HomeMy WebLinkAbout0278.092L
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JU_o"le 4, 1992
THE HONORAB~E CITY COUNCIL
Palo Alto. california
Regional Water QUAlity control plant -~endment i5 to Partner9#
Agreement.
Members of the Council:
Report in Br-ief
This raport recommends that council authori~e the Mayor to execute
Amendment No. 5 to the Basic Agreement between the cities of ~s
~ltos~ Mountain View, and Palo Alto ~hich establishes the financial
arrangements for operation of the Regional water· Quality Control
Plant (RWOCP) 4 Amendment No.5 directs the City of Palo Alto to
return interest on any overpayment to the cities cf Los Altos and
Mountain View.
Background
In Fiscal Year-1990-1991, the final audited actual costs of
operatio~s and ~ebt service for the RWQCP were less than budgeted.
since the partner cities pay the city of Palo Alto quarterly, based
on the budqeted amount, an overpayment occurred. Tne overpayment
became part of a City of palo Alto reserve account for the Water
Quality Control Plant and thus earns interest. The existing Basic
Aqr-ee-:nent does net address interest on overpayments.
The partner cities believe that the interest earned from
overpayments sho~ld be credited to the partner cities of Los Altos
and Mountain View. ~endrnent No. 5 to the Basic Agreement has been
prepared to return interest on overpayments.
Amendment No. 5 would direct t.he city of Palo Alto to credit Los
"_Ito:;. and Mountain Vie18 with ovei:payment and interest on
overpayment which may occur in the future and those which occurred
in Fiscal Year 1990-1991. The City of Palo Alto Wastewater Reserve
will not be reduced to correct for overpayment. Rather r £utu~e
bills to tne partner citi~s ~ill be reduced appropriately.
Underpaytnents would be handled in a similar manner .... ith thE:
adjustment made after the end of the fiscal year. While
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underpayments have not be~~ a problem in th~ past, they could arise
if the RWOCP is assessed discharge fines or other unfo£eseen costs
arise.
Mq9Mendat ism
staff recommends that. Council autbor.ize tha Mayor to execute
Amendment No. S to the Basic ~9reement between the Cities of Los
Altos, Mouhtain vie.w and Palo Alto concerning th-e Reqional Wiater
Quality Control Flant (P.WQCP).
Respectfully submitted,
WILLIAM IH)(S
Manaqer, Water Quality Contr~l Plant
(J reO)jQl~~---
DAVID G. ADAMS
Directoo:-of PU~~ Works
(\ U \.;~7~"' ___ ~ FLEMING /) fAS~istant city Ma~ager \_/ ''-.---,
cc: city of Los Altos
City of Mountain View
Attachme,nt:
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Amendment No. 5 to £l.asic AgcE:e:ment betW'een the
Cities of Los Altos, Mountain View, and Palo Alto
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ADDENDC~ NO~ 5 TO BASIC AGRE~~ENT
BEr~EN THE CITIES OF PALO ALTO, HOU~~AIN VIEW AND LOS
FOR ACQUISITION, CONSTRUCTION AND MAINTENANCE
OF A JOI~~ SEw~R SYSTEM
A!/TOS
Thi s Addendum No. 5 to Basic Agree:tl!ent is made al".d
enter~d into this day of ____ , 1992, by and between
the city of Palo illo ,"Palo Alto"), the City of Mountain View
(Mountain view"J ~nd t.he city of Los Altos (-Los Altos"), 311
municipal corpora.tions under the la'Ws of the State of California.
1. On OCtober 10, 1968, Los Altos, Mountain V1ew, and
Palo Alto ("the parties") entered into the Basic Agreement for the
ac~~isition, construction and ~ainten3nce of a joiut sewer system.
2. Or. Noveml:ler 5, 1977, the parties entered into
Addendum No. 1 to Basic Agreement to add nev sections 28, 29 and
30.
3. On January 14, 1980, the parties en'!:€red into
Addendum No. 2 to Basic Agreement to amend and restate p~rdgraph
14.
4. On April 9, ~9a5, the parties entered into Addendum
No.3 to Basic Agreement to add a new subparagraph to paragraph 1~~
to amer.d subparagraph 19(a). and to add new para9raphs 31, 32, 33,
34, and 35.
5. On May 30, 1991, the parties entered into an
~Addendum No. 4 to the Agreernent~ to account far the allocation of
d~bt service on the utility revenue bonds, the proceeds of ~hich
.ere used to pay for construction of improvements to tr.:e Palo Alto
Regional Water Quality Control Plant.
6. The parties wish to revise the Basic Agreement to
provide fer pajntlent of interest on any excess payn;ent and any
underpayment by a party and to amend certain provisions of the
"Addendum No. , to the Agreement~"
IN CONSIDERATION OF the following mutual covanants, terms
and conditions, the parties agree:
SE'r,::'_TION 1. subparagraph (d) of par-agraph 14 of the Basic
Aqre~roent is hereby amended to read as follo~s;
WCd) Qua~terly on August 15, November 15, February 14, and
May 15, the parties to this Basic Agreement shall deposit with
the Administrator one-fourth of each party I s proportionate
share of the cost of maintenance and operation as estimated
pursuant to subparagraph (c) of this paragrapb 14; provided,
however, the November 15 payment for each fiscal year shall be
increased or decreased to adjust the estimated amount payable
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by the party to an amount for such party based upon the actual
total lIlai.:ntell.ance and oppration e>epenses for the fiscal year.
Accordi~gly, if at the end of any fi~cal year the a~ount paid
by a pact:,· e.xceeds the amount 'Jhich should have been charged
in accordance 'With the actual budget, the excess shaJl be
credited to such party. based uPOJ"l. the actual m~intenance a.r.d
operation expenses incurred for that full fiscal year and the
total volume of .se .... ·age and the quantity of chemical oxygen
demand, suspend~d solids, and a~onia contained tnarein that
sush party contributes to the Joint System. In case of an
underpayment, the party shall be billed by the Administrator
for the deficiency on the same basis and shall pay the same
within thirty (30} days of the date of issuance of the bill.
For the first fiscal year or part thereof that the Joint
System operates, the proportion of the estimated expenses for
maintenance and operation to pe paid by the parties t.o t.he
Administrator and the time of payment shall be that hereat~er
aqr.eed u!='on by th~ parties~"
SECTION 2. The new subpardgraph (a), "",hich was added to
paragraph 14 of the Basic Agreement entitled "Payment of Main
tenance and Operation Expenses" bj' Section 1 of Addendum No. J to
Basic Agreem~nt, is hereby renu~~ercd subparagraph (e) to paragraph
14 of t.he Basic Agreement, and, as amended, is incorporated herein
b:~r reference and made a part hereaf, to read as follo'Ws:
-(e) OVerhead expenses shall be included as a cost item in
the Joint System 2xpenses~ ThEY shall be charged to the Joint
S}"stem in the same manr .. er as they are calculated and al.located
by the City of Palo Alto Fin~nce Department to the various
departments/divisions of Palo Alto. O',,·erhead expenses may
include but not be limited to Central Services, Utilities
Administration and Vehicle Operation and Maintenance as those
terms are defined and used by the City of palo Alto }'inance
Department in the City of Palo Alto's A..~ual Budget and
financial r~ports. A..""y changes in the methodology used by
Palo Alto to allocate such cve:.rhead expen5es shall bE formally
pr~sented to Mountain View and Los Altos. Any dis?ute arising
concerning the overhead expenses shall be resolved as provided
in paragraph 19."
~rECTIQN :} ~ 1<_ ne',J SUbparagraph (f) is hereby added to
paragraph 14 of the Basic Agreement to read as follo .. "s:
"( f) (i) As respects deposits made pursuant to s'.JPparagraph
(d), if at the end of any fiscal year t.~e amount paid by a
party in accordance with the estimated budget ex-ce.eds the
amount 'Which should have haen charged to such party in
accordance 'With the actual budget, interest shall be paid on
one-half of the excess amount credited to such party for such
fiscal year. If at the end of any fiscal year the amount paid
by a party in accordance with the estimated budget is less
L~an the amo~nt ~hich should have been charged to such party
in a..:.cordar.ce ~ith t.he actual budget, jnterest shall be paid
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on one-ltal.f of the deficit 6::'lOunt debited. to s\\ch p~rty fo~
su~h ~iscal ye~r.
(ii) For purposes of this subparagraph (f), the interest ~~te
shall be equal to the average annual rate of intarest inco~e
(accrual basis) earned by Palo Alto on its po~folio invest
ments for the fiscal year in which payment ~as made by a party
in accorda.nce .... ith the estimated budget, as reported in the
lI!nvestment Activity Report" to the Council of the Citr of
Palo Alto issued dU:l'ing the month of July of tne fiscal year
i~~diately following the fiscal year in which the estimated
payments are ~ade. If interest shall be due on pa~ents ~ade
in accordance with an estimated budget for less than a full
fisc~l year; the int~rest rate shall be equal to the average
~onthly rate of iMterest income (accrual basis) earned by Palo
Alto on its investment portfolio for the numhe~ of months in
such ~artial fiscal year for tJhich interest rate calcula't.ions
have been made.
(iii) Such interest shal.l be credited or debited and made by
an aQjustment to the party's propcrtionate share of the costs
set forth in subparagraph (d) for the fiscal quarter in ':!ihien.
estimated pa}~ent of s~ch costs are due. The interest rate
adjustment shall be co~puted and made for payments which were
made C'I' ~"'hicn shc~.lld have be€n 'W.ade dur ing fiscal year ~990 -
1991 and any subsequent fiscal year ~ The interest shall be
computed on on~-half of the amount of the diff~rence between
ccr..-cributions actually made ur.der the estimated budget and
contributions that should have been made und-er the actual
budget. For purposes of determining the amo~nt ot interest
payable hereunder, the actual budget amount used to determine
a. member city's contribution shall be determined in accordance
with Palo Alto's audited financial statements."
SECTION 4. Section 6 of AddendulP No~ -4 to the
A9rEe~ent is hereby-amended to re~d 35 fcllo~s:
'"SEC'1'.I9.F 6 -BILLING
The billing of trle Cities by Pale. Alto for: all debt
payments shall include the following;
(a) The total annual debt service requirement
(principal, interest and tn.lstee e:x:penses) will be inclurted in
the annual budget forecast of the Regional Water Quality
Cootrol Plant ("RWQCP~);
(b) The city of Mountain View and the city of Los
Altos will be billed for one-third of their proportionate
share of the budgeted debt service (principal and interest) on
Nove....-..... er 15 and. t"Wc-thirds of their proportionate share of th~
budge~~d debt service (principal and inte~est) en May IS ~ith
the October and April billings, respectivelYi
{c] The expense of the RWQCP:
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(d) Accou.nt balances and the balanc-9 of outstanding
principal owed by each party; and
(e) The
reserv@. fund (s)
requirement. ~
proportionate share of the interest on the
to each partyl s annual debt service
~ECTION 5. Except as amended herein, the Ba$ic Agreement
and all amendments thereto and the Addendum No~ 4 to the ~greement
shall remaih in full force and effect.
IN
Agree.ment is
california on
ATTEST:
City Clerk
WITNESS W...JEREOF, this Addendum tio.
executed by the parties hereto at
the date first above stated.
MaYCJr
APPRono :AS TO FORM:
senior Assistant city Attorney
APPROVE;):
City Manager
5 t.o
Palo
Basic
Alt('l,
~.TTEST: CITY OF MotJN'TAIN VIE","
City Clerk
APPROVED AS TO FORM:
City Attorney
APPROVED:
,-.::-:-====--------City Manager
Mayor
Director of Utilities
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A'I'TEST:
City Clerk
APPROVED AS TO FOR.lot(:
City Attorney
APPROVED:
city Manager
CITY OF WS ALTOS
M~yor
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