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HomeMy WebLinkAboutWater Agreement - 01/27/2003.._ r AGREEMENT THIS AGREEMENT, made and entered into this day of 20~, by and between the City of Central Point, a municipal corporation of the Sta a of Oregon, hereinafter referred to as "City" and the City of Medford, a municipal corporation of the State of Oregon, acting by and through its duly constituted Board of Water Commissioners, hereinafter referred to as "Commission", witnesseth: WHEREAS, the Commission treats and transports domestic and industrial water to the City, and WHEREAS, the entire service area supplied by the Commission has seen substantial customer growth which will require expansion of the transmission and treatment . _ . - facilities~to meet-the additional demand for water, and WHEREAS, an equitable method of financing was established in 1994 and most currently revised in July 2001 which allows new customers to pay for their proportionate share of the cost of this expansion and thereby minimizing the financial impact to existing users, and WHEREAS, this method of financing applies evenly to all new customers receiving water service from the Commission whether they are direct customers or are served by one of the cities or districts who receive water from the Commission, and WHEREAS, the Commission evaluated the alternatives and established System Development Charges (SDCs) in 1994 to provide the equitable method of financing future plant expansion, NOW, THEREFORE, THE PARTIES HERETO HEREBY AGREE TO THE FOLLOWING: SECTION 1 The Commission completed a System Development Charge Study dated September 1993, which was revised in February 1994, May 1997, and again in July 2001, which determined and established the appropriate SDCs. These charges were developed in accordance to ORS 223.297 to 223.314. The City of Central Point has adopted a Resolution to enact SDCs. SECTION 2 SDCs are collected by the Commission and/or City whenever a new water service connection is installed or whenever an existing service is enlarged for all services installed or enlarged after January 1, 2002. All charges collected by the City will be held in a separate account and forwarded to the Commission along with an accounting of the number and sizes of the services installed. The Commission shall provide the City an annual accounting of SDCs collected. SDCs will be reviewed and updated annually in accordance with the adopting resolution or ordinances. SDC agreement - City of Central Point page t SECTION 3 The Commission utilizes a utility basis for determining the water rate it charges its city customers. Under this rate analysis, the City is required to pay a return on investment for its share of the faalities paid for by the Commission. In all future rate actions, facilities funded by SDCs shall not be included in the return on investment portion of the rate analysis. This will have the effect of moderating future water rate action to the City. SECTION 4 The Commission shall render technical assistance to the City in determining SDCs for large services and other questions concerning this policy, The Commission shall also be responsible for handling all appeals related to the SDCs. SECTION 5 This agreement shall be in full force and effect until; January 1, 2008. Annually and prior to the end of this period, all parties subject to these SDCs shall meet and fully review these charges to be sure they are providing the alternate funding as intended. At those times, the parties may extend or abolish the use of SDCs to fund future plant expansion. The parties met on April 19, 2001 to review the SDCs in effect and determined an increase from $548.91 to $782.69. The finalized "System Development Charge Study" dated July 2001 was adopted by the Commission following a public hearing held on September 5, 2001. SECTION 6 The Commission agrees to defend the City against any legal action which may arise over the development, methodology, or implementation of the SDCs. The City shall supply information and technical support to the Commission to assist it in this defense. SECTION 7 The payment of SDCs to fund new plant construction shall not diminish the control or ownership of the treatment or transmission facilities by the Commission. The cities and water districts, whose customers paid the SDCs, are on limited term water supply contracts with the Commission. In order to protect the interest of the cities and water districts and their customers, if the City, Water District or Commission chooses to no longer utilize the facilities fundedtiy the SDCs, the following refund policy shall be established: w A. The Commission shall return to the City or Water District where the customer resides who paid the original SDC its prorated share of the unexpended balance of the SDC fund. This prorated share shall be based upon the actual unexpended fees collected by the City or Water District plus the interest earned. B. The Commission shall return to the City or Water District where the customer resides who paid the original SDC a prorated share of the depreciated plant value of the SDC funded water facilities already installed. The prorated share shall be a percentage based upon the total amount of SDC paid by the City or Water District divided by the total SDC collected which was used to fund the facility. There will be no adjustment for the year in which the SDC payment was made. SDC Agreement -City of Central Point Page 2 '` ~'' C. In order to avoid a financial hardship on the Commission, a reasonable schedule of up to five (5) years shall be developed for repayment of the depreciated value of the SDC funded water facilities. 4N WtTNESS WHEREOF, the City of Central Point has caused this agreement to be executed in duplicate by its duly authorized officers and the City of Medford, acting by and through its Board of Water Commissioners.has caused the same to be executed by the Chair of said Commission andsts 1ecorder as dated. Bate ~ a 7 ~~~ Date: 2/6/03 SDC Agreemeak-City of Centra4 Point CITY OF CENTRAL POINT Mayor \j~1 Recorder CITY OF MEDFORD SY AND THROtfGli ITS BOARD OE WATER COMMISSIONERS Edward N. Olson Page 3