HomeMy Public PortalAboutPLRWS Settlement AgreementSETTLEMENT AGREEMENT
City of McCall/Payette Lakes Recreational Water & Sewer District
Valley County Case No. CV-2005-352-C
This Settlement Agreement ("Agreement") is made between the City of McCall, a
municipal corporation located in Valley County, Idaho (the "City"), and the Payette Lakes
Recreational Water and Sewer District, a sewer district organized and existing under and by
virtue of Chapter 32, Title 42, Idaho Code, and lying partially adjacent and contiguous to the
geographical boundaries of the City of McCall, Idaho (the "District") (the District and the City
shall be referred to collectively herein as the "Parties"). The Agreement was entered into to be
effective October 20, 2010 (the "Effective Date"), and is conditioned upon prior approval by the
governing boards of the City and the District, and execution by their duly authorized officers.
RECITALS
A. Valley County Case No. CV-2005-352-C (the "Lawsuit") involves a dispute
between the City and the District regarding their conflicting interpretations of the Cooperative
Agreement between the Parties dated December 15, 1977, and its seven amendments
(collectively, the "Cooperative Agreement").
B. The Cooperative Agreement established the Parties' rights and responsibilities in
relation to the facility which receives, treats, stores and disposes of the City's and the District's
wastewater (the "Facility"). The Facility is primarily located upon real property owned by the
City in Valley County (the "Property").
C. On October 20, 2010, the Parties executed the Settlement Term Sheet (the "Term
Sheet") which set forth the conceptual terms upon which the Parties agreed to settle the Lawsuit.
D. The purpose of this Agreement is to formalize the Term Sheet.
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AGREEMENT
In consideration of the above recitals, which are hereby incorporated into this Agreement,
and the promises, representations, warranties, covenants, conditions and agreements contained
herein, the Parties agree as follows:
1. The District's Wastewater. In accord with this Agreement and all applicable
local, state and federal statutes, rules, ordinances and policies, the City confirms and guarantees
to receive, treat, store and dispose of up to 608,000 gallons per day of wastewater from the
District unless and until the District completes detachment of its collection system from the
Facility.
2. Ownership of Facility and Property. The District acknowledges and agrees that
the City is the owner of the Property and the Facility and that the District has no ownership
interest of any kind in the Property or the Facility, but subject to the terms and conditions set
forth in this Agreement, has an enforceable right to have its wastewater received, treated, stored
and disposed of in the Facility.
3. Interim Facility Fee. As compensation to the City for receiving, treating, storing
and disposing of the District's wastewater, the District agrees to pay a monthly user fee of
$8,333.33 commencing on November 1, 2010 ("Interim Facility Fee"). The first Interim
Facility Fee payment was due and paid November 1, 2010. All Interim Facility Fee payments
are due and payable on the first day of each month, and shall be delinquent at the close of office
hours on the tenth day of the month in which such payment falls due; provided, that if such tenth
day of the month falls on a Saturday, Sunday, or legal holiday, then such payment shall be
delinquent at the close of office hours on the next business day. If not paid before delinquency, a
penalty of five percent (5%) of the amount due shall be assessed and immediately payable. A
monthly service charge shall be added to any portion of the Interim Facility Fee not paid within
thirty (30) days past the due date thereof; provided, however, that any such service charge shall
be calculated in the same manner as service charges to non -District rate payers are calculated.
a. Interim Facility Fee Increases. In the event the City increases its rates to
its non -District rate payers, the Interim Facility Fee shall be concurrently increased in an
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amount equal to such increases and based upon Equivalent Dwelling Units (EDU's). For
example, if the City increases the wastewater charge to non -District rate payers by $2.00
per month per EDU, the charge to the District will be increased by $2.00 per month per
EDU. In the event of any such increase(s), the City shall make available for the District's
inspection, complete documentation detailing how any such rate increase(s) was (were)
calculated. The District shall not be responsible for any portion of such a rate increase
that is attributable to the following:
(1) Maintenance, repair or replacement of elements of the City's
collection system;
(2) Removal or reduction of inflow and infiltration into the City's
collection system;
(3) The J-Ditch/Wausau/St. Clair litigation, or any other prior costs
incurred in connection with the cost of the J-Ditch project;
(4) Any other costs incurred prior to the Effective Date;
(5) Costs for the expansion of any element of the Facility, so long as at
the time of such expansion the flow generated by the District is less than 608,000
gallons per day. For purposes of this Paragraph 3.a(5), the term "expansion" shall
mean any improvements to the Facility required to increase the amount of gallons
per day that can be received, treated, stored or disposed of by the Facility.
"Expansion" does not include any improvements related to upgrades,
replacements, repairs and/or maintenance which do not increase the amount of
gallons per day that can be received, treated, stored or disposed of by the Facility;
and
(6) Any increase solely attributable to or caused by inflow and
infiltration into the City's collection system.
b. Expiration of Interim Facility Fee Payments. The District shall
continue to pay the Interim Facility Fee, together with adjustments thereto as permitted
SETTLEMENT AGREEMENT (MCCALL/PLRWSD) - 3
by the terms of this Agreement, and any prorated portion thereof, until the earlier of: (a)
the District's detachment from the Facility; (b) the date established in the TAG Plan
(defined below) if the TAG Plan is approved by the District pursuant to Paragraph 4; or
(c) December 31, 2016. Upon the expiration of the Interim Facility Fee payments, the
District will either be detached from the Facility or the District will be paying a new rate,
which rate will be established through the TAG Plan. In no event will the City be
required to continue to receive, treat, store or dispose of the District's wastewater past the
expiration of the Interim Facility Fee payments unless the District is paying the new rate
provided for in this Agreement.
4. TAG Plan/Future Rates to the District. The Parties agree to create a technical
advisory group (the "TAG"), the purpose of which is to provide professional, technical advice
and guidance to the Parties regarding long-term future planning and rate making for the Facility.
a. Formation of the TAG. The TAG shall consist of three technical
advisors: one appointed by the City (the "City TAG Advisor"); one appointed by the
District (the "District TAG Advisor"); and one jointly appointed by the City TAG
Advisor and the District TAG Advisor (the "Independent Advisor"). The Independent
Advisor's role shall include, among other things, a critical analysis of prior
recommendations by both Parties' engineers and a critical analysis of any future
recommendations by either Party's engineers. In the event the City TAG Advisor and the
District TAG Advisor cannot agree on an Independent Advisor by March 3, 2011, the
City shall decide who to appoint as the Independent Advisor. Any decision by the City to
unilaterally appoint an Independent Advisor shall be made in compliance with the Open
Meeting Law requirements of Idaho Code Sections 67-2340 through 67-2347. Either
Party may replace its TAG advisor at any time. The Independent Advisor may only be
removed from the TAG by mutual agreement of the City and the District; provided,
however, that in the event the City unilaterally appoints the Independent Advisor as set
forth above, the City shall have the right to replace the Independent Advisor in its sole
discretion. No member of the McCall City Council or the District Board of Directors
shall also be a TAG advisor.
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b. Responsibilities. The TAG is responsible for making a written
recommendation to the Parties on the following two topics:
(1) Both the short-term and long-term manner in which the wastewater
treatment, storage and disposal requirements of the customers of the City and the
District will be met; and
(2) The rate model used to determine charges to users of the Facility,
including the District. Development of the rate model will take into account the
limitations on rates specified by Idaho law, including, but not limited to: Idaho Code §§
50-1028 and 50-1032, and the guidance provided in Loomis v. City of Halley, 119 Idaho
434, 807 P.2d 1272 (1991). Further, any rate model developed by the TAG or otherwise,
shall take into account all relevant factors as may exist at such time as such rate model is
developed, to the full extent necessary to create a fair and equitable apportionment of
costs and rates across the entire base of both City and District users of the Facility.
c. DEQ and EPA. The TAG is encouraged to coordinate with, and seek
advice from, the Department of Environmental Quality (DEQ), the US Environmental
Protection Agency (EPA) or other relevant regulatory agencies, but has no authority to
bind the City or the District in any way with the DEQ, EPA, or any other public agency.
d. Allocation of TAG Costs; Staffing.
(1) The City and the District shall separately be responsible for all
costs and fees associated with their respective advisors. All hourly fees and per
diem expenses of the Independent Advisor shall be shared equally by the Parties;
provided, however, that in the event the City unilaterally appoints the
Independent Advisor pursuant to Paragraph 4.a., the payment of said hourly fees
and per diem expenses shall be advanced by the City and then passed on to the
City and District users through the rate structure to be developed during the
TAG process. To the extent that engineering or other professional services are
required in creating the TAG Plan (defined below), over and above the hourly
rate and per diem charge of the Independent Advisor, such engineering or
professional services ("Additional TAG Services") shall be contracted for by the
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City. The payment of the costs associated with the Additional TAG Services
shall be advanced by the City and then passed on to the City and District users
through the rate structure to be developed during the TAG process. In the event
the District elects to detach from the Facility pursuant to Paragraph 4.f.7, the
District shall be required to pay its share of the costs identified above through
the rate structure developed during the TAG process, but upon actual detachment
from the Facility, shall have no further responsibility to pay for said costs.
2) In the event the Independent Advisor requires a contract for
his/her/its services, the City will enter into the contract.
(3) The Parties will use their best efforts to make their respective staff
available to work diligently and cooperatively with the TAG.
e. Open Meetings and Public Records Compliance. All meetings of the
TAG are subject to the Open Meeting Law requirements of Idaho Code Sections 67-2340
through 67-2347. All records produced or used by the TAG are subject to the Public
Records Law requirements of Idaho Code Sections 9-337 through 9-350. The City will
make available the resources of the City Clerk's office to assist in compliance with the
Open Meeting Law and the Public Records Law requirements. This assistance will
include posting meeting notices and agendas, preparing minutes, and archiving
documents, all in cooperation with the TAG.
f. TAG Plan. The TAG shall submit its written recommendation
simultaneously to the City and the District on or before July 29, 2011. The following
schedule shall be followed to finalize the TAG Plan:
(1) The City shall, within 45 days of receiving the TAG Plan, consider
and vote to approve, reject, or request modifications to the recommendation from
the TAG. If the TAG's recommendation is not approved by the City, the TAG
will be directed to continue its investigation and evaluation of options with a goal
of specifically addressing any concerns raised by the City. The TAG shall
address the City's concerns in a revised written recommendation no later than 45
days thereafter. The City will again consider and vote on the revised written
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recommendation from the TAG. This process shall continue until the City
approves one of the TAG's recommendations.
(2) Upon a TAG recommendation being approved by the City (the
"TAG Plan"), the District shall have 45 days from the date of said approval to
consider and vote to accept, reject, or request modifications to the TAG Plan. If
the District does not respond to the City in writing within the 45 day period, the
District will be deemed to have approved the TAG Plan.
(3) If the District requests modifications to the TAG Plan, the District
shall convey its concerns in writing to the City. The City, in its sole discretion,
will then either (a) direct the TAG to attempt to address the District's concerns, or
(b) disregard the concerns of the District. If the City directs the TAG to address
the District's concerns, the process set forth in Paragraphs 4.f(1) through 4.f(2)
shall continue until a TAG Plan is approved by the City and the District. If at any
point the City, in its sole discretion, chooses to not act further on any remaining
concerns of the District, the City may declare the then -current version of the TAG
Plan as the final version. The District shall have 45 days from such a
determination by the City to accept or reject the then -current version of the TAG
Plan.
(4) If approved by the District, the TAG Plan, and the rate model set
forth therein, will be deemed binding upon the District. In such event, the District
shall begin payment under the rate model set forth in the TAG Plan upon the date
established in the TAG Plan.
(5) If the District rejects the TAG Plan, or withdraws from the TAG
process by providing written notice to the City, the District shall have the right
but not the obligation to commence detachment of its collection system from the
Facility. In the event the District has failed to detach from the Facility by
December 31, 2016, the District shall immediately commence paying the fully
charged rate pursuant to the model adopted through the TAG Plan, and will
continue to pay said amount thereafter (subject to future adjustments permitted by
the terms of this Agreement) until the District's detachment should the District
ever detach from the system.. Upon detachment from the Facility, the District
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shall no longer have any rights or responsibilities related to the Facility and this
Agreement shall be deemed terminated; provided however, the agreements set
forth in paragraphs 7-13 herein shall survive any such termination of this
Agreement.
(6) In no event shall any rate approved by the City in either the TAG
Plan, or otherwise, impose upon the District any of the costs identified as non -allowable
in paragraph 3.a.(1)-(4) herein. Further, any rate model developed by the TAG or
otherwise, shall take into account all relevant factors as may exist at such time as such
rate model is developed, to the full extent necessary to create a fair and equitable
apportionment of costs and rates across the entire base of both City and District users of
said facility.
(7) In the event that the District elects to detach from the existing
Facility pursuant to the terms of this Agreement, such detachment may impact
certain currently shared elements of the City's and District's respective collection
systems. To the extent not addressed by existing written agreements, the parties
shall use their best efforts to reach an equitable agreement regarding such
elements.
g. Dissolution of the TAG. Upon approval of the final version of the TAG
Plan by the City, the TAG shall be dissolved. Additionally, in the event the City has not
approved a recommendation by the TAG as set forth in Paragraph 4.f(1) by December 31,
2011, the TAG shall be dissolved and the City shall take whatever actions it deems
appropriate to create a future wastewater treatment strategy and associated rate model.
For purposes of this Agreement, the City's creation of such a future wastewater treatment
strategy and associated rate model shall be deemed a TAG Plan and, upon approval of the
same by the City, the District shall have the opportunity to accept or reject it pursuant to
Paragraphs 4.f(4) and 4.f(5). In no event will the rate model described in paragraph 4(g)
be imposed upon the District prior to December 31, 2016 Further, in no event shall such
rate model incorporate or impose upon the District any costs identified as non -allowable
in paragraph 3.a.(1)-(4) herein. Further, any rate model developed by the TAG or
otherwise, shall take into account all relevant factors as may exist at such time as such
rate model is developed, to the full extent necessary to create a fair and equitable
SETTLEMENT AGREEMENT (MCCALL/PLRWSD) - 8
apportionment of costs and rates across the entire base of both City and District users of
said facility.
5. Future TAG Plans. It is anticipated that, sometime after the TAG Plan is
implemented, additional modifications to the Facility will be required that require new facility
plans to be pursued and implemented ("Future TAG Plans"). In such events, the process set
forth in Paragraph 4 shall control the process; provided, however, that the City shall adjust the
date -specific deadlines in Paragraph 4 to reflect the appropriate deadlines for the creation and
approval of any Future TAG Plans; provided further that, in no event shall the time periods
within which the Parties review and decide whether to accept, ask for modifications, or reject, be
less than the time periods in Paragraphs 4.f(1) through 4.f(3). In other words, a new TAG will be
formed, a new TAG Plan will be approved by the City, and the District may opt in or opt out.
6. Judicial Confirmation. The Parties agree and affirmatively represent that the
resolution of the Lawsuit and the obligations contained in this Agreement are ordinary and
necessary obligations of the Parties, and that by executing this Agreement both Parties are
protecting the health safety and welfare of their respective constituents. Accordingly, the Parties
agree to use their best faith efforts to obtain judicial confirmation of this Agreement pursuant to
Idaho Code Section 7-1301, et seq. (Idaho's Judicial Confirmation statutes).
7. Release and Dismissal. Except with respect to the obligations specifically
created or acknowledged by or arising out of this Agreement, the Parties agree to a mutual
release of all claims known or unknown that were raised or could have been raised in the
Lawsuit. Upon entry of an order judicially confirming this Agreement as set forth in Paragraph 6
above, the Parties agree to stipulate to the dismissal of the Lawsuit with prejudice, with each
Party to bear its attorney fees and costs associated with the Lawsuit.
8. Conclusive and Binding Nature of Agreement. This Agreement is without
recourse and is made without any warranties or representations whatsoever. Each Party
acknowledges that, after entering into this Agreement, they may discover different and/or
additional facts concerning the subject matter of this Agreement or their understanding of the
facts. Each Party hereby expressly assumes such risks and agrees that this Agreement shall, in
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all respects, be effective and not subject to rescission, cancelation or termination by reason of
such additional or different facts or the Parties' understandings of the facts. This Agreement
shall be binding upon and inure to the benefit of the Parties hereto, their successors, assigns,
heirs, and personal representatives and, except as expressly set forth herein, no inducement or
agreement has been made to either of the Parties.
9. Representation by Counsel. The Parties, and each of them, hereby acknowledge
that they have been represented by counsel and have made independent investigations and
inquires deemed necessary or appropriate in connection with the subject matter of this
Agreement prior to the execution hereof.
10. Entire Agreement. This Agreement constitutes the entire agreement between the
Parties hereto and supersedes and replaces all prior agreements, negotiations or understandings,
written or oral, with respect to the subject matter hereof. Without limiting the generality of the
foregoing sentence, this Agreement specifically supersedes and replaces the Term Sheet and the
Cooperative Agreement, both of which are hereby deemed terminated, null and void.
11. Future Acts. The Parties, and each of them, agree to do any further acts, or
execute and deliver any further document or instruments, as any other Party may reasonably
require for the purpose of giving full effect to the provisions of this Agreement.
12. Controlling Law. This Agreement shall be controlled by and construed in
accordance with the laws of the State of Idaho.
13. Execution of Agreement. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all counterparts together shall constitute and be
deemed one and the same instrument.
SETTLEMENT AGREEMENT (MCCALL/PLRWSD) - 10
EFFECTIVE as of the day and year written above.
City of McCall
By:
Mayor
Date: // Fe-4 7 ? c'//
Attest:
Clerk
Payette Lakes Recreational Water and Sewer District
By:
Chair
Date:
Attest:
Secretar
a. //
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SETTLEMENT AGREEMENT (MCCALL/PLRWSD) - 11