Memorandum 14-125 Revised Wastewater Agreement with Kachemak City

Memorandum 14-125

TO:              Mayor Wythe and Homer City Council

FROM:        Walt Wrede

DATE:         August 18, 2014

SUBJECT:   Revised Wastewater Agreement with Kachemak City

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Resolution 14-008 entitled “A RESOLUTION OF THE CITY COUNCIL OF HOMER, ALASKA, APPROVING A NEW INTERGOVERNMENTAL WASTEWATER AGREEMENT BETWEEN THE CITY OF HOMER AND KACHEMAK CITY” first appeared on the January 27, 2014 City Council agenda.  The Council discussed the Draft Agreement at a work session on February 24 and again at a Special Meeting (Executive Session) on March 10. At the March 10 Regular Meeting the Council postponed Resolution 14-008 until August.

The City Council expressed numerous concerns about the Draft Agreement and asked the Manager and the City Attorney to rewrite the Agreement to incorporate its concerns. The Draft Agreement was an amended version of the original Agreement adopted in the 1980’s. Some Council members thought the document was confusing and hard to understand. Others did not think that it adequately represented how the City of Homer wastewater utility operates today or the relationship between the two cities with respect to the utility. All Council members provided their specific comments to the Manager in the form of notes written on the Draft Agreement.

Resolution 14-008 is back before the Council and is included on the August 25 meeting agenda. The Wastewater Agreement has been rewritten and it incorporates Council comments to the extent feasible and prudent. Highlights include:

The requirement that Homer pay for professional consultants at various points is removed. This includes when the rate model is reviewed and when proportional shares for capital improvements benefitting both Cities are determined. Homer could employ professionals if it saw the need but is not required to do so.

The requirement that proportional shares for capital improvements be based upon 20 year projections is removed. Cost sharing is simply based upon proportional volume at the time of construction.

The Sections on Kachemak City fees and contributions to certain capital improvements are reorganized and simplified for easier understanding.

The Rate Review Committee membership has been loosened and made more flexible.

The meter option for sewer only customers in Kachemak City has been inserted.

I look forward to your comments on this latest version of the Agreement. Copies of this Agreement were provided to Kachemak City on Friday, August 15. It is likely that Kachemak City will not be able to get comments back to me before the meeting.  It is also possible that further negotiation will be necessary. Therefore, this resolution may need to be postponed again for another meeting. I bring this new Agreement to you now (possibly prematurely) so that you can see the direction it is going and provide comment. We also wanted to comply with the Council’s direction and bring this back to you in August.

RECOMMENDATION:  Review the Amended Wastewater Agreement and Approve Resolution 14-008. Postpone until September 8 if necessary.