HomeMy WebLinkAbout252-05 RESOLUTIONRESOLUTION NO. 252-05
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A RESOLUTION TO APPROVE A CONTRACT WITH THE
CITY OF ELKINS CONCERNING THEIR SEWER RATES
AND OTHER MATTERS
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section L: That the City Council of the City of Fayetteville, Arkansas, hereby
approves the Sewer Contract with the City of Elkins, Arkansas attached as Exhibit A and
authorizes Mayor Coody to execute this contract.
PASSED and APPROVED this 20th day of December, 2005.
ATTEST:
By:
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:FAYETTEVILLE• E
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SONDRA SMITH, City Clerk
APPROVED:
AI
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SEWER CONTRACT
This Agreement, made and entered into thi. /Lay of 4 eegvin„2005, by and
between the City of Fayetteville, Arkansas, hereinafter referred to as "Fayetteville", and
the City of Elkins, Arkansas, hereinafter referred to as "Elkins";
WITNESSETH:
WHEREAS, Fayetteville in its governmental capacity own and operates its own
complete wastewater collection, treatment and discharge system; and
WHEREAS, Elkins in its governmental capacity owns and operates its own
wastewater collection system and does not operate a wastewater treatment or discharge
system; and
WHEREAS, Fayetteville receives wastewater from Elkins and then transports
and processes the wastewater in Fayetteville's wastewater treatment facility and
discharged treated wastewater effluent under Fayetteville's National Pollution Discharge
Elimination System (NPDES) permit; and
WHEREAS, at this time it has been determined that the best and most feasible
trcatment for Elkins' wastewater can be provided by Fayetteville's wastewater treatment
facilities; and
WHEREAS, Elkins desires to contract with Fayetteville to provide continued
transportation and treatment for the wastewater from Elkins; and
WHEREAS, Fayetteville must ensure that this role does not place financial
burden of Fayetteville's retail customers for which Fayetteville's retail customers receive
no benefit; and
WHEREAS, Elkins must ensure that this role does not place financial burdens on
Elkins' retail customers for which Elkins' retail customers receive no benefit; and
WHEREAS, Elkins acknowledges that Fayetteville must add and fund capacity
additions from time -to -time.
NOW THEREFORE, in consideration of the mutual covenants, promises and
conditions hereinafter set forth and other valuable considerations, the receipt of which is
hereby acknowledged by Fayetteville and Elkins, it is hereby agreed as follows:
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A. TREATMENT OF SEWAGE
1. Fayetteville agrees to accept for treatment the sanitary sewage delivered by Elkins
to the Fayetteville system and to process such wastes in the same manner as
wastes from Fayetteville are treated under the following terms and conditions:
2. Elkins will construct all facilities required to deliver wastewater from Elkins to a
"Point of Connection" to Fayetteville's sewer collection system as described
below and as Elkins' wastewater is discharged to the environment under
Fayetteville's NPDES permit or permits, as well as any other regulatory
requirements that apply as a result of said permit or permits. This applies to any
and all permits that pertain to any portion of the wastewater conveyance and
treatment system through which Elkins wastewater flows. Fayetteville will
provide Elkins a current copy of the NPDES permit and any future revisions.
Permits which are issued relative to portions of the Fayetteville wastewater
conveyance and treatment system through which Elkins wastewater docs not flow
do not apply.
3. Fayetteville and Elkins agree that Fayetteville shall accept and treat all
wastewater flows from Elkins until the bio -loading at the Paul Noland Plant
("Plant") and the hydraulic loading at any point in the collection system from the
Point of Connection to and including the "Plant" reaches 75%, and, at that time
the Elkins and Fayetteville agree to pro -rate the remaining capacity between all
cities and any non -city customers using the "Plant" based on the existing
percentage of that "Plant" by each city or non -city customer until additional
capacity is provided. Fayetteville will provide Elkins with thc average monthly
bio -loading for the Noland plant for all of 2005. Going forward, Fayetteville will
provide monthly reports to Elkins showing the average bio -loading for each
month.
B. RATES FOR SEWER SERVICE
1. Elkins and Fayetteville agree that rate -making shall be fair and equitable, be easy
to administer and understand and shall be based on policies that result predictable
rate adjustments and avoid abrupt rate changes.
2. Elkins agrees that Fayetteville's return on investment on assets employed to
provide service to Elkins will be limited to 2% above the average bond coupon
outstanding debt at the time of the comprehensive cost of service study noted in
paragraph 5 below.
3. Elkins and Fayetteville agree the rate for sewage treatment services provided
herein shall be reduced to $2.81 per 1,000 gallons of sewage received by
Fayetteville from Elkins for treatment beginning on the date this agecment is
approved by both Cities. The Cities acknowledge this rate reduction is partially
due to thc Elkins sewer meter registering faulty volumes.
4. Fayetteville and Elkins agree to apply and accept a retroactive adjustment
reducing the 2005 rate of $5.71/1,000 gallons to $2.81/1,000 gallons based on
actual mctcrcd volumes, back to March 1, 2005. Both cities acknowledge this is a
settlement that resolved all potential claims and released any rights they might
have had prior to March 1, 2005 relating to sewer rates, metering, etc.
Fayetteville agrees to release its rights for all back billings for volume
underreporting that has occurred prior to the effective date of this agreement.
5. Fayetteville will conduct a comprehensive cost -of -service study in the future that
will reset these sewer rates based on industry standards. Fayetteville shall cause
the rate per 1,000 gallons for wastewater treatment services to be determined by
an independent utility rate consulting firm with demonstrable expertise in water
and wastewater utilities under a wholesale contractual agreement and in
compliance with the rate methodology based in part or whole on the rate making
standards promulgated by the American Water Works Association (AW WA),
Water Environment Federation (WEF) or other authoritative organization. All of
the wastewater flows from Elkins shall flow through a metering device provided
at the pump station which pumps to the point of connection of the Elkins system
to the Fayetteville system.
C. IMPACT FEE IMPLEMENTATION
or CONTRACTURAL SURCHARGE
1. Elkins and Fayetteville further agree that Elkins shall pay an additional
$0.25/1,000 gallons of billed sewage, beginning January 1, 2006, to fund Elkins'
portion of future capacity enhancements to the Fayetteville collection and
treatment facilities utilized by Elkins. Fayetteville and Elkins agree that this rate
per thousand shall be evaluated concurrent with each comprehensive cost -of -
service study described in Section B paragraph 5 above as govemed by Section H
below. Fayetteville and Elkins further agree that Elkins shall assess, collect and
remit to Fayetteville the cost of increasing capacity for the sewer lines necessary
to serve Elkins as depicted in APPENDIX A and described in Section 1. The
capacity cost is to be calculated on the volume of contributed wastewater flow
caused by the development under review.
2. Fayetteville agrees to fund a wastewater impact fee feasibility analysis in
compliance with the Arkansas Development Impact Fees Act. Elkins and
Fayetteville agree that this contract may be amended to incorporate wastewater
impact fees at the conclusion of the applicable studies required by the Arkansas
Development Impact Fees Act.
3. The payment for wastewater treatment shall be based on metered water purchases
discounted by the formula described in APPENDIX B. Elkins and Fayetteville
agree to use eighty-five per cent (85%) as the initial percentage. This initial
percentage shall remain in effect until December 31, 2006 at which time the
percentage may be adjusted to reflect adjusted wastewater flows as calculated by
a registered engineer contracted by Elkins. Elkins and Fayetteville agree that the
volume of wastewater received by Fayetteville at the "Point of Connection" shall
be measured by the wastewater meter installed. The Cities agree to base monthly
billing on the percentage method unless the metering device readings detect any
volume discrepancies greater than 10% for three consecutive months. Elkins and
Fayetteville agree to use actual meter readings while the volume discrepancies are
investigated. The use of the meter for billing purposes shall cease only upon
mutual agreement between Elkins and Fayetteville.
4. Fayetteville shall provide the maintenance and any required replacement of the
metering dcvicc, and Elkins shall be the right of inspection of the metering device
and "Point of Connection" at any reasonable time. Elkins shall have full and
complete access to the pump station at all times. The metering dcvicc shall he
calibrated in compliance with the manufacturer's guidelines for accuracy once per
ycar by Fayetteville.
5. A statement for sewer services shall be rendered by Fayetteville once each month,
and shall be paid by Elkins in accordance with Fayetteville Code of Ordinances
Chapter 51.141, as amended from time -to -time and incorporated herein as of
September 14, 2005:
Sewer Billing procedure (A) Bills for sewer service shall be rendered monthly.
Sewer bills are due and payable on or before the 20'" day following the billing
date stated on the sewer bills. Sewer bills not paid on or before the due date shall
be considered delinquent and an additional charge of 10% of the total bill shall
be added, and if any bill is not paid within 30 days after the bill shall be due, suit
may be brought to collect the amount due, together with the expenses of collection
and a reasonable attorney's fee. (B) In the case of the sewer customers outside
the city limits, if the monthly service charges are not paid within the prescribed
time. sewer service to the customer will be discontinued in the same manner and
subject to the same provisions as prescribed for discontinuance of service under
51.140(B).
D. ELKINS RESPONSIBILITY FOR SEWER MAINTENANCE
1. Elkins shall have full responsibility for all maintenance and operations of Elkins'
sanitary sewer system, including all parts thereof necessary to deliver the sanitary
waste to the point of connection with the Fayetteville system in such a manner to
he suitable for the treatment capabilities of the Fayetteville system. In such
regard, Elkins agrees to comply with all reasonable requirements of Fayetteville.
2. Elkins agrees that Fayetteville will have the right to inspect the sanitary sewage
system of Elkins at all reasonable timcs so as to assure Fayetteville that the
construction, maintenance and operation of said sanitary sewer system in being
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carried out in a manner consistent with modem engineering and health practices.
Fayetteville may inspect any taps onto the sanitary sewer system of Elkins at the
time of installation of said taps, said inspection to be by a designated official of
Fayetteville. Fayetteville will notify the Elkins Water and Sewer Department
during normal business hours, of Fayetteville's intent to inspect portions of Elkins
Wastewater Collection System. Fayetteville agrees to provide Elkins a copy of
any written reports that result from the inspection(s).
E. ELKINS' ADOPTION OF SEWER CODE REQUIREMENTS
1. Elkins agrees to adopt and enforce with reference to all users of its sanitary sewer
system requirements and restrictions which are, at least, as restrictive as those
provisions of the ordinances of Fayetteville restricting and controlling discharges
into the sanitary sewer system of the City of Fayetteville. The requirement of this
subparagraph shall be interpreted as to require the adoption and enforcement of
such restrictions by Elkins as are equal to any ordinances or subsequent
amendments to such ordinances of Fayetteville.
2. Elkins hereby agrees to exclude from their sewage collection system any
industrial process wastewater without prior written approval from Fayetteville.
Elkins agrees to provide Fayetteville an official copy of the Elkins adopted
guidelines.
F. REPORTING DEVELOPMENT APPROVALS
1. Elkins agrees to provide to Fayetteville, on an annual basis, all development
approvals grants by the Elkins Planning Commission and/or Elkins City Council.
G. TERM OF CONTRACT
1. The term of this contract shall be for the life of loan #9206 whose original date is
July 23, 1981, with the loan having an initial term of forty (40) years, from
Farmers Home Administration to the City of Elkins, which is being made to
enable Elkins to build its sewage facilities.
H. SEWER RATE SCHEDULE ADJUSTMENT
1. The rate schedule established herein is subject to adjustment by Fayetteville every
two (2) years during this contract upon thirty (30) days written notice to Elkins
that Fayetteville intends to conduct a comprehensive rate study.
2. Fayetteville agrees that Elkins may participate in the selection of the independent
rate consultant
1. POINT OF CONNECTION
1. The "Point of Connection" shall be at the end of Fayetteville's 10 -inch gravity
sewer line in Lewis Woods Lane in the Baldwin Community as depicted in
APPENDIX A.
1. HOLD HARMLESS
I. Elkins covenants and agrees that it will defend and hold harmless against and
indemnify said City of Fayetteville, Arkansas, for any judgment which might be
obtained against them by reason of any negligent act on the part of Elkins in the
operations, maintenance and construction of Elkins' sewage collection facilities
within Elkins' service area. This provision does not waive either City's statutory
sovereign immunity. Fayetteville shall not be responsible for damages resulting
from acts of God, acts of war, insurrections, or rebellions, acts of public enemy,
acts of any unauthorized persons, firms, or corporations, or acts of Elkins', its
agents or employees.
K. CONTRACT BINDING ON SUCCESSORS
I. This contract shall be binding upon the parties hereto, their successors and
assigns. In the event of any occurrence rendering Elkins incapable of performing
under this contract, any successor of Elkins, whether by result of legal process,
assignment, or otherwise shall succeed to the rights of Elkins under this contract.
L NO FRANCAISE OR OTHER FEE OR TAX TO BE LEVIED
I. Elkins will not during the period of this contract or any renewal thereof, Icvy any
franchise tax, occupation tax, or any other tax or fee of any form whatsoever, by
whatever name it may be called, upon Fayetteville, or the services rendered by
Fayetteville pursuant to this contract without consent of all the parties.
M. 'I'ERMINATION
I. This agreement may be terminated by either party upon a material or substantial
breach by the other of any of the covenants or agreements contained herein, and
the failure of the party in breach to remedy such breach within six (6) months
after receipt of written notice of the existence of such breach. Either party will
have the right to utilize a mediation process if they disagree with a proposed
breach. Elkins reserves the right to re -negotiate or terminate this contract if it is
advantageous for the Elkins to pursue a different type of sewage treatment
process, subject to advance notification of at least two years.
N. NOTICES
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1. The written notices provided for herein shall be sufficient if sent by certified mail,
return receipt requested, postage prepaid, to the Mayor of the City of Fayetteville,
113 West Mountain Street, Fayetteville, Arkansas, 72701, or the Mayor of the
City of Elkins, 348B North Center Street, Elkins, Arkansas, 72727, but not
limited thereto.
IN AGREEMENT WITH ALL THE TERMS AND CONDITIONS ABOVE AND IN
WITNESS WHEREOF, The Mayor and City Clerk of the City of Fayetteville,
Arkansas, by authority of a Resolution adopted by the City Council of the City of
Fayetteville, and the Mayor and City Recorder of the City of Elkins, Arkansas, by
authority of a Resolution adopted by the City Council of the City of Elkins, have
hcrcun�tpp set their hip\d and caused the corporation seal to be affixed and dated this
atb-day of \10 ► n )2005.
By:
CITY 0 FAYETTEVILLE
DAN COODY
Mayo Fayetteville, A
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Attest.
Sondra Smith, City Clerk
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CITY OF ELKINS
CK LADYMAN
ayor of Elkins, AR
Attest.• nie-
Corder
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Fayetteville - Elkins Wastewater Agreement
APPENDIX B
Wastewater Volume Based On Metered Water
FORMULA ACTIONS Example
Water Meter Reading Volume - September, 2005 4,431,900
Wastewater Volume as a % of Water 85% 3,767,115
7
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Kyle Cook
Submitted By
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City of Fayetteville
Staff Review Form
City Council Agenda Items
or
Contracts
15 -Nov -05
City Council Meeting Date
Division
Action Required:
w
Fayetteville Sewer Committee
Department
Approval of Sewer Agreement with the City of Elkins.
Approximately $75,000.00
Cost of this request
5400-0940-4432 01
Account Number
Project Number
Budgeted Item
Category/Project Budget
Funds Used to Date
Remaining Balance
Budget Adjustment Attached
Program Category / Project Name
Sewer Revenues
Program / Project Category Name
Water & Sewer
Fund Name
X6?‘
Fay eville Sewer Committee Chair
City Attorney
4/1153/4
U/vas
Previous Ordinance or Resolution #
Original Contract Date.
Original Contract Number:
Received in Mayor's Office
%p G/.e/ /nd16n de Jy /// 5-45 mS
FAYETTEALLE
THE CITY OF FAYETTEVILLE. ARKANSAS
DEPARTMENTAL CORRESPONDENCE
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TO: Fayetteville City Council
FROM: Kyle Cook, Chair - Fayetteville Sewer Committee //
DATE: November 7, 2005
Subject: Elkins — Fayetteville Wastewater Contract
Recommendation
The Fayetteville Sewer Committee recommends approval of the attached contract between the City
of' Elkins and the City of Fayetteville for Fayetteville to provide wastewater transportation and
treatment services.
Background
On July 21, representatives of the City of Elkins formally requested the sewer service contract
between Elkins and Fayetteville be opened for negotiation. The Fayetteville Sewer Committee
named Kyle Cook and Stephen Davis as the negotiating team representing Fayetteville in the contract
negotiations with Elkins.
Discussion
Contract negotiations with Elkins began in late July and continued until the attached contract was
completed in mid-October.
This contract has been reviewed by the Fayetteville Sewer Committee and the City Attorney. The
Sewer Committee at its October 13 meeting. The Elkins Sewer Committee and Elkins City Attorney
have also reviewed the contract and recommended it to the full Elkins City Council for approval.
This contract was approved by the City of Elkins last week.
For a more comprehensive discussion of the contract terms please refer to the Staff memo attached.
1:\Water & Sewer\Outside City Contracts\Elkins \Elkins Wastewater Contract Agenda Memo_Nov 2005_Sewcr Commiuec.doc
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RESOLUTION NO.
A RESOLUTION TO APPROVE A CONTRACT WITH THE
CITY OF ELKINS CONCERNING THEIR SEWER RATES
AND OTHER MATTERS
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
approves the Sewcr Contract with the City of Elkins, Arkansas attached as Exhibit A and
authorizes Mayor Coody to execute this contract.
PASSED and APPROVED this 15th day of November, 2005.
ATTEST:
By:
By:
APPROVED:
DAN COODY, Mayor
SONDRA SMITH, City Clerk
FAYETTEALLE
THE CITY OF FAYETTEVILLE. ARKANSAS
DEPARTMENTAL CORRESPONDENCE
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TO: Fayette v le Sewer Committee
THROUGH: D
FROM: Stephen Davis, Finance al Services Direct
DATE: November 7, 2005
Subject: Elkins — Fayetteville Wastewater Contract
Recommendation
Staff recommends approval of' the attached contract between the City of Elkins and the City of
Fayetteville for Fayetteville to provide wastewater transportation and treatment services.
Background
The cities of Elkins and Fayetteville entered into an agreement on July 23, 1981 whereby Fayetteville
agreed to accept and treat wastewater delivered by Elkins to Fayetteville at a point of connection to
the Fayetteville wastewater collection system located in the Baldwin Community on Lewis Woods
Lane. The initial contract was entered into so that Elkins could obtain a loan from the Farmers
Home Administration to construct a sewer collection system within Elkins. The original term of the
loan is forty (40) years. The 1981 contract allocated annually, to Elkins, 36.5 million gallons of
treatment capacity in the Paul Noland Wastewater Treatment Plant.
Contractual Issues With the 1981 Agreement
There arc a number of contractual issues Fayetteville wanted to clarify in the Elkins -Fayetteville
contract.
• Guaranteed Capacity for a Forty (40) Year Term. The original contract allocated capacity in
the Paul Noland Treatment Plant from 1981 to 2021.
• The contract did not contain any provisions for infrastructure funding.
• Elkins did not have to provide Fayetteville with the quantity of approved developments.
• The original contract did not address rate-of-retum calculation method or which facilities to
use for rate development purposes.
• Billing disputes based on the existing Elkins sewer meter.
• Payment terms were not consistent with Fayetteville ordinances.
Discussion
This contract has been reviewed by the Fayetteville Sewer Committee and the City Attorney. The
Sewer Committee reviewed the contract at its October 13 meeting and recommended forwarding the
agreement to City Council for approval. The Elkins Sewer Committee and Elkins City Attorney
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also reviewed the contract. The Elkins Sewer Committee recommended it to the full Elkins City
Council for approval and it was approved last week.
This contract strengthens the 1981 service agreement between the cities. It establishes the method
for rate development, how capacity expenditures are funded, provides for data - sharing on approved
developments in Elkins and links continued development in Elkins to bio -loading capacity at the
Paul Noland Treatment Plant. The new contract sets forth a capacity allocation formula on the bio -
loading and hydraulic loading threshold attains 75% of rated capacity. Current bio -loading in excess
of 80% and hydraulic loading is in excess of 100% of the permitted capacity.
The contract also reduces the rate per 1,000 Fayetteville charges Elkins. The current rate per 1,000 is
55.71 and the new rate, as stated in the contract, is 52.81.
• Guaranteed Capacity for a Forty (40) Year Term. The original contract
allocated capacity in the Paul Noland Treatment Plant from 1981 to 2021.
The original term of the contract with Elkins was tied to Elkins loan that was used to
construct their sewer collection system. Changing the expiration term of this contract would
probably require the lending agency's approval. The attached contract is for a sixteen- (16)
year term. It is set to expire in 2021, as was the 1981 contract. The 1981 contract allocated
Elkins 36.5 million gallons on an annual basis. The contract docs not address what, if
.anything, Fayetteville or Elkins can do when this maximum volume is reached. The
maximum volumes have been exceeded annually beginning in 2003.
The new contract adds language that will protect Fayetteville from rapid growth in Elkins by
linking the ability to add new customers to the bio -loading and hydraulic loading of the
Fayetteville facilities used to provide services to Elkins.
• The contract did not contain any provisions for infrastructure funding.
This contract contains an infrastructure funding mechanism. It charges 50.25/1,000 gallons
beginning with billings issued after January 1, 2006. The contract also commits Fayetteville
to contract for an impact fcc feasibility analysis in compliance with the Arkansas
Development Impact Fees Act. The Cities agree, in the contract, that this contract can be
amended to incorporate impact fees once all of the required analyses are completed.
• Elkins did not have to provide Fayetteville with the quantity of approved
developments.
Elkins has committed, in this new contract, to provide Fayetteville with an annual report on
the number of developments approved by either the Elkins Planning Commission or the
Elkins City Council.
1:\Water & Sewer\Outside City Contracts\Elkins\Elkins Wastewater Contract Agenda Mcmo_Oct 2005.doc
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• The original contract did not address rate -of -return calculation method or
which facilities to use for rate development purposes.
This contract stipulates the facilities that Fayetteville can use to develop the cost -of -service
rates for Elkins. The contract also establishes the rate-of-retum percentage to be used for rate
development purposes. The rate -of -return percentage will be based on 2% above the highest
bond coupon outstanding at the time of the cost -of -service rate study. The contract also
removes the requirement that the independent consultant be a professional engineer and
allows the consultant to be an expert with demonstrable experience in utility rate
development utilizing the guidelines promulgated by the American Water Works Association
or Water Environment Federation.
■ Billing Disputes based on Elkins meter.
The existing contract provides that Elkins will maintain and replace the meter. Elkins does
not have any documentation that the meter has ever been maintained or calibrated.
Fayetteville, before October 2003, did not exercise our right of inspection of Elkins meter to
confirm the accuracy of the meter readings. OMI and the meter manufacturer in October
2003 conducted a series of tests that revealed the Elkins meter was under -reading by 50%.
The meter was set to read 100% and a subsequent calibration test revealed an additional 15%
volume error. These tests were observed by representatives of Elkins and Fayetteville and
documented, in writing, to the Mayor of Elkins.
This contract transfers the responsibility of the sewer meter from Elkins to Fayetteville and
establishes a volume billing procedure that is consistent with how Fayetteville bills our
residential customers for sewer service. The new billing procedure is based on 85% of water
sold to Elkins. This volume calculation is subject to confirmation using a meter that is
accurate within 0.15%. If the meter reading volumes vary by 10% or more for three (3)
consecutive months the Cities agree to use the meter readings until the discrepancy is
resolved. Fayetteville commits, in this new contract, to have the meter calibrated annually by
the manufacturer.
Because the faulty sewer volumes were used to compute the 2003 Sewer Rate for Elkins
Fayetteville has caused the rate to be recomputed based on the revised volumes for the base
year (2002). This new rate is S2.81/1,000 gallons. Fayetteville and Elkins negotiators have
ageed, subject to both Elkins and Fayetteville City Councils approval, to accept as
settlement of all prior claims related to under/over billing Fayetteville re -computing Elkins
monthly sewer bills back to March 1, 2005 and refunding to Elkins any excess. The expected
refund is approximately $75,000.00.
▪ Payment terms were not consistent with Fayetteville ordinances.
The contract incorporates Fayetteville's payments terms contained in our ordinances so that
all customer groups have the same payment terms.
1:\Water & Sewer\Outside City Contracts\Elkins\Elkins Wastewater Contract Agenda Memo_Oct 2005.doc
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Budget Impact
The budget impact of this contract is the refunding of wastewater revenue re -calculated at the agreed-
upon rate on actual metered volumes back to March 1, 2005. It is expected that this refund will be
approximately S75,000.
The concern, expressed by the Sewer Committee and City Council, is that Fayetteville rate -payers be
held harmless as a result of this contract. The S2.81/1,000 rate will produce more revenue than was
identified by the 2003 Water & Sewer Rate. The 2003 Water & Sewer Rate Study identified
approximately S81,000 in revenue from Elkins in 2006. Because of meter errors, discovered
subsequent to implementation of the 2003 Rate Study, Fayetteville has received approximately
$275,000 in excess of the revenue requirement identified in the 2003 Water & Sewer Rate Study for
2004 and YTD 2005.
For additional information concerning billing volumes and probable refund, please review the
attached tables. Also attached is a letter to Mayor Ladyman that provides more information on the
meter and subsequent calibration testing.
ATTACHMENTS:
Fayetteville -Elkins Sewer Contract - 2005
Fayetteville -Elkins Sewer Contract — 1981
Correspondence — Mayor Jack Ladyman
Elkins Wastewater Billing Schedule — Billing in Excess of Rate Study Findings
Elkins Revised Billable Calculations
Schedule of Probable Refund — Elkins
Elkins Wastewater Billing Option
Meter Data Sheet
1:\Water & Sewer \Outside City Contracts\Elkins\Elkins Wastewater Contract Agenda Memo_Oct 2005.doc
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s
�E�EK
CONTRACT'
THIS AGREEMENT, made and entered into this Zday of
9r 14.4
, 1981, by and between the CITY OF FAYETTEVILLE, ARKANSAS,
ei after referred to as "FAYETTEVILLE", and the'CITY OF
*ELKINS, ARKANSAS, hereinafter referred to as "ELKINS",
W -I -T -N -E -S -S -E -T -H:
WHEREAS, Fayetteville in its governmental capacity owns
and operates itp own sewlgo system; and,
•
WHEREAS, the residents of Elkins are not now served by a
public sewage system; and,
WHEREAS, ip order to maintain the health and well-being of
the residents of Elkins, it is imperative that a sewage
system be provided; and,
WHEREAS, it has been determined that the best and most
feasible treatment for Elkins' wastewater can best be provided
by Fayetteville's wastewater treatment facilities; and,
WHEREAS, Elkins desires to contract with Fayetteville to
provide transportation and treatment for the wastewater from
Elkins; now,"
THEREFORE, in consideration of the mutual covenants and
conditions hereinafter set forth and other valuable considerations,
the receipt of which is hereby acknowledged by Fayetteville and
Elkins, it is hereby agreed as follows:
Fayetteville agrees to accept for treatment the sanitary
sewage delivered by Elkins to the Fayetteville system and to
process such wastes in the same manner as wastes from Fayette-
ville
ayetteville are treated under the following terms and conditions:
A. Elkins will construct all facilities required to
•
deliver wastewater from Elkins to a "Point of Connection' to •
Fayetteville's sewer collection system.
B. The amount of wastewater that Fayetteville agrees to
treat under this contract shall not exceed an annual average
daily amount of 100,000 gallons per dny and shall not exceed
150,000 gallons in any one day.
•l
l 1,
c. The rate for sewage treatment services provided herein
shall be sixty-eight cents ($0.68) per 1,000 gallons of sewage
'received by Fayetteville from Elkins for treatment, same to, be
calculated based on the metered sewage flow through the metering
c.
device hereinafter provided for. Upon completion of an in process
sewer rate study by Mick 6 Veach for the CiLy of Fayetteville, this
rate shall be revised in accordance with the rate determined by
said rate study. A statement for sewer services shall be
r
rendered by Fayetteville once each month, and shall be paid
by Elkins within 30 days after receipt of said statement.
D. The payment for sewage treatment shall be based upon
a measurement of such sewage through a metering device provided
at the pump station which pumps to the point of connection of the
Elkins system to the Fayetteville system. During any period of
time that the metering device should be out of service, the City
of Fayetteville shall bill the City of Elkins by using (1) elec-
tronic timing devices placed on each pump, or (2) the
average daily flow for the previous three-month period. This method
shall be used for the full period of time the meter is out of
service. Elkins shall provide the maintenance and any required
replacement of the metering device, and Fayetteville shall have
the right of inspection of the metering device and point of connec-
tion at any reasonable time. Fayetteville shall provide the
monthly reading of the metering device for the purpose of pre-
paring billings pursuant to the rates established by Paragraph
C above or by subsequent amendments thereto. Fayetteville shall
have full and complete access to the pump station at all times.
The metering device'shall be checked for accuracy once per year
by Fayetteville.
E. (1) Elkins shall have full responsibility for all
maintenance and operation of Elkins' sanitary sewer system, in'
cluding all parts thereof necessary to deliver the sanitary
waste to the point of connection with the Fayetteville system
in such a manner to be suitable for the treatment capabilities
of the Fayetteville system. In such regard, Elkins agrees to
comply with all reasonable requirements of Fayetteville.
e
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(2) Elkins agrees that Fayetteville will have the right
to inspect the sanitary sewage system of Elkins at all reasonable
•times so as to assure Fayetteville that the construction, mainte-
nance and operation of said sanitary sewer system is being carried
-out in a mariner consistent with modern engineering and health
practices. Fayetteville may inspect any taps onto the sanitary
sewer system of Elkins at the time of installation of said taps,
said inspection to be by a designated official of Fayetteville.
(3) Elkins agrees to adopt and enforce with reference
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to all users of its sanitary sewer system requirements and re-
strictions which are, at least, as restrictive as those provisions
of the ordinances of Fayetteville restricting and controlling '
discharges into the sanitary sewer system of the City of Fayette-
ville. The requirement of this subparagraph shall be interpreted
as to require the adoption and enforcement of such restrictions
by Elkins as are equal to any ordinances or subsequent amendments
to such ordinances of Fayetteville. Further, Elkins hereby agrees
to exclude from their sewage collection system any industrial
process wastewater without prior written approval from Fayetteville.
F. (1)" This contract shall be for the life of the loan
from Farmers Home Administration to the City of Elkins, which is
being made to enable Elkins to build its sewage facilities.
Thereafter, this contract shall be reviewed and subject to
renegotiation by both parties thereto once each two (2)
years on the anniversary date of this contract.
(2) The rate schedule established herein is subject to
adjustment by Fayetteville each two (2) years on the anniversary
date of this contract upon thirty (30) days written notice to
Elkins. ,The rate schedule may be adjusted more often, at the
request of either party hereto, should the "Cost of Service"
increase or decrease.
C. The point of connection shall be at the end of
Fayetteville's 10 inch gravity sewer line in Lewis Woods Lane
in the Baldwin Community.
R. Elkins covenants and agrees that it will defend and
hold harmless against and indemnify said City of Fayetteville,
'Arkansas, for any judgment which might be obtained against them
by reason of any negligent act on the part of Elkins in the opera -
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tion, maintenance and construction of Elkins' sewage collection
facilities within Elkins' service area. Fayetteville shall not
be responsible for damages resulting from acts of God, acts of
war, insurrections, or rebellions, acts of a public enemy, acts
of any unauthorized persons, firms, or corporations, ow acts of
Elkins, its agents or employees.
I. This contract shall be binding upon the parties hereto,
their successors and assigns. In the event of any occurrence
rendering Elkins incapable of performing under this contract,
any successor of Elkins, whether by result of legal process,
assignment, or otherwise shall succeed to the rights of Elkins
under this contract.
J. Elkins will not during the period of this contract or
any renewal thereof, levy any franchise tax, occupation tax, or
any other tax of any form whatsoever, by whatever name it may be
called, upon Fayetteville, or the services rendered pursuant to
this contract without consent of all the parties.
K. This agreement may be terminated by either party
upon breach by the other of any of the covenants or agreements
contained herein, and the failure of the party in breach to
remedy such breach within thirty (30) days after receipt of
written notice of the existence of such breach.
L. The written notices provided for herein shall be
sufficient if sent by certified mail, return receipt requested,
postage prepaid, to the City Manager of the City of Fayetteville,
Arkansas, or the Mayor of the City of Elkins, Arkansas, but not
limited thereto.
IN WITNESS WHEREOF, the Mayor and City Clerk of the City of
Fayetteville, Arkansas, by authority ofa resolution adopted by
the Board of Directors of the City of Fayetteville, and the Mayor and
City Recorder of the City of Elkins, Arkansas, by authority of