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Interlocal Agreement for Wastewater Treatment Disposal and Transport Services�,'ITY CLERK CIVIC CENTER EDMONDS, WA 980;20 0-41 1 1p'l/ C� AGREEMENT FOR WASTEWATER TREATMENT, DISPOSAL AND TRANSPORT SERVICES By and Among THE CITY OF EDMONDS THE CITY OF MOUNTLAKE TERRACE OL"'MPIC VIEW WATER AND SEWER DISTRICT Lwo RONALD SEWER DISTRICT May 17, 1988 LID VOL 2 1 46PUE0001 TABLE OF CONTENTS Page Section 1 Definitions 3 Section 2 Management of the Project 9 Section 3 Financing of the Project 9 3.1 Cost of the Project 9 3.2 Allocation of Project Costs 10 and Plant Capacity 3.3 Grant Funding 11 3.4 Payment of the Participant's 11 Share of Project Costs 3.5 Bond Issuance 12 Section 4 Upgrading or Expanding the Facilities 13 Section 5 Sewage Treatment 13 5.1 Availability of Capacity 13 5.2 Capacity Limit 14 5.3 Notification of Nearing Capacity Limit 15 5.4 Transfer of Capacity 15 5.4.1 Cost of Capacity Transfer 16 5.4.2 Alternative Costs of Capacity Transfer 16 5.4.3 Sharing in Capacity Transfers 17 5.4.4 Temporary Capacity Transfer 17 5.5 Treatment of Domestic Sewage Only 17 5.6 Sewage Quality 18 5.7 Pre -Treatment Ordinances 18 Section 6 Operation, Treatment and Quality of the 19 HL. 214 6PAGE000 Facilities and the Participant's Internal System 6.1 Operation and Maintenance 19 of the Facilities 6.2 Reporting Requirements 20 6.3 The Participant's Internal System 21 6.4 Ballinger Lift Station and Related 23 Facilities 6.5 Joint Use of Collection Systems Owned by One 25 Party. 6.6 Charges and Procedures Related to Joint 25 Sewerage Areas of Olympic View Water and Sewer District and the City of Edmonds Section 7 Payment for Maintenance, Operation, and Overhead 26 Costs for the Treatment of Domestic Sewage 7.1 Monthly Payments 26 7.2 Overhead Costs 27 7.3 Standby Maintenance Charge 28 7.4 Facilities Capital Improvements Fund 29 7.5. Participant's Rates and Sources of Payment 30 7.6 City Rates 31 7.7 Books and Accounts 31 Section 8 Oversight Committee 31 8.1 Establishment of Oversight Committee 31 8.2 Oversight of Construction 32 8.3 Oversight of Operations and Maintenance 32 Section 9 Replacement Standards; Insurance 33 OU 8 9 n02 VOL. 2146PAGE003 9.1 Replacement and Rehabilitation 33 Standards 9.2 Insurance 33 Section 10 Arbitration 34 Section 11 Successors and Assigns 34 Section 12 Amendment or Modification 34 Section 13 Governing Laws 35 Section 14 Number and Gender 35 Section 15 Notice 35 Section 16 Term 36 Section 17 Memorandum of Understanding 36 Exhibit A Allocated Capacity and Percentage Shares 38 Exhibit B Operations and Maintenance Costs -- Direct 39 Operations and Maintenance Costs -- Overhead 39 Exhibit C Memorandum of Understanding 40 Exhibit D Equivalent Customer Units Parameters 45 Exhibit E Methodology for Cost Computation Related 46 Capacity Transfer Exhibit F Service Area Map for 1988 47 Exhibit G Preliminary Project Cost Estimates 48 VOL, 214OPAGEO004 AGREEMENT FOR WASTEWATER TREATMENT, DISPOSAL, AND TRANSPORT SERVICES THIS AGREEMENT is effective as of the 17th day of May, 1988, by and among the City of Mountlake Terrace, Olympic View Water and Sewer District, and Ronald Sewer District (the "Participants"), and the CITY OF EDMONDS (the "City") (collectively, the "Parties"), all municipal corporations of the State of Washington. WHEREAS, the City's wastewater treatment and disposal facilities (the "Facilities") are being upgraded to meet the discharge limitations of the City's current National Pollutant Discharge Elimination System waste discharge permit; and WHEREAS, the City must improve the Facilities so that they will be in compliance with applicable federal, state, and local laws and regulations; and WHEREAS, the State of Washington has enforced both Federal and State statutes and in 1985 issued a Compliance Order and a Compliance Schedule to the City for the construction of secondary treatment facilities; and WHEREAS, the City desires to expand the capacity of the Facilities at the 2nd Avenue and Dayton Street site in order to meet current domestic wastewater treatment needs of various public entities located 8 8 0 6 Op 2 0 15 7 VOL. 21_ 46PAGE0005 in or near the City (collectively, the "Participants") and to provide projected ultimate treatment capacity for the City and the Participants as defined under "Allocated Capacity;" and WHEREAS, the Participants wish the City to assume the ownership and operation of certain transmission, metering, and pumping facilities, which are used jointly by some or all of the Participants and the City; and WHEREAS, the Participant is one of several Participants served by the Facilities, and the Participant is to equitably share in the financing of the necessary improvements to the Facilities provided that the City reserves a portion of the capacity of the improved Facilities for the treatment of danestic wastewater from the Participant's service area; and WHEREAS, The City desires to plan and provide for the long -tern capital and operational needs of the Facilities, which may include mandated technological and regulatory changes and increased capacity and space demands; and WHEREAS the Participants desire to be kept informed prior to and during the construction of improvements; to provide for a method of overseeing construction, operation, maintenance, and expansion of the facilities; and to provide a procedure for reviewing and commenting upon the Treatment Plant annual budgets; and M_ VOL. 2146PAGE0006 WHEREAS, the City and the Participants desire to provide for an integrated Industrial Pretreatment program within their respective service areas as required by DOE and/or EPA; and WHEREAS, The City and the Participants executed a Memorandum of Understanding in 1987 setting forth a number of principles and expressing their intent to enter into this Agreement; NOW, THEREFORE, in consideration of the foregoing and the mutual promises provided for herein, the Parties hereto for themselves, their assigns and successors in interest, agree as follows: Section 1. Definitions. For the purpose of this Agreement, the following words shall have the following meanings unless another meaning is clearly intended: 1.1. "AADF" means annual average daily flow, and shall mean the total flow of domestic sewage in millions of gallons during a full calendar year divided by the number of days in such year, expressed in 1.2. "Allocated CapacitygapaciLy of Domestic Sewage" means the maximum annual average daily flow (AADF) of Domestic Sewage that the Participant is authorized by this Agreement to transmit to the Facilities, measured in volume. Volume shall be measured by metered Domestic Sewage flow expressed in M®s of AADF. A substitute for direct metering is to be used where co -mingled flows for small 060211k) 157 - 3 - VOL.2146PA6E0007 numbers of users (under approximately 100 ECUs) described in Section 6.5 make direct measurement impractical. 1.3. "Ca city Limit" means the preceding 12 month AADF of any Party when it equals the Party's Allocated Capacity of Domestic Sewage. 1.4. "City" means the City of Edmonds or its successor. 1.5. "Customer" means a "single family residence" and/or an "equivalent customer unit" (ECU), as defined below. 1.6. "DOE" mans the Washington State Department of Ecology, or its successor. 1.7. "Domstic Sewage" means sanitary wastes normally collected from residential establishments, and shall include commercial and industrial wastes of similar strength or quality, and other commercial and/or industrial wastes that are pre-treated in accordance with City and/or Participant requirements meeting DOE and EPA guidelines. Domestic Sewage shall exclude ground water, storm water, drain water and industrial wastes not pre-treated in accordance with City and/Participant requirements meeting DOE and EPA guidelines. 1.8. "EPA" means the United States Environmental Protection Agency, or its successor. 4 - VOL. 214PAGE000S 1.9. "Ecuivalent Customer" Unit or "ECU" is a measure applied to a user of the sewerage system other than "single family residence." The number of Equivalent Customer Units assigned to any such user (for example, an apartment house, motel, school, hospital, nursing home, and any other public or commercial establishment) shall be the numerical ratio of the monthly volume of wastewater contributed by such user to the monthly volume of wastewater contributed by a typical single family residence. To serve as a practicable basis for computing the number of ECU's contributing into the joint sewerage system -- when and if such a computation is necessary or desirable to either augment or replace a direct flow measurement -- a list of users and the corresponding "equivalent customer" ratings is attached in Exhibit D, and incorporated herein by reference. 1.10. ,"Facilities" means the City's wastewater treatment facilities as described in the City of Edmonds Engineering Report, dated September, 1986, as amended, and includes the effluent transmission pipe used by all Participants (Edmonds Way Trunk), the outfall, the diffuser, and, upon the completion of the Project, the Improvements. 1.11. "Flow" means the volume of sewage per unit of time. 1.12. "Improyemnts" means those improvements to the Facilities described in the City of Edmonds Facilities Plan, dated January, 1988, as amended, or engineering plans and specifications approved by DOE, EPA, and the City, all of which are incorporated herein by this reference, and approved change orders carried out in '60�`l) 5 Vol.2i46PAGE 0009 - - accordance with the construction of the facilities required under this Agreement. 1.13. "Influent Point" means the point at which each Participant's Internal System connects to the Facilities. 1.14. "Internal System" means all sewer lines, pump stations and other sewer facilities upstream from the Influent Point owned and operated by each Participant, respectively. 1.15. "M®" means million gallons per day, referring to a rate of sewage flow. 1.16. "Maintenance and gyration Costs" means all direct costs and expenses incurred by the City in transporting and treating Domestic Sewage through the Facilities, maintaining those Facilities, and administering a joint Industrial Pre -Treatment program. Maintenance and Operation costs are described in Exhibit B, attached hereto and incorporated herein by this reference . 1.17. "Memorandum of Understand" means the agreement of that name between the City and the Participants executed in September, October and November, 1987, attached as Exhibit C and incorporated herein by reference. 1.18. "Monthly Maximum Flow" means the total flow of sewage in millions of gallons divided by the total number of days in that 6 - VOL. 2146PAGE OOIs- 0 r/� f month during which the greatest volume of flow occurs, in any given calendar year, and is expressed in MGD. 1.19. "NPDES Permit" means a National Pollutant Discharge Elimination Permit" granted to the City or to the Participant, as applicable, pursuant to chapter 90.48 RCW and the Federal Water Pollution Control Act, as amended. 1.20. — "Other Facilities" means facilities other than the Treatment Plant, the outfall and diffuser, and the Edmonds Way Trunk, which are used by the City and one or more Participants to transmit, measure, and pump sewage. 1.21. "Overhead Costs" means the City's general administrative, supervisory, and other indirect costs related to the operation and maintenance of the Facilities and Other Facilities. Overhead Costs shall be computed by the "step down" method. Overhead costs are described in Exhibit B, attached hereto and by reference incorporated herein. 1.22. "Oversi ht Committee" means the committee of that name established in Section 8 of this Agreement. 1.23. "Parties" means the City and the Participants. 1.24. "Participant's Jurisdiction" means the service area within which the Participant is responsible for providing wastewater 2 7 _ 7 _ VOL. 21 46PA6E001 1_ collection services, depicted on Exhibit F, attached hereto and by this reference incorporated herein. 1.25. "Project" means the Improvements and activities needed to implement it. 1.26. "Project Cost" means (1) the cost of preparing the planning studies and engineering plans and specifications for the Improvements; (2) the amounts paid to contractors for work performed under contracts for construction, installation and inspection of the Improvements; (3) the recorded pay and expenses of employees of the City directly related to the design, construction, installation and inspection of the Improvements, but not including any general City overhead; (4) the cost of materials, equipment and supplies directly related to the Improvements; (5) the cost of acquiring and condemning land, easements and rights -of -way for or related to the Improvements; (6) the cost of legal, engineering and other professional services related to the financing, planning, acquisition, construction, installation and inspection of the Improvements and to the resolving of any disputes or lawsuits related thereto, provided, however, that these costs are attributed to the project as a whole and not to the City's separate share; (7) the cost of obtaining necessary permits and franchises' (8) the cost of any reasonable expenses incurred by the City to mitigate the impact of the Facilities at the Dayton Street site upon the immediately surrounding neighborhood, including but not limited to expenses for landscaping, buffering, limited concealment of secondary clarifiers and street interfaces; (9) the cost of vacant land �11; VY -8- VOL.2a-4FiPAGEOOY2 purchased by the City in 1984 for expansion of the secondary treatment plant -- a sum of $137,462.06; and (10) other costs reasonably related to the planning, design, project administration, construction management, and general project management for the Improvements. 1.27. "Single Family Residence" means one structure, all connected and under the same roof, located on a lot or tract of real property having a separate and individual property description, with no other structure used for human occupancy located on that tract or lot, and which structure is used as a single family dwelling. Section 2. Management of the Project. The City shall, to the best of its ability, administer the planning, design, acquisition, construction and construction management of the Improvements and pay for the Project Cost thereof in accordance with the terms of this Agreement. The City shall use its best efforts to obtain permits and approvals necessary for construction, installation and inspection of the Improvements, and to secure grants from available sources. Section 3. Financing of the Project. 3. 1. Cost of the Project. The approximate Project Cost is estimated to be $39,500,000 . The exact cost of the Project will be determined by the City, acting reasonably, after construction, installation and acceptance of the Improvements. Should all bids or the contract price plus the total amount of all change orders exceed the estimated Project Cost, a bid award or any change order causing the 18806020 157 - 9 - VOL. 2146PAGE0013 estimated Project Cost to be exceeded shall be voted on by the Council of the City only after meaningful consultation with the legislative authority of each Participant, at a joint meeting to be called by the City. The City has entered into a Design Grant Agreement with the State for a maximum of $1.5 million. The City also expects to receive a grant and/or loan from either the State or the Federal Government in an amount equal to approximately 50% of eligible costs as defined by the respective programs. The City shall use its best efforts to obtain these grants. Interest earnings the City is permitted to retain on grant and loan proceeds shall be applied to the Project Cost and shall be treated as grant proceeds for the purpose of this Agreement. 3. 2. Allocation of Project Cost and Plant Capacity. Part of the Project Cost may be financed from grants and/or loans. The remaining Project Cost shall be paid for by the City and the Participants in the proportionate shares of their respective Allocated Capacities of Domestic Sewage as follows: Allocated Capacity Of Domestic Project Cost Party Sewage (AADF) Contribution % Edmonds* 4.609 MGD 50.787% Mountlake Terrace Olympic View Water District Ronald Sewer District 2.103 MGD 23.174% 1.502 MGD 16.551% 0.861 MGD 9.488% - 10 - VOL, 2i46PAGE0014 TOTAL: 9.075 100.000% * Edmonds share includes separately contracted capacity for approximately 70 connections in the Town of Woodway, and separately contracted capacity for approximately 200 connections for Lynnwood. 3. 3. Grant Funding. The total amount of grant and/or loan proceeds, including any earned interest, available for the Project, whether received in a lump sum or in installments over a period of time, or through a reduced interest rate loan program, shall be applied toward the reduction of the total Project Cost to be allocated among the Participants as described above. 3. 4. Payment of the Participant's Share of Project Costs. Commencing November 2, 1987, each Participant shall pay to the City its proportionate share of previous eligible Project Costs paid by the City. Subsequently, the City shall submit to each Participant monthly invoices for eligible Project Cost and each Participant shall make every effort to make expeditious payment on the next available disbursement cycle. Documentation provided by the City in support of the preliminary Project Cost amounts shall be similar to documentation required for grant reimbursement. In the event that a Participant's payment is received more than 45 days after receipt of City's bill, the City shall be entitled to a late payment surcharge equal to the interest which the payment would have earned for the period in excess ' -11- VOL. 2146PAGE0015 of 45 days, based on an interest rate typically used for municipal investing purposes. The Participant shall have the option to pay the balance of its share of the Project Costs in one lump sum on or before the date of the City's issuance of revenue bonds or notes (whichever occurs first), or in monthly payments during the design, construction and installation of the Improvements pursuant to monthly invoices of the City. The Participant's lump sum payment shall be by check, draft or wire transfer in immediately available funds and shall be placed in an escrow account and withdrawn at such titres and in such amounts as are determined by the City to be necessary to meet the obligations of the contract for construction and installation of the Improvements. All interest accumulated in an escrow account established in the City Treasury for each Participant shall be returned to the Participant or at the Participant's direction shall be applied to Participant's share of the Project Cost. If the Project Cost exceeds or is less than the estimate set forth in Section 3.1, the City shall at reasonable times and upon reasonable notice in writing assess or refund to the Participant for its share of that difference, and the Participant shall pay those assessments, if any, subject to the provisions of Section 3.1. 3. 5. Bond Issuance. The City and each Participant each retain its rights to issue bonds and other obligations in accordance with applicable law, but shall not act in such a manner as to impair the rights of the holders or owners of bonds issued by any other Party. - 12 - VOL.2146PAGE0016 Section 4. YjRqradin or indin the Facilities. If the City is further required by applicable laws or regulations to upgrade or expand the Facilities to provide a higher level of wastewater treatment or to modify the methods and/or locations of wastewater discharge, each Participant shall, if it desires to continue discharging Domestic Sewage into the Facilities, pay the Participant's proportionate share as set forth above of the cost of constructing such additional improvements and/or adding needed equipment, and acquiring land, whether by purchase or lease. The City may require the Participant to make payments on the same basis as the Project Costs. The City and each Participant shall seek opportunities to minimize or avoid the cost of additional improvments through mutually agreeable modifications in the quantity and quality of Domestic Sewage discharge by the Participant. In lieu of paying for its share of the cost of constructing such additional improvements, any Participant may at its discretion discontinue discharge of Domestic Sewage into the Facilities, and then pay only those charges described in 7.3 of this Agreement. Section 5 . Sewage_ Treatment. 5. 1. Availability of Capacity. Until approximately April, 1991, when the City is scheduled to complete the Improvements, the City shall receive, transport and treat by means of the existing Facilities the domestic sewage discharged by each Participant up to the limits permitted by EPA and DOE. Upon completion of the Improvements, the City shall receive, transport and treat by means -of the Facilities the 13 - VOL. 2146PAGE 0017 Domestic Sewage discharged by the Participant up to the Participant's Allocated Capacity of Domestic Sewage. Unless otherwise provided in this Agreement (and/or in other agreements between Participants), a Participant shall not serve customers in another Participant's service area, subject to applicable laws and regulations. The City will provide this quantity of Allocated Capacity of Domestic Sewage as long as the Participant shall require it, barring events and circumstances which are beyond the City's control. However, this Agreement creates no obligation by the City beyond the term of this Agreement. 5. 2. Ca city Limit. After construction of the Improvements, no Party may discharge into the Facilities any Domestic Sewage in amounts greater than its Allocated Capacity of Domestic Sewage, and the City may refuse to accept and treat any amounts in excess of any Party's Allocated Capacity of Domestic Sewage. If the City determines that the amount of the Party's Domestic Sewage is in excess of the Party's Allocated Capacity of Domestic Sewage, the Party shall pay, in addition to its ordinary charges described in Section 7.1, any extraordinary costs incurred by the City to treat the excess Domestic Sewage, as well as costs related to capital costs to treat and transport the excess capacity. Capital costs for treating sewage flows beyond the Capacity Limit or the Allocated Capacity of Domestic Sewage without prior arrangements such as described below, shall be charged according to the methodologies described in Section 5.4 on Transfers of Capacity, and shall be credited to each Party based on its Allocated Capacity of Domestic Sewage. The City shall account to any Party for its extraordinary costs. Any extraordinary costs collected by the City C* UQ5" � Z _� �� `f -14 - VOL. 2146PAGE0018 from the Party shall be credited to the total Operation and Maintenance cost prior to apportionment of M & O costs to the other Parties that are within their respective Allocated Capacities of Domestic Sewage. The City's acceptance of excess amounts on any occasion or occasions shall not bind the City to accept excess Domestic Sewage amounts on any other occasion. When the AADF of the Party reaches 85 percent of the Party's Allocated Capacity of Domestic Sewage, the Party shall commence planning for treatment of its domestic sewage beyond its Allocated Capacity of Domestic Sewage. 5. 3. Notification of Nearing Qapacity Limit When any Participant's flow reaches 85 percent of its Capacity Limit, the City shall notify it in writing. The Participant shall commence the preparation of plans to use its remaining Allocated Capacity and to provide for additional capacity beyond the Capacity Limit. The Participant shall be responsible for providing the City with information on proposed development which would increase its flows. 5. 4. Transfer of Capacity. If a Party desires to discharge greater amounts of Domestic Sewage into the Facilities than are allocated as set forth herein, it may request to purchase that additional capacity from any other Party with purchased capacity in the Facilities. If a Party determines that its Allocated Capacity of Domestic Sewage is excessive it may offer to sell such excess capacity to any other Participant. For the purposes of this Section 5 only, the Town of Woodway shall be considered a Party and shall be given the 0 D - 15 - VOL. 2146PAGE 001.9 opportunity to purchase capacity in the future. It is fully recognized by the City and the Participants that no Party is obligated in any way to transfer capacity -- temporary or permanent -- to any other Party. The willingness of any Party to enter into a transfer arrangement and the terms of such arrangement shall not be subject to review by the Oversight Committee or to arbitration. The City shall be notified of all pending and final transfers of capacity and of all terms of such transfers in writing, and shall make this information available to all Participants. 5.4.1. Cost of Capacity Transfer. The cost of transferring such capacity shall be determined by the Future Value method which is based on the principle that the capacity purchaser should reimburse the capacity seller for all previous payments which the seller has made for the transferred capacity, and for the compounded costs of such payments as defined by an interest rate which the City or the Participant could have expected to receive by investing these payments. The interest rate shall be set by the capacity seller and shall be consistent with generally accepted public accounting principles. Exhibit E, attached and incorporated herein by reference, describes the methodology that would be used to derive the capacity transfer price at any future year. 5.4.2. Alternative Costs of Capacity Transfer. Any two Participants, or any Participant and the City, may agree to different terms than those described above and in the methodology in Exhibit E. adMIAM 16 - do�.2i46PAGG0020 k-1 0 121 �,. 5.4.3. Sharina in Capacity Transfers. In the event that any two participants have agreed to a transfer of capacity on either cost basis above, the other Participants shall be given the opportunity to participate in the transfer if they agree to the transfer costs, and if sufficient capacity is available. 5.4.4. Temporary Capacity Transfers. Temporary capacity transfers will be permitted, for a period not exceeding five years, from any Party having excess capacity to any Party needing capacity on the basis of any terms negotiated between those Parties. The Participants agreeing to a temporary capacity transfer shall notify the City of the terms of their arrangement, which shall include a plan for ending the temporary transfer by demonstrating how permanent provisions are to be made. In no event may the the total Allocated Capacity of Domestic Sewage of the Parties after the transfer exceed the Allocated Capacity of Domestic Sewage of the Parties before the transfer. 5. 5. Treatment of Domestic Sewage Only. No Party shall discharge into the Facilities any wastewater other than Domestic Sewage. The City is obligated to treat only Domestic Sewage and may reject all other forms of wastewater. The City may refuse to transport and treat Domestic Sewage from those portions of any Participant's sewage collection system which do not conform to DOE and/or EPA standards for Domestic Sewage. VOL. 21 46PAGEO021 - 17 - 5. 6. Sewage Quality. While there has historically been, and continues to be, a presumption that each Participant's and the City's sewage flows are predominantly domestic residential flows with reasonable, and approximately equivalent, levels of Biological Oxygen Demand (BOD) and Suspended Solids (SS) levels, the Participants and the City shall be willing to address any changes in such presumptions. The Participants and the City shall cooperate to develop, as needed, ordinances and programs to mitigate BCD and SS levels which are higher than acceptable norms, as determined by either regulatory requirements or by generally accepted environmental practices. The costs of such programs, if and when undertaken, shall be directly applied to Parties responsible for the discharge of nonconforming wastewater and, unlike general Maintenance and Operation costs, shall not be based on overall sewage flow levels of the City and the Participant. 5. 7. Pre -Treatment Ordinances. If and when required to do so by EPA or DOE, or other applicable regulations and agreements, all the Parties shall adopt a Pre -Treatment Ordinance (or Resolution as may be appropriate) meeting all Federal and/or State requirements. The City shall be responsible for the administration and operation of a pre-treatment program, if and when mandated. Administration and operation shall include, but not be limited to, developing procedures, forms, and instructions; categorizing dischargers; records keeping; compliance tracking; establishment of annual limits; sampling, testing, and monitoring; preparation of control documents; and preparation of permits. Each Participant shall be responsible within its jurisdiction s 20 . - 18 - VOL. 2146PAGE 0022 for identification of dischargers, issuance of control documents, issuance of permits, and enforcement of compliance, and collection of any special fees, penalties, or other associated extraordinary charges. All City costs shall be included in the direct costs of Operation and Maintenance of the treatment plant. All the costs relating to the responsibilities of each Participant shall be absorbed by the Participant. Section 6. Operation, Treatment and Quality of the Facilities and the Participant's Internal System. 6. 1: _ ration and Maintenance of the Facilities. The City shall own and shall be responsible for the operation and maintenance of the Facilities, both before and after construction of the Improvements, subject to the terms of this Agreement. The Facilities shall be operated and maintained in accordance with high engineering standards, and the standards established by the EPA, the DOE, the Washington State Department of Social and Health Services and other federal, state and local agencies. The quantity of Domestic Sewage discharged by a Participant into the Facilities shall be metered at the Influent Point, with the exception of co -mingled flows which will be accounted for by other generally accepted methods using either Equivalent Customer Units, directly measured water flows for winter months, or other methods approved by the Oversight Committee. The meter that measures the Participant's discharge of Domestic Sewage into the Facilities shall be calibrated by the City at least once each uoL.2146PAGE0023 y - 19 - calendar year with the presence of any Participant that so desires, and may be inspected by either Party at the expense of such party at any time upon reasonable notice to the other. The City will continue to monitor other relevant variables such as water consumption by each Participant, rainfall, and other suitable variables, which will be used to provide redundancy for failed meters and an alternative method to check the validity and accuracy of the meter readings. The City and the Participants shall commission a separate engineering study to evaluate metering devices and practices so as to be able to install and properly operate the most suitable measurement and recording devices for the City's and the Participants' needs. 6. 2. Reporting Requirements. Each Participant shall provide the City with monthly reports of the number of sewer connections. The City shall monthly read, record and report the amount of measured Domestic Sewage, measured in MC,D, discharged into the Facilities, accounted for by Participant. If a Participant is notified that it has reached 85 percent of its Capacity Limit, the Participant shall at least once every calendar quarter thereafter advise the City in writing of any governmental or private actions that will affect the volume and quality of the Participant's Domestic Sewage flow, including but not limited to the issuance of building permits, sewer permits, water permits and plat approvals, the adoption of land use and zoning ordinances or amendments thereto, and the execution of developer extension contracts. � _- -20- VOL. 2146PAGE0024 The City shall periodically inspect its Facilities and the Participant shall periodically inspect its Internal System to ensure adherence to applicable standards and to minimize infiltration, exfiltration and deposits of rock or other debris. During construction of the Improvements and thereafter, the City and any Participant at any reasonable time may inspect the Internal System and the Facilities. 6. 3. The Participants' Internal System. Each Participant shall operate and maintain its Internal System at its sole expense, including all of its facilities as required to maintain the volume and quality of Domestic Sewage within the limits set forth in this Agreement. Each Participant shall observe the highest practicable standards and practices in the construction, operation, and maintenance of its Internal System with particular attention to the following: (a) minimizing entry into the sewerage system of groundwater and/or surface water (I/I - infiltration and inflow); maintaining a favorable character and quality of Domestic Sewage in accordance with the standards set forth in Section 5.6, (b) eliminating septicity and objectionable odors, entry of petroleum wastes or other chemicals and/or wastes detrimental to sewer lines, pumping stations, the Facilities, and the waters of Puget Sound; and (c) maintaining an efficient and economical utility operation, while achieving optimum pollution and environmental control. Each Participant shall prevent, except for unusual circumstances to be reviewed and recommended by the Oversight Committee, the connection of any storm or drainage facilities to its Internal System. ';62 0 - 21 - VOL. 2146PAGE 0025 The City shall give written notice to the Participant of any condition within the Participant's Internal System that violates this Agreement or applicable laws, regulations or permits. If the Participant does not correct such condition within a reasonable time after the City gives written notice thereof, the Participant shall pay to the City any reasonable and necessary costs and expenses incurred by the City in connection with such condition. If the Participant discharges into the Facilities any solids, liquids, gases, toxic substances or other substances which the City reasonably believes is causing or will cause damage to the Facilities, or is creating a public nuisance or a hazard to life or property, the Participant shall either discontinue the discharge of such substances or pay for the costs of modifying the Facilities so that they are capable of satisfactorily handling such substances. Because substandard conditions of Domestic Sewage may cause serious damage to the Facilities, the Participant shall comply with any City order regarding the composition of Domestic Sewage, and after compliance may thereafter cause to be arbitrated the reasonableness of that order in accordance with Section 10. The Parties shall cooperate with each other to determine the source of possible violations of applicable law, regulations and permits (including applicable NPDES Permits). In the event the City is fined or otherwise penalized by local, State, or Federal agencies for failure to operate or maintain the Facilities in accordance with the requirements of the agencies, and it is demonstrated to the satisfaction of the City that such failure is due in whole or in part to the Participant's discharge of Domestic Sewage in violation of this Agreement, then the Participant shall pay its allocable share (as _ VOL.2146PAGE0026 22 determined by the parties or by an arbitrator in accordance with Section 10) of the costs of such fines or penalties, including its share of the associated administrative, legal and engineering costs incurred by the City in connection with the fines or penalties. 6. 4. Ballinger Lift Station and Related Facilities. The City, at its convenience, but no later than one year after completion of the Treatment Plant Project, shall assume ownership and operational responsibility for the Ballinger Lift Station and related meters and sewer mains from the City of Mountlake Terrace. If found necessary on the basis of the City's evaluation and at the City's discretion, these facilities shall then be upgraded to conform with City standards and needs, with capital cost participation by Mountlake Terrace and Ronald Sewer District based on capacity and with each of those Participants paying its share of the capital costs at the time of construction. Operation and Maintenance costs will be allocated to each Participant annually on the basis of AADF. The City shall have the option of transferring the responsibility for the flows currently transported through the Ballinger Lift Station to the Municipality of Metropolitan Seattle ("Metro") in the event that a sewage exchange for Metro Richmond Beach flows is implemented. In the event of such a flow transfer, and the construction of various facilities needed to implement the Metro transfer, the City, Mountlake Terrace, and Ronald Sewer District would retain the responsibility of all capital and. Maintenance and Operation Costs, including possible demolition of the existing lift station, on VOL. 214+6PAGE002"7 the basis of proportionate share of annual flow through the Metro transfer facilities. Under the Metro option the City would still retain the responsibilities related to the transport and treatment of the domestic sewage that currently flows through the Ballinger Lift Station, including, but not limited to, planning, preliminary and final engineering, metering, recording, accounting and reporting. The assumption by the City of the Ballinger Lift Station -- either through the City's ownership and operation, or through transfer to Metro -- shall include a provision for honoring the existing agreement between Mountlake Terrace and Lynnwood for emergency overflow to the west trunk sewer with payment to the City via Mountlake Terrace by method that will protect the parties' purchased capacity at the Facilities. Also as part of this section, Mountlake Terrace shall have the right to close out its existing remaining debt service obligation to the City for existing facilities, because this remaining obligation is relatively small and has a very brief remaining period. The Parties to this Section 6.4 shall cooperate to the extent necessary to facilitate the sewage transfer between the City and Metro, recognizing that the construction of these facilities may include some temporary flow diversions, construction impacts, and other impacts which may not totally be anticipated at this time. It is recognized that the costs of the Ballinger Lift Station and the related facilities for implementing a Metro transfer are only participated in by the City, Mountlake Terrace, and Ronald Sewer District. ofjyYZ - 24 - VOL. 21.46PAGE0028 6. 5. Joint Use of Collection Systems Owned by One Party. It is recognized by the Parties that at present certain Parties discharge sewage into a collection and transmission system which is part of the Internal System of another Party. Furthermore, in the future one Party may wish to use parts of the Internal System of another Party as a practical means of transporting sewage. The joint use areas are shown on the Service Area maps in Exhibit F. The joint usage of such facilities shall be agreed to by both the discharging Party and the Party that owns these facilities. The discharging Party's volume of flow shall not be counted in the calculation of the facility owner's volume of Allocated Capacity of Domestic Sewage. 6. 6. Charges and Procedures Related to Joint Sewerage Areas of Olympic View Water and Sewer District and the City of Edmonds. The joint areas of these tvxD Participants are shown in Exhibit F. The discharging Participant shall be responsible for all charges collected by the City for the transmission and treatment of the Domestic Sewage discharged into the joint facility, including all the costs contained in this Agreement , if applicable. The Participant owning the facility shall be reimbursed by the discharging Participant at the owning Participant's current rates for all costs related to the jointly used collection facility including Maintenance and Operation costs and General Facility Fees (also known as connection charges) related to this facility only. The discharging Participant shall be responsible for the billing of the discharging customer and for reimbursing the facility owner for its costs relating to the shared VOL. 4 w r ) r S } - 25 - facility. Sewer permits and inspections shall be provided by the discharger's Participant and such Participant shall provide the facility owner with a copy of the side sewer card and inspection report within 30 days after the final inspection. Should a jointly used Internal System require either capacity expansion or other capital improvements, the terms of funding such improvements shall be negotiated between the facility owner and the discharger's Participant. Section 7. Payment for Maintenance, Operation, and Overhead Costs for the Treatment of Domestic Sewage._ 7. 1. Monthly Payments. Commencing as soon as practicably possible after the execution of this Agreement, the Participant shall make monthly payments to the City for the transportation and treatment of each Participant's Domestic Sewage. The monthly payments shall consist of one twelfth of the Participant's proportionate share of the Maintenance and Operation Costs and Overhead Costs adopted in the annual budget of the City for the Facilities. Each Participant's percentage share of the total annual Maintenance and Operation Costs and Overhead Costs shall be determined by dividing the AADF of the Participant for the calendar year preceding the budget year by the sum of the AADF of the Participants and the City for the calendar year preceding the budget year. If the total amount paid by the Participant during any calendar year is different from the amount due and owing for the calendar year based on actual AADF and Maintenance and Operation Costs and Overhead Costs, a final adjusting bill or payment shall be made by the City by April 1 of the subsequent year with the adjustment 3 c20157 - 26 - VOL. 2146PAGE0030 being paid or credited in 6 equal monthly installments. The estimated current monthly payments shall be computed on the basis of the following formula: Allocation = (Most recent July -July flow %) X (Adopted O&M Budget)/12 Note: for the purposes of this Agreement the 0 & M Budget shall include the Overhead costs as well as direct costs. The City shall provide the Participants with a full accounting of all flows for each calendar year as well as a separate summary of the actual Maintenance and Operation Costs incurred during the previous calendar year. The flows and costs will include both the Facilities and the Other Facilities, and shall be provided at the earliest time possible during the calendar year, and no later than March 1, barring unforeseen circumstances. Each Participant's monthly payments shall be due at the earliest date depending on the Participant's accounts payable cycle. In the event that the Participant's payment is received more than 45 days after receipt of City's bill, the City shall be entitled to a late payment surcharge equal to the interest which the payment would have earned for the period in excess of 45 days, based on an interest rate typically used for municipal investing purposes. 7. 2. Overhead Costs. In addition to the direct Maintenance and Operation costs described in Appendix B, each Participant will pay an Overhead Cost equal to 10 percent of the direct Maintenance and Operation Costs allocable to that Participant. The 27 VOL.2146PAGE 0031 - percentage was computed by the "step-down" allocation method as applied to the City's general administrative, supervisory, and other indirect costs related to the operation and maintenance of the Facilities. The Overhead Cost percentage may be reviewed by the Oversight Committee at the request of any of the Participants within 3 years of the new plant start-up, estimated to be April of 1991. Any future review and change in the percentage shall utilize the "step down" method. 7. 3. Standby Maintenance Charge. Whenever a Participant discontinues the discharge of Domestic Sewage into the Facilities, or discharges less than 0.3 MGD of Domestic Sewage into the Facilities for a period of 30 days or more, the Participant shall pay to the City in lieu of the monthly charge described above (Section 7.1) until it regularly discharges more than 0.4 MGD, a standby maintenance charge, which shall be a monthly fee calculated by the City to provide for the Participant's proportionate share (as defined in Section 3.2) of the City's fixed (not related to amount of sewage) costs of operating and maintaining the Facilities in a condition of readiness to accept and treat Domestic Sewage at the full capacity of the Facilities. The Participant shall give the City written notice of its intention to discontinue the discharge of Domestic Sewage (or to reduce its regular discharge to less than 0.3 MGD) at least 2 months prior to such discontinuance, and shall give the City 2 months notice of its intention to commence discharging Domestic Sewage over 0.4 MGD into the Facilities. Overhead Costs shall be added to this charge. o o2o 15 - 28 - VOL. 2146PAGEUO32 7. 4. Facilities Capital DEprovemnts Fund. The City shall establish a capital improvements fund to handle future capital improvements, major replacements, or major repairs not included within the regular Maintenance and Operation Costs. The amount of the capital improvements fund shall be initially set at $100,000. Each Participant shall contribute to the fund in the same ratio as its original allocated capacity percentage as shown in Exhibit A. Disbursements from the fund shall be treated as having been made on a pro rata basis according to the same allocation as contributions to the fund. Initial assessments to the fund shall be made in equal annual installments over a period of five years. Subsequent assessments shall be structured so as to maintain as nearly as possible a $100,000 balance, and shall be phased on the same basis as the original assessments to the fund. Every five years the nominal amount of the fund (originally $100,000) shall be increased to reflect inflationary cost increases, using such commonly accepted indices as the Engineering News Record (ENR) Construction Index. The City shall maintain a separate accounting of the fund with any interest earning accruing and remaining in the fund. Disbursements from the fund in excess of $30,000 (as adjustable for inflationary cost increases as described above) shall be approved by the City Council, only after review and cent by the Oversight Committee. The existence of the Capital Improvements Fund and the fact that expenditures are made therefrom shall not be construed as limiting the ability of the City to make and allocate to the Participants needed expenditures on an emergency basis and under the terms of this ,. V01.2146PAGE 0033 Agreement when the public safety, health and general welfare, legal and regulatory requirements or unforseen circumstances require expeditious action. Money in the Capital Improvements Fund shall be used only for future capital improvements, major repairs and major replacements to the Facilities, and shall not be pledged to or used for payment of any bonds, notes or obligations of the City or any of the other Participants. Expenditures from the Fund shall be considered a Maintenance and Operation Cost as defined in this Agreement and those expenditures shall be made as directed by the City. For purposes of cost allocation to Participants, however, these expenditures in the Maintenance and Operation Costs category will be allocated on the basis of Allocated Capacity of Domestic Sewage and not on the basis of annual flow. 7. 5. Participant's Rates and Sources of Pa nt. The Participant shall pay the charges described in Sections 7.1 through 7.3 out of the revenues of the Participant's Internal System. The Participant's payments to the City shall be part of the expenses of maintenance and operation of the Participant's Internal System, prior and superior to any charge or lien of any revenue bonds issued by the Participant that are payable from the revenues of its Internal System. The Participant shall establish rates and collect fees and charges for sewer service in amounts at least sufficient to pay for (a) the maintenance and operaton of the Participant's Internal System, including the Participant's payments to the City, and (b) the principal ., r - •. F,*: he of and interest on any and all Participant revenue obligations that constitute a charge on the revenue of the Participant's Internal System. 7. G. City Rates. The City shall establish rates and collect fees for sewer service in amounts at least sufficient to pay for (a) the maintenance and operation of the City's sewer system, including its share of the Facilities, and (b) the principal of and interest on any and all City revenue obligations that constitute a charge upon the revenues of the City's sewer system. 7. 7. Books and Accounts. The City shall keep full and complete books of accounts showing the Maintenance and Operation Costs incurred in connection with the Facilities and the Other Facilities, and the portion thereof applicable to each of the Participants. The costs of keeping those books shall be considered to be a Maintenance and Operation Cost to the City. Audits of the books shall be performed every three years unless waived by the Oversight Committee, and the cost shall be considered a direct cost of the Treatment Plant. More frequent audits, if requested by any Participant, shall be charged to the Participant(s) making the request. Section 8. Oversight Committee. 8.1. Establishment of Oversight Committee. There is hereby established an Oversight Committee for the purpose of (a) advising the City concerning construction, operation, maintenance and expansion of the Facilities, (b) giving the Participants the opportunity to resolve any disagreements that may arise between or - 31- VOL.2146PAGE0035 among them with respect to the construction, operation, maintenance and expansion of the Facilities, (c) providing a mechanism for reviewing construction cost which raise the total Project Cost above $39.5 million, and (d) for the additional purposes described in this Agreement. The Oversight Committee shall consist of a designated representative (or designated alternate representative) of each Participant. Each Participant shall have one vote. 8.2. Oversight of Construction. Prior to and during construction of the Improvements, the City shall report to the Oversight Committee at least once each month concerning progress of the Project. Any increase in the Construction Cost above $39.5 million at the time of the awarding of the contract for construction of the Improvements, or at the time construction contract amendments are requested, shall be reviewed by the Participants in accordance with Section 3. 8.3. Oversight of Operations and Maintenance. After acceptance of the Improvements, the Oversight Committee shall meet at least quarterly, unless, by a vote of at least a majority of the votes held by the Participants, the Oversight Committee decides to meet less frequently. At each quarterly meeting of the Oversight Committee, the City shall report to the other Participants concerning the operation and maintenance of the Facilities as more particularly described in Exhibit B. On or before July 1 of each year, the City shall provide to the other participants a preliminary proposed budget for operation and .� 32 � ,f .' � _ _ VOL.2146PAGE 0036 maintenance of the Facilities during the following year. The City shall review and consider any reports and recommendations made by the Oversight Committee on subjects and matters described in Exhibit B. Section 9. Replacement Standards; Insurance. 9. 1. Re lacement and Rehabilitation Standards. Replacement, reconstruction, rehabilitation, expansion or upgrading of the Facilities shall be in accordance with applicable federal, state and local -laws and regulations. Additions, betterments and improvements to the Facilities of the City shall be installed and constructed in accordance with generally recognized engineering standards at least equal to the standards of the City and in accordance with all applicable federal, state and local laws and regulations. 9. 2. Insurance. The City shall purchase on behalf of all the Participants and maintain, through either companies or insurance pools, insurance sufficient to pay for all loss or damage to the Facilities resulting from their operation in a normal and prudent manner, including loss or damage caused by the operation of joint sewerage facilities which are not a direct part of the Treatment Plant. The Participant shall purchase and maintain, through either companies or insurance pools, insurance sufficient to pay for all loss or damage to the Facilities caused by the operation of its Internal System. In the alternative, the City or a Participant may set aside cash in a reserve fund in an amount sufficient to pay for such loss or damage, subject to review and recommendation by the Oversight Committee. ' ' - 33 - VOL. 2146PAGE0 037 Section 10. Arbitration. In the event of a dispute between the City and a Participant concerning any matters arising under the terms and conditions of this Agreement, unless specifically excluded from arbitration, the dispute shall first be considered by the Oversight Committee in a non -binding manner. If the dispute is not settled in the Oversight Committee, it shall be placed before an arbitrator approved by the disputing parties, and the decision of that arbitrator shall be final and binding on both parties. However, the parties by agreement may waive arbitration. The venue of the arbitration shall be the Seattle vicinity, unless the disputing parties agree otherwise. The arbitrator's fees and costs shall be shared equally by the Parties. Section 11. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon successors in interest and assigns of the Parties, and is not intended to confer rights or benefits upon any third party except as expressly stated herein. Performance of the obligations undertaken by either party may not be assigned without the prior written consent of the other, which consent shall not be unreasonably withheld. Section 12. Amendment or Modification. No amendment or modification of this Agreement, including any addition or deletion thereto, shall be effective unless approved and executed by the Parties in the same form and manner as, and subject to the remaining provisions of, this Agreement. In the event the City contracts with any Participant in a manner that modifies the term of this Agreement, the City and that Participant shall offer the other Participants the opportunity to incorporate the same terms in this Agreement or in additional contracts, assuming the modifications are applicable to the Participants. Section 13. Governing Laws. This Agreement shall be governed and construed in accordance with the laws of the State of Washington. Venue in connection with any legal proceeding affecting this Agreement shall be in the Superior Court of the State of Washington for Snohomish County. Section 14. Number and gender. Whenever applicable the use of the singular number shall include the plural, the use of the plural number shall include the singular and the use of any gender shall be applicable to all genders. Section 15. Notice. All notices and payments relating to this Agreement shall be made at the following addresses, unless the other party is otherwise previously notified in writing: To the City: City of Edmonds 505 Bell Street Edmonds, Washington 98020 To the Participant: City of Mountlake Terrace 23200 58th Ave. West Mountlake Terrace, WA 98043-4697 Olympic View Water and Sewer District 23725 Edmonds Way Edmonds, WA 98020-6097 Ronald Sewer District 17505 Linden Ave. N. P.O. Box 33490 Seattle, WA 98133 - 35 - von• 21_46PAGE0039 Section 16. Term. The term of this agreement shall be for 30 years from its effective date. At the end of this period the parties will negotiate in good faith towards the continuance of this Agreement with the understanding that the economic terms of continued participation will reflect the investment of the Participants in the Facilities and the remaining useful life and remaining capacity of the Facilities at that time. Section 17. Memorandum of Understanding. This Agreement shall be construed and applied consistent with the Memorandum of Understanding, attached as Exhibit C, but in the event of conflict, this Agreement shall govern. This Agreement supersedes and replaces sewage service agreements between the City and Olympic View Water and Sewer District (dated October 9, 1967), and between the City and the City of Mountlake Terrace (dated October 5, 1971), and those agreements shall be of no further force and effect. EXECUTED IN DUPLICATE to be effective as of the date set forth above, or such later effective date as may be required under Chapter 39.34 RCW, if applicable. CITY OF MOUNTiAKE TERRACE CITY OF EDMONDS r By __ .J By Mayor or - 36 - VO�..2146PAGE0040 Attest: U.4 AM - Approved as to Form: OLYMPIC VIEW MTER AND SEWER DISTRICT 0 Board of Commissioners Attest: Approved as to Form: Attest:�2 0 Approved as to Form: RCNALD SEWER DISTRICT President, Board of Commissioners Attest: Approved as to Form: va. 2146PAGE0041 37 - Exhibit A Allocated Capacity and Proportionate Share Allocated Capacity Proportionate of Domestic Sewage* Percentage Edmonds** 4.609 MGD 50.787% Mountlake Terrace 2.103 MGD 23.174% Olympic View Water District 1.502 MGD 16.551% Ronald Sewer District 0.861 MGD 9.488% TOTAL: 9.075 100.0000 ** Edmonds share includes separately contracted capacity for approximately 70 connections in the Town of Woodway, and separately contracted capacity for approximately 200 connections for Lynnwood. * Expressed in MGD's of AADF ^; � I _ 38 - VOL.2146PAGE0042 Exhibit B MAINTENANCE AND OPERATION COSTS -DIRECT Direct costs include, but are not limited to: Labor, power, light, water, heat, phones, chemicals, equipment, tools, materials, supplies, insurance premiums, engineering services, attorney services, other contract services, rent, inspection, and taxes; The cost of rehabilitating, reconstructing or replacing equipment and portions of the Facilities as needed to continue substantially the same capacity and quality of service (Facilities Reserve and Replacement Fund., Section 7.4) or the debt service costs for obligations incurred for such replacement, rehabilitation or reconstruction (provided, that where the Participant provides a cash contribution for such replacement, rehabilitation or reconstruction, the City's debt service costs relating to the same replacement, rehabilitation or reconstruction shall not be included in Maintenance and Operation Costs for purposes of this Agreement); and Such financing and debt service costs for which the Parties may become jointly liable. MAINTENANCE AND OPERATION COSTS -- OVERHEAD These are the costs which are initially set at 10% of the Direct 0 & M costs. They were computed by the Step Down method, and are intended to recover general governmental costs related to the operation of the wastewater treatment plant and related facilities. These costs include but are not limited to: financial costs including budgeting, accounting, accounts payable; data processing; risk management; personnel administration including hiring, personnel management; buildings and grounds maintenance performed by the City; custodial work if needed; general legal costs; security; equipment rental (unless directly charged). �R5 6��� � - 39 - VOL.2146PAGE0043 Exhibit C Memorandum of Understanding June 30, 1987 Rev. 7/15/87 Rev. 9/9/87 Rev. 9/22/87 flows only M140RANDUM OF UNDERSTANDING Background The representatives of the jurisdictions named below and referred to as the Participants, have been meeting regularly since March, 1987, to draft the elements of an Agreement for the provision of Secondary Sewerage Treatment Facilities (the Project) by the City of Edmonds for the Participants. This Memorandum incorporates most of the principles and concepts which the Legislative bodies have set in position papers exchanged earlier this year. Immediate execution of this Memorandum will enable all the Participants to commence financial participation in the project, and will be followed by the expedient preparation of a full legal Agreement. Principles 1. Each Participant is to fund its own share of plant design capacity, which for the purposes of cost allocation is defined as Annual Average Daily Flow (AADF), expressed in units of million gallons per day (MGD). 2. The following ultimate design capacities, expressed in Annual Average Daily Flows, will be made available to each participant: Capacity Percentage Edmonds 4.498 49.5640 Mountlake Terrace 2.082 22.938% Olympic View Water District 1.487 16.3890 Ronald Sewer District 0.852 9.383% Woodway (464 ECU s) 0.107 1.183% Lynnwood 0.049 0.543% TOTAL: 9.076 100.0000 Note: It is recognized that these percentages are subject to minor fluctuations for a brief interim period while some Participants are finalizing their precise -flow figures. 3. The total project costs shall be allocated among the Participants according to the percentages of capacity as committed under item 8806020157VOL.2146PAGE0044 - 40 - #2. Total project cost shall not exceed $45 million without Participant approval. 4. Annual Operations and Maintenance costs, formalized in an annual budget, shall be allocated to the participants on the basis of yearly Annual Average Daily Flow percentages. Payments will be made on a monthly basis Allocation = (Last Year Flow o) x (Adopted Budget)/ 12 Note: An adjustment will be made at year's end to correct for actual expenditures and for actual flows. 5. All participants concur as to the formation of a formal Oversight Committee, advisory to the Edmonds City Council. The role of the Committee, to be provided for in detail in the final Agreement, shall include review and submittal of recommendations on various operational and budgetary matters of a certain level of significance. Examples would include the establishment of a preliminary proposed annual budget by approximately the middle of the year; overhead costs levels; Reserve and Replacement Fund expenditures over $30,000; establishment and review of annual cost audits; long term capital plans; and influent quality standards" 6. An overhead cost equal to 100 of direct costs of O and M shall be charged to all participants. The costs included in the direct and the overhead categories shall be detailed to the greatest extent possible in a technical appendix to the Agreement. The overhead factor can be reviewed by the Oversight Committee at the request of any of the Participants within 3 years of new plant start up. The Step -Down method shall be utilized for the purpose of computing and reviewing the overhead cost allocation. 7. Eligible costs shall include the costs of reasonable mitigation measures at the present Dayton Street site, designed with intent of minimizing and mitigating the impact of the plant on the immediate residential and commercial neighborhood. Costs shall include such elements as landscaping, buffering, limited structural concealment of the secondary clarifiers, a pleasant appearing street interface, and other necessary elements to achieve the objectives of reasonable mitigation. Also included will be the cost of the vacant parcel which was purchased by Edmonds in 1984 for the purposes of expansion to secondary treatment. 8. The final agreement shall contain provisions for the establishment of a reserve and replacement fund, to be shared in the same proportions as the capacity (item #2 above). The amount shall be established by the Oversight Committee, and all expenditures from the fund in excess of $30,000 shall be subject to its review. This will not be construed as limiting the ability of Edmonds to make and allocate to the Participants needed expenditures on an emergency basis when the public safety, health, and general a `a - 41 - Vol..2146PAGEOO45 welfare, regulatory mandates, or other unforeseen circumstances require expeditious action. 9. Any governmental grants to the project, whether made in a lump sum or through extended payments, shall be applied proportionately to the capacity shares paid by the Participants. 10. Upon execution of this Memorandum with the City of Edmonds, each signatory shall commence payment of outstanding and future invoices related to the planning, design, and construction of the project, at the percentage specified under item #2. Remittances are to be made to the City of Edmonds on a monthly basis. Documentation for billing shall be in the same manner as for grant reimbursements. 11. The final agreement shall include a provision for the transfer of capacity among willing Participants in this Memorandum and the subsequent Agreement, and shall include a method of determining appropriate cost of such transferred capacity. 12. Provisions shall be included for monitoring flows and land use permits, and for ensuring that allocated capacities are not exceeded by any participant. 13. The City of Edmonds, no later than January 1, 1992, shall assume ownership and operational responsibilities for the Ballinger Lift Station and related meters and sewer mains from the City of Mountlake Terrace. The facility shall be upgraded to conform with City of Edmonds standards and needs, with cost participation by Mountlake Terrace and Ronald Sewer District based on flows. Operations and Maintenance costs shall also be allocated on the basis on annual average daily flows. The City of Edmonds shall have the option of transferring operation of this lift station to Seattle Metro in the event that a sewage exchange for Richmond Beach flows is successfully implemented, and that such transfer of responsibilities is advantageous, to the same degree as without a flow exchange to Metro, to all parties. 14. Existing debt service obligations for the present system (an outstanding amount of approximately $25,000) shall be prepaid by the City of Mountlake Terrace at the time when the City of Edmonds assumes ownership and operational responsibility of the Ballinger Pump Station and related facilities. This would void existing capital obligations on the present treatment plant. 15. The City of Edmonds shall have a separate agreement with Ronald Sewer District for both sewage treatment and for the Ballinger lift station operation. The former agreement shall commence with the execution of this Memorandum, and the latter shall be implemented according to #13. 16. Ownership, operation, and maintenance of the treatment plant_, and all attendant responsibilities, rest with Edmonds. 42 - VOL.2146PAGE0046 17. The term of the agreement shall be for 30 years, with the Participants having a lifetime of plant interest by paying their share. 18. Capacity will be based on flow quantities only and not on sewage quality characteristics such as BOD and/or SS. Provisions will be made for the City of Edmonds to determine the acceptability, terms, and conditions for service to any customer within the service area who is found to have excessive BOD, excessive SS, or any other influent characteristics which may impact plant operations and costs. 19 Provision shall be made for honoring existing agreement between Lynnwood and Mountlake Terrace for emergency overflow to west trunk sewer with payment to Edmonds via Mountlake Terrace by method that will protect the parties' purchased capacity. 20. Special provisions need to be made for cost allocation where the Participants serve customers in other Participant's jurisdictions, and where direct sewage metering is impractical. 21. Edmonds shall be responsible for the maintenance of accounting systems as required my accepted standards. 22. Provision shall be made for arbitration of disputes. 23. The concepts contained in this Memorandum, and in the subsequent full agreement, shall apply in predominantly the same manner to all parties sharing in the capacity of the plant. Some provisions may be necessary to address matters outside the Project of the Plant Operations, and which are of interest to some of the Participants only. Should the Participants not sign this memorandum simultaneously, any "latecomers" shall make payments to the other Participants (either directly or through Edmonds) for expenses already incurred. It is anticipated that Participants will be excluded from capacity participation in the treatment plant, other than as provided in existing contracts, unless the Memorandum is executed by September 20, 1987. 24. Edmonds and Olympic View Water and Sewer District agree to negotiate in good faith any and all operational service and administrative issues which are contained in existing agreements, or issues not contained in any agreements, and fall outside the funding of the Secondary Treatment Project and the operation of the Plant. 25. Section 23 notwithstanding, the City of Edmonds, at its own discretion, may assist the Town of Woodway in financing its share of the Project, on terms which are acceptable to both parties. This is in recognition of the unique obstacles which Woodway faces in financing its share of the project costs. Other Participant may offer the same kind of assistance to Woodway,-subject to a review by the City of Edmonds. 5 '� ` 2 0 1 - 43 - VOL. 2146PAGE004 26. The execution of the Memorandum does not limit the right of all parties to negotiate the details of incorporating the principles of the Memorandum into the final Agreement. C �k0 5 - 44 - VOL. 2146PAGE 0048 • MEMORANDUM OF UNDERSTANDING SIGNATURE PAGE City of Edmonds: terry 5. u�g17 , n, mayor Date: Attest: Si nature, Title City of Mountlake Terrace: r Date: Attest: l i ignature, it e Ronald Sewer District: Phi Montgome y Ir P Board of Co issio er Date. �p -5~_ 7 Attest: Sig ure, MEMOUND3/TXTSECON wo060201:57 tter e ames Sinclair VOL.2146PAGE0049 Page 2 MEMORANDUM OF UNDERSTANDING Olympic View Water District: jonn M. F1SCher Board of Commissioners SIGNATURE PAGE atricia L. Meeker arolyn Nacke Date. Attest:_ Si nature, Tit e MEMOUND3/TXTSECON 94013)0 0 2 0 15 voL.2146PAGE0050 Exhibit D Equivalent Customer Calculation Parameters In areas of co -mingled and/or unmetered flows, direct measurement of one Participant's flows through the Internal System of another Participant may not be practical. In such a case the Parties would reach an agreement to determine alternative measures of sewage flows. The following uses shall be considered as having the listed Equivalent Customer Units: Single Family House -- 1 ECU. Non -Residential Dischargers (including all residential other than single family houses) -- 1 ECU per 750 cu. ft. per month of water usage. The 750 cu. ft. per month per ECU equivalence shall be subject to review by the Oversight Committee when requested by any Participant. It is expected that Parties who use this Exhibit for computation of sewage flows will take into account factors which may cause the literal application of ECU methodology to either overestimate or underestimate the sewage flows. As an example, a school with extensive grounds would have very large seasonal fluctuations as to the actual sewage being discharged into an Internal System of a Participant, as well as in the consumption of water. The typical use of winter water consumption, which excludes lawn watering, would not be an accurate substitute because in the summer the school is vacant. Summer water consumption, however, is an inaccurate substitute as well because in includes irrigation water which is not discharged into sewerage systems. This example illustrates the problem, but in reality no school is in an area of co -mingled flows. In fact, almost all the uses in co -mingled flow areas are residential. V0L.20146PAGE0051 - 45 - Exhibit E Methodology for Cost Computation Related to Capacity Transfer - 46 - VOL.2146PAGE0052 EXHIBIT E TRANSFER OF CAPACITY COST CALCULATIONS METHODOLOGY PROJECT COSTS AND FINANCING PARAMETERS TOTAL COST: $39,500,000 BOND INTEREST: 8.00% FUTURE VALUE 8.00% GRANT: 50.00% TERM: 20 INTEREST RATE: CAPACITY (MGD'S) 9.075 YEARLY PAYM'T: $22,166 (defined by capacity seller on the basis of a commonly used public 1988 NET COST OF 0.1 MGD (Approx. 430 homes): $217,631 finance index for municipal FUTURE VALUE OF 0.1•MGD IN YR. 20: $1,014,368 investments. It can be equal to Average daily flow from typical home, gal.: 230 the bonding interest rate.) YEAR ACTUAL CUMULATIVE FUTURE YEAR FUTURE DEBT ----------------------------- SERVICE ..------- VALUE --------- ---------------� VALUE VALUE 1 $22,166 $22,166 $22,166 -------------------------- 31 ----- $2,365,140 2 $22,166 $44,332 $46,106 j 32 $2,554,351 3 $22,166 $66,499 $71,960 33 $2,758,700 4 $22,166 $88,665 $99,883 34 $2,979,395 5 $22,166 $110,831 $130,040 35 $3,217,747 6 $22,166 $132,997 $162,610 36 $3,475,167 7 $22,166 $155,163 $197,784 37 $3,753,180 8 $22,166 $177,329 $235,773 38 $4,053,435 9 $22,166 $199,496 $276,801 j 39 $4,377,709 10 $22,166 $221,662 $321,112 j 40 $4,727,926 11 $22,166 $243,828 $368,967 J 41 $5,106,160 12 $22,166 $265,994 $420,650 42 $5,514,653 13 $22,166 $288,160 $476,469 43 $5,955,825 14 $22,166 $310,327 $536,752 44 $6,432,291 15 $22,166 $332,493 $601,859 j 45 $6,946,875 16 $22,166 $354,659 $672,174 46 $7,502,625 17 $22,166 $376,825 $748,114 j 47 $8,102,835 18 $22,166 $398,991 $830,129 48 $8,751,061 19 $22,166 $421,157 $918,705 49 $9,451,146 20 $22,166 $443,324 $1,014,368 50 $10,207,238 21 $1,095,518 51 $11,023,817 22 $1,183,159 j 52 $11,905,722 23 $1,277,812 j 53 $12,858,180 24 $1,380,037 54 $13,886,835 25 $1,490,440 55 $14,997,781 26 $1,609,675 56 $16,197,604 27 $1,738,449 57 $17,493,412 28 $1,877,525 58 $18,892,885 29 $2,027,726 59 $20,404,316 30 $2,189,945 [ 60 $22,036,661 NOTE: FUTURE VALUE COLUMN IS THE AMOUNT WHICH A PARTICIPANT WOULD HAVE HAD IF INSTEAD OF BUYING 0.1 MGD, ITS FUNDS HAD BEEN INVESTED AT THE FUTURE VALUE INTEREST RATE. TYPICAL HOME FLOWS ARE FOR EXAMPLE ONLY. FILE:FUTCOST1 4/8/88 VOL. 2146PAGE0053 Exhibit F Description of Service Areas - 1988 J - 47 - VOL. 2146PAGE0054 r r i W f�� :ir • �r, ; O a S'3nV Fvtz i W I S 3l�V niS M j Wo DI Q I ,� v L% j Q 4 Q N Z y ~ N � I J J W � Q � F- �6.��' v O~ wLJ o � aW �Z r� 3�a w _51 N Q �Z J� 7 a Zo W N� aw W W� wW 3 W eD Qr 'I r \ � ncf t121 0 21 n'y ]t ti {] � ��-_' ••� 66 1. f'�ri a Co O Q YI ZjY � � z /�A O S I U � 1� O <<N 1111 O L Z O i o' ZIN VOL. 2146PAGE0056 8 Exhibit G Preliminary Project Cost Estimates CURRENT PROJECT COST ESTIMATE CONSTRUCTION COSTS 1990 Construction Costs $27,850,000 Sales Tax 2,520,000 Contingency 3,650,000 $34,020,000 - Est_ VE Savings 79 000 Subtotal $33,941,000 ALLIED COSTS Engineering Predcsign 320,674 Design 1,969,384 Construction 1,867,412 Legal City Administration 75,000 -Misc. and Contingency 200,000 Value Engineering 85,000 Contingency 482 530 Subtotal $5,000,000 TOTAL $38,941,000 Potential Added Cast to Cover N_ Clarifier .._ CONSTRUCTION 400,000 ENGINEERING 29.300 TOTAL, INCL_ OPTION S39,370,300 = 48 - VOL, 214 f PAGE 0 0 5'7 0 0 ADDENDUM FOR PROFESSIONAL SERVICES AGREEMENT Wastewater Treatment, Disposal and Transport WHEREAS, the City of Mountlake Terrace, Olympic View Water and Sewer District, and Ronald Sewer District (the "Participants") and the City of Edmonds (the "City"), (collectively the "Parties"), all municipal corporations of the State of Washington, entered into an underlying Agreement for wastewater treatment, disposal and transport, for a term of thirty (30) years, from May 17, 1988 to May 17, 2018; and WHEREAS, the City has requested that the term set forth in the underlying Agreement be extended two (2) years to allow time for issues between the Parties to be resolved. NOW, THEREFORE, in consideration of the mutual benefits accruing, it is agreed by and among the Parties hereto as follows: 1. The underlying Agreement of May 17, 1988 among the Parties, incorporated by this reference as fully as if herein set forth, is amended in, but only in, the following respects: 1.1 Term of Agreement: To extend this Agreement to May 17, 2020. 2. In all other respects, the underlying Agreement among the Parties shall remain in full force and effect, amended as set forth herein, but only as set forth herein. a111� DATED this, day of May, 2017. CITY OF EDMONDS CITY OF MOUNTLAKE TERRACE By: By: - — David O. Earling, Mayor Scott 1- ill, Manager ATTEST/AUTHENTICATED: ATTEST/AUTHENTICATED: By: By: f 4 �tScott Passey, City CIe Virginia sen, City Clerk APPROVED AS TO FORM: APPROVED AS TO FORM: - -- -- By:�' - — - Office of the City Attorney Gregory G. S •hrag, City Attorney Page 1 of 2 ADDENDUM FOR PROFESSIONAL SERVICES AGREEMENT Wastewater Treatment, Disposal and Transport OLYMPIC VIEW WATER AND SEWER DISTRICT Title: RONALD SEWER DISTRICT By. Title: -- --- ATTEST/AUTHENTICATED: ATTEST/AUTHENTICATED: By: By. R Title: ��f 1�CLSA& ;1� Title: "� "� IV APPROVED AS TO FORM: By: 1)1a';101 Title: ' e114 I �ur+iti�G APPROVED AS TO FORM: By: Y Title:ff�'s e - Page 2 of 2