2. Proposed Latecomer Agreement - Old School StationLATECOMERS AGREEMENT FOR REIMBURSEMENT FOR
MUNICIPAL WATER AND SEWER SYSTEM EXTENSIONS
AGREEMENT, made this day of , 2008, between Montana Venture
Partners, LLC, a Montana Corporation ("Developer") and the City of Kalispell, situated in
Flathead County, Montana ("City").
wITNESSETH:
RFCITAI.S
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 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
$3,963,548.26 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 determined 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 for the purpose of receiving service from the connection,
shall be based upon the equivalent residential units ("ERU") 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
LATECaMERs AGREEMENT P. t
Extensions, by a bill of sale to be executed and delivered by Developer to the City. Developer
shall assign easement deed for utilities, as applicable (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 hold
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 for the purpose of receiving service from the connection prior to the date of this
Agreement.
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 for the purpose of receiving service from the connection, a fee equal to the fair pro
rata share of the total project costs as set forth in Section 5 below ("Assessment Fees").
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 predesign and design engineering, construction
administration, surveying, construction, review, stormwater prevention plan, and legal fees, and
interest during construction incurred and paid by Developer. The Assessment Fees for each of
the properties who subsequently tap onto, connect to or use the Extensions for the purpose of
receiving service from the connection shall be based upon the estimated equivalent residential
units ("ERUs") 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 3,161 ERUs for
the municipal water system extension and 1,111 ERUs for the sewer system extension
(a) The Assessment Fee for owners of properties who subsequently tap onto,
connect to or use the municipal water system extension for the purpose of receiving
service from the connection shall be $429.70 per ERU, adjusted annually in accordance
with Section 5(c) below. The Assessment Fee for fire flow shall be determined as
defined in Exhibit C of this Agreement. The maximum number of ERUs for which
Developer shall be entitled to reimbursement for the municipal water system extension
shall be 3,161 ERUs.
(b) The Assessment Fee for owners of properties who subsequently tap onto,
connect to or use the sewer system extension shall be $2,344.62 per ERU, adjusted
annually in accordance with Section 5 (c) below. The maximum number of ERUs for
which Developer shall be entitled to reimbursement for the sewer system extension shall
be1,111ERUs.
LATECOMERs AGREEMENT P. 2
(c) The per ERU 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
reported by the Wall Street Journal on November 30 (or the next business day) of the
previous year, plus 1.5%.
6. The ERUs for purposes of computing the Assessment Fees to be collected
pursuant to this Agreement shall be determined in accordance with Exhibit "C," attached hereto
and incorporated herein by this reference.
7. Reserved.
8. The City agrees not to allow any tapping into, connecting to or using of the
Extensions for the purpose of receiving service from the connection 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. Furthermore,
new residential developments will be required to pay the Assessment Fees for every newly
developed lot at the time of filing the final plat. 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 for the purpose of receiving service from the connection, 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 for the purpose of receiving service from the connection.
9. 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.
10. 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, after
notice, to such successor of Developer as the City, in its sole judgment, deems entitled to such
benefits; and 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.
11. 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
LATECOMERs AGREEMENT P. 3
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.
12. This Agreement shall become operative as of the date first written above, and
shall remain in full force and effect until December 31, 2018, 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.
13. A six (6) percent administrative fee in addition to the per ERU assessment fees
described previously in this Agreement shall be assessed by the City of Kalispell, Montana.
14. 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.
15. All communications regarding this Agreement shall be sent to the parties at the
addresses listed below, unless notified to the contrary.
Montana Venture Partners, LLC
Mr. Andrew J. Miller
P.O. Box 697
Kalispell, Montana 59903-0697
City of Kalispell
Mr. James Patrick, City Manager
P.O. Box 1997
Kalispell, Montana 59903
16. 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.
17. This Agreement shall be construed in accordance with the laws of the State of
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.
18. 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.
19. 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.
20. This Agreement, including its exhibits and all documents referenced herein,
constitutes the entire agreement between the City and Developer, and supersedes all proposals,
LATECOMERs AGREEMENT P. 4
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.
MONTANA VENTURE PARTNERS, LLC
A MONTANA CORPORATION
■
[NAME]
[TITLE]
DATE , 2005
CITY OF KALISPELL, MONTANA
[NAME]
[TITLE]
DAB , 2005
NOTARY BLOCS
Exhibit A — sewer and water system extension drawing -To be attached to the Final Agreement
Exhibit B -- breakdown of reimbursable costs
Exhibit C — ERU determination
LATECOMERS AGREEMENT P. 5
EXHIBIT A
Water and Sewer Main Drawing
EXHIBIT B
TOTAL PROJECT COST FOR WATER AND SEWER MAIN EXTENSIONS
ACTIVITY
WATER
F SEWER
TOTAL
MMI Design/Construction Admin
$235,995.75
$235,995.75
$471,991.50
M M_ - Predesig n
$10, 697.00
$10, 697.00
$21, 394.00
MMI - Survey
$7,671.00
$7,671.00
$15,342.00
Construction
$9977034.97
$2,128,550.90
$32125,585.87
Easements Costs
$0.00
$0.00
$0.00
Easement Fees
$0.00
$0.00
$0.00
MDEQ Review Fees
$500.00
$500.00
$17000.00
SW P PP Fees
$1, 250.00
$1, 250.00
$2, 500.00
Legal Fees
$3,750.00
$3,750.00
$7,500.00
Interest During construction
$1019514.19
$216,720.70
$318,234.89
TOTAL COST
1$11358,412.91
1 $2$605,135.35
$31963,548.28
EXHIBIT C
COST PER EQUIVALENT RESIDENTIAL UNIT (ERU) DETERMINATION
The purpose of this exhibit is to document the methodology used to determine the cost
per Equivalent Residential Unit (ERU) for reimbursement to Montana Venture Partners,
LLC as referenced in the Late Comers Agreement for Reimbursement for Municipal
Water and Sewer System Extensions between the Montana Venture Partners, LLC and
the City of Kalispell.
DOMESTIC WATER
An equivalent residential unit is defined as a single family home. The water demand of
an ERU is defined as the maximum daily demand of a residential single family home.
This demand is calculated as follows:
Total people per home (ERU) = 2.31 (Ref. 2000 Census Data)
Average Day Water Demand = 145 gallons per person per day (0. 10 gallons per person
per minute) (Ref. City of Kalispell Water, Wastewater, and Storm Drainage Facility Plan,
January, 2002, Page 3-6)
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 ERU = (2.31 people/ERU)x(0.10 gpm/person)x(2.7)= 0.62
gpm per ERU
The Montana Venture Partners, LLC water main has been oversized in accordance with
the City of Kalispell requirements 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 Comers Agreement will be based. This point will be the entrance to Old
School Station Subdivision. It is important to note this flow establishes the base point for
the reimbursement to Montana Venture Partners, LLC. 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) or future improvements to the water main.
According to the Basis of Design Report for the Old School Station project, the capacity
of the water main at the entrance of old School Station Subdivision is 2,960 gallons per
minute (gpm) at a residual pressure of 20 psi not including the additional capacity of the
well that was constructed as part of the Old School Station project. The base minimum
fire flow for any development is 1,000 gpm in therefore this fire flow will be considered
an equal benefit to everyone served by the pipeline. Therefore, the leftover domestic
capacity of the main is 1,960 gpm. The maximum number of ERU's that can be served
with this capacity is figured by dividing this capacity by the Maximum. Day Demand per
ERU, which gives a total number of 3,161 ERU's that can be reimbursed by this
agreement.
Dividing the total project cost by the maximum number of ERU's the main can supply
results in a cost per ERU reimbursable to Montana Venture Partners, LLC. With a total
project cost of $1,358,412.91 and the total ERU's served of 3,161, the base cost per ERU
is $429.70.
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 ERU based on a Treasury Note Rate of
4.6%, giving an annual interest rate of 6.1 %:
Table 1
Yearly Reimbursement Costs/ERU - Water
Year
Reimbursement Factor
Reimbursement Amount per ERu
2067
1.69
$429.70
2008
1.66
$455.48
2699
1.12
$481.27
2019
1.19
$511.35
2611
1.26
$541.42
2612
1.34
$575.80
2013
1.42
$610.18
2414
1.59
$644.55
2915
1.59
$683.23
2616
1.69
$726.20
2617
1.79
$769.17
2618
1.96
$816.43
The Reimbursement Factor and Reimbursement Amount per ERU shown in this Table is based on the Treasury
Note Rate at the time of the creation of this agreement. The actual factor and rate will be determined annually a
described in the text above.
The City of Kalispell ERU Determination Schedule for Impact Fees (attached) will be
used to determine the number of domestic ERUs for non-residential projects. The City
may update this schedule at any time and will utilize the most current schedule for the
calculation of ERUs.
FIRE FLOW
The Montana venture Partners, 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:
Table 2
Fire Flow Reimbursement Schedule
Fire Flaw
Cost per Square Foot of
Structure
1,000 ---- 11500
$2.00
11501 - 21000
$2. 50
21001 -- 21500
$3.00
21501 - 39000
$3.50
3,001 - 37500
$4.00
31501 -- 41000
$4.50
> 4,000
$5.00
Total reimbursement to Montana Venture Partners is based on the total number of ERUs
that can be sold (3,161). 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 from Table 1. For example, if a project in 2010 had a
$25,000 fire flow fee, the number of equivalent ERUs would be $25,000/($511.35/ERU)
= 48.9 ERUs.
SEWER
An equivalent residential unit for wastewater is also defined as a single family home.
The maximum wastewater flow per ERU will be defined as the peak hourly flow from a
residential single family home. This demand is calculated as follows:
Total people per home (ERU) = 2.31 (Ref. 2000 Census Data)
Average -Day Wastewater Demand = 100 gallons per person per day (0.07 gallons per
person per minute) (Ref. Montana Department of Environmental Quality)
Average-Day/Peak Hour Factor = 2.75 (Ref. Montana Department of Environmental
Quality, equation for peak hourly flow based on population)
Maximum Peak Hour Flow per ERU = (2.31 people/ERU)x(0.07 gpm/person)x(2.75)=
0.45 gpm/ERU.
The sewer main has been oversized in accordance with the City of Kalispell requirements
in order to serve future growth in the area. Sewer main reimbursement costs are also
based on the capacity of the system. The system currently is most limited by the size of
the sewage lift station which has a capacity of 500 gpm. Using a Peak Hour flow of 0.45
GPM per ERU, the total number of ERU's that can be reimbursed by this agreement is
1,111.
Dividing the total project cost by the maximum number of ERU's the sewer system can
supply results in a cost per ERU reimbursable to Montana Venture Partners, LLC. With
a total project cost of $2,605,13 5.3 5 and the total ERU's served of 1,111, the cost per
ERU is $2,344.62.
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 ERU based on a Treasury Note Rate of
4.6%, giving an annual interest rate of 6.1 %:
Table 3
Yearly Reimbursement Costs/ERU - sewer
Year
Reimbursement Factor
Reimbursement Amount per ERU
2007
1.00
$2,344.62
2008
1.06
$27485.30
2009
1.12
$2,625.98
2010
2011
1.19
1.26
$21790.10
$2,954.22
2012
1.34
$3,141.79
2013
2014
1.42
1.50
$3,329.36
$3,516.93
2015
2016
1.59
1.69
$3,727.95
$3,962.41
2017
1.79
$47196.87
2018
1.90
$41454.78
The Reimbursement Factor and Reimbursement Amount per ERU shown in this Table is based on the Treasury
Note Rate at the time of the creation of this agreement. The actual factor and rate will be determined annually a
described in the text above. 1.
As with the water, the City of Kalispell ERU Determination Schedule for Impact Fees
will be used to determine the number of ERUs for non-residential projects. The City may
update this schedule at any time and will utilize the most current schedule for the
calculation of ERUs.
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