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HomeMy WebLinkAboutITEM VIII-B-4 CITY OF r B - AGENDA BILL APPROVAL FORM WASHINGTON Agenda Subject: Date: Resolution No. 4660 November 29, 2010 Department: Attachments: Budget Impact: Public Works Resolution No. 4660 and Exhibit "A" $ 0 Agreement Administrative Recommendation: City Council adopt Resolution No. 4660. Background Summary: Resolution No. 4660 authorizes the Mayor and City Clerk to execute an Interim Water Sales Agreement between King County Water District No. 111 (WD111) and the City of Auburn. The City of Auburn and WD111 are parties to Interlocal Agreement 2 for the Lea Hill Intertie Project. The City and District desire to avoid unpredictable water sales and to create a predictable and reliable cost for wholesale water to be sold by Auburn to the District. The new agreement addresses details for the cost and quantity of water to be provided to the District. W1206-4 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: December 6, 2010 Item Number: VIII.B.4 AUBURN *MOPE THAN YOU IMAGINED RESOLUTION NO. 4 6 6 0 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 KING COUNTY WATER DISTRICT NO. 111 WHEREAS, the City adopted Resolution No 2721 executing an Interlocal Agreement No. 2 for the Lea Hill Intertie Project between the Covington Water District, King County Water District No. 111 and the City of Auburn; and WHEREAS, to avoid unpredictable water sales and to create a predictable and reliable cost for wholesale water to be sold by the City to the Covington and King County Water District, on June 17, 2002, the City adopted Resolution No. 3482, which authorized the execution of an Interim Water Sales Agreement between the parties; and WHEREAS, on February 22, 2005, the prior Interim Water Sales Agreement was superseded and replaced with a new agreement per Resolution No. 3817; and WHEREAS, Covington has opted out of the original agreement; and WHEREAS, The City and the King County Water District No. 111 wish to continue their prior arrangement; WHEREAS, in keeping with the original intent of the parties to create a predictable and reliable cost for wholesale water, it is appropriate for the City to Resolution No. 4660 December 1, 2010 Page 1 of 3 enter into a new Interim Water Sales Agreement with King County Water District No. 111 which would supersede and replace the prior agreement. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, KING COUNTY, WASHINGTON, HEREBY RESOLVES as follows: Section 1. The Mayor of the City of Auburn and the Auburn City Clerk are hereby authorized to execute an Interim Water Sales Agreement between the City of Auburn and King County Water District No. 111, in substantial conformity with the Agreement attached hereto, marked as Exhibit "A" and incorporated herein by this reference. Section 2. The Mayor is hereby authorized to implement such administrative procedures as may be necessary to carry out the directives of this legislation. Section 3. This resolution shall be in full force and effect upon passage and signatures hereon. Dated and Signed this day of , 2010. CITY OF AUBURN PETER B. LEWIS, MAYOR Resolution No. 4660 December 1, 2010 Page 2 of 3 ATTEST: Danielle E. Daskam, City Clerk APP V D TO FORM. D iel B. Heid, ttorn Resolution No. 4660 December 1, 2010 Page 3 of 3 INTERIM WATER SALES AGREEMENT between KING COUNTY WATER DISTRICT NO. 111 and the CITY of AUBURN This Agreement ("Agreement") is made and entered into this day of December, 2010 by and between King County Water District No. 111, a Municipal Corporation ("District") and the City of Auburn, a Municipal Corporation ("Auburn") (individually a "Party" and collectively the "Parties"). Recitals: A. The Parties are also parties to "Interlocal Agreement 2 for the Lea Hill Intertie Project between King County Water District #111, and the City of Auburn" ("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 District. C. By guaranteeing a minimum purchase of water for a given period of time, the cost of water, which to a significant extent is based on peaking factors, can be minimized for all of Auburn's customers. D. This Agreement is intended to establish a rate for a fixed block of water for the mutual benefit of the Parties. E. It is in the interest of the District to have a predictable supply of Resolution No. 4660 Exhibit "A" Page 1 of 8 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 Parties intend that the take or pay water provided for in this Agreement is a portion of and not in addition to the 2.5 MGD allocated to the District 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 District agrees to purchase a minimum block of water as identified in this Agreement from Auburn on a "take or pay" basis. For purposes of this Agreement, a "Block" shall mean either an average of 0.75 MGD of water between the time period of October 1 and May 31, or an average of 1.0 MGD of water between the time period of June 1 and September 30. "Take or pay" shall mean that, in the absence of an emergency as set forth in Section 7 of this Agreement, the District shall pay for the Block of Resolution No. 4660 Exhibit "A" Page 2 of 8 water whether or not the water is actually taken by the District, subject to the provisions of Section 2 herein. CHARGES FOR WATER: On a monthly basis, the District will pay, as shown on Exhibit 1 attached hereto and incorporated herein by this reference, the Base Charge, plus the Block Rate. In addition to the Base Charge and the Block Rate, any water taken in excess of the Block amount ("Excess Water") during any month shall be billed at the appropriate overage rate shown in Exhibit 1; provided, that: 1) any water taken during an emergency, as defined in Paragraph 7, shall be billed at the Block Rate, and 2) if Auburn is unable to deliver up to the Block quantity of water requested by the District, then Auburn shall only bill the District for the amount of water actually delivered at the Block Rate. Auburn shall send a monthly bill to WD 111 for all water purchased by the District. I QUANTITY AVAILABLE / DELIVERED: The Block quantity shall be calculated as the amount of water to be delivered at an average rate of either 0.75 MGD or 1.0 MGD (depending on the season) measured over a rolling 3 day period, with total quantities delivered within any single day being within 10%, plus or minus, of the Block quantity in effect at the time as measured at the Auburn Intertie Pump Station meter ("Master Meter"). For the Block quantity, the District will be Resolution No. 4660 Exhibit "A" Page 3 of 8 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. ANNUAL RECONCILIATION: 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 Agreement. If there is a difference between the Master Meter and the calculated quantities, Auburn will either charge or credit the District's account at the Block Rate. ANNUAL REVIEW AND ADJUSTMENT: The initial Block of either 0.75 MGD or 1.0 MGD(depending on the season) shall remain in effect through December 31, 2015. Each year, the Block may be adjusted by mutual agreement. By September 1 of each year the District shall notify Auburn of its intent to continue without change or request an increase or decrease in writing of the Block quantity desired. Auburn will review its ability to approve the change and may approve any requested change in the Block quantity up to but not to exceed 1.5 MGD which would become effective January 1 of the year following the request. If Auburn determines it cannot approve the request it will Resolution No. 4660 Exhibit "A" Page 4 of 8 communicate this information to the District before October 1, and continue to provide the same amount as during the current year. In the event that neither Party communicates its intent to adjust the Block under this provision, the Block shall be deemed to continue unchanged. I; 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, 2015. The Agreement shall automatically be renewed for an additional year at the conclusion of the term of this Agreement or any extension thereof unless either Party provides the other with notice of an intent not to extend this Agreement, which notice shall be received by the other Party 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. ZI EMERGENCIES: For purposes of this Agreement, an emergency shall be defined as a need for water 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 event within the water supply system. An emergency period shall be Resolution No. 4660 Exhibit "A" Page 5 of 8 for no more than five (5) working days without written request by the District 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 District of the interruption or limiting not less than three days prior to the service disruption. The City agrees to use best efforts and reasonable diligence to notify the District 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. 8) PRIOR AGREEMENT SUPERSEDED: This Agreement supersedes and replaces the Interim Water Sales Agreement between Covington Water District, King County Water District No. 111 and the City of Auburn dated February 22, 2005. In witness whereof the Parties have caused this Agreement to be executed by their duly authorized representatives on the day of , 2010. CITY OF AUBURN PETER B. LEWIS MAYOR Resolution No. 4660 Exhibit "A" Page 6 of 8 ATTEST: Danielle E. Daskam, City Clerk APPR VED FOR : ie B. Hei , City Attorney KING COUNTY WATER DISTRICT NO. 111 WILLIAM C. HALL GENERAL MANAGER ATTEST: APPROVED AS TO FORM: District Attorney Resolution No. 4660 Exhibit "A" Page 7 of 8 Interim Water Sales Agreement Between King County Water District No. 111 And the City of Auburn Exhibit 1 Take or Pa Monthl Rates Year Base Charge Block and Summer Winter Overage Overage Rate 2010 $175.00 $0.91 Block rate + $0.25 2011 $175.00 0.91 X CPI* Block rate + $0.25 2012 $175.00 2011 Rate X Block rate + CPI` $0.25 2013 $175.00 2012 Rate X Block rate + CPI" $0.25 2014 $175.00 2013 Rate X Block rate + CPI* $0.25 2015 $175.00 2014 Rate X Block rate + CPI* $0.25 * 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 2011 equals the October 2010 CPI value divided by the October 2009 CPI value. Resolution No. 4660 Exhibit "A" Page 8 of 8