HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/15/2014 - SECOND READING OF ORDINANCE NO. 096, 2014, AUTHORIAgenda Item 5
Item # 5 Page 1
AGENDA ITEM SUMMARY July 15, 2014
City Council
STAFF
Jon Haukaas, Water Engr Field Operations Mgr
Kevin Gertig, Utilities Executive Director
Carol Webb, Regulation & Govt Affairs Manager
SUBJECT
Second Reading of Ordinance No. 096, 2014, Authorizing the Mayor to Execute the First Amendment to the
Amended and Restated Intergovernmental Agreement with the Fort Collins-Loveland Water District, the Fort
Collins-Loveland Water District Enterprise and the Fort Collins Water Utility Enterprise.
EXECUTIVE SUMMARY
This Ordinance, unanimously adopted on First Reading on July 1, 2014, authorizes the Mayor to execute the
First Amendment to the amended and restated intergovernmental agreement (IGA) with the Fort Collins-
Loveland Water District, the Fort Collins-Loveland Water District Enterprise, and the City of Fort Collins Water
Utility Enterprise for the delivery of potable water. The item will require the party that exceeds the allotment of
water allowed for exchange to provide raw water reimbursement in addition to the charges for treatment.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on Second Reading.
ATTACHMENTS
1. First Reading Agenda Item Summary (w/o attachments) (PDF)
2. Ordinance No. 096, 2014 (PDF)
Agenda Item 14
Item # 14 Page 1
AGENDA ITEM SUMMARY July 1, 2014
City Council
STAFF
Jon Haukaas, Water Engr Field Operations Mgr
Kevin Gertig, Utilities Executive Director
Carol Webb, Regulation & Govt Affairs Manager
SUBJECT
First Reading of Ordinance No. 096, 2014, Authorizing the Mayor to Execute the First Amendment to the
Amended and Restated Intergovernmental Agreement with the Fort Collins-Loveland Water District, the Fort
Collins-Loveland Water District Enterprise and the Fort Collins Water Utility Enterprise.
EXECUTIVE SUMMARY
The purpose of this item is to authorize the Mayor to execute the First Amendment to the amended and
restated intergovernmental agreement (IGA) with the Fort Collins-Loveland Water District, the Fort Collins-
Loveland Water District Enterprise, and the City of Fort Collins Water Utility Enterprise for the delivery of
potable water. The item will require the party that exceeds the allotment of water allowed for exchange to
provide raw water reimbursement in addition to the charges for treatment.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
The original Amended and Restated Intergovernmental Agreement was approved on September 13, 2013 to
be effective with the new “Water Year” on November 1, 2013. Upon operationalizing the terms of the
Agreement it was discovered that the transfer of raw water along with payment for any water transfer
“overages” was not included in the IGA as intended. The terms of the agreement are mutual so that the same
settlement terms apply to any imbalance owed to Fort Collins Utilities or FCLWD.
FINANCIAL / ECONOMIC IMPACTS
Approval of this Amendment will allow the party providing excess water in any given month to recover the raw
water component associated with producing that potable water.
ENVIRONMENTAL IMPACTS
This ongoing Agreement makes for more efficient use of existing infrastructure, thereby delaying any
expansion of the Soldier Canyon Filter Plant owned and operated by the Tri-Districts, or the construction of a
new water treatment facility.
BOARD / COMMISSION RECOMMENDATION
The objectives of amending this Agreement were presented to the Water Board on June 20, 2013. The Water
Board voted unanimously to recommend approval of amending the Intergovernmental Agreement for the
ATTACHMENT 1
Agenda Item 14
Item # 14 Page 2
Delivery of Potable Water with Fort Collins Loveland Water District and the future amendment to the similar
Intergovernmental Agreement with the North Weld County Water District.
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ORDINANCE NO. 096, 2014
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE MAYOR TO EXECUTE THE FIRST AMENDMENT TO
THE AMENDED AND RESTATED INTERGOVERNMENTAL AGREEMENT
WITH THE FORT COLLINS-LOVELAND WATER DISTRICT,
THE FORT COLLINS-LOVELAND WATER DISTRICT ENTERPRISE,
AND THE CITY OF FORT COLLINS WATER UTILITY ENTERPRISE
FOR THE DELIVERY OF POTABLE WATER
WHEREAS, the City owns a water utility which acquires, treats, transmits and distributes
potable water (hereinafter referred to as “the City Water Utility”); and
WHEREAS, in doing so, the City owns and the City Water Utility operates a water
treatment plant located at 4316 LaPorte Avenue, Fort Collins, Colorado (hereinafter referred to
as “the City’s Treatment Plant”); and
WHEREAS, the City Water Utility distributes potable water to its customers through a
variety of water transmission facilities located within the City (hereinafter referred to as “the
City’s Transmission Facilities”); and
WHEREAS, the Fort Collins-Loveland Water District (the “District”) is a special district
organized and existing under Colorado law that also operates a water utility which distributes
potable water through a variety of water transmission facilities located within Larimer County,
Colorado (hereinafter referred to as “the District’s Transmission Facilities”); and
WHEREAS, in order to establish updated arrangements for the delivery of potable water
by amending and updating previously existing agreements, the City and the District negotiated
and presented for formal approval in late 2013 an Amended and Restated Intergovernmental
Agreement for the Delivery of Potable Water (the “Agreement”), which was approved on
October 15, 2013, by the City Council through its adoption of Ordinance No. 135, 2013; and
WHEREAS, the Agreement has been fully signed and implemented by the parties; and
WHEREAS, in the course of implementing the Agreement, staff has identified an
ambiguity regarding the requirement to provide raw water to offset imbalances in water
delivered under the Agreement, and recommends that this requirement be clarified and
confirmed amongst the parties to the Agreement through the adoption of a First Amendment to
the Agreement, attached hereto as Exhibit “A” and incorporated herein by this reference (the
“Amendment”); and
WHEREAS, pursuant to C.R.S. §29-1-203(1), the City and the District are authorized to
cooperate or contract with one another to provide any function, service or facility lawfully
authorized to each of them; and
WHEREAS, Article II, Section 16 of the Charter of the City of Fort Collins (“Charter”)
additionally provides that the City Council may, by resolution or ordinance, enter into contracts
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with other governmental bodies to furnish governmental services and make charges for such
services, or enter into cooperative or joint activities with other governmental bodies; and
WHEREAS, Article XII, Section 6 of the Charter provides that the City Council shall by
ordinance from time to time fix, establish, maintain, and provide for the collection of such rates,
fees or charges for water and electricity, as will produce revenues sufficient to pay the cost of
operation and maintenance of the utilities in good repair and working order, and for other
enumerated purposes; and
WHEREAS, the City’s Water Utility Enterprise (the “City Enterprise”) and the Fort
Collins-Loveland Water District Enterprise (the “District Enterprise”) were created by the City
and the District, respectively, in order to comply with the provisions of Section 20, Article X of
the Colorado Constitution and Article 45.1 of Title 37 of the Colorado Revised Statutes and to
permit the City and the District, acting through their respective enterprise, to issue revenue bonds
and enter into multi-year fiscal obligations in connection with their operation of a water utility;
and
WHEREAS, the City Enterprise and the District Enterprise are made parties to the
Agreement solely for the purpose of entering into any multi-year fiscal obligation imposed under
this Agreement; and
WHEREAS, the City Enterprise is authorized in Section 26-43 of the Code of the City of
Fort Collins to enter into contracts relating to the City’s water system.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the Council hereby approves the Amendment, and finds and
determines the Agreement to be for the benefit of the City Water Utility and its ratepayers.
Section 2. That the Council hereby authorizes the Mayor to execute the Amendment
on behalf of the City, in substantially the form attached hereto as Exhibit “A”, together with such
modifications and additions as the City Manager, in consultation with the City Attorney,
determines necessary and appropriate to protect the interests of the City or further the purposes
of this Ordinance.
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Introduced, considered favorably on first reading, and ordered published this 1st day of
July, A.D. 2014, and to be presented for final passage on the 15th day of July, A.D. 2014.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 15th day of July, A.D. 2014.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
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FIRST AMENDMENT TO
AMENDED AND RESTATED
INTERGOVERNMENTAL AGREEMENT
FOR THE DELIVERY OF POTABLE WATER
This First Amendment (“Amendment”) to the Amended and Restated Intergovernmental
Agreement for the Delivery of Potable Water (“Water Delivery Agreement” or “Agreement”) is
made and entered into this ___ day of ________________, 2014, effective as of November 1,
2013, nunc pro tunc, by and between the CITY OF FORT COLLINS, a Colorado municipal
corporation, (hereinafter referred to as “the City”), the CITY OF FORT COLLINS WATER
UTILITY ENTERPRISE, an enterprise of the City (hereinafter referred to as “the City
Enterprise”), the FORT COLLINS-LOVELAND WATER DISTRICT, a political subdivision of
the State of Colorado, (hereinafter referred to as “the District”), and the FORT COLLINS-
LOVELAND WATER DISTRICT ENTERPRISE, an enterprise of the District (hereinafter
referred to as “the District Enterprise”) (all collectively referred to as the “Parties”).
W I T N E S S E T H :
WHEREAS, the Parties entered into the Water Delivery Agreement on September
13, 2013, effective as of November 1, 2013, in order to establish updated terms and
conditions for the delivery of potable water; and
WHEREAS, the Parties have determined that the transfer of raw water for water
delivery overages was intended by them to be an element of the Water Delivery
Agreement; and
WHEREAS, in order to incorporate said additional term to the Water Delivery
Agreement, the Parties desire to enter into, as of the effective date of said Agreement, this
First Amendment.
EXHIBIT A
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NOW, THEREFORE, in consideration of the foregoing recitals, the Parties’ mutual
terms, covenants and conditions contained herein, and other good and valuable consideration, the
receipt and accuracy of which are hereby acknowledged, the Parties agree as follows:
1. Amendment to Paragraph 4.B. Paragraph 4.B of the Agreement is hereby amended to
read as follows:
B. For all water delivered under this Agreement, in any given month within a Water
Year that the respective amounts requested by and delivered to each of the parties
differ by no more than twelve million (12,000,000) gallons (the “Carryover
Limit”), then the calculation of applicable overage charges under this subparagraph
B will be carried over and incorporated into the calculation and related billing for
overage charges for the succeeding month. In any month that the respective
amounts requested by and delivered to each of the parties, adjusted by any
carryover from the preceding month as set forth above, differ by more than the
Carryover Limit, the party receiving the greater amount (the “Owing Party”) shall
owe to the other party (the “Owed Party”) compensation (in the form of payment
and transfer of raw water) for the difference between the amount delivered in such
month and the Carryover Limit (the “Overage”) as described in paragraph C
below:
2. Amendment to Paragraph 4.C. Paragraph 4.C of the Agreement is hereby amended to
read as follows:
C. It is the intent of the Parties to adjust the rate payable for an Overage over
approximately a three year period. The City is projecting rate increases of 4%
annually over the next several years. The rate shall become equal to the full
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treatment charges of the City beginning in calendar year 2017. For deliveries in all
calendar years after 2017, the rate for overage charges shall be adjusted annually
on a calendar year basis at a rate consistent with the overall rate increase to the
entire customer base of the City.
1. The schedule to step into the full rate shall be as follows:
a. For deliveries in the remainder of calendar year 2013 and the full
calendar year 2014, treatment charges shall be due from the Owing
Party to the Owed Party on the Overage calculated at the rate of One
Dollar and Thirty-Five and Zero Hundredths Cents ($1.3500) per
thousand gallons of metered flows.
b. For deliveries in calendar year 2015, treatment charges shall be due
from the Owing Party to the Owed Party on the Overage calculated at
the rate of One Dollar and Sixty-Nine and Twenty Hundredths Cents
($1.6920) per thousand gallons of metered flows.
c. For deliveries in calendar year 2016, treatment charges shall be due
from the Owing Party to the Owed Party on the Overage calculated at
the rate of Two Dollar and Three and Thirty-Eight Hundredths Cents
($2.0338) per thousand gallons of metered flows.
2. Such compensation shall be paid within thirty (30) days after the issuance
of the related invoice by the Owed Party and it shall be paid by the City
Enterprise or the District Enterprise, as applicable, solely from the net
revenues of their respective water utilities.
3. The Owing Party shall transfer raw water from the Colorado-Big
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Thompson Project (“CBT”) to the Owed Party in an amount equal to the
volume of the Overage, within ten (10) days after the issuance of the
related invoice by the Owed Party. All transfers of CBT water shall be
made in accordance with rules established by the Northern Colorado Water
Conservancy District (“NCWCD”).
4. No Further Modification. Except as expressly amended by this Amendment, the
Water Delivery Agreement is unmodified and shall continue in full force and effect.
IN WITNESS WHEREOF, the said City has caused this agreement to be executed by its
Mayor, attested to by its City Clerk with the corporate seal of said City hereunto affixed, the said
District have caused this agreement to be executed by its president, and the City Enterprise and
the District Enterprise have each cause this agreement to be executed by its respective president,
as of the day and year first above written, in duplicate.
THE CITY OF FORT COLLINS
A Municipal Corporation
By: __________________________
Mayor
ATTEST: APPROVED AS TO FORM:
_________________________ ________________________
City Clerk Deputy City Attorney
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CITY OF FORT COLLINS WATER
UTILITY ENTERPRISE
An Enterprise of the City
By: __________________________
Enterprise President
ATTEST:
_____________________
Enterprise Secretary
FORT COLLINS-LOVELAND
WATER DISTRICT,
A Political Subdivision of the State of Colorado
ATTEST: By:
, President
___________________________
, Secretary
FORT COLLINS - LOVELAND
WATER DISTRICT ENTERPRISE,
An Enterprise of the District
ATTEST: By:
, President
___________________________
, Secretary