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HomeMy WebLinkAbout165-04 RESOLUTION• a RESOLUTION NO.165-04 A RESOLUTION TO APPROVE A SETTLEMENT AGREEMENT WITH THE CITY OF FARMINGTON TO RESOLVE ALL SEWER MAINTENANCE, REPAIR AND REHABILITATION ISSUES AND TO APPROVE A BUDGET ADJUSTMENT OF $350,000.00 FROM THE WATER AND SEWER FUND RESERVES WHEREAS, representatives from the cities of Farmington and Fayetteville met for two days of mediation in an attempt to resolve sewer rehabilitation, maintenance and repair issues related to Farmington's sewer system which is to be maintained by Fayetteville pursuant to a contract entered into in 1994; and WHEREAS, it is in the best interests of both cities to settle and resolve these issues in such a way that the most cost effective repairs and rehabilitation of the Farmington system can be ascertained and accomplished promptly; and WHEREAS, both mediation teams agreed to present and recommend approval of the attached Settlement Agreement to their City Councils; and WHEREAS, the Fayetteville City Council desires to maintain the close and cooperative relationship with the City of Farmington, its public officials and citizens; and WHEREAS, the Fayetteville City Council determines that it is in the best interest of the citizens of Fayetteville and all of its sewer customers to enter into the Settlement Agreement with the City of Farmington. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby expresses its gratitude to the mediation teams that all sewer rehabilitation, repairs and maintenance issues could be amicably resolved and hereby approves the Settlement Agreement (attached as Exhibit A) and authorizes Mayor Coody to execute this agreement. Section 2: That the City Council of the City of Fayetteville, Arkansas hereby approves the Budget Adjustment attached as Exhibit B to transfer $350,000.00 from the Water and Sewer Fund Reserves. • • Section 3. That the City Council of the City of Fayetteville, Arkansas hereby authorizes the administration to proceed with the retention of RJN to further study the Farmington sewer system and to prepare plans, specifications and bid documents for necessary construction work to meet the City of Fayetteville's obligations under this Settlement Agreement. PASSED and APPROVED this 19th day of October, 2004. ATTEST: etS le -k •'c,vt . O,Z•e.O :FAYETTEVILLE:1•1314By: :'z • :.N. F. 9s'• 1,700 NNS?::• '- ''•,NGTON c;°0N "'Iuuuua'i By: lxtdt-av SONDRA SMITH, ity Clerk APPROVED: 4( • • CITY OF FARMINGTON CITY OF FAYETTEVILLE ARKANSAS SETTLEMENT AGREEMENT (Jointly drafted and agreed to by Fayetteville City Attorney Kit Williams and Farmington City Attorney Steve Tennant) To resolve and settle any possible claim or cause of action related to maintenance, repair, replacement or other right, duty, responsibility or action required by paragraph 9. OPERATION AND MAINTENANCE and paragraph 10. CONSTRUCTION OF NEW FACILITIES of the Fayetteville -Farmington Sewer Contract entered\ into on March 8,1994, the Cities agree as follows. 1. The City of Fayetteville shall retain RJN within about 30 days of the acceptance of the terms of this Agreement by both City Councils. RJN shall be retained and paid by the City of Fayetteville to perform a study of the Farmington system including flow rate and to inspect and to prepare plans and specs for manholes and sewer mains listed in Priority One and Two for reconstruction or rehabilitation as needed. The City of Fayetteville shall pay for i rehabilitation or reconstruction for manholes that need such work because of maintenance. 2. The City of Farmington shall pay for the reconstruction of manholes that need such work because of improper installation (above/below grade) or damage not related to maintenance The Cities of Fayetteville and Farmington shall endeavor to let these contracts for manhole repair within 90 days after RJN has been retained. � 3. The City of Farmington shall make available to RJN and/or the City of Fayetteville all data, reports, photos; studies, etc from the Severn/Trent study upon request. i' 4. RJN shall conduct a flow rate and evaluation study of the Farmington sewer system to determine what repairs of the sewer mains would be cost effective to repair, rehabilitate or replace. The City of Farmington engineer shall have the right to review and • CITY OF FARMISTON CITY OF FliYETTEVILLE ARKANSAS comment upon whether potential repairs, rehabilitation or replacements would be cost effective. 5. The City of Fayetteville shall repair, rehabilitate or replace those portions of the sewer mains in Farmington that the RJN study recommends as cost effective which are less than fifteen feet in length. 6. The City of Farmington and the City of Fayetteville\ shall cost share 50/50 of the first $200,000.00 of repair/replacement costs for sewer mains fifteen feet or longer 7. The City of Farmington shall pay 100% of the repair/replacement costs for sewer mains fifteen feet or longer after the first $200,000.00. 8. None of the initial 50/50 repair/replacement costs shall relate to the Town Branch interceptor main. 9. The City of Farmington shall enact and vigorously enforce ordinances to ensure that all private service sewer lines noted in the Severn/Trent study are promptly repaired and that new service sewer lines do not cause inflow and infiltration problems. 7 Agreed to thisaai td day of October, 2004. CITY OF FARMINGTON, ARKANSAS By: HN HARRIS Mayor CITY OF/ FAYETTEVILLE, ARKANSAS By: 2 DAN COODY / Mayor Attest: 4 5 a eac Attest: :� Otivia-' Sondra Smith, City Clerk ....... /TR',,,�� &.a •'G\T Y �0;- •. t -U 133 FAYETTEVILLE: 1 •City of Fayetteville, Arkansas Budget Adjustment Form Budget Year 2004 Department: Water & Wastewater Division: Water & Sewer Maintenance Program: Sewer Mains Construction Date Requested 10/19/2004 Adjustment Number Project or Item Requested: $350,000 is requested in the Sewer Improvements account in the Farmington Sewer Rehabilitation capital project. Project or Item Deleted: $350,000 is proposed from the Use of Fund Balance in the Water & Sewer Fund. Justification of this Increase: Funds will be used to cover initial contracts and priority one manhole repairs as designated by the Settlement Agreement with the City of Farmington. Justification of this Decrease: Sufficient funding remains to comply with City policies. Increase Budget (Decrease Revenue) Account Name Account Number Amount Project Number Sewer improvements 5400 5700 5815 00 350,000 04042 1 Decrease Budget (Increase Revenue) Account Name Account Number Amount Project Number Use of fund balance 5400 0940 4999 99 350,000 Approval Signatures Requested 13 Date udget a ger r Date ILAi. Dep i�ctor 401% Finan - & Intern4 Services'esDiector ent Mayor Date /o- 6• orG Date // /04 iiff Date Budget Office Use Only Type: A B C Date of Approval Posted to General Ledger Posted to Project Accounting Entered in Category Log Initial Date Initial Date Initial Date Initial Date NAME OF FILE: CROSS REFERENCE: Item # Date • Resolution No. 165-04 wlagreement & budget adjustment Document 1 10/01/04 memo to mayor & City Council 2 draft resolution 3 copy of Settlement Agreement 4 memo to City Council 5 copy of proposed Settlement Agreement 6 Staff Review Form 7 memo to Greg Boettcher 8 9 . 10 11 12 13 14 15 16 17 18 19 20 7",// • • top ark ye vi le AMIN S i/ea,L. y-- City Council Meeting of October 19, 2004tnc�vol CITY COUNCIL AGENDA MEMO To: Mayor and City Council Thru: Hugh Earnest From: Greg Boettcher Chief Administrative Officer Water/Wastewater Director Date: October 1, 2004 Subject: Resolution authorizing the Mayor to execute a Settlement Agreement relating to the Farmington Mediation including a budget adjustment from Water and Sewer Fund Reserves to provide funding for the initial agreement actions. RECOMMENDATION Fayetteville City Administration recommends approval of a resolution authorizing the Mayor to execute a Settlement Agreement with the City of Farmington, Arkansas. Included with this action is a corresponding budget adjustment to transfer $350,000.00 from the Water and Sewer Enterprise Fund Reserves to cover intial contracts and priority repairs to the Farmington Sanitary Sewer System. BACKGROUND The content of the March 8, 1994 agreement titled "FARMINGTON-FAYETTEVILLE SEWER CONTRACT has been the subject of continuing disagreement between the contracting parties. To bring this matter to closure, the Cities of Farmington and Fayetteville agreed to use the services of a mediator to achieve consensus, retaining Mr. Sid McCollum of Alternative Dispute Resolutions (ADR, Inc. of Bentonville, Arkansas) to facilitate this process. Designated representatives of Farmington and Fayetteville have held multilple meetings to present views, discuss issues and develop solutions. From these mutual efforts, the mediation team has reached a consensus regarding the sanitary sewer maintenance issue, the terms, conditions, obligations and schedule for the resolution strategy being set forth in the attached "SETTLEMENT AGREEMENT . DISCUSSION The FARMINGTON-FAYETTEVILLE SEWER CONTRACT is over 10 years old, the content reflecting sewer maintenance methods of 1994. Fayetteville's sewer system maintenance practices have changed during said period; today's maintenance operations employing modern strategies and technologies to improve efficiency and effectiveness. With regard to the Farmington sewer system maintenance, Fayetteville's contract performance has been orientated towards the historic definition of maintenance, using a literal interpretation of the agreement terms. The mediation team has proposed a settlement that obligates the City of Fayetteville to maintain the Farmington sewer system in a manner similar to that of the Fayetteville system, to make maintenance decisions based upon equivalent criteria and to also limit Fayetteville's pipeline replacement obligations to that clearly defined in the contract. Cooperatively, Farmington is obligated to enforce repair of private sewer service line problems and to accept financial responsibility for work clearly outside the definition of maintenance. Since Farmington, at its sole cost, did complete a Sewer System Evaluation Survey • ye vi le • City Council Meeting of October 19, 2004 using Severn Trent Pipeline Services that provides valuable information that will be used to guide Fayetteville's ensuing sewer system maintenance activities; it was deemed equitable to allow Farmington partial credit for the value of such work. The proposed settlement agreement allows approximately 50% of Farmington's expenditure for the sewer system evaluation survey (estimated at $100,000.00) to be credited towards Farmington's financial responsibility for out -of -contract repairs/maintenance. BUDGET IMPACT Approval of the SETTLEMENT AGREEMENT will commit $350,000.00 from Water and Sewer Fund Reserves, enabling project commencement in the 2004 Budget Year. Fayetteville has an ongoing sanitary sewer system rehabilitation program that is a normal component of the Water and Wastewater Department's planning, operations, maintenance and budgeting. It is anticipated that the 2005 Budget will include $1,500,000.00 for sanitary sewer rehabilitation work, said appropriation being more than adequate to cover the remaining costs of the Farmington Sewer Rehabilitation Project. Approval of the SETTLELMENT AGREEMENT, in effect, moves the Farmington Sewer Basin forward as the coming year's priority for sanitary sewer rehabilitation. The mediated inclusion of Farmington's Sewer Basin as a part of the rehabilitation program does provide the benefit of limiting Fayetteville's future exposure to a lawsuit and an unfavorable judgment should the City Councils not voluntarily approve the SETTLEMENT AGREEMENT. The approval of the "SETTLEMENT AGREEMENT will require the use of Water and Sewer Fund Reserves for professional services, manhole rehabilitation work, sewer line maintenance needs and for cost shares on any out -of - contract scope repairs/maintenance. • • RESOLUTION NO. A RESOLUTION TO APPROVE A SETTLEMENT AGREEMENT WITH THE CITY OF FARMINGTON TO RESOLVE ALL SEWER MAINTENANCE, REPAIR AND REHABILITATION ISSUES AND TO APPROVE A BUDGET ADJUSTMENT OF $350,000.00 FROM THE WATER AND SEWER FUND RESERVES WHEREAS, representatives from the cities of Farmington and Fayetteville met for two days of mediation in an attempt to resolve sewer rehabilitation, maintenance and repair issues related to Farmington's sewer system which is to be maintained by Fayetteville pursuant to a contract entered into in 1994; and WHEREAS, it is in the best interests of both cities to settle and resolve these issues in such a way that the most cost effective repairs and rehabilitation of the Farmington system can be ascertained and accomplished promptly; and WHEREAS, both mediation teams agreed to present and recommend approval of the attached Settlement Agreement to their City Councils; and WHEREAS, the Fayetteville City Council desires to maintain the close and cooperative relationship with the City of Farmington, its public officials and citizens; and WHEREAS, the Fayetteville City Council determines that it is in the best interest of the citizens of Fayetteville and all of its sewer customers to enter into the Settlement Agreement with the City of Farmington. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby expresses its gratitude to the mediation teams that all sewer rehabilitation, repairs and maintenance issues could be amicably resolved and hereby approves the Settlement Agreement (attached as Exhibit A) and authorizes Mayor Coody to execute this agreement. Section 2: That the City Council of the City of Fayetteville, Arkansas hereby approves the Budget Adjustment attached as Exhibit B to transfer $350,000.00 from the Water and Sewer Fund Reserves. • • Section 3: That the City Council of the City of Fayetteville, Arkansas hereby authorizes the administration to proceed with the retention of RJN to further study the Farmington sewer system and to prepare plans, specifications and bid documents for necessary construction work to meet the City of Fayetteville's obligations under this Settlement Agreement. PASSED and APPROVED this 19th day of October, 2004. By: ATTEST: By: SONDRA SMITH, City Clerk APPROVED: DAN COODY, Mayor • CITY OF FARMINGTON CITY OF FAYETTEVILLE ARKANSAS SETTLEMENT AGREEMENT Qointly drafted and agreed to by Fayetteville City Attorney Kit Williams and Farmington City Attorney Steve Tennant) To resolve and settle any possible claim or cause of action related to maintenance, repair, replacement or other right, duty, responsibility or action required by paragraph 9. OPERATION AND MAINTENANCE and paragraph 10. CONSTRUCTION OF NEW FACILITIES of the Fayetteville -Farmington Sewer Contract entere into on March 8,1994, the Cities agree as follows: 1. The City of Fayetteville shall retain RJN within about 30 days of the acceptance of the terms of this Agreement by both City Councils. RJN shall be retained and paid by the City of Fayetteville to perform a study of the Farmington system including flow rate and to inspect and to prepare plans and specs for manholes and sewer mains listed in Priority One and Two for reconstruction or rehabilitation as needed The City of Fayetteville shall pay for rehabilitation or reconstruction for manholes that need such work because of maintenance. 2. The City of Farmington shall pay for the reconstructi'' n of manholes that need such work because of improper installation (above/below grade) or damage not related to maintenance The Cities of Fayetteville and Farmington shall endeavor tohIet these contracts for manhole repair within 90 days after R t has been retained. 3. The City of Farmington shall make available to RJN and/or the City of Fayetteville all data, reports, photosptudies, etc from the Severn/Trent study upon request. 4-RJN-7`shalkconduc tlow ratetand evaluation study of the Farmington sewer system to determine what repairs of the sewer mains would be cost effective to repair, rehabilitate or replace. The City of Farmington engineer shall have the right to review and • • • CITY OF FARMINGTON CITY OF FAYETTEVILLE ARKANSAS comment upon whether potential repairs, rehabilitation or replacements would be cost effective. 5. The City of Fayetteville shall repair, rehabilitate or replace those portions of the sewer mains m Farmington that the RJN study recommends as cost effective which are less than fifteen feet in length. 6. The City of Farmington and the City of Fayetteville shall cost share 50/50 of the first $200,000.00 of repair/replace enr costs for sewer mains fifteen feet or longer. 7. The City of Farmington shall pay 100% of the repair/replacement costs for sewer mains fifteen feet or longer after the first $200,000.00. 8. None of the initial 50/50 repair/replacement costs shall relate to the Town Branch interceptor main. fl tAlj ., 9. The City of Farmington shall enact and vigorously enforce ordinances to ensure that all private service sewer lines noted in the Severn/Trent study are promptly repaired and that -new service sewer lines do not cause inflow and infiltration problemser Agreed to this az day of October, 2004. CITY OF FARMINGTON, ARKANSAS By: • CITY OF FAYETTEVILLE, SAS 1 By: OHN HARRIS D • COODY Mayorzzatt ra +' .'rw+r-':. ".s:.r.s._' °r.--...-' :ate .t a°"'Y3�5n'Lat4' Attest: ;%�ixeko lean Swift, City Clerk 44i'' . Attest: Sondra Smith, Ci Clea 0.. . ,'ff, -\ •• y' Y O,c S,L.p'. •FAYETTEVILLE Vs WAN* J2: FAYETTEVILILE THE CITY OF FAYETTEVIIIE, ARKANSAS KIT WILLIAMS, CITY ATTORNEY DAVID WHITAKER, ASST. CITY ATTORNEY DEPARTMENTAL CORRESPONDENCE yfEVT ASA LEGAL DEPARTMENT TO: City Council FROM: Kit Williams, City Attorney q ( DATE: October 6, 2004 RE. Mediation and Settlement of Farmington Sewer Maintenance Issues Fayetteville's mediation team of Steve Davis, Greg Boettcher, Phil Stafford (from the U of A) and myself met on two separate occasions for day long mediation sessions with the City of Farmington. The primary issues were related to what the two cities had agreed to do within their contract of 1994 (that will not expire until 2009). The contract's language in paragraphs 9 (placing maintenance and repair duties on Fayetteville) and 10 (placing replacement and enlargement duties on Farmington) was not crystal clear. Although we believe that we have been living up to the duties imposed upon us by the contract, reasonable arguments could be made that we need to do more. In the last several years, the City of Fayetteville has more actively examined the inflow and infiltration problems in our sewer system on a basin wide basis and performed cost effective repairs and rehabilitation where needed. This benefits our system by reducing the amount of water that must be treated at our waste water plant. The mediation team now recommends that we engage our sewer evaluation consultant, RJN, to study the Farmington sewer basin in the same manner. Cost effective rehabilitation and repairs that are our responsibility under the contract shall be contracted and paid for by Fayetteville. • • Farmington shall pay for defects it is responsible for and will vigorously enforce private sewer line infiltration problems. A limited amount of sewer main replacement that could be considered to be the City of Farmington's main responsibility shall be cost shared 50/50 by Fayetteville for several reasons, but primarily because it is in our interest to reduce sewer system inflow that robs our sewer plant of capacity and costs money to treat. Mother major reason for offering this Settlement Agreement to Farmington was our belief that it was in our citizens' and rate payers' best interest for the two cities to work on this rehabilitation project together and devote our resources to solving the sewer problems rather than spending time and money in litigation. SETTLEMENT AGREEMENT (Jointly drafted and agreed to by Fayetteville City Attorney Kit Williams and Farmington City Attorney Steve Tennant) To resolve and settle any possible claim or cause of action related. to maintenance, repair, replacement or other right; duty, responsibility or action required by paragraph 9 OPERATION AND MAINTENANCE and paragraph 10. CONSTRUCTION OF NEW FACILITIES of the Fayetteville -Farmington Sewer Contract entered into on March 8, 1994, the Cities agree as follows: 1. The City of Fayetteville shall retain RJN within about 30 days of the acceptance of the terms of this Agreement by both City Councils. RJN shall be retained and paid by the City of Fayetteville to perform a study of the Farmington system including flow rate and to inspect and to prepare plans and specs for manholes and sewer mains listed m Priority One and Two for reconstruction or rehabilitation as needed. The City of Fayetteville shall pay for rehabilitation or reconstruction for manholes that need such work because of maintenance. 2. The City of Farmington shall pay for the reconstruction of manholes that need such work because of improper installation (above/below grade) or damage not related to maintenance The Cities of Fayetteville• and Farmington shall endeavor to let these contracts for manhole repair within 90 days after RJN has been retained. 3. The City of Farmington shall make available to RJN and/or the City of Fayetteville all data, reports, photos, studies, etc from the Severn/Trent study upon request. 4. RJN shall conduct a flow rate and evaluation study of the Farmington sewer system to determine what repairs of the sewer mains would be cost effective to repair, rehabilitate or replace. The City of Farmington engineer shall have the right to review and comment upon whether potential repairs, rehabilitation or replacements would be cost effective. 5. The City of Fayetteville shall repair, rehabilitate or replace those portions of the sewer mains in Farmington that the RJN study recommends as cost effective which are less than fifteen feet in length. 6. The City of Farmington and the City of Fayetteville shall cost share 50/50 of the first $200,000.00 of repair/replacement costs for sewer mains fifteen feet or longer. 7. The City of Farmington shall pay 100% of the repair/replacement costs for sewer mains fifteen feet or longer after the first $200,000.00. 8. None of the initial 50/50 repair/replacement costs shall relate to the Town Branch interceptor main. 9. The City of Farmington shall enact and vigorously enforce ordinances to ensure that all private service sewer lines noted in the Severn/Trent study are promptly repaired and that new service sewer lines do not cause inflow and infiltration problems. Agreed to this day of October, 2004. CITY OF CITY OF FARMINGTON, ARKANSAS FAYETTEVILLE, ARKANSAS By: By: JOHN HARRIS DAN COODY Mayor Mayor Attest: Attest: Farmington City Clerk Sondra Smith, City Clerk • • • • FARMINGTON SANITARY SEWER REHABILITATON PROJECT INITIAL PROJECT COST PREDICTION -IMMEDIATE ACTION ITEMS OCTOBER 1, 2004 INITIAL PROJECT BUDGET -FISCAL YEAR 2004 FUNDING ACTIVITY ESTIMATED COST Engineering Services for Evaluation, Design, Bidding $ 175,000.00 Sanitary Sewer Manhole Repairs (Priority 1 and 2) $ 74,185.00 Mainline Repairs (50% of Priority 1) $ 75,366.00 Cost Correction Factor (2002 to 2004 = +7.4%) $ 11,063.00 Administrative and Contingency (4%) $ 14,386.00 PREDICTED INITIAL COSTS $ 350,000.00 The requested initial funding covers the design and bidding of rehabilitation activities deemed cost-effective and consistent with Fayetteville's rehabilitation analysis framework. It is anticipated that the manhole maintenance work and selected portions of the mainline maintenance needs will be cost-effective; forming the scope of the first contract award. Under the Fayetteville consultant's scope of services will be the further investigation of findings of the Farmington Sewer System Evaluation Survey; said work to verify that the recommended actions are justified under Fayetteville's criteria. This investigation is expected to include field investigations, dry/wet weather flow recordings, smoke testing, dye testing and other analysis to validate the maintenance investment. STAFF IEW FORM - FINANCIAL OBLIGATIOU X AGENDA REQUEST CONTRACT REVIEW GRANT REVIEW For the Fayetteville City Council Meeting of: October 19, 2004 FROM: Greg Boettcher Name Water & Wastewater Water and Wastewater Division Department ACTION REQUIRED: Approval of a resolution authorizing the execution of a SETTLEMENT AGREEMENT between Farmington and Fayetteville, terms of said agreement reflecting the outcome of a mediation process. The intitial budget for professional services and phase one rehabilitation work is estimated at $350,000.00. A budget adjustment is proposed to transfer funds into the project account from Water and Sewer Fund Reserves. COST TO CITY: $350,000.00 $ Cost of this request Sym. 6960 • Ssts.00 -94; ea- $ - Use of Fund Reserves Farmington Sewer Rehabilitation Category/Project Budget Program Category / Project Name Account Number Funds Used to Date Program / Project Category Name 04042 $ - Water and Sewer Project Number Remaining Balance Fund Name BUDGET REVIEW: Budget Manager Budgeted Item X Budget Adjustment Attached /v Tidy Date CONT CT/GRANT/LEASE REVIEW• CONT 7,211-4;„, /O�y�U[� U l _ to (S io `{ ting Marjager Date Internal Auditor Date City Attorne /6/(0/o LI Date Purchasing Manager Date STAFF RECOMMENDATION: Division Head Date fG�Aff�I/' /61-0/-10V Depa/tment Director Date Financ- & Internal Services Dir. Chief nistrativ- Officer Ma o Date Received in Mayor's Office Cross Reference: Previous Ord/Res#: Orig. Contract Date: /0-17111 Orig. Contract Number: Date/ Date New Item: Staff Review Form - Page 2 Date Yes No FAYETTOLLE THE CITY OF FAYETTEVILLE, ARKANSAS City Clerk Division DEPARTMENTAL CORRESPONDENCE To: Greg Boettcher Water/Wastewater Director From: Clarice Buffalohead-Pearman City Clerk Division Date: November 1, 2004 Re: Resolution No. 165-04 • 113 West Mountain Fayetteville, AR 72701 Telephone: (479) 575-8323 Fax: (479) 718-7695 city_clerk©c i.fayettevi Ile.ar. us The City Council passed the above resolution October 19, 2004. The resolution, approves the settlement agreement with Farmington regarding the sewer maintenance and rehabilitation and repair issues. I have attached that resolution. The City Council also approved a budget adjustment for said purpose which a copy is attached. This resolution, with attachments, will be recorded in the city clerk's office and microfilmed. If anything else is needed please let the clerk's office know. Attachment(s) cc. Nancy Smith, Internal Auditor Barbara Fell, Budget & Research Hoc- otf THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE taa- TO: Kit Williams, City yS srney FROM: Dan Coody, Ma DATE: June 15, 2005 SUBJECT: Kit Memorandum of Understanding — City of Fayetteville and City of Farmington — Transfer of Ownership of the Farmington Sewer System to the City of Fayetteville Mayor Harris approached me in May to begin the conversation concerning establishing water and sewer rate equity between the citizens of each city. I instructed Staff to begin those conversations with the intent that a long-term solution be found that addresses both environmental issues as well as financial issues. The Staffs of Fayetteville and Farmington jointly developed the attached Memorandum of Understanding that calls for Fayetteville to assume ownership of the Farmington sewer system in exchange for Fayetteville reducing existing rates to match those charged in Fayetteville and for Fayetteville to begin collecting wastewater impact fees on development in Farmington. Mayor Harris and I are transmitting this Memorandum of Understanding to our respective City Attorneys to develop appropriate contracts that can be presented to the respective City Councils for review, deliberation and action. No provision of the Memorandum of Understanding can become effective until both City Councils have approved the final document. My Staff is available to provide any details that you deem appropriate in drafting the contract documents. •