15-0707 Evergreen AgreementSANITARY SEWER
TREATMENT AGREEMENT
between
CITY OF KALISPELL
and
FLATHEAD COUNTY WATER AND SEWER DISTRICT NO. 1
EVERGREEN
This Agreement entered into this 1st day of July, 2015, by and between the City of Kalispell
[hereinafter "Kalispell"] and Flathead County Water and Sewer District No. 1 — Evergreen
[hereinafter "Evergreen"], as evidenced by their signatures hereon agree as follows:
Section 1: Recitals
WHEREAS, Kalispell is a municipality of the State of Montana located within Flathead County
and organized pursuant to Title 7 Chapter 3 Part 43. Kalispell owns, maintains and
provides certain utility services, including wastewater treatment, to its city residents
with oversight from the Montana State Department of Environmental Quality.
Kalispell may legally provide its utilities to serve areas outside of Kalispell
for consideration and if it is deemed to be in the best interests of Kalispell
and its residents; and
WHEREAS, Evergreen is a duly formed County Water and Sewer District created under the
authority of the Montana state law. Evergreen currently possesses the statutory
authority to provide water supply and distribution, wastewater collection, treatment
and conveyance to properties in the proximity of its facilities with oversight from
the Montana State Department of Environmental Quality; and
WHEREAS, Evergreen entered into an Interlocal Agreement with Kalispell dated the 25th day of
July, 1990, hereinafter referred to as the "1990 Interlocal Agreement", in which
Evergreen conveys the sewage it collects to Kalispell WWTP. The 1990 Interlocal
Agreement expires July 25, 2015; and
WHEREAS, Evergreen entered into an Interlocal Agreement with Kalispell dated the 30th day of
November, 2007, hereinafter referred to as the "2007 Interlocal Agreement", which
delineated the provision of services and responsibilities of Kalispell and Evergreen
with respect to municipal wastewater services that may be provided to properties
located outside of RSID 132 but within such proximity to Evergreen's collection
and conveyance system. The 2007 Interlocal Agreement remains in effect until
modified or repealed by all necessary parties; and
WHEREAS, Kalispell is required to implement and enforce a pretreatment program to control
discharges from all industrial users of its wastewater treatment system pursuant to
requirements set forth in 40 CFR Part 403. Evergreen is required to authorize
Kalispell to implement and enforce the City's sewer use ordinance and 40 CFR 403
within Evergreen's service area.
Page 1 of 7
WHEREAS, it is in the best interests of all of the citizens of Flathead County that water quality
continue to be protected by providing municipal sewage treatment services to all
properties presently served by Evergreen, together with other properties located
within such proximity to the Evergreen sewage collection and conveyance facilities
that they may be served by Evergreen for collection and conveyance of sewage to
the Kalispell WWTP.
NOW THEREFORE, IT IS AGREED by and between Kalispell and Evergreen that it is to their
mutual advantage to adopt this Agreement as follows:
Section 2: Purpose
It is the purpose of this Agreement to delineate the provision of services and responsibilities of
Kalispell and Evergreen with respect to municipal waste water services that may be provided to
properties connecting to Evergreen's collection and conveyance facilities that such property may
be served by Evergreen.
Section 3: Administration of Municipal Sewer Services
3.01 No separate legal entity is established by this Agreement.
3.02 Agreement: Evergreen agrees that it will abide by all current Code, Rules, Regulations,
Resolutions, and Ordinances, including but not limited to prohibited wastes, discharge
limits, surcharges above base strengths, treatment plant impact fee, and pretreatment rules
of the City of Kalispell, State Department of Environmental Quality, and the
Environmental Protection Agency relating to sewage treatment.
Evergreen agrees that it will inform its users of the requirements they are subject to and
the penalties to which such users are subject, for violation of the discharge requirements
and prohibitions.
3.03 Consent Required by Kalispell: In the event owners of property outside of that portion of
the District Boundary as shown in Exhibit A attached hereto, request to connect mains or
services to the collection and conveyance system operated by Evergreen, said property
owner(s) must, prior to connection, apply for and obtain a written consent by the Kalispell
City Council, or designee. Kalispell may decline the application for any reason. If
Kalispell accepts the application, the property owner(s) or users shall provide a written
execution of a waiver to protest annexation, consent to withdraw from the rural fire
district, enter into a development and or pretreatment agreement with Kalispell, meet
pretreatment regulations, and pay the treatment plant impact fee.
Evergreen is authorized hereunder to connect any property to its collection and
conveyance system within that portion of the District Boundary as shown in Exhibit A
attached hereto, unless and until, Evergreen is notified by Kalispell that there is not
sufficient treatment capacity at the Kalispell WWTP to treat any additional sewage from
Evergreen. Property located inside the District Boundary, prior to allowing connection by
Page 2 of 7
Evergreen, is required to obtain written consent of Kalispell's City Manager, or designee,
after satisfying the requirement of paying the treatment plant impact fee.
Annually Evergreen will provide Kalispell an updated map highlighting properties that are
connected to the Evergreen Sewer System and will provide average and maximum daily
flows from Evergreen to the Kalispell WWTP. This will assist the City in making
informed decisions on plant capacity and future plant upgrades.
3.04 Ownership of Kalispell WWTP: Kalispell shall remain the sole owner of Kalispell
WWTP.
3.05 Ownership of Sewage Conveyance Lines and Facilities: Evergreen shall remain the sole
owner of its collection and conveyance system.
3.06 Quality of Sewage to be treated: It is understood between the parties it is Evergreen's
responsibility to manage the quality of sewage discharged to the Kalispell Treatment
Plant. The effluent sewage from Evergreen shall meet the sewage quality limits as
outlined in City Code, Ordinance, Resolutions, and Regulations.
Evergreen shall not discharge to the Kalispell Wastewater Treatment Facility Prohibited
Wastes as outlined in City Code, Ordinance, Resolution and Regulations that will injure
or interfere with any sewage treatment process, cause Kalispell a permit discharge
violation, constitute a hazard to humans or animals, create a public nuisance, may
contaminate sewage sludge, create any hazard in, or have an adverse effect on the water
receiving discharge from the treatment facility. If Evergreen's discharge is not within the
specified limits required by City Code, Ordinance, Resolutions, and Regulation,
Evergreen shall be notified and thereafter shall immediately begin an investigation for
sources of contamination of the sewage and take action necessary to eliminate the
contamination. Kalispell will assess Evergreen the cost of all sampling, treatment plant
operation damages, and discharge permit penalties the City has been assessed from
contamination from Evergreen's discharge to the treatment facility.
When Evergreen's average daily flows increase greater than 20% in a 15-day period, the
District will begin an investigation for sources of excess ground and surface water flows
and keep the City informed of the findings and actions being taken to alleviate the excess
flows.
3.07 Odor Abatement: In order to reduce the odors at the Treatment Plant where the effluent
arrives at the end of Evergreen's force main, the District shall construct and maintain odor
treatment facilities within two years of this signed agreement that will reduce the amount
of hydrogen sulfide gas and odor released at the end point of the force main at the
Kalispell Treatment Plant.
3.08 Sewage Treatment Rate: Evergreen agrees to pay to Kalispell the sewer treatment volume
rate, base rate and surcharge rate for the sewage received from Evergreen at the Kalispell
Wastewater Treatment Plant. The rate charged to Evergreen shall not exceed the sewer
treatment rate charge for a property located within the Kalispell City Limits based solely
Page 3 of 7
upon the service properties being located outside of the Kalispell City Limits. The rate
excludes the following:
1. any portion of the Kalispell Treatment Rate which is for the
cost/expense of collection/conveyance of sewage from properties
within Kalispell to the Kalispell Wastewater Treatment Plant,
2. treatment cost related to Kalispell's inflow and infiltration (I&I), and
finally
3. any billing expenses for the owner of the properties within the City of
Kalispell.
Each year's rate(s) calculation will be based on Evergreen's and Kalispell's actuals for
flows and the prior fiscal year ending June 301'. Included in the rate calculation will be a
contribution to the replacement fund for either $450,000 or 50% of depreciation whichever
is lower per fiscal year. Evergreen will provide Kalispell the number of customer and flow
volume for each year. Likewise, Kalispell will provide Evergreen with the number of
customers, volume billed and flow volume. The rate(s) formula is in Exhibit B attached
hereto and incorporated fully herein by this reference.
The entire volume of sewage from Evergreen shall be measured by Evergreen's meter tied
into the City telemetry -monitoring system, tested, and calibrated yearly. The metering
system shall be verified for compliance at least yearly through coordination between
Evergreen and the City.
Kalispell shall bill Evergreen for sewage treatment on the tenth of each month. Payments
are due in full no later than ten (10) days after mailing of the Kalispell bill.
3.09 Rate Study: A treatment rate study, performed by a financial consultant, may be performed
during the term of this agreement. Any rate study conducted will establish individual
treatment rates (both volume and base) for both Kalispell and Evergreen and will supersede
the rate method established in 3.08. Evergreen agrees to pay Kalispell the sewer treatment
rates for the sewage received from Evergreen at the Kalispell Wastewater Treatment Plant
as established in the rate study. Kalispell will work cooperatively with Evergreen in the rate
development process to ensure the rates established are not discriminatory or based on out -
of -city designation. Rather, the rate is to based on the cost of service to treat Evergreen's
sewer discharge, the replacement fund contribution is maintained, and the rate takes into
account the exclusions of items 1 through 3 in Section 3.08.
3.10 Pretreatment: Evergreen agrees to authorize Kalispell to implement and enforce the City's
sewer use ordinance and 40 CFR 403 within Evergreen's service area. Kalispell will: (1)
update the industrial waste survey; (2) issue permits to all industrial users required to obtain
a permit; (3) conduct inspections, sampling, and analysis; (4) take all appropriate
enforcement action as outlined in the Kalispell's sewer use ordinance; and (5) perform any
other technical or administrative duties the Parties deem appropriate. In addition, Kalispell
may, as agent of Evergreen, take emergency action to stop or prevent any discharge which
Page 4 of 7
presents or may present an imminent danger to the health or welfare of humans, which
appears to threaten the environment, or which threatens to cause interference, pass through,
or sludge contamination.
If the authority of Kalispell to act as agent for Evergreen under this Agreement is
questioned by an industrial user, court of law, or otherwise, Evergreen will take whatever
action is necessary to ensure the implementation and enforcement of its sewer use
ordinance against its industrial users, including, but not limited to, implementing and
enforcing its own sewer use ordinance on its behalf and/or amending this Agreement to
clarify the Control Authority's authority.
Evergreen will reimburse Kalispell for costs incurred in implementing and enforcing a
pretreatment program to control discharges from all industrial users of its wastewater
treatment system pursuant to requirements set forth in 40 CFR Part 403. Kalispell will
provide Evergreen with a detailed accounting of all such costs.
The Parties will review and revise this Agreement to ensure compliance with the Federal
Clean Water Act (42 U.S.C. 1251 et seq.) and rules and regulations (40 CFR Part 403)
issued thereunder, as necessary, but at least once every 5 years on a date to be determined
by the Parties.
3.11 Force Main: The parties agree that a flow of 200 gpm is reserved for Kalispell in
Evergreen's force main from the intersection of Willow Glen Drive and Concord Lane to
the Kalispell WWTP.
Section 4: Applicable Law
These parties agree that this Agreement shall be governed in all respects by the laws of the State
of Montana and the parties expressly agree that venue shall be in Flathead County, Montana and
no other venue.
Section 5: Binding Affect
This Agreement shall be binding upon and shall inure to the benefit of the legal representatives,
successors, and assigns of the parties.
Section 6: No Third Party Beneficiary
This Agreement is for the exclusive benefit of the parties and shall not constitute a third party
beneficiary agreement and shall not be relied upon or enforced by a third party.
Page 5 of 7
Section 7: Dispute Resolution
a. Any claim, controversy, or dispute between the parties, their agents,
employees, or representatives shall be resolved first by negotiation between senior -level
personnel from each party duly authorized to execute settlement agreements. Upon mutual
agreement of the parties, the parties may invite an independent, disinterested mediator to
assist in the negotiated settlement discussions.
b. If the parties are unable to resolve the dispute within forty-five (45) days
from the date the dispute was first raised, then such dispute shall be resolved in a court of
competent jurisdiction in compliance with the Applicable Law provisions of this
Agreement. In that event, the prevailing party shall be entitled to recover attorney fees and
costs of the litigation.
Section 8: Severability
If any portion of this Agreement shall be held to be void or unenforceable, the balance thereof
shall continue to be effective.
Section 9: Original Agreements and Resolutions of Kalispell
All terms of the 1990, 1996, and 2007 Interlocal Agreements and Addendum between the parties
hereto and Resolution No. 5103 of Kalispell augmenting those agreements shall remain in full
force and effect until the effective date of this Agreement, at which time they will be superseded
by the adoption of this Agreement.
Section 10: Effective Date
This Agreement shall become effective with the fiscal year beginning July 1, 2015. The process
to transfer Trumble Creek Crossing customers from Kalispell to Evergreen will commence upon
execution of the agreement.
Section 11: Term of Agreement
The duration of this contract is 20 years. This agreement is negotiable at any time if both parties
so consent in writing. If no notice to terminate or renegotiate is received at least three months
prior to expiration of this Agreement, then this agreement will renew for an additional five-year
term subject to the preceding clause.
Page 6 of 7
IN WITNESS WHEREOF, the local governments have caused this instrument to be duly
executed by their proper officers as follows:
CITY OF KALISPELL
APPROVED BY THE CITY MANAGER OF THE CITY OF KALISPELL on the day of
201 as authorized by the City Council to execute this Agreement.
ATTEST:
By: By:
Aimee Brunckhorst Doug Russell
City Clerk City Manager
(SEAL)
FLATHEAD COUNTY WATER AND SEWER DISTRICT NO. 1 EVERGREEN APPROVED
BY THE BOARD OF DIRECTORS OF THE FLATHEAD COUNTY WATER AND SEWER
DISTRICT NO. 1 EVERGREEN on the day of , 201
ATTEST:
Roberta Struck
Secretary
John T Fallon
Board President
Page 7 of 7
/ 11
Exhibit B Evergreen Rate Calculation Worksheet
Kalispell Current Sewer Utility Rate
FY Actual Flows/1,000 gallons
Kalispell Evergreen Total
816,779 159,355 976,134
Monthly Base Rate
$/1,000 gallons
$8.44
$4.78
WWTP
Collection
Billing
Expense Sum
FY14/15
FY14/15
FY14/15
A
Total Personal Services (includes lab personal for WWTP )
$
673,603
$
347,624
$ 96,642
B
Total Maintenance & Operations (includes lab for WWTP)
$
890,625
$
398,054
$ 80,729
C
Capital Outlay from Operating Budget (rates)
$
119,000
$
545,826
D
Capital Outlay from Bond & Impact Fees
$
45,000
$
1,005,640
E
Capital Outlay/Maint from Replacement Funds
$
953,610
$
-
F
Debt Service from Rates
$
871,565
$
2,189
G
Replacement Funds
$
411,599
$
-
H
Depreciation Expense (non cash)
$
842,146
$
793,775
Expenditure Total
$
4,807,148
$
3,093,108
$ 177,371
Less
Capital Outlay/Maint from Replacement Funds (E) $ (953,610)
Capital Outlay from Bond & Impact Fees (D) $ (45,000) $ (1,005,640)
Depreciation Expense/Non Cash (H) $ (842,146) $ (793,775)
Total $ 2,966,392 $ 1,293,693 $ 177,371
Step 1: Calculate % split for cost per 1,000 gallon based on actual expenses
Calculated Rate Treatment $ 3.04 65.7% percent of total
Calculated Rate Collection $ 1.58 34.3% percent of total
Total $ 4.62 100.0%
Step 2: Actual per 1000 gal rate, minus % for I/I, minus billing cost, percent split from Step 1 calculation applied
Total actual charged pre 1,000 gal $ 4.78 Kalispell
Rate minus % of I/I $ 4.09 billed/1,000 gal % I/I
Billing cost per 1,000 gal $ 0.22 699,625 14.3%
Rate per/1,000 gal minus billing cost $ 3.88
Treatment per 1,000 gallons $
Collection per 1,000 gallons $
Step 3: Base rate application with Step 1 calculated percent split
Treatment Monthly Base Rate $
Step 4: Evergreen's Yearly Volume and Base Rates
2.55
65.7%
Of
$
3.88
1.33
34.3%
Of
$
3.88
5.55
65.7%
of
$
8.44
Volume Rate $ 2.55 $/1,000 gallons
Monthly Base Rate $ 5.55 per month per account
Evergreen Accounts 1,884 Accounts provided by Evergreen
Estimated Annual Cost $ 531,596.64 per year