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