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HomeMy WebLinkAbout1993.10.19_OPWA Agenda1 1 1 PUBLIC NOTICE OF THE MEETING OF THE OWASSO PUBLIC WORKS AUTHORITY TYPE OF MEETING: Regular DATE: October 19, 1993 TIME: 7:00 p.m. - PLACE: Council Chambers, Owasso Community Center Notice and Agenda filed in the office of the City Clerk and posted on the City Hall bulletin board at 4:00 p.m. on Friday, October 15, 1993. Marcia Boutwell, Council Clerk AGENDA 1. Call to Order 2. Flag Salute 3. Roll Call 4. Request Approval of the Minutes of October 5, 1993 Regular Meeting Attachment #4 5. Request Approval of Claims Attachment #5 Owasso Public Works Authority October 19, 1993 Page 2 6. Consideration and Appropriate Action Relating to a Request for a Supplemental Appropriation to the FY 1993 -94 Budget and Amending the Budget to Provide for Additional Revenue. Ms Bishop Attachment #6 7 3 Staff will recommend Trustee approval of a supplemental appropriation to the OPWA water department budget in the amount of $49,750.00, and that the OPWA budget for estimated revenues be increased in the amount of $25,000. Report from OPWA Manager Report from OPWA Attorney 9. Unfinished Business 10. New Business Owasso Public Works Authority October 19, 1993 Page 3 11. Adjournment 1 OWASSO PUBLIC WORKS AUTHORITY MINUTES OF REGULAR MEETING Tuesday, October 5, 1993 The Owasso Public Works Authority met in regular session on Tuesday, October 5, 1993 in the Council Chambers at the Owasso Community Center per the Notice of Public Meeting and Agenda posted on the City Hall bulletin board at 4:00 p.m. on Friday, October 1, 1993. ITEM 1: CALL TO ORDER Chairman Randolph called the meeting to order at 7:05 p.m. ITEM 2: FLAG SALUTE The flag salute was led by Chairman Randolph. ITEM : ROLL CALL ' PRESENT Bob Randolph, Chair ' John Phillips, Vice Chair Charles Burris, Trustee Rex Bowen, Trustee STAFF Rodney J Ray, City Manager ft Ronald D Cates, Authority Attorney Marcia Boutwell, Recording Secretary A quorum was declared present. ABSENT Mary Lou Barnhouse, Trustee ITEM 4: REQUEST APPROVAL OF THE MINUTES OF SEPTEMBER 21, 1993 REGULAR MEETING. Charles Burris moved to approve the minutes as written, by reference hereto; seconded by John Phillips. ' AYE: Burris, Phillips, Bowen, Randolph NAY: None ' Motion carried 4 -0. r 17 1 Owasso Public Works Authority ITEM 5: REQUEST APPROVAL OF THE CLAIMS October 5, 1993 John Phillips moved, seconded by Chairman Randolph, to approve the following claims as submitted: (1) OPWA Fund $88,198.00; (2) OPWA Capital Improvement Fund $24,214.17; (3) Total Transfers $31,884.16; (4) Payroll $19,022.71. AYE: Phillips, Randolph, Bowen, Burris ' NAY: None Motion carried 4 -0. ' ITEM 6: CONSIDERATION AND APPROPRIATE ACTION RELATING TO A REQUEST FOR TRUSTEE APPROVAL OF A CONTRACT BETWEEN THE OPWA AND THE TULSA METROPOLITAN UTILITY AUTHORITY PROVIDING FOR THE PURCHASE OF WATER AND ESTABLISHING RATES FOR SUCH PURCHASES. The City of Owasso has purchased water from the City of Tulsa for the past 20 years and, until the last two years, have had a contractual agreement. Because of the inability to agree on specific language in one article, there has not been a formal contract for two years. A contract has been submitted by the City of Tulsa and that contract has been rewritten by Mr Cates, eliminating the unacceptable language. Following discussion, Charles Burris moved to approve a contract between the Owasso Public Works Authority and the Tulsa Metropolitan Utility Authority and City of Tulsa providing for the purchase of water at $1.41 per thousand gallons, and authorize the mayor to execute the necessary document. Motion was seconded by John Phillips. AYE: Burris, Phillips, Bowen, Randolph NAY: None Motion carried 4 -0. ITEM 7: CONSIDERATION AND APPROPRIATE ACTION RELATING TO A CLAIM FILED BY BRIAN DEWIT'T AGAINST THE OPWA FOR DAMAGES INCURRED AS A RESULT OF A WASTEWATER BACKUP. This item is a result of Trustee directive to staff from the previous meeting. Information relating to maintenance on the sewer line in question prompted staff to resubmit the DeWitt's claim after meeting with them and learning of their wishes. The insurance carrier once again denied the claim and staff met with Mr & Mrs DeWitt to negotiate as settlement as directed by the Trust. Mr & Mrs DeWitt agreed to settle the claim for $1500 and to sign a release of same. Mr DeWitt addressed the Trust regarding his concern about how state law treats insurance payments for sewer backups. He also expressed a desire for regular maintenance on the lines and records 2 Owasso Public Works Authority October 5, 1993 being kept on that maintenance. Following discussion, Charles Burris moved to authorize a settlement with Mr & Mrs DeWitt in the amount of $1500. Motion was seconded by Rex Bowen. AYE: Burris, Bowen, Phillips, Randolph NAY: None Motion carried 4 -0. ITEM 8 REPORT FROM OPWA MANAGER No report. ITEM 9 REPORT FROM OPWA ATTORNEY No report. ITEM 10: UNFINISHED BUSINESS None ITEM 11: NEW BUSINESS None ITEM 12: ADJOURNMENT Chairman Randolph moved, seconded by Rex Bowen to adjourn. AYE: Randolph, Bowen, Burris, Phillips NAY: None Motion carried 4 -0 and the meeting was adjourned at 7:14 p.m. Marcia Boutwell, Recording Secretary 3 Bob Randolph, Chairperson 1 CITY OF OW iSS710- PUBLIC WORK'S. AUTHORITY 10/14!98 1. A/P CLAIMS REPORT A IR 9 ' r # �'E IL:OR DESCRIPTION A ",` :,I7 t ---------- ------------------------- ------------------------- ------- - - - - -- '* 1�10 DEPARTMENT MASTER FOUND * .# ------------------------------ 94 0 0 Q �� DEPT OF C _INVT 'RONMENTAT QTj 1 WASTE ttl!--,MT A. T E P I W ------------------------------ ^4{};.24 r"..EPA --Ty—P,'— TOTAL COMMUNICATIONS 9'0548 WATER PRODUCT._ TN� 940.t'�--3' 1 7 f.) WATEF' PPODT.TiCTS INC OPWA ADMIMT'.2,TRATTON 940733 940734 BRAD SPARKMAN MICHAEL Mil-LEP ------------------------------ 940735 LLOYD LEACH I 940116 PlO;,NAL-D D CATE'S RETAINED 940737 940752 SUBURBAN OFFICE SUPPLY SUPPLIES W.fDF-T - REENHOU-SE P-EYS Cr-. 9407 ;3 MESO T RAININ G 94796 0 !!FTjzTlTNG DOZIER — FRITNTTFIG 9410863 ''41- = =5 OFFICE DEFCT CARD PLAN 940910 - Z, ROGERS COUNTY FIT".2ki, 946104R CSC CFEDTT SERVICES, INC SERVICES 94 A, 8 .6 3n TFEASUF---,P PETTY CASH PETMB PETTY CASH 940R;8 OML MUV% IFAL ASSURANCE G LT A—./FLEET COVERAGE DEPARTMENT TOTAL ====) A. T E P I W ------------------------------ WASTEWATER I ------------------------------ PA{-iEF RENTAL SUPPLIES SUP PLIES METER FADER METER PEADER METE-;!; R , I READER. MEER READER UNIFORM FENT/CLEAH USE FILIES REILMB PETTY CASH ACOTTIPE W-ATEP SERVICE ^4{};.24 MCCAN COMMUN T A; 10- `,�3 COMMUNICATIONS 9'0548 WATER PRODUCT._ TN� 940.t'�--3' 1 7 f.) WATEF' PPODT.TiCTS INC SLUDGE DISPOSAL 940733 940734 BRAD SPARKMAN MICHAEL Mil-LEP W.4"R 940735 LLOYD LEACH I 940736' TYRONE DINFINS 940737 C-TNTAS COP?. 94:14-7 -7 W.fDF-T - REENHOU-SE P-EYS Cr-. 940-.L-2 CITY OF TULSA 9407R-4 WA TVP PPODUCTS Tgr 9410863 TREASURER PETTY C-A�'-H 940910 - Z, ROGERS COUNTY FIT".2ki, DEPARTMENT TOTAL WASTEWATER I ------------------------------ PA{-iEF RENTAL SUPPLIES SUP PLIES METER FADER METER PEADER METE-;!; R , I READER. MEER READER UNIFORM FENT/CLEAH USE FILIES REILMB PETTY CASH ACOTTIPE W-ATEP SERVICE 5145. ------------- 35 54_i.__ 700.00 22.57' 7`50.00 114.4= 2C)9. -- .46.81 17,405.36 ------------- 13, 2:?4 23.45 237.''2 750.00 15 22 . '15 5 13.40 214.20 4 72,.i • 51`.[10 -3 7 4-, "0 0 0 0 152 4. 4.,;0 44.90 160 .:.11 5 29 .Cs 9401'-74 MCCAW COMMUNICATIONS PAGER PEENNTA T I 940.t'�--3' 1 WASTE MANAGEMENT OF CIRLA SLUDGE DISPOSAL 9'.4'069'! W.4"R PRODUC7S INTC ST.' FF L I E S I 5145. ------------- 35 54_i.__ 700.00 22.57' 7`50.00 114.4= 2C)9. -- .46.81 17,405.36 ------------- 13, 2:?4 23.45 237.''2 750.00 15 22 . '15 5 13.40 214.20 4 72,.i • 51`.[10 -3 7 4-, "0 0 0 0 152 4. 4.,;0 44.90 160 .:.11 5 29 .Cs CITY OF OWABSO 0�4&SSO PUBT IC WD��S 10/14/93 16:48:16 A/F CLAIMS REPORT A P A? v PaHE: �D w V F 1 iDOR DESCRIPTION AIM OUI I7 ---------- ------------------------- ------------------------- ------------- 940703 Ali A 1-11?IC&L SG��ICES CO Al Li CALIBRATION 120,O0 940737 CI0TA5 CORP. "QIFORM R—m8T/CLEAN 15O.00 940743 CVR�IN MA?8ESON SCISN?IFI S��P�I�S 50� 51 940752 S BUPBAN OFFICE SUPPLY SUPPLIES 7` 17 940�?0 �ORFN/�INK SP�S7� T�C. OX�SSB C2�� 12'^75 94088� 7AYLD� PAPER CD SuPP�Iz S 9408c3 SAM'5 wB6��5��� S��P�IGS 212. 16 DEPARTMENT TOTAL ====> ------------- 1,rO5.6O REFUSE COLLECTIONS ------------------------------ 9407ci2 SUPVRBA0 OFFICE SUPPLY SVzPL IGS 6.30 940835 8FI 93 COMM REFUSE 1},395.13 ------------- DEPARTMENT TOTAL ====> 117401,43 PSCY S CENTER ------------------------------ 940835 BTI 9/93 COMM REFUSE 1,549.00 ------------- DSFAR7MEN? 7O?�1-1 1,549.00 ------------- F TT ND TOTAL ===} 186,989.98 10 CITY OF ON&SSD OFmA CAPITAL IMPROVEMENT FUND 10/14/93 16:48:16 A/P CLAIMS REPORT APAPVR PAGE: 9O # VENDOR DESCRIPTION AMOUNT ---------- ------------------------- ------------------------- ------------- DEBT SERVICE ------------------------------ �40817 TIBvR?Y BANK & TPUS? OWRB �O&� 2,887.37 ------------- DEPARTMENT TOTAL WASTEWATER ------------------------------ 940814 FRC, IK . SERVICES 5,850.00 ------------- DEPARTMENT TOTAL ------------- ��ND TOTAL ===> 8,737.3? 11 OWASSO PUBLIC WORKS AUTHORITY PAYROLL PAYMENT REPORT PAY PERIOD ENDING DATE 10/02/93 APPROVED: 10/19/93 Chairman Trustee Trustee I MEMORANDUM ' tBACKGROUND: Over two years ago city staff members and Rogers County Rural Water District staff initiated ' discussions relating to a long term philosophy regarding the future relationship between the two organizations. At that time it was reported to the Council that a viable option fox addressing that long term relationship would be for the city and the district to agree to a concept that would allow the city to acquire certain portions of the district as the city's growth moved into the district's service area. Additionally, it was reported that the staff believed that eventually the city could serve water to the entire area west of the Verdigris River. It was believed that such a relationship would be serve the interest of the citizens of Owasso and the customers of both the city and the water district. It was recognized at that time that the first phase of such acquisition would most likely be in the area immediately north of the Owasso High School and ' east of 129th E Ave. That area includes approximately 1 1/2 sections that is primarily undeveloped and would be a logical acquisition because of its proximity to the existing city water . service area. Subsequent to those discussions, the majority of the section around the high school was annexed by the City Council upon request of the property owners. After annexed portions of the area began to sell to potential developers, the City of Owasso began to petition the water ' district to remove those tracts from the district's service area so water could be supplied by the city. Initially the district was understanding and did detach two areas so the city could provide water service. Subsequently, however, there were concerns on the part of the district that the ' city seemed to want to "piecemeal" the undeveloped portions of that area into our service area, leaving the district to serve their existing customers. That concern was heightened when the city later requested that additional property be released from the district for development within the ' city. At that point, the district's board adopted a policy that prohibited the release of any other tracts until the City of Owasso would agree to take the entire 1 1/2 sections east of 129th E Ave and north of 86th St and west of 145th E Ave. On February 12, 1993, the Council received a memorandum from the staff reviewing the concept relating to purchasing the area described above from the Rogers County Rural Water TO: CHAIRPERSON AND TRUSTEES ' OWASSO PUBLIC WORKS AUTHORITY FROM: RODNEY J RAY ' CITY MANAGER SUBJECT: REQUEST FOR SUPPLEMENTAL APPROPRIATION AND ' AMENDMENT OF FY 1993 -94 BUDGET DATE: October 15, 1993 tBACKGROUND: Over two years ago city staff members and Rogers County Rural Water District staff initiated ' discussions relating to a long term philosophy regarding the future relationship between the two organizations. At that time it was reported to the Council that a viable option fox addressing that long term relationship would be for the city and the district to agree to a concept that would allow the city to acquire certain portions of the district as the city's growth moved into the district's service area. Additionally, it was reported that the staff believed that eventually the city could serve water to the entire area west of the Verdigris River. It was believed that such a relationship would be serve the interest of the citizens of Owasso and the customers of both the city and the water district. It was recognized at that time that the first phase of such acquisition would most likely be in the area immediately north of the Owasso High School and ' east of 129th E Ave. That area includes approximately 1 1/2 sections that is primarily undeveloped and would be a logical acquisition because of its proximity to the existing city water . service area. Subsequent to those discussions, the majority of the section around the high school was annexed by the City Council upon request of the property owners. After annexed portions of the area began to sell to potential developers, the City of Owasso began to petition the water ' district to remove those tracts from the district's service area so water could be supplied by the city. Initially the district was understanding and did detach two areas so the city could provide water service. Subsequently, however, there were concerns on the part of the district that the ' city seemed to want to "piecemeal" the undeveloped portions of that area into our service area, leaving the district to serve their existing customers. That concern was heightened when the city later requested that additional property be released from the district for development within the ' city. At that point, the district's board adopted a policy that prohibited the release of any other tracts until the City of Owasso would agree to take the entire 1 1/2 sections east of 129th E Ave and north of 86th St and west of 145th E Ave. On February 12, 1993, the Council received a memorandum from the staff reviewing the concept relating to purchasing the area described above from the Rogers County Rural Water MEMORANDUM Supplemental Appropriation October 15, 1993 ' Page 2 District #3. That memorandum provided the basis for a discussion by the Council and staff for ' a period of one month. Then, on February 25, 1993, the staff presented to the Chair and Trustees of the Owasso Public Works Authority a recommendation relating to the purchase of approximately 1 1/2 sections of water service area from the Rogers Rural Water District. On March 2, 1993, the Owasso Public Works Authority entered into a contract with the Rogers County Rural Water District providing for the purchase of water service area as described above. The contract was based on the concepts contained in the February 25, 1993 ' memorandum to the Owasso Public Works Authority and requires a payment to the Rogers County Rural Water District in the amount of $49,750.00 to the district in compensation for the water lines and service area that will now be included in the Owasso service area. A part of the , concept that related to the approval of that contract was an agreement by developers who owned property in the affected area to provide $25,000 as their contribution to the purchase. That contribution would allow the development of their property within the city limits of the City of Owasso and have availability of Owasso city municipal water service. Pursuant to the terms of the contract, it is now approaching the closing date for the purchase of that service area. The Owasso Public Works Authority is required on November 1 to assume responsibility for water service in the area purchased and must, on that date, provide payment in the amount of $49,750.00 to the district as provided for in the previously approved contract. In order for the staff to accomplish the closing of the purchase on the date required by the contract, it is necessary that the fiscal year 1993 -94 OPWA budget be amended in two areas in order to provide appropriated funds for that purchase. The two amendments that are required for this transaction are: (1) a supplemental appropriation to the water department budget of $49,750.00, and (2) an amendment to the estimated revenues of the Owasso Public Works Authority budget in the amount of $25,000.00 (such revenue to be provided by private sector developers in the affected areas). While $25,000.00 of the required $49,750.00 will be provided by the private sector, the additional $25,000.00 will, if approved, be appropriated from OPWA reserves. In order to recoup the funds paid from reserves for the purchase of the service area, the Trustees have approved an increase in water tap fees for anyone tapping onto the water system in the 1 1/2 section to be acquired. The amount of such increase is $100.00 per tap, and our figures indicate that the $25,000.00 will be recovered in less than five years. Attached for your review are memorandums providing background to this subject and the contract approved by the Council on March 2, 1993. It is the intent of the contract for this acquisition to close on November lst. Details between the two organization staffs have been finalized for that acquisition and include a review by our city attorney of documents that must be filed by the Rural Water District indicating a release of liens on any of those properties, and documents that must be filed by the City of Owasso indicating that our intent for acquiring the service area and water lines is to serve water to those customers. Additionally, it should be noted that the staff is in a position to implement on November 1 new rates for the customers in our rural service areas. As you may recall or as you may see from the background MEMORANDUM Supplemental Appropriation October 15, 1993 Page 3 memorandums, a portion of the concept the Council adopted in approving the contract for the purchase of this additional service area was to initiate a phasing of an equalization of rates structure between in -city water customers and rural water customers on the City of Owasso's ' municipal water system. That equalization of rates is a phased -in process and must be approved each year by the Council. The staff believes that all of the conditions for the close of the acquisition have been met and that we are now ready to acquire the service area and begin providing water service to those customers. There are some decisions that still have to be made in terms of how we can best supply water service to those customers in the future, and the staff will be visiting with members of the Authority in the very near future to discuss a proposal for the construction of a water line in that area in addition to the two small feeder lines that we're now constructing to connect that portion of the system together. However, in order to meet the November 1st deadline, there must be an appropriation to the budget of funds and an approval to make payment in the amount of $49,750.00 to the Roget County Rural Water District. In order to do that, the recommendation below is made for your consideration. RECOMMENDATION: The staff recommends Trustee approval of a amendment to the estimated revenue section in the FY93 -94 OPWA budget by increasing the estimated revenues in the amount of $25,000.00. Additionally, the staff recommends a supplemental appropriation from OPWA reserves to the ' water department section of the FY93 -94 OPWA budget in the amount of $25,000.00. ' ATTACHMENTS: ' 1. Contract between Owasso Public Works Authority and Rogers County Rural Water District 2. Memorandum dated February 12, 1993 3. Memorandum dated February 25, 1993 i i t :P. CO1\ 1lACr MQr-k THIS CONTRACT made and entered into this 2„d day of 1993, by and between RURAL WATER DISTRICT NO. 3, Rogers County, Oklahoma, party of the first „ part, hereinafter referred to as "DISTRICT', and THE OWASSO PUBLIC WORKS AUTHORITY, a Public Trust, of Owasso, Oklahoma, party of the second part, hereinafter referred to as "AUTHORITY". WITNESSETH: WHEREAS, District is a duly incorporated Rural Water District, and whereas, ' Authority is a duly authorized Public Trust, both created under the authority of the Statutes of the State of Oklahoma; and, ' WHEREAS, District is operating a Rural Water District in Rogers County, Oklahoma, and Authority is distributing water in an area partially located in Rogers County, Oklahoma; and, WHEREAS, it has been deemed by both the Boards of District and Authority to be in the best interest of all parties concerned, that District deannex a portion of its area now being served, based upon its inability to properly provide service to its customers, and to sell and transfer that portion of its system to Authority, said legal description of the area to be deannexed and transferred, and the property and equipment to be transferred, all as described and set forth in Exhibit "A" attached hereto and incorporated herein and made a part hereof; and, ' WHEREAS, Authority is equally desirous of purchasing same, NOW THEREFORE, in consideration of the mutual covenants, promises and agreements, the parties hereto agree as follows: 1. District will cause the property described on Exhibit "A" to be deannexed from ' Rural Water District No. 3, Rogers County, Oklahoma, by the proper statutory procedures. Said deannexation to be completed prior to 180 days from the date this contract is signed by all parties. The Parties agree to agree on a date of closing within 180 days from the ' date this agreement is signed by all parties or any extension is made in writing signed by both parties. In the event deannexation is delayed, and the closing provided is not accomplished within said 180 days from the date this contract is signed by all parties, or unless the time is extended by all parties, then this Contract shall be void. 2. District will convey all of their right, title and interest in and to their presently ' owned rights of wav and easements, and all lines, meters and equipment, as described in Exhibit "A ", and include any equipment now in place or to be in place on the date of closing, or to such time as the closing may be extended as provided in Paragraph 1 above, upon the terms and conditions hereinafter set forth. 3. District will provide Authority with such maps, plats and engineering drawings that they may now have in their possession, and reasonable personal assistance to Authority in the location of said meters, lines, easements, rights of way, and equipment. t 4. Both District and Authority agree the transfer will take place at 8:00 a.m. on a closing date to be agreed upon within said 180 day period or any extension thereof. ' Until said time, District shall be responsible for the furnishing of service to its customers and shall be liable for any such operation and shall be entitled to accumulated billings until 8:00 a.m, on the date of closing. District agrees to provide a final reading on or before that time and a final billing rendered to customers. It is specifically agreed that if payment of the final billing, as prepared and billed by District, comes into the hands of Authority, Authority will forthwith account and pay over to District any such sums acquired by them. ' The closing date as herein set forth may be extended in accordance with the provisions of Paragraph 1 above. ' S. District agrees to make proper conveyance to Authority by assignment of its easements and rights of way and by proper Bill of Sale in and to all personal property and equipment, all as described in Exhibit "A" attached hereto. District makes no warranty, express or implied, as to the title to the real property, rights of way, easements to be conveyed by them to Authority, except that it has the right to assign such rights of way and easements and it will warrant title to the personal property, lines, meters and equipment as described on Exhibit "A ". Authority will have a reasonable time to inspect and test such equipment and lines, but District makes no warranty, express or implied, of the condition of the lines, meters and equipment. 6. District states and represents that the property conveyed is subject to a lien and that they will obtain a release of said lien from the Farmers Home Administration, satisfactory to Authority of the area to be deannexed and the property to be sold and conveyed to Authority under the terms and conditions hereinafter set forth. ' 7. Authority agrees to provide water service to the present customers in the deannexed area at the same rate as that charged to water customers within the limits of the City of Owasso, Oklahoma. Authority agrees to accept Benefit Units from District members in lieu of a water meter deposit and to reassign said benefit units to District for cancellation. 8. Persons seeking water service who are not being served at the time of closing shall be permitted service connection at the discretion of Authority subject to ordinary and customary fees as may be applicable. 9. District agrees to furnish Authority at time of closing a list with current addresses of its customers. 10. Authority agrees to pay District at time of closing the total purchase price for the property described in Exhibit "A ", of Forty Nine Thousand Seven Hundred Fifty Dollars ' (S49,750.00) said purchase price to be paid in cash, subject to the following: (a) Delivery at time of closing of all necessary recordable documents executed ' by the District in favor of the Authority to convey all items referred to in Paragraph above. (b) List of customers as provided in Paragraph 9 above. _ S 1. it 1 1 t 1 1 (c) Release of lien on behalf of the Farmers Home Administration. (d) Provide the Authority with UCC search in Rogers and Oklahoma County and certification from the Secretary of State, all evidencing there are no liens or encumbrances filed against the subject property other that the Farmers Home Administration Mortgage. 11. Authority will assume all right, title and interest in said property conveyed and shall assume the duty to maintain and operate said system from 8:00 a.m. of date of closing and shall assume liability for the operation of said system as shall occur from that time and date. District acknowledges that it shall be liable for any claims or occurrences attributable to its operation of the system up to the time and date of closing and each party hereto agrees to hold the other party harmless from any liability, attorney's fees and expenses of any nature whatsoever arising from or related to any liability assumed herein. 12. The cost and performance of this Contract shall be as follows: Each party shall pay their respective attorney fees. Authority shall pay recording fees of the documents acquired from District No. 3, and any and all expenses incurred in obtaining financing for the purchase of any property. District No. 3 shall pay expense of deannexation and any expense incurred relative to The Farmers Home Administration loan. District No. 3 shall pay their expenses of material and labor to disconnect from the District lines within the deannexed area. Authority shall furnish such necessary material and labor to connect the deannexed area to its system. IN WITNESS WHEREOF, the parties hereunto have affixed their hands and seals of the signature to be attested by an appropriate officer of each party, the day and year first above written. ATTEST: Secretary ATTEST: RURAL WATER DISTRICT NO. 3 Rogers County, Oklahoma By: Ct.k Chairman THE OWASSO PUBLIC WORKS AUTHORITY By: ZaiL hrman 1 EXHIBIT "A" A. LEGAL DESCRIPTION OF AREA BEING DEANNEXED: THE N 1/2, AND THE SE 1/4, AND THE N 1/2 OF THE SW 1/4, ALL IN SECTION 21, TOWNSHIP 2 NORTH, RANGE 14 EAST, TULSA COUNTY. AND A D THE SOUTH 1/2 LESS AND EXCEPT THE EAST 50 FEET OF THE SE 1/4, ALL IN SECTION 16, TOWNSHIP 21 NORTH, RANGE 14 EAST, TULSA COUNTY. B SEVENTY -SIX (76) METERS AND NORMAL APPURTENANCES. C. ALL WATER LINES, VALVES AND APPURTENANCES OWNED BY RURAL WATER �DGSTRICT #3 IN THE ABOVE DESCRIBED AREA. LESS AND EXCEPT THE (4 ') P C WATER LINE LOCATED IN THE EAST 50' OF THE SE 1/4, SECTION 16, TOWNSHIP 21 NORTH, RANGE 14 EAST, TULSA COUNTY. D. AERIAL PHOTOGRAPHS OF THE AREA DEPICTING THE METER LOCATIONS. w I i Ll r-, 1 ALL ROW AND EASEMENTS LOCATED IN ABOVE DESCRIBED AREA. 1 MEMoxnrmuM TO: THE CHAIRPERSON AND TRUSTEES IOWASSO PUBLIC WORKS AUTHORITY FROM: RODNEY J. RAY ' SUBJECT: AGREEMENT BETWEEN OPWA AND ROGERS COUNTY RURAL WATER DISTRICT PROVIDING FOR ACQUISITION OF ONE AND ONE - HALF SECTIONS OF RRWD SERVICE AREA DATE: FEBRUARY 25, 1993 BACKGROUND: During the February 16, 1993 meeting of the OPWA, the staff presented a proposed agreement ' that would provide for the transfer of approximately one and one -half sections of land from the Rogers County Rural Water District service area to the OPWA (City) service area. During a discussion of the issues, it became apparent that there were some very basic concerns relating ' to the proposal. The Trustees did not take action on the proposed agreement, other than to table the matter and refer it back to staff for additional development. For the past two weeks, I have worked to develop a plan of action that would address the i concerns expressed by the Trustees and allow the acquisition to proceed. At the time of this writing, a final proposal has not been fully developed and accepted by the other parties involved ' in the matter. There has, however, been a significant amount of discussion and there is a framework in place that provides a basis for continuing the process. The staff continues to strongly support the acquisition of the service area as a sound business investment that will produce increased revenues as the area is developed. At this point, I am working from the concept that a long -term equalization of the "rural" water rates, using a phased -in process of reducing those rates, would be acceptable to the Council. The basis for this part of the concept lies in a "revenue neutral" proposal that would call for the reduction of rates for the City's "outside" customers by the exact amount of revenue produced by the new customers gained from the Water District. Under this plan the Trustees would agree to rate protection for the new customers and would make a long -term commitment to existing rural customers for continued rate reductions based on added customers from the acquired ' service area. Initially, the staffs calculations indicate that the rate reduction for those customers would be between $3.50 and $5.00 per month (that range is based on average usage and could be slightly impacted by actual usage after a one -year history is acquired). Staff discussions with ROGERS COUNTY RURAL WATER DISTRICT ACQUISITION FEBRUARY 25, 1993 PAGE TWO ' some of the parties involved indicate that this portion of the concept is being well received, in fact, the basic concept was initially suggested by a Trustee. The second part of the concept revolves around the payment of $49,750 to the District for the service area. There is obvious concern relating to the requirement of an up -front payment. As you may recall during the discussion, one developer mentioned that his development company would be willing to advance fund a portion of the lump sum payment. I have held discussions with the principles of that firm, and, as of this point, do not have a firm proposal to make ' regarding their level of commitment. Discussions have ranged form a 50 -50 (50% developer and 50% City) advance funding to a 100% developer- funded plan. There are serious doubts that we can achieve a 100% advance - funding by the developer unless there is some method of them ' to be compensated for the cost of the money used to fund the buy -out. While that is a viable possibility, it has not been discussed with the Trustees. Additionally, the developers are not comfortable with advancing funds for the buy -out without a clearly defined time limit on the erepayment of those funds. Generally, a time period of three years has been suggested as a reasonable time for the City to pay back the advance funding. The staff estimates that a $100 ' increase in tap fees would produce approximately $27,800 during the first three years (based on existing development projects encompassing an estimated 178 lots in Windsor I, Windsor H, Brentwood and a 50 acre unnamed addition in the planning stage). Central to resolving this issue are three questions that only the Trustees can answer. First, is the issue of whether or not the Trustees are receptive to advance funding a portion of the initial $49,750 acquisition cost, and if so, how much of that cost are the Trustees willing to advance? Second, are the Trustees willing to provide some repayment of the cost of the money the developer would advance? If this is acceptable, how much of that cost would the Trust be ' willing to make available? Thirdly, what time frame for repayment of an advance funding is acceptable to the Trustees? The staff is of the opinion that a consensus can be reached on all of the basic points of this agreement and a recommendation will be presented to the Trustees at the meeting. I believe that the recommendation will include the "revenue neutral" /rate reduction proposal, an increase in tap fees for the acquired area, an advance funding of the purchase price by the developer, with a payback of that advance funding over a three year period and with some additional payback to cover the cost of the advance funding. However, an option to that recommendation could ' include only a partial advance funding of the purchase price by the developer with no consideration of re- payment of the cost of the money. That option would, however, include a recommendation that the Trustees invest funds for about half of the purchase price. Such cost would be recovered from additional tap fees in the area under discussion. ROGERS COUNTY RURAL WATER DISTRICT ACQUISITION FEBRUARY 25, 1993 PAGE THREE I have attached the proposed contract between the OPWA and the District for your review. I view this issue as being critical to the future of Owasso and want you to know that I am available at your convenience to discuss the matter with you. If you have questions, please call Mr. Compton, Mr. Augustine, Ms. Bishop or me. RECOMNIENDATION: A recommendation will be made at the meeting. ATTACHMENT: 1. Proposed agreement 2. Memorandum dated February 12, 1993 1 1 1 1 1 1 1 1 1 1 1 D MEMORANDUM TO: FROM: CHAIRWOMAN AND TRUSTEES OWASSO PUBLIC WORKS AUTHORITY RODNEY J. RAY SUBJECT: PROPOSED PURCHASE OF SERVICE AREA FROM ROGERS RURAL WATER DISTRICT #3 IDATE: FEBRUARY 12, 1993 BACKGROUND: i staff members and Rogers Count Rural Water District staff initiated Over two years ago City g y discussions relating to a long -term philosophy regarding the future relationship between the two ' organizations. At that time it was reported to the Council that a viable option for addressing the long -term relationship would be for the City and District to agree to a concept that would allow the City to acquire certain portions of the District as the City's growth moved into the District's tservice area. Additionally, it was reported that our staff team believed that eventually the City could serve water to the entire area west of the Verdigris River. It was believed that such a relationship would best serve the interest of the citizens and customers of both the City and the Water District. It was recognized that the first phase of such acquisition would, most likely, be in the area immediately north of the Owasso High School and east of 129th East Avenue. That area includes approximately one and one -half sections that is primarily undeveloped, and would be a logical acquisition because of its proximity to the existing City boundary. Subsequent to those discussions the majority of the section around the school was annexed by the City Council upon request from the property's owners. After annexed pieces of the area began to sell and development of those parcels was begun, each time a tract began to develop the developer and City of Owasso would petition the Water District to remove that tract from ' the District's service area so water could be supplied by the City along with other municipal services. Initially, the District was understanding and did, in fact, detach two areas so the City could provide service. At that time, however, there were concerns that the City seemed to want tto "piece- meal" the undeveloped portions of that area into our service area leaving the District to serve their existing customers. That concern was heightened when the City later requested that additional property be released from the District for development within the City. At that n PROPOSED PURCHASE OF SERVICE AREA FEBRUARY 12, 1993 ' PAGE TWO point the District's Board adopted a policy that prohibited the release of any other tracts until the City of Owasso would agree to take the entire one and one -half sections east of 129th E. Avenue north of 86th Street and west of 145th East Avenue. The District took that position, because it believed that to allow the City to have all of the area that would produce future revenue, while being forced to maintain the existing customers of that - area, was a poor business decision. They did not want the responsibility of having to maintain their own lines along side City lines and have the maintenance cost associated with the upkeep of what would eventually become a kind of "no -mans area ". That feeling resulted in the District telling our staff that they felt an agreement should be finalized for the City to take over the entire area and include the purchase of their existing lines as a part of the "deal" criteria. After reviewing the District's proposal the City staff review team was of the opinion that the proposal for taking over water service for that area was premature and would result in a large ' capital liability for the City. Although the District's lines in the area under discussion are in good condition, it was the staff position that development in the area was not occurring, that land prices were too high to promote the sale and development of the area, and that absent t development the City would be forced to do substantial capital investment to maintain service to the existing 66 customers. It was also the staff opinion that the existing customers would not provide enough revenue to offset the capital, operating and maintenance cost. Based on that evaluation the staff was not receptive to accepting a deal for a buy -out at that point. Subsequent to that opinion, several things happened that forced the staff to rethink its position. First, all of the undeveloped land in the section around the high school has sold to parties interested in development. Fox land to Windsor Lake Developer, Synar land to Terrill Taylor - Brentwood and Trayband property to Charlie Helscel. Second, housing developments will ' accomplish most of the capital cost needed to continue service to the existing customers. Lastly, the recent creation of an Enterprise Fund could certainly use the revenue generated by an additional thousand water taps during the next five to ten years. In reviewing the land available for development in the areas under discussion, it is the staff opinion that a conservative figure of 1600 new water customers could be used to calculate revenue /expense figures for analyzing this proposal. That number of customers will eventually generate $96,000 per year in contribution to the Enterprise Fund Capital Program alone. 1 Additionally, that number of water customers will increase the OPWA bottom line by approximately 20% over our current level. When considering that capital costs are minimal (less than $5,000 to hook up to system) the financial impact of acquiring the area is significant. It ' is also anticipated that the acquisition fee of $49,750 can be recouped by adding a fifty dollar ($50) extra charge on the tap fee for all water taps in that area. Based on our data it is expected that the acquisition cost would be recouped in the following manner: l f t t t PROPOSED PURCHASE OF SERVICE AREA FEBRUARY 12, 1993 PAGE THREE Thus a $50 per tap extra charge assessed to that one and one -half section will, over a seven year period produce enough revenue to pay the $49,750 acquisition cost plus add an additional $30,250 to the OPWA to offset any maintenance cost on the existing system as its mains are replaced by development. ACQUISITION COST: The proposal from the District requests payment (lump sum) of $49,750. That payment is in consideration for acquiring the following areas and lines. SECTION 21 TOWNSHIP 21N, RANGE 14E 1. 100 acres with 1400 feet of 2" pvc 2. 40 acres with 1500 feet of 4" pvc (Pleasant View) 3. 180 acres with undeveloped land SECTION 16 TOWNSHIP 21 N, RANGE 14E 5-D ''#1 00 1993 -94 $ 6,000 (120 lots) 1994 -95 5,000 (100 lots) JOB 1995 -96 15,000 (300 lots) 1996 -97 17,500 (350 lots) 1997 -98 15,000 (300 lots) 1998 -99 11,500 (230 lots) 1999 -2000 10,000 200 lots Total surcharge $ 80,000 1,600 lots �-- Thus a $50 per tap extra charge assessed to that one and one -half section will, over a seven year period produce enough revenue to pay the $49,750 acquisition cost plus add an additional $30,250 to the OPWA to offset any maintenance cost on the existing system as its mains are replaced by development. ACQUISITION COST: The proposal from the District requests payment (lump sum) of $49,750. That payment is in consideration for acquiring the following areas and lines. SECTION 21 TOWNSHIP 21N, RANGE 14E 1. 100 acres with 1400 feet of 2" pvc 2. 40 acres with 1500 feet of 4" pvc (Pleasant View) 3. 180 acres with undeveloped land SECTION 16 TOWNSHIP 21 N, RANGE 14E PROPOSED PURCHASE OF SERVICE AREA FEBRUARY 12, 1993 PAGE FOUR 1. 160 acres with 4,600 feet of 3" pvc 900 feet of 4" pvc 1,700 feet of 2" pvc 1,500 feet of 1 1/2" pvc 2. 60 acres with 5,600 feet of 4" pvc 3. 420 acres of undeveloped land Total acres developed - 360 Total number of customers now - 66 Total feet of 4" pvc - 8,000 Total feet of 3" pvc - 4,600 Total feet of 2" pvc - 3,100 Total feet of 1 1/2" pvc - 1,500 Total acres undeveloped - 600 Total projected taps when fully developed - 1,600 PROPOSED CONTRACT: The contract proposed by the District contains the following items: 1. Lump sum payment of $49,750 upon presentation of mortgage free deed 2. Transfer of ownership of all existing lines and easements to OPWA and engineering plans for all lines PROPOSED PURCHASE OF SERVICE AREA FEBRUARY 12, 1993 PAGE FIVE 3. Six months for City to assume service to existing customers of the District 4. Agreement to charge only in -City water rates to 66 existing District customers 5. Detachment of all of Section 21 and Section 16 from Rural Water District service area with lien releases from F. H. A. COMN[E vTS: 1. The acquisition of this area will create a positive revenue source for the OPWA. The area jis already developing and the only reason for the lack of additional development is the lack of desire to develop while this issue is unresolved. t, 2. Even though we can work out a deal with the District for them to provide water while the City provides sewer, refuse and other services, it is logical to have only one provider for all services. 3. Under the staff proposal, all acquisition costs would be returned to the City as taps were requested, thus no current citizen would be paying for the acquisition, additionally the extra tap fee would produce funds for any maintenance and operation needs of the existing system. 4. The existing lines serving the 66 customers will not provide adequate fire protection. While there is no law or requirement for that protection the Trustees should note that fire fighting capacity in the currently developed areas of section 16 and 21 will be limited until housing developmentS replaces all of the main lines. Even then the lines within the County subdivisions would not be replaced and would not support fire fighting equipment. 1 5. Mr. Cates has reviewed and commented on the proposed contract. All changes requested were approved by the District's Board. 6. While I do understand the natural reluctance of the Trustees to pay for what we consider sub- standard lines and then assume responsibility for those lines, I strongly believe that the City is the logical provider of services to that area and should move to acquire the rights to service the property with a municipal water service. t PROPOSED PURCHASE OF SERVICE AREA FEBRUARY 12, 1993 PAGE SIX RECOMMENDATION: The staff recommends Trustee approval of the attached agreement and authorization for the Chairwoman to execute the necessary documents, and approval of an expenditure of $49,750 to the Rogers Rural Water District #3 as compensation for the service area. ATTACHMENTS: 1. Proposed contract 2. Map showing area under discussion t am T to M it m m iw � Ong 1� 1 LI �i 207 SOUTH CEDAR P.O. BOX 180 OWASSO, OKLAHOMA 74055 May 11, 1993 James W Summerlin 501 W First St PO Box 99 Claremore, OK 74018 City of Owasso (918) 272 -22 ,1 FAX. (918) 272 -4999 gF, ROGERS CO RURAL WATER VISTRICT #3 - OWASSO CONTRACT Dear Mr Summerlin: The purpose of this letter is to confirm receipt of your correspondence dated April 23, 1993 wherein you transmitted executed copies of the above referenced contract and requested a confirmation in regard to the contract attachment "A ". Additionally, you requested that a closing date of October 31, 1993 be established pursuant to the terms of the contract. Subsequent to that correspondence, you and I conducted a telephone conversation (5 -5 -93) z „ regarding item "C" of Attachment "A" to the contract and mutually agreed that the.44pe*water line originally excluded from the contract would now be in lu as part and parcel of the5�`�A3 purchase agreement. Please consider this letter as official confirmation that our staff has reviewed the attachment "A" to the contract and the easements associated thereto and find them to be accurate and consistent with the intent and terms of the contract. Further, please note that the inclusion of theA' -W, h- water line referred to in item "C" of the attachment is considered by the City as included in the purchase agreement pursuant to our telephone conversation of 5 -5 -93. 5 In reference to the suggested closing date of October 31, 1993, please consider this correspondence as acceptance of such date, provided however, that all other contract terms are satisfied at that time. I trust this confirmation of Owasso to the t your oard rmembersnand staff again express for the appreciation of the City opportunity to met our common challenges by working together. Sin y Rodney J ay 4 City Manager copy: Mayor Randolph City Council Members NEMoxnxnuM TO: 1 FROM: CHAIRMAN AND TRUSTEES OWASSO PUBLIC WORKS AUTHORITY RODNEY J. RAY SUBJECT: DATA RELATING TO "RURAL" WATER CUSTOMERS /RATES IDATE: JANUARY 13, 1993 BACKGROUND: In 1973 the Owasso Utility Authority and Owasso Public Works Authority implemented a water rate payment schedule that included a rate differential between water customers living inside the corporate limits and those outside the corporate limits. In 1977 several "rural" citizens appeared before the City Council to protest the "double rates ". Again, on September 2, 1980, several citizens petitioned the Council for relief from the higher rates. The Council response to the 1980 protest was to annex the Westport (July 7, 1981) and Hillside (May 1981) additions who were at that time not in the City limits and therefore were paying the higher "rural" rate. Between 1973 and 1987 our records (incomplete) indicate that the differential rate was maintained. Each instance of "in City" rate increase was accompanied by an approximately doubling of that increase added to the "rural" rate. However, beginning in 1987 the OPWA began to levy rate increases at the same level to both types of customers. The impact has been to stop increasing the difference, but has not reduced the amount of difference between the rates. At this time, the difference in rates is approximately 75% (76.3% difference for base rate and 74.2% difference on the per 1000 gallon charge). That rate difference produces an annual revenue of $59,208 ($ 4,933.71 monthly). Attachment "A" shows the numbers used for our calculations. The data sheet shows the number of "rural" customers, their monthly usage, the amount paid under the rural rates, the amount that would have been paid if the "in City" rates applied and the difference the higher rate produces. Please note that the usage for the data sheet was averaged for each customer over a four month period. Therefore, the calculations are intended as an approximation and not to be considered exact. Using the data referenced above, the staff has calculated the increase in rates for all customers that would be required if the existing revenue stream were not to be reduced by a rate "RURAL" WATER CUSTOMERS /RATES JANUARY 13, 1993 PAGE TWO reduction to "rural" customers. To achieve that goal, all customers would have an increase of forty cents (40) in the base rate and ten cents (10) per one thousand gallons of water purchased. The average user in our system would see an increase of approximately $1.15 per month to cover the rate reduction. While there are several rate formulas that can be used to achieve the same total revenue the staff believes that splitting the increase between the base charge and usage provides the most equitable distribution of cost. Washington #3 $ 12.50 $ 3.00 $ 33.50 (up to 400,000 gal.) * Rogers County #3 Rates are 1 -5,000 gallons - $1.50 11,000 6- 10,000 gallons - $1.75/1,000 11,000 - 15,000 gallons - $2.50/1,000 16,000 - 20,000 gallons - $3.00/1,000 20,000 + gallons - $3.50/1,000 This memorandum is intended to transmit information and should not be considered as a staff position or recommendation. If you have questions or comments, please call Ms. Bishop or me. tATTACBAIENT: 1. Attachment "A" t A t t a ATTACHMENT "A' CITY OF OWASSO Rural Water Customers January 12, 1993 Note: Monthly usage is an average for 9/92 through 12/92. Existing 'Inside Customer Monthly 'Rural' Rate City' Rate Monthly Count Usage* Billing Billing Decrease Commercial 14 170,333 $914.83 $523.57 $391.26 Mufti- family 1 307,000 $1,447.61 $830.21 $617.40 Residential 271 1,495,692 $9,153.32 $5,228.27 $3,925.05 Total 286 1,973,025 $11,515.76 $6,582.05 $4,933.71 Note: Monthly usage is an average for 9/92 through 12/92. on 1 s I" Mr Noble Sokolosky Mr David Charney Trail's End Development Inc PO Box 641 Owasso, OK 74055 RE: IMPLEMENTATION OF ROGERS COUNTY RURAL WATER DISTRICT #3 BUYOUT Gentlemen: (918) 272 -2251 FAX. (9 18) 272 -4999 On March 2, 1993, the City Council approved the conceptual buyout proposal for the purchase of the water service rights for a part of the Rogers County Rural Water District #3, described as all of the remaining portions of Section 21, Township 21 North, Range 14 East that have yet to be released by the water district board, and the south half of Section 16, Township 21 North, Range 14 East. A significant part of the agreed to proposal revolves around the developer(s) providing advance funding of $25,000 (50% of the buyout cost). Since the City is required to close the purchase of the service area by October 31, 1993, please ensure that payment is made to the Owasso Public Works Authority by the close of business on October 29, 1993. It is important to note that, due to the nature of this transaction, the Authority must make its payment to the Rural Water District at the closing. Therefore, it is necessary that we have "collected funds" from the payment prior to that time (close of business on October 29, 1993). If you have any questions, please contact me at 272 -2251. Sinc el , Rodney J ay City Manager City of Owasso 207 SOUTH CEDAR �• P.O. BOX 180 i 10 - - : OWASSO, OKLAHOMA ' 74055 September 9, 1993 on 1 s I" Mr Noble Sokolosky Mr David Charney Trail's End Development Inc PO Box 641 Owasso, OK 74055 RE: IMPLEMENTATION OF ROGERS COUNTY RURAL WATER DISTRICT #3 BUYOUT Gentlemen: (918) 272 -2251 FAX. (9 18) 272 -4999 On March 2, 1993, the City Council approved the conceptual buyout proposal for the purchase of the water service rights for a part of the Rogers County Rural Water District #3, described as all of the remaining portions of Section 21, Township 21 North, Range 14 East that have yet to be released by the water district board, and the south half of Section 16, Township 21 North, Range 14 East. A significant part of the agreed to proposal revolves around the developer(s) providing advance funding of $25,000 (50% of the buyout cost). Since the City is required to close the purchase of the service area by October 31, 1993, please ensure that payment is made to the Owasso Public Works Authority by the close of business on October 29, 1993. It is important to note that, due to the nature of this transaction, the Authority must make its payment to the Rural Water District at the closing. Therefore, it is necessary that we have "collected funds" from the payment prior to that time (close of business on October 29, 1993). If you have any questions, please contact me at 272 -2251. Sinc el , Rodney J ay City Manager