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Home My WebLink About02-22-2005 ITEM VIII-B-3AC[TY OF WASHINGTON AGENDA BILL APPROVAL FORM Agenda Subject: Resolution No. 3817 Date: January 28, 2005 Department: Attachments: Budget Impact: Public Works Resolution No. 3817 $ 0 Administrative Recommendation: City Council to introduce and adopt Resolution No. 3817. Background Summary: Resolution No. 3817 authorizes the Mayor and City Clerk to execute an Interim Water Sales Agreement with the Covington Water District and Water District No. 111. This agreement supercedes and replaces the previous Agreement, which was approved by Resolution No. 3482 on June 17, 2002 and expires in December 2005. The Agreement being executed will be in effect through December 2010. W0222-1 04.11 Reviewed by Council & Committees: Reviewed by Departments & Divisions: ❑ Arts Commission COUNCIL COMMITTEES: ❑ Building ❑ M&O ❑ Airport ❑ Finance ❑ Cemetery ❑ Mayor ❑ Hearing Examiner ❑ Municipal Serv. ❑ Finance ❑ Parks ❑ Human Services ❑ Planning & CD ❑ Fire ❑ Planning ❑ Park Board ®Public Works ® Legal ❑ Police ❑ Planning Comm. ❑ Other ® Public Works ❑ Human Resources Action: Committee Approval: ❑Yes ❑No Council Approval: ❑Yes []No Call for Public Hearing Referred to Until Tabled Until Councilmember: Wagner Staff: Dowd Meeting Date: February 22, 2005 Item Number: V111.13.3 AUBURN * MORE THAN YOU IMAGINED RESOLUTION NO. 3817 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN INTERIM WATER SALES AGREEMENT BETWEEN THE CITY OF AUBURN AND COVINGTON WATER DISTRICT AND WATER DISTRICT NO. 111 WHEREAS, the City Council of the City of Auburn, Washington, adopted Resolution No. 3482 on June 17, 2002, authorizing the execution of an Interim Water Sales Agreement between Covington Water District (Covington), King County Water District No. 111 (WD 111) and the City of Auburn (Auburn) under the authority of their respective enabling legislation and under the authority of Chapter 39.34 RCW, the Interlocal Cooperation Act; and WHEREAS, the parties desire to continue the intent of the Agreement to avoid unpredictable water sales and create a predictable and reliable cost for wholesale water to be sold by Auburn to Covington and WD 111; and WHEREAS, it is in the public interest for the parties herein to continue the intent of the interim water sales agreement; and WHEREAS, this Agreement supersedes and replaces the Interim Water Sales Agreement between Auburn, Covington and WD 111, which was approved by Resolution No. 3482 and executed on June 17, 2002. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON. HEREBY RESOLVES as follows: Resolution No. 3817 January 28, 2005 Page 1 Section 1. The Mayor is hereby authorized to execute an Interim Water Sales Agreement between Auburn and Covington and WD 111 in substantial conformity with the agreement attached hereto, marked as Exhibit "A" and incorporated herein by this reference. Section 2. That the Mayor is authorized to implement such other administrative procedures as may be necessary to carry out the directives of this legislation. Section 3. That this Resolution shall take effect and be in full force upon passage and signatures hereon. Dated and Signed this day of 2005: CITY OF AUBURN PETER B. LEWIS MAYOR ATTEST: Danielle E. Daskam, City Clerk AS TO FORM: Winiel B. Heid, City Attorney Resolution No. 3817 January 28, 2005 Page 2 Exhibit "A" INTERIM WATER SALES AGREEMENT between COVINGTON WATER DISTRICT, KING COUNTY WATER DISTRICT NO. 111 and the CITY of AUBURN This Agreement ("Agreement") is made and entered into this day of February, 2005, by and between Covington Water District (Covington) a Municipal Corporation, King County Water District No. 111 (WD III), a Municipal Corporation (collectively referred to herein as "the Districts") and the City of Auburn (Auburn), a Municipal Corporation. Recitals: A. The parties to this Agreement are also parties to "Interlocal Agreement 2 for the Lea Hill Intertie Project between Covington Water District, King County Water District #111, and the City of Aubum" ("IA2") B. The parties desire to avoid unpredictable water sales and create a predictable and reliable cost for wholesale water to be sold by Auburn to the Districts. C. By guaranteeing a minimum purchase of water for a given period of Exhibit "A" Resolution 3817 time, i.e., a take or pay approach, the cost of water, which to a significant extent is based on peaking factors, can be minimized for all of Auburn's customers. -1- D. This Agreement is intended to establish a rate for a fixed block of water for the mutual benefit of the parties of this Agreement. E. It is in the interest of the Districts to have a predictable supply of water available, and in Auburn's interest to have a predictable and consistent source of revenue from the sale of such water. F. The parties are authorized to enter into this Agreement under the authority of their respective enabling legislation and under the authority of Chapter 39.34 RCW, the Interlocal Cooperation Act. G. The 1.5 million gallons of water per day ("MGD") take or pay water provided for in this Agreement is a portion of and not in addition to the 5 MGD as addressed in IA2. Now, therefore, in consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the adequacy of which is hereby acknowledged, the parties hereby agree as follows: 1) TAKE OR PAY: The Districts agree to purchase an average of 1.5 Exhibit "A" Resolution 3817 MGD of water from Auburn on a take or pay basis. Take or pay shall mean that the Districts shall pay for 1.5 MGD whether or not the water is actually taken by the Districts (the "take or pay" water also referred to in this Agreement as "the Block" of water; provided -2- the Block of water may be modified as set forth in Paragraph 4 "Annual Review and Adjustment" herein). If the Districts cannot accept 1.5 mgd due to an emergency, as defined in Paragraph 6, they will be billed for the water they receive at the Block rate. 2j CHARGES FOR WATER: The Districts shall pay the rate per one hundred cubic feet of water ("CCF") for the 1.5 MGD Block shown in Exhibit 1, attached hereto, which is by this reference incorporated, except as further addressed in Paragraph 3 herein. Any water taken in excess ("Excess Water") during the summer (June 1 through September 30) shall be billed at the summer overage rate shown in Exhibit 1. Any water taken during an emergency within the Covington and/or WD 111 systems, as defined in Paragraph 6, shall be billed at the 1.5 mgd Block rate. Auburn shall send one monthly bill to WD 111 for all water purchased by the Districts. J QUANTITY AVAILABLE / DELIVERED: The 1.5 MGD Block of water Exhibit "A" Resolution 3817 shall be defined as a block of water to be delivered at an average rate of 1.5 MGD measured over a rolling 3 day period with total quantities delivered within any single day being no more than 10% more or less than 1.5 MGD at the Auburn Intertie Pump Station meter (Master Meter). If the Districts are unable for any reason to accept the Block of water, the minimum monthly payment shall be 1.5 MGD multiplied by the rate then in effect pursuant to Paragraph 2 above. If Auburn is -3- unable to deliver the amount of water requested by the Districts, up to the Block of water, then Auburn will bill the Districts for the amount of water actually delivered at the block rate pursuant to Paragraph 2 above. For the take or pay water Block provided for herein,.the Districts will be served on the same basis and with the same reliability as service is provided to Auburn's retail customers, and any curtailment, restrictions or limitations on delivery shall be on same basis as curtailment, restrictions or limitations on delivery to Auburn's retail customers. 41 ANNUAL TRUE UP OF THE TAKE OR PAY QUANTITY DELIVERED: The Master Meter is located at the Lea Hill Intertie Pump Station to measure the flow of water. The Master Meter will be read in January of each year to adjust for differences between the Master Meter and the water calculated to have been sold under this"take or pay" agreement. Billing for differences between the Master Meter and the calculated quantities will be charged or credited at the "take or pay" rate to the District's accounts. ANNUAL REVIEW AND ADJUSTMENT: The initial Block of 1.5 MGD shall remain in effect through December 31, 2010. Each year, the "take or pay" Block may be increased by mutual agreement. By September 1 of each year the Districts shall notify Auburn of their Exhibit "A" Resolution 3817 -4- intent to continue without change or request an increase in the Block quantity. Any requested change in the Block quantity would be effective January 1 of the year following the request. In the event that neither party communicates its intent under this provision, the Block shall be deemed to continue unchanged. 61 TERM: This Agreement shall remain in full force and effect from the first day of the month following the execution of this Agreement through December 31, 2010; provided that this Agreement shall automatically be renewed for an additional year at the conclusion of the term of this Agreement or any extension thereof unless any party provides the others with notice of an intent not to extend this Agreement, which notice shall be received by the other parties not less than one year prior to the expiration of the term of this Agreement or any extension thereof. The termination of this Agreement shall not affect any rights or obligations under IA2. 1 EMERGENCIES: For purposes of this Agreement, an emergency Exhibit "A" Resolution 3817 shall be defined as resulting from a water shortage, a major water line break, fire demand, contamination to the water supply system, mechanical equipment failure, electrical equipment failure or Puget Sound Energy facility failure, or any other mutually agreed upon emergency within the water supply system. An emergency period shall be for no more than five (5) working days without written request -5- by the Districts and approval by Auburn in writing to extend the emergency period. The City may change, reduce or limit the time for or temporarily discontinue any water supplied for an emergency in excess of the Block quantity without notice. Prior to a planned interruption or limiting of emergency service, the City will notify the Districts of such not less than three days prior to the service disruption. The City agrees to use best efforts and reasonable diligence to notify the Districts as soon after it becomes aware of the need for emergency service disruption and further will, to the extent practical, limit the service disruption to daylight hours. 1 JOINT AND SEVERAL OBLIGATION: The obligation of the Districts as set forth therein shall be a Joint and Several obligation of the Districts. Allocation of the take or pay Block of water and the payment for such water shall be negotiated between the Districts outside of this Agreement. J, PRIOR AGREEMENT SUPERSEDED: This Agreement supersedes and replaces the Interim Water Sales Agreement between Auburn, Covington and WD 111 executed on June 17, 2002. Exhibit "A" Resolution 3817 -6- in witness whereof the participants hereto have caused this Agreement to be executed by their proper officers on the day of 2005. ATTEST: Danielle E. Dasksm, City Clerk City Attorney Exhibit "A" Resolution 3817 CITY OF AUBURN PETER B. LEWIS MAYOR -7- ATTEST: APPROVED AS TO FORM: District Attorney ATTEST: APPROVED AS TO FORM: District Attorney Exhibit "A" Resolution 3817 COVINGTON WATER DISTRICT JUDY NELSON GENERAL MANAGER KING COUNTY WATER DISTRICT NO. 111 WILLIAM C. HALL GENERAL MANAGER WE Interim Water Sales Agreement Between Covington Water District, King County Water District No. 111 And the City of Auburn Exhibit 1 Take or Pay Monthij Rates Year Base Charge* 1.5 MGD and Summer Winter Overage Overage Rate 2005 $175.00 $0.85 1.5 MGD rate+ $0.25 2008 $175.00 $0.85 1.5 MGD rate+ $0.25 2007 $175.00 $0.85 1.5 MGD rate+ $0.25 2008 $175.00 0.85 X CPI** 1.5 MGD rate + $0.25 2009 $175.00 2008 Rate X 1.5 MGD rate + CPI'* $0.25 2010 $175.00 2009 Rate X 1.5 MGD rate + CPI** $0.25 *Covington and WD 111 are each responsible for paying a Base Charge of $175.00 per month per district. ** CPI means the Consumer Price Index — Urban for the Seattle — Tacoma — Bremerton area for the month of October of the prior year, divided by the October value of the year prior to that (see example below). Example: CPI for 2008 equals the October 2007 CPI value divided by the October 2006 value. Exhibit "A' Resolution 3817