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1996-03 SA1 Sewer and Water Powers Special ElectionKODIAK ISLAND BOROUGH ORDINANCE NO. 96 -03 Introduced by: Mayor Selby Requested by: Assembly Drafted by: Borough Attorney & Borough Clerk Introduced: 02/01/96 Public Hearing: 02/15/96 Amended: 02/15/96 Adopted: 02/15/96 AN ORDINANCE PROVIDING FOR THE SUBMISSION TO THE QUALIFIED VOTERS OF SERVICE DISTRICT NO. 1, WITHIN THE KODIAK ISLAND BOROUGH, THE QUESTION OF WITHDRAWING WATER AND SEWER POWERS FROM SERVICE DISTRICT NO. 1 AT A SPECIAL BY -MAIL ELECTION IN AND FOR SERVICE DISTRICT NO. 1, WITHIN THE KODIAK ISLAND BOROUGH, ON MAY 21, 1996, AND TRANSFERRING WATER AND SEWER IMPROVEMENTS TO THE CITY OF KODIAK WHEREAS, the Kodiak Island Borough Assembly created Service District No. 1, within the Kodiak Island Borough (KIB), with the powers to provide water and sewer services by virtue of Resolution No. 78 -18 -R, Resolution No. 78 -35 -R, and Ordinance No. 78 -06 -0; and WHEREAS, Service District No. 1 is immediately adjacent to the boundaries of the City of Kodiak (City); and WHEREAS, Service District No. 1 obtains water and sewer services by virtue of a connection to the City's water and sewer lines; and WHEREAS, the Borough and the City desire to enter into an agreement that the City should assume the ownership, maintenance and operation of the existing water and sewer utilities in Service District No. 1; and WHEREAS, the cost of water and sewer services to the individual consumers within Service District No. 1 should be reduced as a result of this agreement; and WHEREAS, this agreement is in the public interest and will provide a public benefit to all residents of the Borough and especially those residing within Service District No. 1; and WHEREAS, the entire service district is effected by this alteration; and WHEREAS, Alaska Statutes (AS) 29.35.010(13) authorizes the Borough to enter into an agreement for cooperative administration of any function or power with another municipality; and Kodiak Island Borough, Alaska Ordinance No. 96 -03 Page 1 of 3 WHEREAS, Kodiak Island Borough Code of Ordinances (KIBC) 4.05.040 provides that the assembly shall initiate any action to alter a service area by introducing an ordinance effecting the proposed action; and WHEREAS, KIBC 4.05.060 provides that an ordinance altering a service area shall not be effective unless approved by a majority of the qualified voters voting on the question in each area affected by the ordinance; NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THAT: Section 1: Classification. Section 4 of this ordinance is of a general and permanent nature and shall become a part of the Kodiak Island Borough Code of Ordinances. The remaining sections of this ordinance are not of general application and shall not be codified. Section 2: Section 3: Section 4: Section 5: Agreement. The transfer of all of the capital assets of the Service District No. 1 water and sewer system to the City of Kodiak is hereby approved on the terms and conditions of the "Agreement of Transfer of Service District No. 1 Water and Sewer Improvements ". The mayor is authorized to execute the agreement and all other documents required for the completion of this transfer. Alteration of Service District Water and sewer powers are withdrawn from Service District No. 1. Amendment. Kodiak Island Borough Code of Ordinances 4.70.010 is amended by substitution to read as follows: Section 4.70.010 Creation and powers. Service district no. 1 is established pursuant to Ordinance No. 78 -06 -0 and encompasses the area described in that ordinance. Road construction and maintenance powers shall be provided in service district no. 1. Flectinn. An election shall be held by mail pursuant to Kodiak Island Borough Code of Ordinance 7.70.010 -030 and there shall be submitted to the duly qualified voters of Service District No. 1 the following question: "Shall water and sewer powers be withdrawn from Service District No. 1?" YES NO Kodiak Island Borough, Alaska Ordinance No. 96 -03 Page 2 of 3 Section 6: Section 7: Section 8: Section 9: ATTEST: flualificatinns. A person who is qualified to vote in Service District No. 1 may vote in the election. Flectinn Datp. The election date specified in Kodiak Island Borough Code of Ordinances 7.70.020 shall be May 21, 1996. Nntirm Notice of the election shall be published not less than thirty (30) days prior to the election in the form and manner provided by Alaska Statutes 29.26.030 and Kodiak Island Borough Code of Ordinances Title 7. Fffective Date: Sections 3 and 4 of this ordinance shall become effective on the first day of July, 1996, if a majority of the qualified voters cast their ballots in favor of the question. The remaining sections of this ordinance shall become effective upon adoption. ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS FIFTEENTH DAY OF FEBRUARY, 1996 AM C, rough Clerk KODIAK ISLAND BOROUGH Je Ga n2 L. Stev -ns, Presiding Officer Kodiak Island Borough, Alaska Ordinance No. 96 -03 Page 3 of 3 AGREEMENT FOR TRANSFER OF SERVICE DISTRICT NO. 1 WATER AND SEWER IMPROVEMENTS THIS AGREEMENT is made this day of , 1996, between the Kodiak Island Borough, a second class borough of the State of Alaska, whose address is 710 Mill Bay Road, Kodiak, Alaska 99615, hereinafter "Borough," and the City of Kodiak, a home rule city of the State of Alaska, whose address is Post Office Box 1397, Kodiak, Alaska 99615 -1397, hereinafter "City." WHEREAS, the Kodiak Island Borough Assembly created Service District No. 1 with the powers to provide water and sewer services by virtue of Resolutions No. 78 -18 -R, No. 78 -35 -R, and Ordinance No. 78 -06 -0; and WHEREAS, Service District No. 1 obtains water and sewer services by virtue of a connection to the City's water and sewer lines, and WHEREAS, the Borough and the City have agreed that the City should assume the ownership, maintenance and operation of the existing water and sewer utilities in Service District No. 1. NOW, THEREFORE, the parties agree as follows: 1. Effective Date This agreement shall become effective upon completion of all of the following actions: (i) its approval or ratification by ordinances duly adopted by both the Kodiak City Council and the Kodiak Island Borough Assembly, and (ii) passage of an ordinance by the Borough Assembly withdrawing water and sewer powers from Service District No. 1 and the approval of such ordinance at an election complying with the requirements of KIBC 4.05.060. 2. Transfer of Assets The Borough hereby assigns and transfers all of the capital assets of the Service District No. 1 water and sewer system to the City, including all water and sewer lines, pump stations, generators, valves, manholes and equipment, including those as described in the as -built drawings for the system which shall be delivered to the City upon the execution of this agreement. All equipment and parts manuals, operating and maintenance manuals and program documents, and all warranty information and documents relating to the transferred facilities shall also be delivered to the City at that time. 3. Operation and Maintenance. The City shall be solely responsible for the maintenance and operation of all water and sewer lines and equipment transferred to it pursuant to this agreement and the Borough shall have no authority with respect thereto and no duty or responsibility whatsoever in connection therewith. If, at any time, it becomes necessary to repair, remove, replace, or relocate any of said lines or other equipment, the same shall be accomplished by the City without cost to the Borough. 4. Water and Sewer Services The City shall supply water and sewer services to customers along the presently existing lines within Service District No. 1 or along any additional lines permitted Agreement for Transfer of Service District No. 1 Kodiak Island Borough/City of Kodiak Page 4 of 5 by the City within the boundaries of Service District No. 1 and shall bill and collect for such services as described below. 5. Fund Balance.. The entire fund balance from Service District No. 1, which is approximately $690,000 shall be transferred to the City upon the effective date of this agreement. 6. Facement The Borough grants to the City, within the presently existing public rights -of -way, public easements, and other public property within Service District No. 1, a perpetual easement for the use, operation, maintenance, repair, relocation, and reconstruction, of water and sewer services, lines and equipment within the boundaries of Service District No. 1. 7. Billings and Co llex'tions The City shall bill each consumer of water or sewer services within Service District No. 1 directly and shall be entitled to discontinue service or take such other actions against delinquent accounts as it deems appropriate in the same manner as it handles customers within the City of Kodiak. The previous water maintenance surcharge of $10 per month and the sewer maintenance surcharge of $12 per month are eliminated. A transition surcharge of $12 per month will be assessed against Service District No. 1 accounts for up to three years after the effective date of this agreement. The transition surcharge shall accrue solely to the benefit of the City and shall be discontinued upon the earlier of the following: (i) three years having passed since the transition surcharge was first collected, or (ii) the total transition surcharges collected by the City plus the Service District No. 1 fund balance transferred to the City equal $800,000 and a review conducted by the City of the costs of operating and maintaining the water and sewer system within Service District No. 1 indicates to the City's reasonable satisfaction that no part of the transition surcharge is needed in order to assure that revenues exceed expenses. Such a review shall be initiated as soon as practicable after the $800,000 total has been reached. If the recommendation resulting from the review is that the transition surcharge be continued, then the City shall establish a date for a further review which shall be selected so as to ensure, to the extent reasonably possible, that collection of the transition surcharge does not continue beyond budget requirements. In no event, however, shall the City have any obligation to refund any transition surcharges collected prior to the effective date of a resolution, ordinance, or other official action of the City Council recognizing that a transition surcharge is no longer needed to assure a balanced budget for operations and maintenance within Service District No. 1. Nothing in this agreement shall in any way affect the City's right to continue to collect the 20% differential in water and sewer rates presently charged against water and sewer services delivered to customers within Service District No. 1, which differential shall remain in effect independent of the transition surcharge, but the City agrees not to raise the differential above 20% of the rates in effect on the date of this agreement. 8. Future Improvements. The construction of future improvements to or the expansion of the water and sewer system within Service District No. 1 shall be at the sole discretion of the City and nothing in this agreement shall obligate the City to construct such improvements. It is the goal of the City to expand the water distribution and sewer collection systems in Service Area No. 1 to serve developed properties. Expansion of the system may also occur via the subdivision process. Funding for improvements may be from land owners, developers, system revenues or grants from local, state, or federal governments. All system improvements must be approved by the City. Agreement for Transfer of Service District No. 1 Kodiak Island Borough/City of Kodiak Page 5 of 5 9. Development Fees. The current sewer and water development fees for both Service District No. 1 and City residents shall be eliminated as of the effective date of this agreement. All such development fees charged on or after October 12, 1995 shall be forgiven or refunded. 10. Entire Agreement. This instrument contains the entire agreement between the parties concerning the subject matter hereof. There are merged herein all prior representations, promises, and conditions, whether oral or written, in connection with the subject matter. Any representa- tion, promise, or condition not incorporated herein shall not be binding upon the parties. 11. Severahility. If any provision of this agreement shall be determined to be void, invalid, unenforceable, or illegal for any reason, the validity and enforceability of all the remaining provisions shall not be affected thereby. The agreement shall be construed in all respects as if such void, invalid, unenforceable, or illegal provisions were omitted. KODIAK ISLAND BOROUGH Jerome M. Selby, Borough Mayor Date ATTEST: Donna F. Smith, Borough Clerk CITY OF KODIAK William D. Jones, City Manager Date ATTEST: Marcella H. Dalke, City Clerk Agreement for Transfer of Service District No. 1 Kodiak Island Borough/City of Kodiak Page 6 of 5