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HomeMy WebLinkAbout2014-056 Agrmt - Medford Water Commission - SDC AGREEMENT TO PAY SYSTEMS DEVELOPMENT CHARGES Between the City of Medford, by and through the Medford Water Commission and The City of Ashland Parties The parties to this agreement are the City of Medford, an Oregon Municipal Corporation, by and through the Medford Water Commission (Water Commission, Commission, MWC), a Medford Charter entity, and the City of Ashland (Ashland), an Oregon Municipal Corporation. Purpose By the authority granted in ORS 190.110 the Water Commission and the City of Ashland may enter into cooperative agreements for the performance of services otherwise provided separately by either entity. This agreement is payment by Ashland of Its fair share of Systems Development Charges (SDCs) expended by the Water Commission to expand its Duff Water Treatment Plant to create surplus facilities in order to treat and transport surplus and other water for Ashland. This agreement does not create any ownership in the Duff Treatment Plant by the City of Ashland. Terms in exchange for payments described herein, and as conditioned upon a separate Wholesale Other City Customer Surplus Water Service Agreement, MWC will allow Ashland to receive surplus water during the months of October through April, and surplus facilities for treatment and transport of Ashland water from the Duff I Water Treatment plant during the months of May through September. Amount Due The total amount of Ashland's fair share of SDC is $2,620,084.00 (Two million, six-hundred twenty thousand, eighty-four dollars and no cents). This amount is based on service of 2,130,000 gallons per day (two million, one hundred thirty thousand gallons per day or 2.13MGD) at $1,476.27 per Equivalent Residential Unit (ERU) and 1200 gallons per day (GPD) per ERU. Payments Ashland shall pay the SDC as follows: An Initial Payment of $262,008.00 (Two hundred sixty-two thousand, eight dollars and no cents) within 10 days of execution of the Wholesale Other City Customer Surplus Water Service Agreement. T he Initial Payment will be applied to the principal amount of the SDC. Page 1 of 3 The outstanding principal of $2,358,076.00 (Two million, three hundred fifty-eight thousand, seventy-six dollars and no cents) will be due in 40 semi-annual installments beginning six months after the initial payment. Semi-annual installments will be $81,877.77 (Eighty-one thousand, eight hundred seventy- seven dollars and seventy-seven cents) based on level amortization over 20 years at an annual interest rate of 3.42%. Ashland may prepay all or any portion of the outstanding balance of this Agreement on any business day upon thirty (30) days' notice to the Commission; provided, however, that each payment shall include payment of the accrued interest on the amount prepaid. In the case of a prepayment that does not repay all of the outstanding principal of this Agreement, the Commission shall recalculate a new level amortization schedule based on the remaining years of the original 20-year term of this Agreement and on the original interest rate. There will be no pre-payment penalty of the remaining balance due. Default Ashland will be deemed in default of this Agreement upon its failure to pay any installment or other charge within 10 days after it is due. Anytime after the ten (10) day period, MWC shall provide Ashland with a written notice of default and a grace period of thirty (30) days in which to cure. After failure to cure the default, MWC, at its option may terminate the SDC Agreement by notice in writing by certified or registered mail to Ashland. The notice may be given before the running of the grace period for default. Nonwaiver. Waiver by either party of strict performance of any provision of this SDC Agreement shall not be a waiver of or prejudice the party's right to require strict performance of the same provision in the future or of any other provision. Termination Payment of SDCs is separate from purchase of water, and all other terms and conditions for payment for surplus water between the parties is provided in Wholesale Other City Customer Surplus Water Service Agreement is separate from this obligation to pay SDCs. However, termination of this SDC agreement constitutes grounds to terminate Ashland's Wholesale Other City Customer Surplus Water Service Agreement. This agreement may be terminated by either party at any time. In the event of termination, the following refund policy shall be established: A. MWC shall return to Ashland a prorated share of the unexpended balance of the SDCs fund. This prorated share shall be based upon the actual unexpended fees paid by Ashland for the SDCs funded surplus supply water facilities plus the interest earned. Page 2 of 3 B. MWC shall return to Ashland a prorated share of the depreciated plant value of the SDCs funded surplus supply water facilities already installed. The prorated share shall be a percentage based upon the total amount of SDCs paid by Ashland divided by the total SDCs collected which was used to fund the facility.. There will be no interest adjustments for the years in which the SDCs payments were made. C. In order to avoid a financial hardship on MWC, a reasonable schedule of up to five (5) years shall be developed for repayment of the depreciated value of the SDCs funded surplus supply water facilities. If this Agreement is terminated due to breach by either party, the injured party reserves all remedies available at law or equity. Condition Subsequent All terms and conditions of this Agreement are enforceable subject to the parties reaching final and enforceable agreement of the Wholesale Other City Customer Surplus Water Service Agreement. Dated thisad "'day of (month), 2014. Signed l Signed l J a^' Medford Water Commission City of Ashland Page 3 of 3