effect is an $.08 per thousand adjustment.
2. It is anticipated that the City/Evergreen replacement
account for the plant will have $493,615 in reserve on June
30, 1996. At the expiration of the current agreement on July
25th of 2015, the City will refund to the Evergreen District
any and all replacement funds that they have contributed to
this reserve account, and that have been unused. The Sewer
District's projected equity in the replacement account is
currently $71,096.
If the total dollar balance of this account drops below
$200,000 during the life of this Interlocal Agreement, the
contribution to the replacement account will be increased by
50% until the balance reaches $500,000, when the contribution
to the replacement account will return to the level that was
used prior to dropping below $200,000. The District started
to use the Wastewater Treatment Plant in July, 1994, and to
date our replacement expenses have been only $106,384. This
will change as the plant becomes older.
3. Accord was reached on the methodology used to calculate
the Wastewater Treatment Plant's administrative charges and
Mayor and City Council
Page 3
June 6, 1996
support service charges by the City. Any change in the
methodology will not be made until the Sewer District
Representatives have been notified.
4. The fiscal year for applying yearly rates and calculation
will be changed from January 1 to July 1 and will be effective
on July 1, 1996.
5. The current rate that the District is being billed for
1996 is $1.64 per 1,000 gallons of flow, and that will change
to $1.56 per thousand and adjustment will be made as
appropriate for 1995 and 1994.
6. All other provisions of the Interlocal Agreement will
remain as written.
Attached to this memo is a proposed addendum to the Interlocal
Agreement drafted by the City Attorney, which will implement the
new provisions. The City's Finance Director, Amy Robertson, the
City Assistant Engineer, John Wilson, and Engineering Consultant,
Tim Berry, provided significant assistance to Glen Neier and myself
in negotiating this compromise!
I was informed today by Stan Clothier, that the District's Board
approved the addendum at their meeting this morning subject to some
wording changes being addressed by the two attorneys. This
addendum adequately protects the interest of the City and should be
ready for your action on June 17.
ADDENDUM TO INTERLOCAL AGREEMENT
NOW THEREFORE IT IS MUTUALLY AGREED BETWEEN THE PARTIES AS FOLLOWS:
SECTION I. a. That "replacement costs" referred to in
Appendix B of the Interlocal Agreement
between the City of Kalispell and
Flathead County Water & Sewer District
No. 1-Evergreen are hereby agreed to be
those costs contained in Exhibit "A"
(Replacement Equipment Schedule),
attached hereto and for purposes of this
Addendum made a part hereof, as the
equipment, appurtenances and accessories
added to the Waste Water Treatment Plant
between 1985 and 1996. Further additions
to or deletions from the Replacement
Equipment Schedule shall be as
determined under this Addendum.
b. The City shall on or before August 1,
each year, during the term of the
Interlocal Agreement provide the District
with a list of equipment, appurtenances,
and accessories added to the plant for
the preceding year resulting in a rate
adjustment for the subsequent year, which
shall be accounted for in the Replacement
Equipment Schedule.
SECTION II. a. That on or before August 1, each year,
during the term of the Interlocal
Agreement the City shall provide to the
District a statement listing the
equipment, appurtenances and accessories
subjeet to replaeement Gest for the
replaced during the preceding year
resulting in an reduGtien in the
expenditure from the Replacement Cost
Reserve Account.
b. It is mutually agreed between the parties
that the District s#a31 --twin has an
equity interest in funds contributed to
the Replacement Cost Reserve Account
based upon the average annual flow of
District to the WWTP. On or before
August 1 of each year, during the term of
the Interlocal Agreement, the City will
provide the District with a Replacement
Cost Reserve Account accounting showing:
1) beginning balance; 2) the amounts
contributed to the fund during the
preceding year; 3) amounts spent for
replacement; 4) balance of account; 5)
percentage of District flow for year
contributed to the WWTP and 6) cumulative
equity of District in Replacement Cost
Reserve Account based upon the average
yearly percentage of District flow to the
WWTP. For purposes of this Addendum the
Replacement Cost Reserve Account for the
year ending June 30, 1996, is as set
forth in Exhibit "B", attached hereto and
thereby made a part hereof.
d. That during the term of Agreement, the
parties agree to not allow the
Replacement Cost Reserve Account to
fall below $200,000. In the event the
Replacement Cost Reserve Account does
fall below $200,000, both parties agree
to increase their respective contribution
to the Replacement Cost Reserve Account
by 50% until the Replacement Cost Reserve
Account reaches $500,000.
e. In the event the Interlocal Agreement is
terminated at the expiration of the
Agreement or any renewal period allowed
under the Agreement, City shall rebate to
District the District's cumulative equity
remaining in the Replacement Cost Reserve
Account.
SECTION III. It is mutually agreed between the parties that
Interlocal Agreement, Sewage Treatment Rate,
is hereby amended to change the effective date
for determination of sewage treatment rates
from January 1 to July 1, commencing July 1,
1996 for the duration of the term of the
Interlocal Agreement.
WWTP.. CALENDAR YEAR
1995
calendar year
ADJ
Jan -June 95
�$108,843.86
July-Dec.'95
total
Wagey'ficamedt/w•c.unemp.
S113,696.73
S222,540.59
(S10,04',.00)
Overtime
S6,228.10
S8,431.92
$14,660.02
IIcalth Ins.
$13,176.20
S13,533.45
$26,709.65
(S1,400.00)
PERD
$7,095.63
S6,573.73
$13,669.36
($622.00)
Office Supplies
S325.84
$77.93
$403.77
small office equip
$899.00
$0.00
$899,00
computer supplies
S452.17
S249.96
$702.13
safety equip
$1,667.84
$543.90
$2,211.74
Lab supplies
$2,109.13
$1,425.96
$3,535.09
Janitorial Supplies
$151.18
$101.68
$252.86
Alum
S2,303.13
$0.00
S2,303.13
Chemicals
S4,527.75
S12,549.39
$17,077.14
other supplies
$1,731.52
$1,694.98
S3,426.50
Gas & Oil
$1,086.91
$3,428.74
S4,515.65
Consumable tools
$4,803.46
$1,092.81
$5,896.27
Postage & freight
$188.08
$304.39
S492.47
Licenses & fees
S2,915.00
$285.00
S3,200.00
Dues
$72.00
$210.00
$282.00
Electricity
$63,370.75
$71,223.46
S134,594.21
Water
$915.70
$1,041.74
$1,957.44
Natural Gas
$14,433.64
$9,454.55
$23,888.19
Telephone
$1,292.07
$1,530.69
$2,822.76
Lab Service
$3,220.27
$2,299.41
$5,519,68
Auditing
$1,550.00
S0.00
$1,550.00
Contract Service
$45,965.51
$53,741.96
S99,707.47
Training materials
$273.35
$273.24
$546.59
Consultants
$760.00
S0.00
$760.00
psc
0
268.54
$268.54
repair & maint
0
243.75
$243.75
equip maint
22814.41
20928.83
S43,743.24
building
1631.29
1014.54
$2,645.83
radio
$71.50
0
$71.50
School & Travel
S962.74
$1,057.46
$2,020.20
Equip Rental
S0.00
$150.94
$150.94
Prop & Liab. ins.
$1,500.00
S25,265.57
$26,765.57
Central Garage
$5,000.00
$5,000.00
$10,000.00
Admin. Transfer
$33,548.46
$41,298.85
$74,947.31
(S1,392.00)
data
5964.%
4 022.40
S9,987.36
(S4,994.00) Evergreen share
subtotal
$361,851.45
S403,01650
$764,867.95
($18,455.00) $346,412.25 xl6.847242% $125,750.00
Replacement
150000.00
$150,000.00
$300,000.00
x16.847242% $50,541.73
subtotal
$511,851.45
$553,016.50
$1,064,867.95
$176,291.72
Debt service Evergreen
$55,530.00
$56,388.00
$111,918.00
$111 918.00
Annual Cost to Evergreen
total $28$209-12
Evergr�en Flows
113,303,600
=
0.16847242
City of Kalispell Flows
672,535,000
'Rate per thousand: total flows
rate:
Kalispell's M&O
S746,412.95
$1.11
Replacement Cost
$300,000.00
$0.45
(flows 672,535,000�__
S1.56 j
Rate per thousand:billable flows -
rate: f
Kalispell's M&O(-evrgn)
S620,662.95
$1.16
Replacement Cost (-e%Tgn)
$249,458.27
$0.47 ,
6/04/96
tllable 534731 200
$1.63 1