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HomeMy WebLinkAboutIAWTF ResearchDRAFT SEWER SERVICE PROPOSAL History In 1956 the Village of Cayuga Cayuga built its own Sewer Treatment Plant to serve the Village of Cayuga Heights. The area principally known as "old Cayuga Heights" was Intercepted and tranmitted to the new plant rather than to continue flowing to the City of Ithaca Sewer Treatment Facility at First and Franklin A slightly larger service area was identified later by teetor-Dobbins, a consultant,to be served as capacity allowed. Attempts were Initiated to expand this area concept farther through the County District No.1 planning of Obrien & Gere In 1974 ,but the Interests of the Village of Cayuga Heights could never be successfully safeguarded. In 1977 the City of Ithaca, Town of Ithaca, and Town of Dryden began similar regional cooperation to upgrade the City of Ithaca Sewer Treament Facility. Eventually planning under Federal guidelines identified total replacement as the most cost-effective option that could meet modern day treatment standards. The plant^was constructed north of State Route 13 at Third Street with a new outfall 2500 feet Into Cayuga Lake.at the confluence of flows from Fall Creek and Cayuga Inlet. It was completed in 1987. This plant can treat 10.5MGD with fairly easy expandability to 17.5 MGD and presently can handle a hydraulic overload without bypassing of at least 26.5 MGD. In December 1987 the Village of Cayuga Heights issued a sewer moratorium to all municipalities outside of the Village. The spare capacity of the Village plant had depleted to the balance determined necessary to serve the remaining needs of the Village vacant lands. Prior to and since that time the Village of Cayuga Heights has determined that any Increased capacity would require changing the ' process from trickling filters to activated sludge for secondary treatment. This change is viewed as problematic with limited space available for change and cost prohibitive to the existing user base. So minor changes to the existing system with small maintenance cost Is the course pursued since 1987 by the Village of Cayuga Heights rather than Initiate 50% capacity Increases or a totally new facilty.at great expense to long time Village users Magnitudes of $3 million and $6 million, respectively, were put on these alternative strategies in the late 1980s. The Village of Lansing and Town of Lansing have separateiy and jointiy studied aiternatives since 1987 to expand the Village of Cayuga Heights Plant, transmit sewerage to the new Ithaca Area Wastewater Treatment Plant (lAWWfP), or construct a third treatment faciiity on Cayuga Lake. Most of these inititatlves to date iack a sufficient user base to satisfy the financial requirements of either the SJS including City or the Viiiage of Cayuga Heights.and stiil be reasonable in expense to the pbtentiai users and/or Audit and Controi. The Town of Dryden has proposed serving sewer needs in the Warren Road industriai area at the lAWWTP. This proposal is known as the "Dryden Initiative". Various discussions have occurred on hookup fees to help .fund these costly capital initiatives; The inaction and inertia of the last five years has caused the Tompklns County Health Department to grant permits for private sewer systems that are environmentally marginal at best in areas where pubiic water exists. Corneii has successfuliy pursued NYSDEC approvai to build a package sewer treatment plant at the Airport Office Park. The State Boys Schooi and other major faciiities in the Town of Lansing are being buiit or pianned with private package piants. These tratment aiternatives when more wideiy and - aggressiveiy pursued and impiemented will foreclose the financial opportunity for cooperative regional efforts and joint funding that now exists to service existing demand and buiid for the future.to the same high environmentaL standard that the lAWWTP has set for the Ithaca area. Dispersed development will tax the environment with the potential of ground poilution in glacial soils and long range contamination of public water sources. As private treatment becomes more environmentaily complex, the local labor market is being overtaken by outside syndicated interests who provide diminished muitipiiers to the base locai economy. PROPOSED INTERIM SOLUTION Any simple interim solution must be financiaiiy positive , to all parties concerned. It shouid also be reversible if long term agreements cannot be reached. The solution should be considerably less capital intensive than aiternatives discussed to date.' It is proposed that the former connection to the City sewer collection system from "old" Cayuga Heights down Kline Road be reactivated to handle up to 250,000 gallons per day or 1040 residential units. The capacity of the Kline Road siphon improvement currently being upgraded and designed by the SJS is adequateiy sized to serve this added flow. Nevertheless the cost of this improvement would be shared by all parties benefited according to available flow capacity. Units* flow diverted to the lAWWTP would be charged 1.5 times the lAWWTP.rate plus tranmission. The difference between 1.5 lAWWTP rate (say $58.76 for a 175gpd unit) plus transmission and the base Cayuga Heights rate of $77.50 would.be covered by district user charges or ad valorem rates. New units to replace flow to the Village of Cayuga Heights Plant would be charged $116.25 which is 1.5 times the Cayuga Heights base rate.of $77.50. This would be funded by the users directly as with other users in the Town of Ithaca, Town of Dryden, Village of Lansing, and Town of Lansing currently. The Village of Cayuga Heights would see increased revenue while not compromising their overaH treatment limit and capacity.-The lAWWTP benefits in some cost sharing for the siphon and in revenue from use of the otherwise depreciating structures and equipment. Revenues would thereby be preserved and more closely matched with future time of use. Because of the low initial capital expense of the diversion through existing infrastructure, the four outlying municipalities are able to build up a base and designated fund to reasonably meet lAWWTP financial proposals for the long term, fund the increased costs of expanding the Cayuga Heights Plant, or pursue approval and construction of a third plant on Cayuga Lake. This sets the stage for a long term solution as the short term agreement is implemented without the large separate capital expense for transmission mains that may be unnecessary to long term regional solutions.^ Under this proposal, the flow would be diverted incrementally so that increased cash flow and income is maintained to both the lAWWTP owners and Cayuga Heights. This can be done through weirs, diverting only on a calculated number of days per month, or other agreed simple engineering methods.that best suit the parties involved or the operational constraints within the Village and lAWWTP systems. COSTS Initial costs are projected .at approximately $40,000 to share Jn upsizing the Fall Creek siphon, making the physical connection and metering flow to the City Plant. New or existing homes and equivalent commercial units hooking up to fronting street sewers already built by December 1992 would be assessed a $3000 per unit hookup fee.and would be given ten years to hookup. New homes and equivalent commercial units built after December 1992 where fronting street sewers did not exist by December 1992 would be assessed a $4000 per unit hookup fee. These fees could be prepaid or will be increased at 5% annually.for 10 years The 1040 units are projected to be used over a ten year plus period generating a-capital pool of approximately $3000 x 300 + $4000 x 700 = $3,700,000 plus interest from which to pay for the above initial improvements,and to eventually fund one of the long term treatment alternatives. If an individual municipality wishes to fund future treatment capacity in a manner other than hookup fees, it can do so upon the approval of all parties to this agreement. For example, the Town of Ithaca may offer an understanding from the lAWWTP partnership that accepts the units added from the Town of Ithaca outside of the seiyice area within the excess capacity the Town owns under the lAWWTP agreement In lieu of building a capital fund for future plant buyin or improvements. FRAMEWORK FORM LONG TERM TREATMENT It will be required of any short term agreement for sewer service on a contract basis that either a long term contract or a joint ownership agreement begin to be negotiated no later than the point • where 125,000 gallons per day has been diverted to the lAWWTP under this agreement. A firm agreement should be reached no later than when 187,500 gallons per day has been diverted with either the lAWWTP owners or Cayuga Heights.or a project completion schedule for a third treatment facility established by resolution of. those owners by that, bench mark. Ahy regional solution for sewerage treatment that could benefit all parties concerned to either extend their current capacity and investment well into the 2000s while others plan in an environmentally sound way for needed treatment opacity should be a part of these discussions. The current owners should benefit by extending the insurance of state of the art treatment for a lifetime while providing for the improvement of the Cayuga Lake ecology by working with the other parties to increase the economic base. ?• DRAFT SEWER SERVICE PROPOSAL History In 1956 the Village of Cayuga Heights built a Sewer Treatment Plant to serve the Village of Cayuga Heights intercepting sewage formerly flowing to the City of Ithaca Sewer Treatment Facility at First and Franklin. In 1963 treatment processes and capacity were upgraded An attempt to form County Sewer District No.1 for the northeast failed In 1969 plans were drawn for increased secondary and tertiary treatment at the Village Plant and construction was completed in 1975. In 1977 the City of Ithaca, Town of Ithaca, and Town of Dryden began a regional effort to upgrade the City of Ithaca Sewer Treament Facility. The new plant was completed in 1987 north of State Route 13 at Third Street with a new outfall 2500 feet into Cayuga Lake at the confluence of flows from Fall Creek and Cayuga Inlet. This plant can treat 10.5MGD with fairly easy expandability to 17.5 MGD and presently can handle a hydraulic overload without bypassing of at least 26.5 MGD. In December 1987 the Village of Cayuga Heights issued a sewer moratorium to all municipalities outside of the Village. The Village of Lansing and Town of Lansing have separately and jointly studied alternatives since 1987 to expand the Village of Cayuga Heights Plant, transmit sewerage to the new Ithaca Area Wastewater Treatment Plant (lAWWTP), or construct a third treatment facility on Cayuga Lake. Most of these inititatives to date lack a sufficient user base to satisfy the financial requirements of either the SJS including the City or the Village of Cayuga Heights and still be reasonable in magnitude of expense to the potential users and NYS Audit and Control. The Town of Dryden has proposed serving sewer needs in the Warren Road industrial area via Varna to the lAWWTP. This proposal is known as the "Dryden Initiative". Various discussions have occurred on hookup fees to help fund these costly capital initiatives. This needs to be carefully structured to meet legal requirements for establishment of a capital reserve. The inaction and inertia of the last five years has caused the Tompkins County Health Department to grant permits for private sewer systems that are environmentally marginal, at best, in areas where public water mains exist. Cornell has successfully pursued NYSDEC approval to build a package sewer treatment plant at the Airport Office Park. The State Boys' School and other major facilities in the Town of Lansing are being built or planned with private package plants. n Time is of the essence. These on-site treatment alternatives when more widely and aggressively pursued and implemented will erode the financial base for cooperative regional efforts and joint funding. This base now exists to maintain existing systems and demand while building for the future to meet the same high environmental standards that the lAWWTP has set for the Ithaca area. Dispersed- countywide development on individual on-site systems will tax the environment with the potential of ground pollution in glacial soils and long range contamination of public water sources. As private treatment and maintenance become more environmentally complex, the local labor market is being overtaken by outside syndicated interests, with exported income, who provide diminished multipliers to the base local economy. PROPOSED INTERIM SOLUTION Any simple interim solution must financially benefit all parties concerned. It should also be capacity limited and reversible for existing plant owners if long term agreements cannot be reached. The solution should be considerably less capital intensive up front than alternatives discussed to date. It is proposed that the former connection to the City sewer collection system, from the original area of the Village of Gayuga Heights, down Kline Road be reactivated to handle up to 250,000 gallons per day or approximately 1040 residential units if the Village Plant cannot meet State NYSDEC permit requirements. The capacity of the Kline Road bypass improvement is now adequately sized to serve this added flow . An opportunity cost covered below would be paid annually for the ability to bypass to the lAWWTP. Flow of units diverted to the lAWWTP would be charged 1.5 times the lAWWTP rate plus tranmission. The difference between 1.5 lAWWTP rate (say $58.76 for a 175gpd unit) plus transmission and the base Gayuga Heights rate of $77.50 would be covered by district user charges or ad valorem rates. New units to be handled by the Village of Gayuga Heights Plant would be charged $116.25 which is 1.5 times the Gayuga Heights base rate.of $77.50. This would be funded by the users directly as is an identical amount charged other users in the Town of Ithaca, Town of Dryden, Village of Lansing, and Town of Lansing currently. The Village of Gayuga Heights would see increased revenue while having a guaranteed backup to assure meeting overall treatment limit and capacity.limits The lAWWTP benefits In some revenues for opportunity. If bypass is necessary additional revenue would thereby be generated from available resources for use to match future n equipment, technological, and capacity needs. Because of the low initial capital expense of the diversion through existing Infrastructure, the four outlying municipalities are able to build up a base and a designated capital improvement account to - reasonably meet future lAWWTP financial proposals for long term contract or ownership, fund the increased costs of expanding the Cayuga Heights Plant, or pursue approval and construction of a third plant on Cayuga Lake. This sets the stage down the line for a long term solution as the short term agreement Is Implemented without the alternative large separate capital expense for transmission mains that may be unnecessary to eventual long term regional solutions. Under this proposal the flow would be diverted in 50,000gallon per day increments. This can be done through weirs, diverting only on a calculated number of days per month, or other agreed simple engineered physical methods that best suit the parties Involved "or the operational constraints within the existing. Village and MWWTP systems. COSTS The proposed Interim solution offers the Town of Dryden, Ithaca, and Lansing and the Village of Lansing an opportunityto expand their sewer unit base before long-term capital-intensive agreements are entered Into. It extends the date of treatment capacity and ownership Investment at the lAWWTP by new owners to possibly year 2005. And. although there will' be limited capital Improvement costs to these municipalities for this solution, it is expected that an equitably derived annual opportunity payment will be made to the joint owners of the lAWWTp. It is suggested at this time that the opportunity cost reflect a proportlolnal share of the expenses of financing the original local cost of $5 million for a lOMGD lAWWTP plus the cost of the recently completed Kline Road Siphon improvement. Based on the potential ultimate diversion of 250,000 GPD the opportunity cost is developed as follows: A. lAWWTP local cost: Local cost for 10 MGD plant $5,000,000 Percentage treatment capacity needed (.25 MGD/10 MGD) x 100% = 2.5% SJS annual debt for local cost approximately $500,000 Proportional Share for local cost financing $500,000 X 2.5% = $12,500 B. Kline Road Siphon Improvement: SJS cost for 2.0MGD improvement $210,000 Percentage pipe capacity needed, (.25 IVIGD/2.0MGD) x 100% = 12.5%- SJS annual debt (assuming bonded) approximately $20,000 Proportional share of Kline Road Siphon improvement financing = $20,000 n x 12.5% = $2,500 Total Annual Opportunity Cost: Items A and B = $15,000. The mutually agreed upon opportunity payments are suggested to continue until the outlying municipalities have reached long term agreements as outlined below. Innovative financing methods will be utilized by the outlying municipalities to fund the opportunity costs as well as the designated capital improvement accounts. For example, new and existing homes and equivalent commercial and multiple units connecting to sewers in the Town of Lansing are now charged $4,000 per unit. Should the remaining municipalities choose to adopt a ' similar connection fee, it Is conceivable that the 1040 units projected to be used over ten-year-plus period will generate a capital pool of roughly $4,200,000 plus Interest. If an individual municipality wishes to fund future treatment capacity in a manner other than through hookup fees, it can do so upon the approval of all parties to this agreement. For example, the Town of Ithaca may develop an understanding with its lAWWTP partnership that would accept units from the Town of Ithaca outside of the lAWWTP service area utilizing the excess capacity the Town already finances inder the lAWWTP agreement, in lieu of building a redundant fund for future plant buy-in or improvements. FRAMEWORK FORM LONG TERM TREATMENT A long term agreement for purchase and ownership of capacity and creative financial support of areawide deferred maintnenance should be the ultimate goal. It will be a requirement of- any short term agreement for sewer service on a contract basis that either a long term, contract or a joint ownership agreement begin to be negotiated no later than the point where 100,000 gallons per day has been diverted to the lAWWTP under this agreement. A firm agreement should be reached no later than .when 150,000 gallons per day has been diverted with either the lAWWTP owners or Cayuga Heights or a project completion schedule for a third treatment facility established by resolution of those owners by this benchmark. Any regional solution for sewerage treatment that could benefit all parties concerned to either extend their current capacity and investment well into the 2000s while others plan in an environmentally sound way for needed treatment capacity should be a part of these discussions. The current owners should benefit by extending the guarantee of state of the art treatment beyond the initial life cycle while providing for the improvement of the Cayuga Lake ecology by working with the other parties to increase the common local economic base. . I >1 Page 1 of 1 Dan Walker From: Susan H. Brock [brock@clarityconnect.com] Sent; Monday, August 16, 2004 5:05 PM To: William J. Gray; Brent Cross; Dan Walker; David Herrick; Larry Fabbroni Subject: plant to plant agt ^ ^ ^ Engineers, Attached Is a revised plant to plant agreement, based on our discussions at our August 9 meeting. Please try to give me your comments this week, and I will then circulate the next version to the whole Intermunlcipal Wastewater Committee. This draft treats all diverted flows, regardless of where they originate within the service area, as Town of Ithaca flows. I went back and checked the Joint Sewer and Intermunicipal Wastewater Agreemehts, and want you to be aware this concept goes beyond what is in those Agreements. The Joint Sewer Agreement says only that VCH flows shall be deemed Town of Ithaca flows. The Interrhiihicipal WW Agreement says under the doctrine of equivalent flows, flows from one municipality can be diverted to make room for other flows, and the municipality whose flows are not diverted may have to pay for treatment of the diverted flows. Neither of these agreements say all diverted flows, regardless of origin, shall be deemed Town of Ithaca flows. The policy makers still need to sign on to this concept. I deleted the "Payment Terms section that was in the prior draft because ail payment Issues for permanent diversions are covered by the Joint Sewer Agreement (Town of Ithaca pays pursuant to that agreement). I also deleted some of the boilerplate in the General Items section-insurance, workers comp, anti-discrimination clause, etc. as those seem appropriate for types of agreements that are different than what we have here. • Susan This electronic transmission contains legally privileged and confidential information intended only for the person(s) named. Any use, distribution, copying or disclosure by any other person is strictly prohibited. If you received this message in error, please immediately notify the sender by telephone at (607) 277-3995 (collect) or send an electronic mail message to brock@claritvconnect.com. In addition, please delete all copies of this message from your computer. 8/19/2004 Plant to Plant Agreement Between City of Ithaca, Town of Ithaca, Town of Dryden And Village of Cayuga Heights This Agreement is made the day of , 2004, between the CITY OF ITHACA, Tompkins County, New York, TOWN OF ITHACA, Tompkins County, New York, and TOWN OF DRYDEN, Tompkins County, New York (hereafter collectively referred to as "lAWWTP Owners"), and VILLAGE OF CAYUGA HEIGHTS, Tompkins County, New York. WITNESSETH: WHEREAS, the Ithaca Area Wastewater Treatment Plant (lAWWTP), which is owned and operated by the lAWWTP Owners; treats municipal wastewater originating from the City and Town of Ithaca, as well as portions of the Town of Dryden, pursuant to a Joint Sewer Agreement dated December 31, 2003, as it may be amended; and WHEREAS, the Village of Cayuga Heights Wastewater Treatment Plant (VCHWWTP), which is owned and operated by the Village of Cayuga Heights, treats municipal wastewater from the Village of Cayuga Heights as well as portions of the Towns of Ithaca, Dryden, Lansing and the Village of Lansing under the terms of individual agreements with the Village of Cayuga Heights and their respective sewer use laws and ordinances; and WHEREAS, the parties believe thai it is in their best interests to make full use of existing community assets before building new or expanding existing facilities, provided any proposed agreement makes allowance for future demands within those municipalities during the agreement period, and that the costs are distributed in accordance with the benefits received, including avoided costs; and WHEREAS, the parties' Intermunicipal Wastewater Agreement dated December 31, 2003, endorses the concept of the Village of Cayuga Heights' utilization of excess capacity in the LAWWTP to avoid the need to expand capacity at the VCHWWTP; NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements herein contained, the parties agree as follows: I Section 1 - Overview, Agreement Basis, and Assumptions 1.1 Exhibit A contains an Overview, Basis for Agreement, and Engineering Assumptions, all of which provide background information and assumptions on which this'Agreement is based. If the assumptions prove to be wrong, the parties shall amend this Agreement to address actual conditions. For example, the preliminary review of ;Page -1 plant operations at the lAWWTP did not uncover any disproportionate impacts or costs that would be triggered by receiving diverted flows. No ratchet effect or sudden increase is anticipated in chemical, electrical, or staffing demands at the lAWWTP. This appears to be due to the relative size of the two plants (13.1 million gallons per day [MGD] and 2.0 MGD) and the actual size of the anticipated flow transfers. Should these assumptions prove to be wrong, the parties shall amend this Agreement so the LAWWTP Owners are fairly compensated for their actual costs. Section 2 -Implementation of Flow Transfers 2.1 The Basis for Agreement (see Attachment to Exhibit A) contains two (2) alternate methods for transferring flows from the VCHWWTP to the LAWWTP. For the purposes of this Agreement, all flow transfers made under Alternate 1 will occur as permanent diversions. Short-term emergency diversions or peak shaving diversions made under Altemate 2 will be considered emergency events. 2.2 Pursuant to the terms of the LAWWTP Owners' Joint Sewer Agreement, flows originating from the Village of Cayuga Heights, which lies wholly within the Town of Ithaca, are deemed to be Town of Ithaca flows. Flows originating from the Village or Town of Lansing may be accepted at the LAWWTP under the concept of "equivalent flows" described in the Intermunicipal Wastewater Agreement. 2.3 The parties hereby agree that permanent diversions of wastewater, regardless of where the wastewater originates within the lAWWTP's service area, shall be deemed to be Town of Ithaca flows. The Town of Ithaca shall pay the lAWWTP for permanently diverted flows pursuant to the terms of the lAWWTP Owners' Joint Sewer Agreement. All LAWWTP Owners' issues regarding such flows, including capacity, O&M payments and flow measurement shall likewise be addressed pursuant to the terms of the Joint Sewer Agreement. The Town of Ithaca's own flows to the lAWWTP, plus the permanently diverted flows, may not exceed the Town of Ithaca's owned capacity in the lAWWTP. Transmission costs and transmission capacity for permanently diverted flows (which are to be deemed Town of Ithaca flows) are addressed through the Joint Interceptor Agreement between the City of Ithaca and Town of Ithaca dated December 31,2003. 2.4 The Town of Ithaca and Village of Cayuga Heights shall enter into a separate agreement or agreements regarding the terms and conditions under which the Town of Ithaca will allow the Village of Cayuga Heights to divert on a permanent basis wastewater originating in the Village of Cayuga Heights, Village of Lansing or Town of Lansing to the LAWWTP. After full execution of the agreement(s), the Village of Cayuga Heights may divert such wastewater to the LAWWTP upon the Village's written notification to the lAWWTP Owners. 2.5 The Village of Cayuga Heights, Village of Lansing and Town of Lansing shall enter into multijurisdictional pretreatment agreements with the lAWWTP Owners before flows from their respective jurisdictions can be permanently diverted to the LAWWTP. Page - 2 2.6 For emergency events, as described in paragraph 2.1 above, all parties agree to work together to avoid or minimize a sewage spill outside of their respective plants, or violations of their permitted operations within their plants, in the case of unanticipated and unforeseeable events. [DOES "UNANTICIPATED AND UNFORESEEABLE" INCLUDE WET WEATHER DIVERSIONS, OR DO WE NEED TO ADD SOME LANGUAGE TO COVER THOSE?] The diverting plant must notify the receiving plant's Chief Operator by telephone before starting the diversion and must follow up the telephone notice with written notice as provided in Section 6.1 of this Agreement. The costs borne by the receiving plant will be billed to the other plant at cost and paid within thirty (30) days of receipt of the bill or paid on such other terms as may be mutually agreed upon. For the purposes of this section, emergency operations will not exceed two weeks in duration (cumulative during any calendar year) or more than one percent (1%) of the annual operating budget of the receiving plant. Events outside these guidelines will require a separate agreement between the parties. Section 3 - Treatment 3.1 The lAWWTP will properly treat and dispose of all transferred flows. The transferred flows must comply with the requirements of the sewer use laws and ordinances of the communities in which they originate and, if more stringent, the pretreatment laws adopted by the lAWWTP Owners. This is to insure that the flows do not cause pass through violations, interference with plant operations, sludge contamination, a threat to lAWWTP worker safety or nuisance odors. Verification testing required by permits or as needed by plant operations will be a cost of this Agreement. If such testing is performed by the receiving plant, the costs will be billed to the other plant at cost and paid within thirty (30) days of receipt of the bill or paid on such other terms as may be mutually agreed upon. 3.2 The lAWWTP Owners'uniform pretreatment laws are attached as Exhibit B. A copy of the LAWWTP operating permit issued by NYSDEC is available upon request to the Chief Operator. Section 4 - Measurement of Flows 4.1 Where possible, transferred flows shall be routed through existing sewage flow meters. When no existing meter is available, flows of 20,000 gallons per day (gpd) and larger will require a meter installation at a location close to the municipal boundary which will be in place within six (6) months of the start of flows. Flows less than 20,000 gpd may be estimated and then verified on a six month basis using portable flow meters. Both the six month period and the 20,000 gpd cut off may be adjusted by mutual agreement as experience accumulates. Section 5 - Agreement Modincation Page - 3 5.1 This Agreement constitutes the entire Agreement of the parties. It may be amended only by the written consent of all of the parties, with each party executing and acknowledging the document containing the amendment through its duly authorized representative. Section 6 - Notification 6.1 Where notification is required by the terms of this Agreement, it shall be delivered by hand or by mail, during business hours, to the following addresses. For notice to the lAWWTP Owners: Chair, Special Joint Committee Ithaca Area Wastewater Treatment Plant 535 Third St. Ithaca, NY 14850 With copies to: Assistant Superintendent of Public Works City of Ithaca Water & Sewer Division 510 First St. Ithaca, NY 14850 Town Engineer Town of Ithaca 215 N. Tioga St. Ithaca, NY 14850 Town Engineer Town of Dryden 65 E. Main St. Dryden, NY 13053 For notice to the Village of Cayuga Heights: Village Engineer Village of Cayuga Heights 836 Hanshaw Rd. Ithaca, NY 14850 Section 7 - Length of Agreement 7.1 This Agreement shall continue in force until May 15, 2026, which is forty (40) years after the original bonds were issued for the lAWWTP. Upon the expiration of the original term, this Agreement may be renewed for additional terms of at least five (5) Page - 4 years each upon the written consent of all the parties. The parties shall review the Basis for Agreement in Exhibit A every five (5) years that this Agreement is in effect to verify the assumptions and projections on which this Agreement is based. The parties agree to use their best efforts to renegotiate the terms of this Agreement if actual experience varies significantly from the assumptions and projections in the Basis for Agreement. Section 8 - Termination 8.1 The lAWWTP Owners or the Village of Cayuga Heights may terminate this Agreement with adequate prior notice. Notice from the lAWWTP Owners to the Village of Cayuga Heights must be provided five (5) years in advance to provide the Village of Cayuga Heights time to respond, design, and build alternate facilities. Notice from the Village of Cayuga Heights to the lAWWTP Owners must be provided one (1) year in advance. These periods are based on the assumption that no capital investments are needed at the lAWWTP to meet the terms of this Agreement. Other periods of notice will be acceptable if agreed to by all parties or as may be agreed to should a capital improvement be necessary or desirable. 8.2 However, nothing in this Agreement is intended to result in the LAWWTP violating the terms of its operating permit with NYSDEC. The lAWWTP Owners may withdraw, in whole or in part, from the terms of this Agreement if withdrawal is necessary to comply with the lAWWTP's SPDES permit. Section 9 -- Dispute Resolution 9.1 Disputes should initially be referred to the individuals responsible for the plant operations, which will be the Chief Operators of both plants and their immediate supervisors. If resolution cannot be reached by these four individuals, the matter shall be referred in writing to the two boards responsible for plant operations, currently the Village Trustees for VCHWWTP and the SJS or SJC for the lAWWTP. Ultimately, the parties may seek whatever recourse is available under the law, but no sooner than ninety (90) days after the matter has been referred to the respective boards in writing. Section 10 - General Items 10.1 Liability Requirements. For purposes of this paragraph, the lAWWTP Owners shall constitute one party, and the Village of Cayuga Heights shall constitute the other party. Each party shall be responsible for all damage to life and property due to negligent acts, errors or omissions of that party, its sub-consultants, agents or employees, in the performance of services under this Agreement. Further, it is expressly understood that each party shall indemnify and save harmless the other party from claims, suits, actions, damages and costs of every name and description resulting from the indemnifying party's negligence, and such indemnity shall not be limited by reason of remuneration of any insurance coverage herein provided. Negligence shall include, in addition to negligence founded upon tort, negligence based upon the party's failure to meet applicable professional standards. Nothing in this section or in this Agreement shall Page - 5 create or give to third parties any claim or right of action against the parties beyond such as may legally exist irrespective of this Section or this Agreement. 10.2 Governing Law: This Agreement shall be governed under the laws of the State of New York. The parties further agree that the Supreme Court of the State of New York held in and for the County of Tompkins shall be the forum to resolve disputes arising out of either this Agreement or work performed according thereto. The parties waive all other venue or forum selections. The parties may agree between themselves on alternative forums. 10.3 Non-assignment Clause: No party may assign or transfer its rights and interests in this Agreement to another entity without the prior written consent of all of the other parties. Notwithstanding the foregoing, if one or more parties dissolve into, merge with, or wholly annex another party or parties, the party remaining after the dissolution, merger or annexation, or the new merged municipality, as the case may be, shall retain all of the rights and interests in this Agreement that were held by the involved parties immediately prior to the dissolution, merger or annexation. 10.4 Each party represents and warrants that (a) this Agreement has been presented to its governing body; (b) its governing body has approved this Agreement by a majority vote of the full possible voting strength of that governing body; and (c) if required, all steps by way of public hearings and/or referendum or otherwise have been taken by the time of execution of this Agreement. Resolutions of each governing body approving this Agreement are attached to this Agreement as Exhibit C. In Witness hereto, the parties have caused this Agreement to executed by their duly authorized officers and sealed with their corporate seals, effective on the day and year aforementioned. CITY OF ITHACA Dated: By: Carolyn K. Peterson, Mayor City of Ithaca TOWN OF ITHACA Dated: By: Catherine Valentino, Supervisor Page - 6 Dated: Dated: Dated: Dated: Dated: Dated: Dated: Town of Ithaca By: Will Burbank, Councilperson Town of Ithaca By: Herb Engman, Councilperson Town of Ithaca By: Sandra Gittelman, Councilperson Town of Ithaca By: Carolyn Grigorov, Councilperson Town of Ithaca By: William Lesser, Councilperson Town of Ithaca TOWN OFDRYDEN By: Steven M. Trumbull, Supervisor Town of Dryden By: Martin Christopher, Councilperson Page - 7 Dated: Town of Dryden By: Michael Hattery, Councilperson Town of Dryden Dated:By: Christopher Michaels, Councilperson Town of Dryden Dated:By: Stephen Stelick, Jr., Councilperson Town of Dryden Dated: [ADD JURATS] VILLAGE OF CAYUGA HEIGHTS By: Walter R. Lynn, Mayor Village of Cayuga Heights Page - 8 EXHIBIT A OVERVIEW, BASIS FOR AGREEMENT, & ENGINEERING ASSUMPTIONS Overview and Method The Village of Cayuga Heights was originally served by a downtown plant, so much of the Village, as well as portions of the northeast quadrant of the Town of Ithaca, can use gravity and topography to redirect wastewater flows to the current downtown (lAWWTP) plant. Demand exists now for new sewer service in areas of the Village and Town of Lansing, and the Town of Dryden, close to the Village of Cayuga Heights and the Ithaca-Tompkins Regional Airport. Additional demand exists in northern portions of the Town of Lansing such as the Lansing School District complex and homes in the Ladoga Park area, whose individually owned facilities will be replaced with connections to municipal treatment facilities; The water quality in Cayuga Lake can be improved by connecting individual properties whose on site treatment systems are built in areas of high water table or shallow bed rock. Diverting existing wastewater flows from the VCHWWTP to the lAWWTP can free up capacity in the VCHWWTP to receive wastewater flows from areas north of that plant. Flows diverted from areas south of the Village's plant can reach the downtown plant by gravity. The load sharing approach makes use of existing treatment .capacity at the lAWWTP, relieves existing excess demand at the VCHWWTP, and allows adequate flexibility to meet projected demands over the next twenty (20) years while adjusting for real demands as they develop. Basis for Agreement In order to meet the goals set forth in this Agreement a series of meetings were held between engineers representing the six communities being served by the two plants. The current operation of the two plants, current flow contributions by the six communities, and estimates for changes in flows were reviewed. Since current and future flows were still within the existing combined treatment capacity, a more detailed review was made of sub-area flows and topography to consider the feasibility of the proposed solution. The initial implementation appeared simple and the benefits to the VCHWWTP would be immediate. The basis of the solution contained herein is summarized in detail in a memo dated August 22, 2003, and revised December 17, 2003, written by the City's Superintendent of Public Works to the other Joint Engineers. It is contained as an Attachment to this Exhibit. Engineering Assumptions This Agreement looks at plant treatment capacity limitations and collection system wastewater flows in terms of volume and time, i.e. gallons per minute (gpm) or Page - 9 million gallons per day (MGD). The age of major portions of the collection system, the make up of local municipal wastewater (due to the largely residential, professional, and high technology make up of the communities), and the configuration of both plants makes this approach to capacity reasonable. Peaking factors (peak flow/average flow) appear to be comparable for the plants and the portions of the collection systems for which data was available. Should other wastewater properties that limit a plant's permitted capacity come into play, e.g. biological treatment, chemical treatment, or solids handling, the parties agree to use their best efforts to amend this Agreement. The preliminary review of plant operations at the lAWWTP did not uncover any disproportionate impacts or costs that would be triggered by receiving these diverted flows. No ratchet effect or sudden increase is anticipated in chemical, electrical, or staffing demands at the plant. This appears to be due to the relative size of the two plants (13.1 MGD and 2.0 MGD) and the actual size of the anticipated flow transfers. Should these items develop at a later date, the parties agree to amend this Agreement. Page -10 EXHIBIT B UNIFORM PRETREATMENT LAWS FOR lAWWTP Page -11 EXfflBIT C GOVERNING BODY RESOLUTIONS (to be added) Page -12 Intermunicipal Wastewater Committee The IWWC met at Village of Cayuga Heights Hall at 830AM on July 15, 2004. In attendance were Steve Farkas, Cathy Valentino, Noel Desch, Steve Tunnbull, Susan Brock, Carolyn Peterson, David Herrick, Dan Walker, Brent Cross, Bill Gray, Walter Lynn. The next meeting of the IWWC will be on August 19, 2004 at VCH Hall at 830AM. The Notes from the July 15 meeting were review and accepted. Pretreatment Agreements The VCH Board has not yet decided whether to adopt the lAWTP regulations or to continue with regulations with a more residential focus. The other municipalities contributing wastewater to VCH will hold off on scheduling public hearings on the regulations until the VCH decision has been made VCH and Town of Ithaca Agreement The Town and Village Treasurers have not yet met to discuss how to handle the loss of revenue by VCH after the start up of the Kline Road diversion. The Town of Ithaca has just paid the bill for the full 2004-2005 year in the amount of ~200K which is based on last year's number of units. The Committee discussed the potential of increasing flows from the Village of Lansing to make up the difference or spreading credits due to the Town of Ithaca over the VCH budget for next year. Vacations may prevent the treasurers from meeting prior to the next IWWC meeting. Dan Walker pointed out that the Kline Road diversion will divert the equivalent of 350 units of the 1200 Town of Ithaca units now served y VCH plant leaving 850 units to be diverted through the future Remington Road interceptor. Dan Walker and Brent Cross will also meet to review the current draft agreement. Kline Road Diversion VCH is about to authorize the contractor to begin work through the notice to proceed. The project including site restoration is expected to be completed by October 15. Plant to Plant Agreement The engineers, Susan Brock and Noel Desch will meet at 9AM on August 9 at the Town of Ithaca to review Susan Brock's draft agreement. There was a consensus that completion and adoption of the agreement is a priority for the IWWC. Stearns & Wheler EIS Final Invoice All 6 partners have now paid their share. Remington Road Diversion D. Herrick reported that the existing 8" line on Lake Street is now close to capacity when the Stewart Park pump station pump is running. The line has -140,000 gpd capacity. Dan Walker pointed out that a surge tank could be constructed to distribute the use of the capacity of the 8" line until the new line were constructed. The IWWC agreed that the development of this project must be pursued in a timely manner to dovetail with the new district formation in the Town of Lansing, new development in the Village of Lansing, the desire of the Town of Ithaca to divert the remaining 850 NE sewer units to the lAWTP, and the need for VCH to be within the SPDES permit limits on a continuous basis for the short and long term future. Brent Cross reiterated earlier discussions that the most straight forward approach might be for VCH to build the line in Remington Road with the help of Bond Act money and the Town of Ithaca to build the Lake Street line to the new high school 36" line. He suggested that rather than these lines being jointly owned that the flow contributors would share in the owning and operating costs as applicable. For example the Village and Town of Lansing, the Towns of Ithaca and Dryden and the Village of Cayuga Heights would pay the line owner an agreed upon percentage of the annual costs as a transmission charge. D.Herrick indicated that the year one (2006-2007) capacity needed would be 600,000gpd and that by 2011 the needed capacity would be Imgd. The engineers will discuss the project at the meeting on August 9. Other Business Steve Farkas reported that Cornell Real Estate is amenable to finding a mutually acceptable route through the property below Lakewatch. TOWN OF ITHACA 215 N. Tioga Street, Ithaca, N.Y. 14850 www.town.ithaca.ny.us TOWN CLERK 273-1721 HIGHWAY (Roads, Parks. Trails, Water &Sewer) 273-1656 ENGINEERING 273-1747 PLANNING 273-1747 ZONING 273-1783 FAX (607) 273-1704 September 19, 2003 Mayor Alan Cohen City of Ithaca 108 E. Green Street Ithaca, NY 14850 Re: Sewer Service Agreement Dear Mayor Cohen: In reviewing the Sewer Service Agreement between the Town and the City dated November 4, 1992, which governs the utilization of portions of the City of Ithaca sanitary collection system to provide for transportation of sewage from the Town through the City to the Jointly owned Ithaca Area Wastewater Treatment Plant, it appears the contract was for an initial period of two years commencing January 1, 1992 (see paragraphs 8 and 9 of the agreement) ending December 31, 1993 subject to automatic renewal from year to year unless advance notice of intent to terminate is given (see paragraph 9 of the agreement). Given the fact that the City and Town have been negotiating the joint interceptor sewer agreement, and expect execution of the new agreement this year, the provisions of the 1992 agreement will no longer be applicable. Accordingly, please take this letter as formal notice, pursuant to paragraph 14 of the agreement, that the Town of Ithaca will terminate the above Sewer Service Agreement effective December 31, 2004, unless a replacement agreement has been negotiated and is in place terminating the agreement prior to that date. Indeed, to avoid any misunderstanding, the Town hereby terminates that agreement, the termination to be effective December 31, 2004. We look forward to working with you to put in place a mutually acceptable and beneficial replacement agreement Sincerely, t..,, n )/^ Catherine Valentino Town Supervisor Co: Mary Russell, Deputy Town Supervisor Tov/n of Ithaca Board Members City of Ithaca Common Council Members William Gray, Superintendent of Public Works Lawrence Fabbroni, Assistant Superintendent of Public Works Norma Schwab, City Attorney John Barney, Attorney for the Town of Ithaca Daniel Walker, Director of Engineering ' l:\LETTERS\Letter to City of Ithaca re sewer service agreement.doc CV;dw -• Page1 9/19/2003 O \/^ Proposed Amendments to the SJS Agreement-March 31, 2003 and revised April 22, 2003 Two separate negotiating teams representing the Joint owners of the lAWTP have met to develop a proposal that would be acceptable to all parties concerned and meet the following goals: 1. Resolve past issues with respect to governance, overhead charges, accounting and auditing. 2. Provide a structure for effective operation and governance of the lAWTP for the short and long term future. The negotiating teams decided that the best way to achieve these goals is to strengthen the SJS agreement rather than to create a new agreement. This decision followed an overview of the Bolton Point agreement and the July 31^^ "group of 6" draft intermunicipal agreement. The following proposal encompasses and amends the provisions of the February 19 draft Memorandum of Understanding on "Charge-backs" to the City General Fund. Service Area Section 1 Scope Appendix III would be amended to include the entire area of the Town of Ithaca including the Village of Cayuga Heights (and the new districts formed in the Town of Dryden since adoption of the SJS agreement.) Title to Property Section 3. Implement as written Budget Section 10 Operating Expenses..The overhead/charge-back matter is still unresolved. The parties now agree that starting in 2004 and for 2005 there would be an overhead charge line item at 10% of the operating budget net of the overhead. No other charge- backs would be included in the operating budget. The Towns want the 10% to start in 2003 The City position is that the City General Fund is already budgeted to receive the $262,846 from the Joint Activity Fund and the loss of approximately $60,000 cannot be ^ Q made up in any other way. The Towns contend that the 10% overhead is appropriate for 2003 since they are waiving any claims for past charge-backs. o Under duties of the Board the parties agrees to include a provision for an Operations Review Committee of the SJS to review 4 to 6 city departments providing service to the SJS each year. The reviews would he for informational and educational benefit and could include among other things site visits to the offices of the specific departments and an explanation of the tasks provided to the SJS, b^t^vould^tisGlude-the-requirenient-of "formal time keeping. Public Works administration, water and sewer division and C- ^ \ engineering could be the first units reviewed. The City also suggests that the Operations Review include a review of the Bolton Point operating structure and cost. The mission ©f the ORC could be to achieve a better understanding of the day to day services provided by the specific departments listed in the amendment as well as other services provided to the SJS. For example past issues and procedures with respect to Capital Reserve Funds could be a specific charge to the committee. The parties agree that the SJS budget would be a stand alone budget on both the revenue and expense side, subject to a separate public hearing conducted by Common Council as part of the City public hearing process on the budget. Each owning entity would continue to be required to adopt the common O&M rates required to generate the revenues that they need to pay over to the City Controller on behalf of the SJS. The City Controller .would file a separate report to the State Dept. of Audit & Control for the SJS budget. The annual audit of City budgets would include a separate audit of the SJS budget by the same auditor. The costs of the annual SJS budget.would be an expense of the SJS. Note: Reference to Joint interceptors should probably be removed since there is expected to be a separate agreement between the City and Town of Ithaca. Governance Section 13. Special Joint Subcommittee. The SJS will continue to have 8 members, four representing the City and four the Towns. The amendment would state that The City members need not be members of the Board of Public Works but two shall be City elected officials. The Board of Public Workrwouldno lo^er be in direct line of authority for SJS actions requiring approval by a City Governing Body. Although not discussed by the negotiators the current impasse provision could perhaps be retained as s ^ follows: If the SJS reaches an impas^oiLa^ommendation the current provision \ involving the (gup^ntendent-of-Public Wo^ the Mayor and the Supervisoriof the twoTowns would be invoked. If unanimous agreement is not reached by these officials the■t. 6? (a\ -V. . _ 0 ^ matter is referred to the municipalities for resolution. ^ Name. Since the Committee would no longer be a sub-committee of the BPW iswould be appropriate to change the name to SJC(Special Joint Committeq) SJS Duties Section 13. Special Joint Subcommittee An additional duty of the SJS will be to interview candidates for the position of Chief Operator generally as provided in Section9.2 of the July 3D' draft agreement. These provisions have been implemented recently for the selection of the current Chief Operator. Section 9 of the current SJS agreement under "Operation" on page 8 may need to cross - reference these terms perhaps as follows. "With respect to the position of Chief Operator refer to Section 13 Duties" SPDES Permit Section 9 under operation Implement change to include all owners on the SPDES permit. Sale of Capacity Section 17 Future Expansion of Capacity. The provisions proposed in Section 5 of the July draft pertain to the sale and expansion of capacity and These would be incorporated in the SJS agreement amendment except references to "new owners". Any owner would therefore not be required to sell a share of its spare capacity. A Table would need to be included to show the capacity status at the time of execution of the amendments. Penalties The July 3 draft included a liquidated damages penalty provision of $300/day for any owner providing service outside the service area. This has not been discussed in any of the Group of 2 or 3 negotiating sessions. It may no longer be applicable in this form with the diversion concept and the larger service are encompassing the Town and Village of Lansing. Prepared by N. Desch \ I-- A CAPACITY PURCHASE AGREEMENT BETWEEN PLANERGY NEW YORK, INC 6308 East MoUoy Road East Syracuse, NY 13057 AND ITHACA AREA WASTEWATER TREATlVtENT FACBLITY 525 Third Street Ithaca, New York 14850 NOVEMBER 11, 1992 J- CAPACITY PURCHASE AGREEMENT SPONSOR: PLANERGY NEW YORK, Inc. 6308 East Molloy Road E. Syracuse, NY 13057 MEMBER: ITHACA AREA WASTEWATER TREATMENT FACILITY 525 Third Street Ithaca, New York 14850 PURPOSE: Whereas, PLANERGY NEW YORK, Inc. (PLANERGY) has entered into a 10- year agreement with New York State Electric and Gas Corporation (NYSEG) to supply 3,000 KW of interruptible electric power through an electric load management cooperative (the cooperative); and Whereas, MEMBER has agreed to provide interruptible power to the cooperative in return for incentive payments; This agreement is therefore established. ARTICLE I: SCOPE OF THE LOAD MANAGEMENT COOPERATIVE The design and scope of the load management cooperative is further explained in Appendix B. ARTICLE H: RESPONSIBILmES AND CONDITIONS MEMBER agrees to provide interruptible load by active participation in the load management cooperative (to be known as "New York Water- Link"®^) . In return, PLANERGY agrees to pay cash incentives for interruptible load provided in each year of active participation. Planersy New York, Inc. Page 1 of II New York Water-Link Following are the limits of commitment: Months in Operation: Jan-Mar, June-Sept. Nov-Dec Maximum Total Hours of Interruption Per Year: 144 Maximum Hours of Interruption In Anv Dav; 4 Maximum Number of Interruptions Per Year: 36 Interruption Possible Between: 7 a.m. and 10 p.m. Contract Length: One fl^ year renewable Potential Duration of Agreement: 10 years Responsibilities of PLANERGY are: 1. To provide all engineering, design, and dispatching necessary for establishing and operating the cooperative. 2. To pay for all equipment, including computers, signaling devices, telephone modems, data logging, and related devices; for installation and maintenance of all equipment; and for monthly and long distance line charges (provided only that MEMBER may be billed for repairing damage caused by negligence on the part of its personnel). 3. To handle all administrative and programmatic contacts with NYSEG concerning this project. 4. To provide training of personnel at the plant sites. 5. To pay MEMBER for the services provided in accordance with this agreement. Responsibilities of MEMBER are: 1. To provide the loads identified in Appendix A when called for by PLANERGY, and to consistently provide full load interruption except in cases of valid and overriding emergencies (see Article IV). 2. Be available for regular or "on-call" status to begin interruptions as early as 7:00 a.m. Monday through Friday of each week (excluding the months of April, May, and October). Interruptions will end no later than 10 p.m. (Notification time will normally be 45 to 60 minutes.) Weekends and legal holidays are normally excluded, although NYSEG retains the right for one winter and one summer "emergency" interruption in the event of rare and unforeseen conditions, which may fall on any day. Failure to participate in an "emergency" call Planergy New York, Inc. Page 2 of II New York Water-Link will not be counted against MEMBER as a pass (Article IV.3), although payment will be deducted. 3. To maintain generators and/or equipment to be interrupted (see list in Appendix A) in operating and safe condition, and in compliance with applicable NYSEG interconnect requirements (if applicable). 4. To provide the labor necessary for the proper monitoring and control identified in 2 and 3 above, and to provide the fuel necessary to operate standby electric generators or direct- drive machines (if applicable) identified in Appendix A as interruptible loads. 5. To permit the installation and inspection by PLANERGY or NYSEG (at PLANERGY or NYSEG expense) of all monitoring and communications equipment necessary to operate the cooperative, and to permit the removal of this equipment if MEMBER ceases to be a member of the cooperative. ARTICLE ni: PAYMENT Cash incentives will be paid to MEMBER so long as it remains a member in good standing of the cooperative (see Article IV) . Payments will be made quarterly throughout the year according to the following schedule: A. REGULAR QUARTERLY ENTITLEMENTS Year S/KW/Ouarter Total $/KW/Year 1993 $ 4.00 $ 16.00 1994 $ 4.00 $ 16.00 1995 $ 4.00 $ 16.00 1996 $ 4.00 $ 16.00 1997 • $ 4.50 $ 18.00 1998 $ 4.50 $ 18.00 1999 $ 4.50 $ 18.00 2000 $ 5.00 ; $ 20.00 2001 $ 5.00 $ 20.00 2002 $ 5.00 $ 20.00 B. SUPPLEMENTAL FUEL REIMBURSEMENT Where applicable, in addition to the regular entitlements (Part A) , Planergy will reimburse the cost of fuel for operating standby generators or direct drive machines that are necessary to replace NYSEG power during interruption periods. The amount of reimbursement will be computed as follows: the cost of fuel to power the generators or direct drive machines less the current kilowatt/hour cost for electricity (reimbursement not to exceed $0.03/KWH). Planergy New York, Inc. Page 3 of 11 New York Water-Link Incentive payments are contingent on PLANERGY's contract with NYSEG. In the unlikely event that payments to PLANERGY are changed, P3CjANERGY and MEMBER agree to undertake good faith renegotiation of the above payment stream to reflect such change. PLANERGY has estimated the load (see Appendix A)" based on operating information provided by MEMBER. The amount of actual load interruption capacity to be paid will be based on data obtained from the PLANERGY metering equipment, and agreed upon by NYSEG. PLANERGY will compute the amount of entitlement (payment) based on an analysis of the actual energy use patterns. Questions regarding the entitlement or billing should be made directly to PLANERGY's New York Office. Records and calculations of entitlements will be open for inspection at any reasonable time. ARTICLE IV: MEMBER IN GOOD STANDING A member in good standing is a member of the cooperative which meets each of the following criteria: 1. Is under a valid contract. 2. Has not resigned from the cooperative. 3. Has not failed to provide at least 90 percent of the interruptible loads identified in Appendix A, whenever called for by PLANERGY, on more than one occasion in any one calendar year, or in more than two consecutive years. 4. Has not received a notice of cancellation from PLANERGY for cause under this article. ARTICLE V: TERM OF AGREEMENT This agreement is for one year, with automatic renewal unless terminated by either party (see Articles IV and VI). This agreement is subject to PLANERGY's contractual agreement with NYSEG. Cancellation or expiration of that contract for any reason terminates this agreement, and the limit of PLANERGY's liability will be to properly remove any equipment, and pay any entitlements or escrowed amounts then owing. ARTICLE VI: SECURITY FUND PLANERGY will retain 25 percent of earned incentives in escrow as a Security Fund. The Security Fund will be held for a period of six (6) months and paid in full (plus interest at average prime rate plus two percent), provided that MEMBER remains a member in good standing under Article IV. This amount is held from each Planergy New York, Inc. Page 4 of 11 ' New York Water-Link member as a protection against (1) a member not providing its contracted load interruption upon request, and (2) a member resigning without proper advance notice, and as such serves to protect the entire cooperative. MEMBER may terminate this agreement without penalty, provided that: (1) 90 days advance written notification is given, and (2) the effective date of termination is anytime during April, May, or October of any year. Withheld incentives.with accrued interest will be paid within 3 0 days after the 'effective date of a termination that meets these requirements. Planergy may retain any unpaid security funds in the event that: (1) MEMBER terminates this agreement without providing proper notification (as specified in this clause), or (2) MEMBER fails to remain in good standing (Article IV). MEMBER'S sole liability to PLANERGY, and PLANERGY's exclusive remedy for any failure under this clause, shall be forfeiture of the security fund. ARTICLE VH: START -UP AND TESTING MEMBER may be asked to participate in an unpaid testing period prior to June 1, 1993, consisting of no more than two, two-hour interruption periods. A 24-hour notification will be provided for the test period. . Incentives will.be earned beginning June 1, 1993, upon successful testing and delivery of interrupted loads. ARTICLE Vm: MEASUREMENT, VERIFICAIION, AND ACCESS PLANERGY will measure and verify capacity savings through computerized metering and data logging equipment to be furnished and installed by PLANERGY. PLANERGY and NYSEG reserve the right of access for inspection, verification, repair or replacement, and removal. ARTICLE IX: PLANERGY LIABIOTY MEMBER holds PLANERGY harmless for any damages and injuries, including loss of life, occurring to persons or property, which do not result directly from PLANERGY's negligence. Planergy New York, Inc. Page 5 of 11 New York Water-Link PLANERGY'S sole liability) except for instances of demonstrative negligence, and MEMBER'S exclusive remedy shall be for payment of the incentives earned during the term of this contract. ARTICLE X: NOTIFICATIONS AND DISPUTE RESOLUTION In the event of questions or disputes, cooperative members should contact; Dennis Flack PLANERGY NEW YORK, Inc. 6308 East Molloy Road E. Syracuse, NY 13057 315/ 433-5032 Fax: 433-5033 Jerry Golden or Wayne Brown PLANERGY, Inc. 1008 West Avenue Austin, TX 78701 800/531-5114 Fax: 512/477-2149 If questions or disputes are not satisfactorily resolved by telephone or mail, a panel consisting of one NYSEG representative, one PLANERGY representative, and one representative from the cooperative member will be convened upon the request of the cooperative member or PLANERGY. The decision of the panel will be final. XI: COMPLETE AGREEMENT This agreement and referenced attachments constitute the full and complete agreement. Revisions and amendments must be in writing and signed by both parties. EXECUTION: THIS AGREEMENT IS HEREBY APPROVED: PLANERGY NEW YORK, INC.ITHACA AREA WASTEWATER TREATMENT FACILITY Title Title Date Date Planergy New York, Inc.Page 6 of 11 New York Water-Link APPENDIX A; CONTRACTED INTERRUPTIBLE LOADS The following loads comprise the interruptible loads to be supplied under this agreement, and will be interrupted upon call by PLANERGY in accordance with the terms of this agreement. LOCATION NAME/DESCRIPTION ESTIMATED KW* Ithaca Main Plant fSOO KW vr^ 432 TOTAL ESTIMATED KW 43 2 NOTE: ENTITLEMENTS WILL BE PAID BASED ON THE STANDARD BASELINE AS DETERMINED FROM A SEASONAL ANALYSIS OF ACTUAL METERED DATA. Planergy New York. Inc. Page 7 of 11 New York Water-Link APPENDIX B: "NEW YORK WATER-UNK?^': WATER/WASTEWATER LOAD COOPERATIVE What^^ is^^the Water-Link Load Control Cocperative? 'fi'i' - ' New York State Electric & Gas Corporation (NYSEG) has contracted with PLANERGY NEW YORK, Inc. to provide 3,000 kilowatts (KW) of electric load reduction in peak winter and summer periods for 10 years starting ih June 1993. Planergy in turn will contract with cities, counties, and private operators of water supply and wastewater treatment facilities in the NYSEG service territory to provide this load control. As- an independent contractor to NYSEG, Planergy is not a direct agent or representative of NYSEG. Plaiiergy, not NYSEG, warranties the monitoring and recording equipment which will be installed as part of the project, and cooperative members will be under contract to Planergy. 2, What are the goals? 3,000 kilowatts (KW) of electric power interruption are to be provided^ on call during the peak winter and summer periods. (Winter includes November through March; Stammer includes June through September). 3. What''are'.the exact commT a. Maximtam of 144 hours of load interaruption per year, b. Maximum of 36 occurrences per 'year (18 winter; 18 summer). c. Maximum of 4 hours per day. d. Interruptions cannot begin before 7:00 a.m. or last beyond 10:00 p.m., Monday through Friday. NYSEG retains the right for one winter and one summer call to occur on a weekend or holiday, but notification periods and conditions are eased to help members comply. Members must shut down scheduled equipment (and/or start up generators or direct-drive machines) within 45 minutes after notification unless otherwise directed. e. Agreed^upon and contracted loads will be shifted off line during all calls for interruption. If generators or direct-drive machines are needed to replace NYSEG power, uX; they ..will be activated by plant staff . Planergy New York, Inc. Page 8 of 11 , New York Water-Link What are the benefits to the cooperative memhia-rgo Starting June 1, 1993, cooperative members who meet their obligations will receive four quarterly payments of $4.00 per KW of load which is available for interruption f$l6 per KW per • This payment is made even for periods during which nocalls for interruption occur. This payment increases to $18 per KW per year in 1997 and to $20 per KW per year in 2000. Members who replace NYSEG power with standby generators or direct—drive machines will also receive reimbursement for added fuel costs. Here are two examples of incentive payments: Example 1: Water Supplier A has two 300 horsepower river intake pumps, and storage capacity sufficient to serve its customers for two or three days. These pumps draw approximately 225 KW each, for a total of 450 KW. As a member. Water Supplier A will receive $7,200 the first year (450 KW X $4/KW/quarter). Including escalations in 1997 and 2000, the total payments over 10 years will be $80,100. The costs of participation are virtually zero, since plant operation staff are already on duty, and there is no generator or other standby power to operate. Example 2: City B has a small 180 KW standby generator. Fuel costs are approximately $12/hour. At worst case, providing the maximum of 144 hours per year, the expense for fuel is about $1,728, 100 per cent of which is either negated by the savings in electricity while the generator is operating, or refunded by Planergy. The incentive payments are $2,880 the first year and $32,040 over 10 years. 5- Isn't there a potential problem with maintaining service to our water and wastewater customers? No. Neither Planergy nor NYSEG will, have any direct physical control over your equipment. If you cannot participate in a particular interruption period due to emergency situations, your plant operators retain complete operational control and can elect not to participate in an interruption. However, this is only for real emergencies (see the next paragraph). ®• Is there a limit to how often we can elect to not participate in an interruption? Definitely! Reliability is the heart of the cooperative. Repeated failure to participate when called on can and likely will result in loss of membership in the cooperative. Planergy New York. Inc. Page 9 of II New York Water-Link Realizing that any meiober could have legitimate emergencies, each participant will be allowed one "pass" each year without penalty or loss of membership; more than that, however, and we may be forced to replace it with another member. 7• Once in. how do we get out...or can we? The cooperative is purely voluntary. A member can get out anytime. We will hold one-fourth of the earned incentives in escrow as security to protect against non-participation in calls for interruption, and members leaving during a winter (November through March) or summer (June through September) period and/or without a 90-day notification. The escrow is payable with interest to members who remain in good standing or who give us 9 0 days notice and leave the cooperative during one of the off-months (April, May, or October). Contracts are one-year, automatically;renewable agreements. We will not cancel members who are productive, reliable participants, and we expect that members who join at the outset won't want to give up the income. 8• OK, SO What is the catch? It is hard not to be leery of proposals that promise benefits for everyone. However, if you look at this concept logically, it makes sense that all parties, including the public and the environment, win. Here's why: 1. NYSEG can delay the construction of new plants, thereby saving money and holding down rates. 2. Load cooperative members earn money by providing "conserved power". This power is saved at NYSEG's peak, so it is as valuable to the utility as adding expensive new generating facilities. 3. Planergy earns its profit by establishing the cooperative, setting up the notification and data verification systems, and operating the system. 4. The environment gets a break because every kilowatt/hour of electricity not consumed represents coal, oil, or other fuel that isn't burned to produce electricity. 5. All ratepayers ultimately benefit, because it helps NYSEG hold down electric rates. 9. What about the effect on mv generator? Generators are designed to give thousands of hours of operation without major repairs. A new generator could operate 30 to 50 years under these conditions. Many people Planergy New York, Inc. Page 10 of 11 New York Water-Link with years of experience in operating generators believe that operation under the described conditions could actually increase the life of some equipment because it will require full-load operation instead of occasional unloaded or partially-loaded test periods that can do more harm than good. If you experience a generator failure during a Water-Link interruption, it won't be caused by your membership; it is safe to say you have simply uncovered a problem waiting to happen. 10• So. when do we start? We are under contract to begin operation June 1, 1993. The following schedule is necessary to meet this goal: August-October 1992 November 1992 Dec. 1992-Jan. 1993 March-April 1993 April-May 1993 June 1, 1993 September 1993 1993-2003 Preliminary visits with staff/officials to explain the program and obtain, expressions of interest. Formal offers extended to prospective members. . Formal action needed from prospective members. Installation of monitoring and communications equipment. Testing of communications network and the load control cooperative response. Ready for actual implementation and readiness testing. Incentive payments begin accrual. First checks arrive. Continued program operation. PLANERGY CONTACTS: Dennis Flack Planergy New York, Inc. 6308 Molloy Road East Syracuse, NY 13057 315/433-5032 (fax 433-5033) Jerry Golden Planergy, Inc. 1008 West Avenue Austin, TX 78701 1-800/531-5114 (or 512/477-8012) (fax 512/477-2149) Planergy New York, Inc.Page II of II New York Water'Link John C. Barney Peter G. Grossman Nelson E Roth Davio a Oubow Hugh c. Kent Randall B Marcus Mary K. Fleck BARNEY. GROSSMAN. ROTH & DUBOW Attorneys at Law 315 NORTH TIOGA STREET P.O. BOX 6556 ITHACA. NEW YORK 14851-6556 (607) 273-6841 MEMORANDUM ^ e n w SGP23i992 TGWN OF ITHACA PI ftNNING. ZONING, ENGINEERING Telecopier (607) 272-8806 (NOT FOR SERVICE OF PAPERS) TO: File FROM: JCB RE: City - Town Sewer Service Agreement DATE: September 22, 1992 I spoke with Mr. Dennis Scheimer of the City of Ithaca yesterday regarding the (hopefully) only remaining open item in the sewer agreement. I expressed to him the concern that the Town has in adding the reference to the City in paragraph 6 of the agreement. I reiterated the fact that the Town had, I believe, comprised, somewhat, in paragraph 6 by agreeing to consider not only the Town's future needs but also the existing usage by the Town in the event the City needs to reconstruct any of its lines. The City seems to want the Town to buy on to the possibility of paying for any lines reconstructed in the City that happen to carry any sewage from the Town at all, even if the need for reconstruction relates solely to new development or usage within the City. Mr. Scheimer was going to speak to Ms. Kennedy who, on August 31, 1992, sent me a letter stating that "So far as I can determine it [the revised agreement] seems to accurately represent our agreement." Either he or Ms. Kennedy will get back to me. If we are unable to resolve this by communications the thought was to probably have one more meeting. cc: Honorable Shirley Rapensperger Mr. Dan Walker seaes'® TOWN OF rmACA m lAST sMtcA smr ITHACA, NIW YORK 14Me April 13, 1989 Mr. John A. Dougherty Superintendent of Public Works City of Ithaca 108 East Green Street Ithaca, NY 14850 Dear Jack: This is a follow-up to my April 6th memorandum on the sewage treatment capacity needed in the - Northeast area. The numbers were reviewed at a meeting yesterday afternoon and informal agreement reached to pursue the following course: (1) Obtain, as soon as possible, a proposal from Stearns & Wheler to design Alternative lA, Parts 2 and 3, namely, the two pieces of the 24" trunk sewer — total estimated cost of nominally $800,000. (2) Obtain approval from the governing bodies of the design and construction cost described in my April 6th memo, summarized as follows: City of Ithaca $168,000. 21% Town of Ithaca 156,000. 19.5% Village of Cayuga Heights 80,000. 10% Village of X*ansing 136,000. 17% Town of Dryden 136,000. 17% Town of Lemsing 124,000. 15.5% $800,000. The new trunk sewer would be owned by the owners of the Ithaca Area Waste Water Treatment Plant, and the 250,000 gpd flow that would be diverted from the Cayuga Heights Plant would occur only until the new capacity was constructed, probably by agreement, within 10 years. By that time, it is expected that the additional flow from this part of the lAWWTP system will have increased by the 250,000 gpd, at which time the total distribution of cost would shift to the lAWWTP owners. It may be wise to consider the finance period of the new improvement at 10 years. The outside parties may request consideratin of the bigger Stewart Park pump station and force main at a later date when more is known about where the new treatment capacity will be located. Mr. John A. Dougherty -2- April 13, 1989 In any event, would you contact Stearns & Wheler with regard to item (1) and see if the BPW is comfortable with paying for 21% of the new trunk sewer? You might wish to point out that the cost for lAWWTP owners to do it alone would be at least double and it is the most critical trunk sewer problem that we face. If it were possible to get the proposal from Steeurns & Wheler within the next two weeks, it might be possible to get it approved at the May meetings of the various bodies. Thanks for your assistance in the matter. Very truly yours, Noel Desch, Supervisor Town of Ithaca ND/nf xc - Ron Anderson Anne Furry Jeannine Kirby Jim Schug Dominick Cafferillo :'>a5Si ',i OWTtY OFFtCC OF DONALD A. KJNSELLA SUPT. OF PUBLIC WORKS CITY OF ITHACA 1 oe EAST GCIEEM STREET ITHACA, NEW YORK 1 4B50 DEPARTMENT OF PUBLIC WORKS MEMORANDUM TELEPHONE; 27M713 CODE 607 To: Mayor BordonI Town Supervisor Desch Alderman Slattery From: Board of Public Works Re: Memorandum of Understanding Date: November 9, I98I Attached is a copy of a Memorandum of Understanding which reflects the Board of Public Works discussions based upon attendance at hearings, meetings and conversations between the Board members and principals of the City and Town. It Is felt by the Board that the memorandum sets forth the basic policies of implementation which are compatible with current adminis* trative procedures, eliminates duplication and provides for substantial input by all parties affected. It is urged that this Memorandum of Under standing be the basis for the final agreement between the City and Town. cc: City Engineer City Attorney Memorandum of Understanding Definitions: SJS = Special Joint Subcommittee WPCF « Water Pollution Control Faci lity The Board of Public Works makes the following recommendations for oversight of the WPCF operation and will request appropriate charter changes. Oversight of the joint WPCF operation will be by a subcommittee (SJS) of the Board of Public Works with final approval of its recommendations by the Board of Public Works and the governing bodies of the municipalities i nvolved. The SJS will have eight members. Representing the City will be the . three members of the Board of Public Works Water and Sewer Committee and the liaison from the Cormnon Council to the Board of Public Works. Representing the towns will be four members of their choice, one of whom must be an elected official from the governing bodies. The SJS will elect its own chairman and shall establ ish scheduled meeting dates to provide for timely referrals to the Board of Publ ic Works. The charge of the SJS shall be to oversee operations of the WPCF, including budget. Matters will be brought before the Board of Public Works with the majority recommendation of the SJS only. If a majority of the SJS cannot agree on any item brought before it, the Board of Public Works shall refer the matter to the City/Towns' respective governing bodies. The SJS must act on matters before it within 30 days. Budget estimates for the joint sewer operation will be submitted to SJS by July 1 of the fiscal year. By September 1, the SJS wi ll submit its recommendations through the Board of Public Works to the chief fiscal officer of the respective municipalities for inclusion in chief executive's budget recommendations. .iJ S j/i i * • ^ - V 6YJ.W XV- ^ CITY OF ITHACA 10a EAST GREEN STREET ITHACA, NEW YORK lASSO OFFICE OF MAYOR received j.;i 16 town of ITHACA TELEPHONE: 272-1713 CODE 607 June 15, 1981 Mr. Noel Desch, Supervisor Town of Ithaca 126 E. Seneca Street Ithaca, New York 14850 Dear Noel: We are in receipt of your letter of June 6, 1981 and have reviewed your notes of our joint meeting of May 14, 1981. After having reviewed comments made by both the City and the Town over the last several weeks and trying to arrive at a satis factory arrangement where everyone can be comfortable regarding the question of a service agreement for continued City ownership or a joint ownership agreement. We have drafted a revised version of the joint onwerships approach (dated May 22, 1981). This draft is being sent to you for your review and comments for a meeting we will try to establish on the 30th of June at 12!nn Noon (brown bag lunch). We feel that with this approach, it allows the Town the flexibility to recoup its capital costs and we feel this agreement represents a major concession by the City in agreeing to joint ownership. This agreement does provide for City operation but with the financial accountability that you have expressed an interest in. Hopefully the time and date of our next meeting is acceptable for you and your people. The meeting is scheduled at that date because Alderman Slattery and I will be out of town the week of the 22nd. We look forward to meeting with you on this matter. Sincerely, Raymond Bordoni Mayor City of Ithaca CC: Mr. Slattery J ®F ITMACA |;k SENECA STREET!$?: ITHACA, NEW YORK ^ 14850 June 6, 1981 Honorable Raymond Bordoni ^ ' Mayor City of Ithaca . . 108 West .Green Street Ithaca, New York 14850 Dear Ray: , I am enclosing my notes of the meeting held on May 14 on the subject of financing the 30 million dollar sev/age treatment plant project. A copy of the notes and this letter is also being forwarded directly to all participants of the meeting for information and comment, as may be appropriate. It seems that we are now at the point where you and I need to take the lead in seeing to it that the final terms of a mutually acceptable joint agreement are developed in the most timely manner possible. Perhaps, the Sewer System Planning Committee can once again play an important role in moving this process along. Very truly yours. Noel Desch Supervisor ND/js SEWAGE TREATMENT FACILITY UPGRADING PROJECT Meeting Notes A meeting was held in the City Superintendent of Public Works office at City Hall at 11:30 a.m., on'May 14, 1981. In at tendance representing the City were Mayor Bordoni, Alderman Banfield, Slattery and Gutenberger, Don Kinsella, Phil Cox, Joe Spano, Dominick Cafferillo and representing the Town, Supervisor Desch, Larry Fabbroni and James Buyoucos. Mr. Parsons from Marine Midland, David Allardice from. Bernard P. Donegan, Inc., and Tom Rothman from Sykes, Galloway & Dikeman. Mr. Parsons opened the meeting by explaining the current status of the bond market, i.e., the few sales and most ap proaching 10%. He explained that both the City and Town currently have recent AA ratings from Moodys and that Dryden is unrated. Mr. Parsons reviewed the history of the Bolton Point sale in that the bonds were down graded to A because of the unrated status of Lansing and Dryden and the lack of familiarity of agents and buyers with joint issues. Tom Rothman indicated that a joint issue would require consider able educational effort on our part with Moodys and the buyers. There was then discussion of the distinction between joint and several, in the case of default. In case of joint bonds, the full faith and credit of the parties is pledged on the bonds. In the case of several, only the faith and credit of that portion for which each participant is responsible is pledged. The City participants at this point seemed to have the impression that joint borrowing was out, but in response to a question by Jim Buyoucos, Mr. Parsons clarified his earlier point by stating that through proper explanation a double A rating could be achieved since there is clearly less risk to bond buyers on joint issues. The group then proceeded to discuss the possibility of joint ownership through each party borrowing its own portion of the project debt allocation. This would assure each party it would get the bond rating based on its particular municipal financial merit, probably AA in each case, Mr. Parsons, Mr. Allardice, and Mr. Rothman all agreed on this point. Neither party could borrow unless it owned a proportionate share of the facilities. Mr. Rothman explained the dilemma involving the exclusion of sewer debt from the constitutional debt limit which provision expires January 1, 1983. Debt contracted for after that date J' -2- will not be excluded from the limit and there is barely suf ficient time for two legislatures and a State wide referendiom to extend it for another 10 years. Phil Cox suggested it may be possible to contract for the local share of the project equivalent by January 1, 1983, namely the outfall. This could resolve the problem of exclusion if DEC and the consultants could be convinced to move the project into the Step III phase, in phases. The group then discussed the feasibility of the City doing the entire borrowing, in the event the debt can be contracted for by January 1, 1983. Noel Desch explained that it would not be possible for the Town of Ithaca to have the City do this on the Towns behalf because of the Towns method of re covering debt from undeveloped tax exempt land on the basis of benefit. A discussion of the provisions of Section 490 of the Real Property Tax Law followed and Tom Rothman confirmed that the Town could not recover the debt portion of its total costs of this project from applicable tax exempt institutions of higher education*on a benefits basis, since it would be billed by the City as O&M. Hence, all other Town users would be subsidizing the undeveloped tax exempt properties through the sewer lise rate or "sewer rents". Such now is not the case. A rate disparity would once again be created. The various types of agreements and sewer board structures were then discussed with Don Kinsella expressing concern about the addition of yet another layer of approvals. Tom Rothman indicated that the design of the sewer board is a difficult one and will require a considerable amount of cooperative spirit between the parties. The Town participants indicated that the existence of a Board of Public Works complicated the local problem. The group then reviewed the various options and agreed that time is of the essence in getting the joint agreement com pleted and ratified. TOWN OF ITHACA 126 EAST SENECA STREET ITHACA, NEW YORK 14850 March 20, 1981 Honorable Raymond Bordoni Mayor City of Ithaca 108 East Green Street Ithaca, New York 14850 Dear Ray: The possibiJity that wp may In.gp federal share on the sewer prn-)pnt raifiPg a number of questions with which we need to deal with before authorizing the engineers to pro ceed with the Step II design. 1. Can we afford to spend $500,000 of local money to buy a design that we could not afford to build with local dollars? 2. Is there not a much more modest design that could maximize remaining value in the existing facility and, therefore, involve a project that we could afford to build with local dollars? I remember both Bob Dingman and Pat Hannan giving us an affirmative answer to this question. Perhaps we should consider hiring them to prepare a feasi bility report in parallel with the Stearns & \>nieler effort. The plan of study for the pretreatment requirement is typ ical of what happens when one is trapped by countless fed eral and state criteria, such as public participation coordination, MBE plans, organizational assessment, etc. Why should we have to spend $180,000 just to confirm what we already know; namely that we have a commitment to provide adequate pretreatment? 3. Even if some funding is restored, will the schedule for the project stretch to the point where inflation will drive up the local share of the cost beyond what a more modest design would cost if the project were done on a fast track basis? It is now an urgent matter. A meeting of City, Town, con- -2-March 20, 1981 sultants, DEC and perhaps our congressional delegation is needed immediately. Do you want to arrange it or shall I? Very truly yours, Noel Desch Supervisor ND/js cc: PJiil Cox ✓Larry Fabbroni Ithaca Town Board ■c>/ ■ • -:Si: . ■•••r , .jrV * ,.f ..f TOWN OF ITHACA 126 EAST SENECA STREET ITHACA, NEW YORK 14850 March 12, 1981 , . Honorable Rajrmond Bordoni Mayor City of Ithaca 108 East Green Street Ithaca, New York 14850 IJear Ray; I am enclosing several copies of a document which sum marizes the features of the two alternatives for owning and operating the new Wastewater Treatment Facilities. The document also expresses my opinions in support of the selection of the joint ownership alternative. I sincerely believe that the adoption of the "service agreement" approach by either the Towns or the City would set back all opportunities for significant joint ventures for many years to come and result in far less than the best service to all who live in the greater Ithaca community, for the long term future. We in government, in Ithaca, are expected to look be yond our parochial interests to create the most repre sentative and responsive mechanisms for providing ser vice. We have a once in a lifetime opportunity here to create a partnership which will last virtually for ever. Can we in good conscience settle for less? I plan to ask the Ithaca Journal to print a summary of '.y. , •;-> V--- T. 1 ' I forward this to you now because I understand that the City Intergovernmental Relations Committee is con sidering a resolution prepared by City Engineer Phillip » Cox which recommends adoption of the "service agree- ment" approach. I would appreciate your prompt dis tribution of this report to those persons who will par ticipate in our future discussions on this matter, so that they become familiar with it prior to our next meeting. ' -A 5ff;'--; -2-March 12, 1981 this report under their opinion column, in the event Common Council appears headed for a vote on the "service agreement" resolution. Very truly yours. Noel Desch :v Supeirvisor ND/js n ' encs. cc: Town Board Members Fabbroni • -f; nn •i-"; I-,;. ^V"'- ; -■> . /k-- • -kv-kk; •■' . •• A; ''■[WMjB- • - . i ' V '• { . . •.-:. '. . :• , ,, ■ ■. :■ ■ i= ■ ■" / : ' 'X '• •» i V*- *• • vj^J f-'- How does one create a long term partnership to provide the most cost effective municipal services? Joint -ownership or service agreement for waste water collection, treatment and disposal? The City of Ithaca and the Towns of Ithaca and Dryden are about to make a long term multi-million dollar commitment to replace the waste water treatment and disposal facilities serving the City, the Varna area of the Town of Dryden and the Town of Ithaca except Cayuga Heights and the northeast. The mechanism created to provide this service is likely to determine the feasibility of developing long term arrangements between the City and the Town for fire service, youth service, mass transit. etc. Extensive engineering, economic and environmental analyses have been accomplished over the past two years and the facilities plan or preliminary design phase has been completed by Stearns and Wheler, approved by the participating municipalities, the New York State Department of Environmental Conservation and the U. S. Environmental Protection Agency. The facilities plan not only determines the capacity and selection of treatment pro cesses and location of the 54" outfall pipe but also the envi ronmental assessment and estimates of life cycle costs. The next step before the project can move forward is an agreement between the parties on the method of ownership and operation of the facilities. Over a 30 year bond retirement period, users can expect to pay approximately $50,000,000 for the operation, maintenance and financing of these sewer services excluding the $28,000,000 federal and state share of the construction cost. Town of Ithaca and Town of Dryden users are expected to pay approxi mately 40% of the local costs or $20,000,000 over the 30 year period, if the growth projections identified in the engineering report prove to be accurate. Following several years of negotiations, the governing bodies of the three municipalities (in March 1979) appointed a Sewer -2- System Planning Committee and charged the Committee to develop least two alternatives for the financing, ownership and operation of the Waste Water Treatment Facilities. The Planning Committee consists of equal representation from the City and Towns, namely ^ .n.mhers from the City, ? from the Town of Ithac^ snd 1 from Dryden. Town and City staff engineering support was provided during the deliberations. The design consultants pro vided relatively little guidance on the matter of governance, except to say "Why would the Town want to get involved in such a complex, messy operation, as a sewer system?" The Planning Coimnittee deliberated at length on the matter of past relationships, in often heated debate. The two alternatives now before us respond to many of the pitfalls of the past and where possible, offer common solutions to past and future plan- ning, policy and operating needs. All Planning Coimnittee participants agree that the approach adopted by the three governing bodies must include the following elements, common to both alternatives developed by the Committee: 1. PT-ovide one uniform sewer rate schedule for users ^v,..n.hout the system (no more rate and one-half) and include a provision wherein rate changes shall be subject to ratification by each participating municipality. 2 Prnvide one mechanism for retiring new and remaining used sewer s,,stem^ (^$4,840,000) so that no municipality would be subsidizing the others use or growth. 3. p..erve snare capacity for each municipality, without any party controlling the use of the others capacity within the constraints of a mutually acceptable uniform set of standards incorporated in a common sewer use ordinance. sv . .V ; ^• ,v- " - • - VSV'=;,?~''" ''-7^.•-.'5" » • -3- 4. Provide facilities for the treatment of septage gener ated in Tompkins County. Contractors handling these septic tank pumpings would be required to deliver them to the new Waste Water Treatment Facility and a charge would be assessed for treatment per load. 5. Provide that the share of the system annual operating .oH n^aintenance cost due from each municipality shall be deter mined from quarterly readings of master meters located on the trunk sewers at the Town line. Each municipality will bill its own customers. 6. Provide that the duration of the agreement shall be at least as long as the life of the bonds for the local share of the improvement, probably 30 years. 7. Provide that all users have equal access to the policy making board for this service. ■■What are the imnlications of these common elements?" 1. A uniform sewer rate schedule for waste water treat- „.ent and disposal services is mandated by EPA and it assures that each user will pay the same price for the same service. Each municipality retains its authority to match the method of collecting the "sewer rents" from individual users, commensu rate with the nature of its own profile of users, (i.e., resi dential, institutional, commercial, etc.). The Towns, example, may not wish to include its entire share of debt re tirement in the sewer rate, reflected on bills to users, but rather assess debt retirement costs against real estate as a benefit assessment because of the large amount of undeveloped but benefitted property. On the other hand, the City with a higher property tax rate and little undeveloped land may wish to include all of its share of the debt retirement in the sewer use rate, ultimately charged to users. -4- The ratification requirement for changes in the uniform sewer rate schedule will reduce the opportunity to commingle expenses for work actually performed on other than jointly used facilities, or unrelated to the sewage treatment function. For example, the $95,000 spent by the City from sewer fund surpluses for the Fall Creek flooding problem would not have been passible since it was of no benefit to the waste water treatment.operation. 2. The debt retirement shares should be in balance with the portion of the system utilized and reserved for each municipality. The City does not want to "front end" the cost for future Town growth. The participating municipalities agree that each should pay for the capacity each needs during the first year of operation as a base load and fixed for the life of the bonds. If such usage later decreases from the base load, the said municipality still pays on the basis of the first year base load. If such usage increases beyond their base load, a portion of their spare capacity is used up. This approach en courages all municipalities to repair their sewers before the new plant is completed and suggests the desirability of completing construction of the master meter installations in advance of the main plant improvements, so that the best data possible will go into the initial rate determinations. The facilities report estimates that 81% of the new plant capac ity will be utilized in the first year of operation and distrib uted as follows: 55% City of Ithaca, 20% Town of Ithaca. 1.2% Town of Dryden, 17.4% Industries, 6.4% Septage. 3. Spare capacity consists of the remaining 19% of the new plant capacity and shall be allocated on a fixed basis as follows 20.6% City of Ithaca, 48.6% Town of Ithaca, 0.6% Town of Dryden, 27.87o Industries, 2,47o Septage. In the event one of the parties needs more than its allocation * M: . y -5- of spare capacity, the other parties agree to make available a portion of their remaining spare capacity and be reimbursed for their previously paid debt cost value in dollars of that year. No longer will one municipality be able to control how the others use their spare capacity, or limit such use. The City Board of Public Works will no longer be able to prohibit an extension in the Towns under the guise that the Town subdivision "does not meet City subdivision criteria." 4. The new facility will assure the proper treatment of septage. No longer will this material be placed in landfalls or spread on open fields to the detriment of the surface and ground water supplies in and around Tompkins County. 5. The use of master meter readings for determining the municipal shares of the annual operating and maintenance cost will create incentive for each municipality to keep its col lector sewers in good condition, since the higher the amount of extraneous flow (i.e., inflow and infiltration) the higher will be its total share of the $500,000 estimated first year annu^ operating and maintenance cost. The approach is critical be cause the operating expenses for the new plant are almost double the existing, and will continue to increase because of their energy, chemical and labor intensive nature. 6. The necessity to spread the capital cost over a 30 year period through capital borrowing and the basis for receiving the $25,000,000 federal and state grant dictates that the contractual relationship between the parties must be a long term one. The implications then become awesome for all parties. The terms of the agreement must deal with every conceivable circumstance that may occur during this long period. We who must decide now are committing our constituents to a major investment and a long term arrangement. 7 Th. of u.or repte..nt.tlo» ood .cooso c.nnot to «l.hoof It. ». h.v, t.,.tl.» olthoot „p„..nt.tloo •6" and a policy making arrangement which can turn its back on a user who may have a different philosophical approach to land use or cost assessment. What are the Advantages and Disadvantages of the Two Alter- natives? 1. Both the City and Town of Ithaca have recent AA Moodys credit ratings. However, the total annual City debt load and property tax load is considerably higher than the Town. Further, the difference between the total assessed value of the City and the Town is expected to continue to diminish. For example, in 1970, the ratio was 69% City, 31% Town and in 1980, 63% City and 37% (both Town numbers excluding the Village of Cayuga Heights). Bond buyers will recognize the combined strength of the three communities when offered, as a ioint borrowing with the full faith and credit of all three pledged on the issue. This in crease competitiveness will result in lower interest rates and a substantial savings for all City and Town users. 2. The eligibility for reimbursement by the State for operating and maintenance cost increases if the joint ownership approach is adopted, since revenues from outside users are no longer considered "profits" which under the service agreement approach are deducted from the gross 0 & M costs. Had joint ownership been implemented five years ago, all users would have shared approximately $76,000 more in State Aid. With the new plant, the probable State Aid revenue loss under the gervice agreement would be approximately $25,000/year. There are of course, no guarantees that such aid will be available in the future. 'i'- n t -7- At the same time, the reduced amomt of the borrowing for which the City will be directly chargeable will make room for fi nancing other critical City capital projects and the annual City borrowing for operating purposes. We also recognize that new sewer debt, in any case, would be outside any statutory debt limits. However, bond buyers are interested in total outstandxng debt. In the service agreement, the City would have to borrow the total $4,800,000 local share plus sufficient cash flow (-'$2,000,000) during the construction to assure timely payment pending reim bursement from the State. Further, in the service agreement. City users would receive no credit for the Town's purchase of remaining equity in the existing land and facilities being incorporated in the new facilities. In the service agreement, the Town would have nothing at the end of the contract period after having spent $20,000,000 to amortize, operate and maintain the plant for 30 years. 3. The joint ownership arrangement dictates a heavy time coimnitment by all the members of the sewer board. The City representatives are understandably concerned that the Town members interest will wane once the hard work of building and operating the new facility becomes a reality. Six years ex perience with the five municipalities making up the water commission tells us otherwise. For example, the four repre sentatives from the Town of Lansing and Dryden, communities whose share of the cost is less than 3%. contribute the same extensive level of effort as each of the members of the munici palities making up the other 97%!! Why does this happen? The municipal representatives know the importance of having the best water operation possible for their community, at the least cost. Their attention is focused on specific needs and not distracted by unrelated budget and political pressures. The operation is called upon to stand on its own feet. liiMiiiii -8- The -joint ownership approach will remove the opportunity for the Town to second guess operating decisions since their represen tatives will be directly involved with those decisions. The same will be true with the City relationship to the sewer hoard. Thrs is the primary reason for having elected representatives from each group. In the City's case, one or two of the non-elected repre sentatives on the sewer board could be members of the water and sewer committee of the Board of Public Works, thereby building an effective bridge between BPW and Common Council. We have legal counsel opinion that no change in the City Charter will be nec essary to create this policy mechanism. 4. Operational liability under the -joint ownershiE ap proach will be shared, whereas in the service agreement the Towns will be held harmless for negligent acts arising out of the operation. While joint liability may be a disadvantage to the Town, Cayuga Lake belongs to all of us and we should, therefore, share in the responsibility to protect it. 5, In the »p-rvice agreement, the City has offered to pro- vide a number of services without cost to the Towns, namely in direct administrative services, such as Purchasing, Personnel, Public works and other central City administrative services such as Planning, Legislative, Legal or other costs. In the joint nwnP.rship approach such services as are needed, and in direct relation to the Wastewater Treatment Facility, will be legitimat expenses but there is incentive to keep demands for such service to a minimum because the City users will pay about 60% of such costs. Experience with the water commission teaches us that such charges, except a direct need for legal services, are very small. If a truck from one of the highway departments is needed, it can be billed on an equipmental rental basis. How do the governing bod^ps control the gtiality and cost effectiveness of the service? in the ^oint ownership agreement, the sewer board is made up of seven representatives. Of the four from the City, two must be -9- . 1 Of the three from the Towns, one from eachelected ..ese representatives ..nlclpallty must an^ serve3t_the_EleSSH«_-:^^ ' Sewer Board action requir representative. ^'°irir.r.o r.L..i» £.. ...£i="- governing bo y. ,,,ilable at all times. Each eo that sufficient c ^ ^icipality must pay the^^^ arises it is resolve y agreement shall then by rhe water cotm>ission involvingdetermine. (Note n^nio ,,3pute has arisen 5 municipaliti ,,iatence. including the design and in the first 6 years of its exi construction period). e The ioin^^-^ 'Trelt- ^optio. oE h.,ipg th. EE«"through the sewer . ™„etitive basis by a private „^nt facility ope«ted on a « effective contractor, if this undertaken studies approach. The Nationa 3^,,r. and evaluation of a n^ en water, fire protec ^ rhe high cost of service contract basis. - already municipal fringe bene^t pac ages. Village of Cayuga A namely,,„e E»o good „„p,gal^ Heigtits Sewage ^ period, The joint omortMP agroe«nt p - - -»' rortt. .otoio. -a t. opetotaa tp CltP oonttactad oat. IS Bovernsns bodlSS^JSL^teSSS-2ESJai^S^^ If and «!.•» " g„th pattl.. nortlng togotft .U1 tecog to oonaldat altatnatlv.. • -10- 7. The City believes the joint ownership approach will fragment the water and sewer division of the Department of Public Works and increase costs through loss of economy of scale. The fact is that joint ownership will require that services provided ^ the sewage treatment operation-fe^ other municipal departments would have to be charged out. Accountability could not be set aside. No longer could the need for a water rate increase be accomodated, at the expense of the sewer operation. Such manipulation of budgets increases the potential for major deferred maintenance costs in the sewer operation. Each operation from an accountability standpoint would have to stand on its own feet. The policymakers would be required to seek the most cost effective source for services, including purchasing, billing, engineering, etc. This does not mean duplication.- For example, at Bolton Point, we have two persons to handle all purchasing, billing, accounting, customer service, financial reporting, pay roll and insurance. Conclusions Over the past two years the sewer system planning committee has made an earnest and sincere effort to develop two approaches which could be satisfactory to both parties. The committee is made up of elected and appointed representatives of all the municipalities who will benefit from these improvements. The pitfalls of the past and needs of the future were addressed and where possible, the service agreement and the joint ownership proposals respond to them. The fundamental shortcomings of the service agreement approach, in my view, is the basic static nature of such agreements. The final agreement must work for at least 30 years. Even the best group of legal and technical minds (which I believe we have avail- -11- able on this project) are not capable of creating a 30 year s;arvice contract with the flexibility required to set policy and manage this large and complex investment. Once locked into a long term provider/recipient or landlord/tenant arrangement, one segment of the community becomes second class constitutents. That segment would not have the power to influence policy through their elected representatives. On the other hand, the partnership which will derive from ownership and attendant joint responsibility will enhance con tinued sensitivity to the needs of the end users, for they retain direct control over the selection of their representatives. On the matter of equity, each municipality participant should be required to buy or acquire onlir the amount of equity needed to properly serve their community of users. The City of Ithaca, for example, should not be required to finance the entire local debt of approximately $5,000,000 on behalf of the Towns, when they will utilize only 60% of the facility, particularly when there are other heavy demands on their credit. The ^oint ownersj^ .^.p^oach assures all City and Town_u^ers of the least cost for this important service. The Towns are prepared to accept responsibility which comes with direct participation in the financing and ownership. The magni tude of the investment we are making on behalf of the people of the City and Towns demands that we adopt the joint ownership alternative. It is their investment we are making and its time to put the strengths of the City and Town together for^, rather than permitting them to work at cross purposes. Whatever the City or the Town can do alone, the two can do in a synergistic way together. We have an opportunity to forge a long lasting^ friendship, a fluid, dynamic mechanism, one which can be readily fine tuned to incorporate the ever changing needs of the commu nity for the best technology, training, administration and accountability, and sensitive to the long range plans of the participating municipalities. We cannot afford an arrangement . which will stagnate and quickly become obsolete. 1^^-: -.S n - -12- We urge all current and prospective users of these sewer services to support the ioint ownership approach by urging your local elected officials to vote in favor or the creation of a partner ship between the City of Ithaca, Town of Ithaca and the Town of Dryden. The Town Boards of Ithaca and Dryden are already on record in support of ioint ownership. Town users, we need your support and the encouragement by you and your neighbors in the City, to convince the members of Common Council to join in this partner- ship. Ik- .■ TO W]¥ OF ITHACA 126 EAST SENECA STREET ITHACA, NEW YORK 14850 March 6, 1981 Mr. Philip L. Cox, P.E. City Engineer, City of Ithaca 108 East Green Street Ithaca, NY 14850 Re: City/Town Sewer Contract Dear Phil: Enclosed please find a copy of the Elements of Agreement Between City of Ithaca and Town of Ithaca for Sewage Treatment and Related Services negotiated in 1977 between the City and Town as an interim agreement controlling our relationship until the ongoing negotiations under your USEPA grant are finalized. At the time the Town's Collector Sewer Step 3 Grant Application was submitted with this Agreement, the exact nature of the City's action in upgrading the sewage treatment plant was uncertain as to method, means, and EPA involvement. As you may know, the City and Town attorneys have never finalized this Agreement. In spite of this lack of finality, implementation of same was not a problem so long as Mr, Hannan, Mr. Dingman, and I were all a part of carrying out the intent, as we were the principal staff who refined the document. With the retirement of both Mr. Hannan and Mr. Dingman, I assume you and the new superintendent are the engineers in charge to deal with in carrying out this contract. The traditional problems in my seven years with the Town have been in the areas of approving sewer extensions in the Town, inspection of construction of public extensions, record of con struction of public extensions, and inspection of outside plumbing. Many of the problems were caused by limited inspection of construction by the Town prior to my time, stubbornness of City officials in not recognizing the Townwide nature of the water district and sewer district approved legally by permissive referen dum of Town registered voters in 1971, and personality clashes of Town and City officials resulting in maintenance and operations primarily compromising the public good. I think it is time the engineering capabilities of the Town staff are recognized by the staff under your responsible charge for what those capabilities are today and not based on prejudices and inadequacies of 1972. I think, as long as there is no official engineer in charge of Water and Sewer, your day-to-day feedback is filled with those prejudices of bygone years, and not with a pers pective of the full range of activities passing over the desk of a City or Town Engineer in a week's time or the future. f-' Mr. Philip L. Cox, P.E. -2- March 6, 1981 As an example, your visit last Friday with regard to a sewer extension suggested some such prejudiced outlook or input. If you sat in my seat you would have known the inquiries on the par ticular property in question have been one every three months since the beginning of time. After a while, the inquiries become routine and if some union plumber mistakes a toilet paper feasibility study for an engineered drawing, the City plumbing inspector. City's scope crew or City Engineer would ordinarily take it in stride until an actual building permit was applied for. However, if one thinks in 1972 terms with no Town Engineer, no Assistant to the Engineer, no full-time Building Inspector, no clerical assistance, and no strict permit enforcement, the toilet paper could be repre sented to you or the superintendent with the old prejudiced philo sophy of "the Town trying to sneak another one by." I find this checking-up attitude insulting at best now that the subservience commanded by the wisdom, experience, professionalism, and age of your retired former superiors is no longer a complicating issue. To clear the record, no water or sewer extension has been designed or built in the Town of Ithaca during my stay by other than a registered engineer in the State of New York, although many pre liminary layouts have been discussed as prepared by planners, arch- tects, surveyors, etc. All water and sewer extension applications to the Health Department must be signed by the chief executive officer or his designee. In our case, this is the Town Supervisor or Town Engineer. No building permit in the Town is approved for lots other than with approved public utilities, or approved private systems by the Health Department. In drafting the referenced Agreement, the City's need to approve extensions within the Town, inspect new construction, pro vide field information for mapping purposes, and patrol the Town for violators was clearly seen to have ended because of Town staff, management of consultant administration, and improved permit sur veillance. In practice, if the major extensions of sewers in the Town under our USEPA Grant is any indication, the patrolling hasn't changed one bit and my perhaps unfounded conclusion is lack of trust or confidence in the Town. Maintenance of pump stations and repairs to same should exclude Mr. Happle and Jack Harding from my comments, as those operations are both handled professionally and as part of our contract. In short, the spying activities are a duplication of services at best. We have had full-time inspectors, or have done our own inspection on all capital projects, in my tenure as Town Engineer. This includes preparing as-built drawings or, at the very least, developing field notes for field location of mains, appurtenances, and services. As far as I am concerned, any design review I may ask the City for is as a courtesy and not a requirement of any contract. Much of what I write may be surprising to you, but, my main intention is to see that the distrust ends now. I do not feel either your letting connections between our water systems become Mr. Philip L. Cox, P.E.-3-March 6, 1981 "faulty or inoperative or our past actions in not providing for full- time construction inspection are professionally responsible to the public and now appears the time to chart a clean course for future technical responsibility regardless of political complications. Sincerely Lawrence P. Fabbroni, P.E Town Engineer • - X- LPF/nf V nn • ' . ;.