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HomeMy WebLinkAboutUtilities 2008-07-07 Item 3A - Agreement - Cascade Water Alliance Member Water AuditHighline water district intertie Water district 75 intertie Water district #75 intertie ISSUE BACKGROUND INFORMATION MEMO To: Mayor Haggerton From: Public Works Director Date: July 1, 2008 Subject: Cascade Water Affiance (CWA) Member Water Audit Agreement Cascade Water Alliance's Water Audit Agreements are to be approved and executed by each member agency. After many long years of negotiation and hard work by member staff and elected officials who serve on Cascade's Resource and Planning Committee, each member's water audit agreement, as required by the interlocal contract, is ready for execution. Tukwila's contract with CWA specifies the parameters at all of Tukwila's delivery points, including the minimum and maximum Hydraulic Gradient (in feet) that can be supplied from the wholesale system, as shown in the attached Member Water Audit. Compared to other wholesalers, the City of Tukwila's long -term drinking water supply is in very good shape. This is due, in part, because our water system is intertied with Kent, Renton and Highline Water Districts. Other options, such as wheeling Tacoma water through Kent's system, are being analyzed. Another initiative that will slow Tukwila's demand for potable water is our partnership with King County Department of Natural Resources via the Renton Wastewater Treatment Facility in the form of Class A reclaimed water. This is a very unique situation when compared to the remainder of King County. RECOMMENDATION Forward to COW and authorize the Mayor to sign CWA Water Alliance Member Audit Agreement. Attachments: Member Water Audit Membership Audit Acceptance Agreement between CWA and the City of Tukwila P: \Utilities Info Memo\Info Memo UC 070208 Cascade Audit Agreements.doc MEMBER WATER AUDIT CITY OF TUKWILA PREPARED FOR CASCADE WATER ALLIANCE May 23, 2008 Section I: Purpose Background This water audit outlines the supply relationship between Cascade Water Alliance (Cascade) and its Members, documenting each Member's official service area and independent supply sources. As a condition for membership in Cascade, Members with independent supply sources participated in a water system audit in 1999. The audit included a review of Member -owned independent supplies, which resulted in an award of independent supply credits for use against future Regional Capital Facilities Charge (RCFC) payments. The prior audits were conducted on the premise that Cascade would commence operation and supply delivery in 2000 however, Cascade did not begin delivering water until 2004. Cascade has recognized the need to update the prior audits for Members with independent supply sources to establish Member obligations to produce water from independent supplies, and to define RCFC credits (redeemable beginning in 2008). This document has been prepared in accordance with Article V, Section 5.2.2 of the Amended and Restated Cascade Interlocal Contract (dated December 15, 2004), which authorizes Cascade to conduct audits of the independent supplies of its Members at any time. Given that the City of Tukwila does not have any independent supply sources of its own, the primary purpose of this audit is to document the supply relationship between the City and Cascade. Section II: Utility Description The City of Tukwila is a municipal corporation that owns and operates a public water system serving customers inside its water service area. Table 1 summarizes information pertinent to the City's water system: Table 1: General Water System Information City of Tukwila Water System Name: Water System ID No: Water System Classification: Type of Ownership: Owner No: Address: System Contact Person: CERU Count as of 12/31/04: Sources of Information: Section 2.1 Service Area City of Tukwila 89500F Group A Community Type Local Govemment 600 Minkler Boulevard Operations Manager 8,732 Cascade City Records The City of Tukwila is bounded by the City of Seatac on the west, the City of Seattle on the north, the City of Renton on the east, and the City of Kent on the south. Tukwila's current and future service area, city boundary, and other adjacent purveyor service areas are shown on Figure 1. The City purchases wholesale water from Cascade (currently Seattle water through the Cascade Block) to serve its customers. In addition to this, the City holds agreements with several non Members that allow it to acquire additional supply in the event of an emergency. 1 Section 2.2 Pre Existing Service Commitments to Non Members The City does not have any pre- existing service commitments to non members. Section 2.3 Distinguishing Characteristics Considerations The following considerations are unique to the City of Tukwila's water system: The City holds a surface water right, but that water right is used exclusively for golf course irrigation and is not part of Tukwila's drinking water distribution system. In addition, the City has a reclaimed water program for irrigation and industrial uses. This program has value to Cascade, as it mitigates potable water demand during peak periods. Section III: Supply Commitment Section 3.1 Delivery Points The specific Points of Delivery are identified in Figure 1 (see page 2). The location of each Point of Delivery is listed in Table 2 and is the Points of Delivery as defined by the Member agency at the time the water audit was finalized. TABLE 2 TABLE OF DELIVERY POINTS HYDRAULIC GRADIENT (Ft) LOCATION JURISDICTION STA_NO TYPE South Center Parkway Tukwila Parkway Tukwila 13 460 490 SUPPLY Christensen Road Baker Rd. Tukwila 15 460 490 SUPPLY 53rd Avenue S S 160th Street Tukwila 16 460 490 SUPPLY E Marginal Way S 112th Street Tukwila 168 445 490 SUPPLY 51st Avenue S S Leo Street Tukwila 169 455 490 SUPPLY W Marginal Place S 102nd Street Tukwila 170 300 490 SUPPLY 3 Minimum Maximum MEMBERSHIP AUDIT ACCEPTANCE AGREEMENT Between CASCADE WATER ALLIANCE And CITY OF TUKWILA MEMBER May 23, 2008 Cascade Water Alliance "Cascade and the City of Tukwila "Tukwila enter into this Membership Audit Acceptance Agreement (the "Audit Agreement with respect to Tukwila's public water system. Article I: Authority Audit Predicate Audit Definitions Section 1.1 Authority. Article V, Section 5.2.2 of the Cascade Water Alliance Amended and Restated Interlocal Contract, dated December 15, 2004, (the "Interlocal requires an audit of each Member's water system and Independent Supply, if any, for the purposes of (1) determining Cascade's supply obligation to that Member, (2) recognizing when the Member has lost Independent Supply, and (3) allocating credits against the Member's Regional Capital Facility Charge for its Independent Supply. Section 1.2 Audit Predicate. Cascade's supply obligations (water quantity and quality) and related supply obligations and the Member's obligations concerning planning, conservation, shortage management, Independent Supply, and payment of Rates and Charges are established by the Interlocal. This Audit Agreement is intended to implement, not modify the Interlocal, and nothing herein shall change the benefits or obligations of a party to the Interlocal. Section 1.3 Audit. This Audit Agreement incorporates and adopts the audit of Tukwila's public water system, dated May 23, 2008, performed by Cascade Water Alliance (the "Audit The Audit was performed according to a methodo logy adopted by the Board of Directors of Cascade (the "Board') in Resolution No. 2008 -04. The original Audit is on file with Cascade. A true and accurate copy is attached hereto as Exhibit A. Section 1.4 Definitions. Capitalized terms not otherwise defined in this Agreement shall have the meaning assigned to them in the Interlocal. The following words have the following meanings when used in this Agreement: a) Production Requirement The quantity (seasonal and annual) of water a Member is required to supply from its independent Supply as established by the Audit and set forth in Section V of Exhibit A. b) Failure to meet Production Requirement A Member's voluntary or involuntary failure to meet Production Requirements and so declared by a resolution of the Board. c) Loss of Supply A Member's permanent Failure to Meet Production Requirements, or a portion thereof, and so declared by a resolution of the Board. Article 11: Independent Supply The Audit accurately identifies and quantifies Tukwila's Independent Supply for the purpose of establishing Cascade's supply commitment to Tukwila. Audit Acceptance Agreement Page 2 of 7 May 23, 2008 Article III: Supply Commitment Cascade's supply commitment, as provided in the Interlocal and further defined by the Audit, shall be implemented through the Points of Delivery that are identified in Exhibit A. Article IV: Wheeling All existing wheeling arrangements between Members or between Members and non- members as described in Exhibit A shall remain in effect. For future wheeling arrangements, Cascade shall pay wheeling charges when, in the judgment of the Board, a wheeling arrangement represents a cost effective way to provide water to a Member or non member. Article V: Points of Delivery Section 5.1 Cascade shall either own, or by contract with Seattle, have wholesale master meters at all points of delivery of the regional transmission system as set forth in Exhibit A. Section 5.2 Costs related to installation of future wholesale master meters initiated by Cascade shall be borne by Cascade. The cost of installing any future wholesale master meters not initiated by Cascade and not listed in Exhibit A shall be charged pursuant to Cascade's fiscal policies to the entity (Member or non member) receiving the water. Section 5.3 The hydraulic gradients for the points of delivery are established in Exhibit A. A Member may request changes to such hydraulic gradient(s) to avoid adverse impacts to their distribution system. Cascade shall assume the initial cost of any adjustments required at the Member supply connection to match the defined range. Cascade shall also assume the initial cost of any adjustments (within the Member's distribution system) resulting from changes to the defined hydraulic gradient range caused by Cascade. Thereafter, the cost of any subsequent adjustments shall be bome by each individual Member. Under emergency conditions or other unusual short-term operating situations, Cascade shall not be obligated to meet minimum hydraulic gradients. Article VI: RCFC Credits Independent Supply Production Requirements Loss Section 6.1 Award of Credits. According to the Audit, Tukwila is entitled to and shall have 0 credits against the Regional Capital Facilities Charge. Section 6.2 Production Requirements Waiver 6.2.1 Tukwila accepts the Audit and the Production Requirement established by the Audit and set forth in Exhibit A, and agrees to produce water from its Independent Supply in an amount at least sufficient to meet its Production Requirements. Audit Acceptance Agreement Page 3 of 7 May 23, 2008 6.2.2 The Board may temporarily modify or waive Production Requirements when: a. the modification or waiver will not result in any increased demand upon Cascade or any increased cost to Cascade; b. the modification or waiver is based upon unforeseen events such as equipment failure, natural disaster, or other situation that could not have been reasonably foreseen by Member(s); c. the modification or waiver is based upon a planned temporary interruption of production as might be needed to perform routine maintenance or modification to a Member's system, the impacts of which have been coordinated in advance with Cascade; d. the modification or waiver is warranted by considerations of equity and faimess as determined in the sole discretion of the Board; e. the modification or waiver is based upon an agreed demand mitigation plan submitted by a Member and accepted by the Board; or f. The modification or waiver is in effect only for a specified and limited (not to exceed one year) period of time. Section 6.3 Production Requirements Administration and Enforcement. Production Requirements shall be administered and enforced as follows: 6.3.1 Cascade will monitor Members' Independent Supply and Cascade's supply to Members through the collection of necessary reports and data. Cascade will evaluate Independent Supply production relative to Production Requirements and periodically report to Members on status. The frequency of such reports will be determined by practical timeframes for receipt and compilation of necessary data from regional and local sources. If a Member fails to meet Production Requirements, Cascade will notify the Member and the Board as soon as practical. 6.3.2 Each year, Cascade will periodically assess the supply and demand situation to determine whether Production Requirements may be waived or reduced based on a finding of surplus in water supply capacity or capability relative to demands. In the event of shortage conditions invoking shortage response, Cascade will work with Members to maximize those Members' reliance on Independent Supply while recognizing that concurrent demand reductions may cause de facto reductions in the ability to put Independent Supply to full productive use. 6.3.3 The Production Requirement shall be reduced pro rata to reflect a reduction in demand levels in any year. For this purpose, Cascade shall determine the actual Cascade usage per CERU for its collective Members, divide this usage by the standard usage per CERU established and used by Cascade, and multiply this ratio times the Production Requirement. This shall be done separately for annual and peak season demands and Production Requirements. 6.3.4 Shortfalls in production that are not waived by the Board or otherwise satisfied by any of the foregoing shall be documented by a resolution of the Board that shall impose penalties according to a graduated series of financial surcharges and operational sanctions, as follows: Audit Acceptance Agreement Page 4 of 7 May 23, 2008 Cascade Actions for Member Shortfall in Independent Supply Production Financial Response (applies to volume of shortfall) Peak Season Shortfall Frequency 'P occurrence in 20 -year rolling period 2nd occurrence in 20 -year rolling period 3' and subsequent occurrences in 20- year rolling period None Surcharge equal to 25% of Cascade's average cost per ccf delivered* Surcharge equal to 200% of Cascade's average cost per ccf delivered* Annual Shortfall None Surcharge equal to 5% of Cascade's average cost per ccf delivered* Surcharge equal to 80% of Cascade's average cost per ccf delivered* Operational Response Cascade notifies Member and Board adopts resolution declaring production failure Cascade notifies Member and Board adopts resolution declaring 2 production failure, imposing penalties, and detailing consequences of further failures Cascade notifies Member and Board adopts resolution declaring 3` production failure, imposing penalties, and waming that a.fourth failure will be deemed a Member declaration of "loss of supply" "average cost per ccf delivered" is defined as total annual Cascade Demand Share revenue divided by total annual Cascade volume delivered. Provided that only one occurrence of a shortfall in Independent Supply Production may be declared per year, and provided further that in the event of multiple shortfalls in the same year (e.g. both peak season and annual shortfalls), the financial penalty shall be the greater of the calculated penalties. 6.3.5 A resolution declaring a permanent Loss of Supply shall be adopted by the Board upon the 4 occurrence of a Failure to Meet Production Requirements in a 20 year rolling period. 6.3.6 Whenever a resolution declaring a Loss of Supply has been adopted by the Board, (a) the Member shall concur in the declaration of Loss of Supply and formally request an additional Full Supply Commitment from Cascade in accordance with Section 5.2.2 of the Interlocal; (b) Cascade shall, at the Member's expense, perform an audit according to the approved audit methodology to quantify Cascade's additional Full Supply Commitment to the Member; and (c) Cascade shall impose, by resolution of the Board, the applicable annual financial penalties provided for in Section 6.3.4 of this agreement for that Loss of Supply, until the Member submits to Cascade a formal request for an additional Full Supply Commitment according to the Interlocal. 6.3.7 Whenever a Member experiences a Loss of Supply, that Loss of Supply shall be documented in a resolution of the Board and copy provided to the Member. The resolution shall Audit Acceptance Agreement Page 5 of 7 May 23, 2008 state the basis for the Board's declaration. A resolution declaring a Loss of Supply may be rescinded upon a showing satisfactory to the Board of replacement of lost supply consistent with the requirements of the Interlocal. ARTICLE VII: General Section 7.1 Integrated Agreement. This Agreement implements provisions of the Interlocal and shall be construed and interpreted to that effect; otherwise, this document and all attachments integrates all prior oral and written representations between the parties and is the complete agreement between Cascade and Tukwila conceming the Audit of Tukwila's public water system. Section 7.2 Amendment. Except as otherwise provided, this Audit Agreement may be amended only in writing and only if such writing is signed by the Member and by Cascade; provided, however, an approved water system plan that modifies the Member's service area shall amend the service area described in Section 2.1 pending a further Audit of the Member's public water system in accordance with the Interlocal. Section 7.3 Interpretation and Venue. This Audit Agreement shall be interpreted and construed according to the laws of the State of Washington; provided that the Interlocal, the Audit, and applicable Cascade resolutions may be consulted as aids to interpretation and construction. Any action to enforce this Agreement shall be brought in King County, Washington. Section 7.4 Effective Date. This Audit Agreement shall be effective on the date that it is approved by resolution of the Board. CASCADE WATER ALLIANCE By: Chair, Board of Directors Attest: Secretary, Board of Directors Date Date Audit Acceptance Agreement Page 6 of 7 May 23, 2008 MEMBER By: Mayor or City Manager or President of Commissioners Attest: Date Date Audit Acceptance Agreement Page 7 of 7 May 23, 2008 MEMBERSHIP AUDIT ACCEPTANCE AGREEMENT Between CASCADE WATER ALLIANCE And CITY OF TUKWILA MEMBER May 23, 2008 Cascade Water Alliance "Cascade and the City of Tukwila "Tukwila enter into this Membership Audit Acceptance Agreement (the "Audit Agreement with respect to Tukwila's public water system. Article I: Authority Audit Predicate Audit Definitions Section 1.1 Authority. Article V, Section 5.2.2 of the Cascade Water Alliance Amended and Restated Interlocal Contract, dated December 15, 2004, (the "Interlocal requires an audit of each Member's water system and Independent Supply, if any, for the purposes of (1) determining Cascade's supply obligation to that Member, (2) recognizing when the Member has lost Independent Supply, and (3) allocating credits against the Member's Regional Capital Facility Charge for its Independent Supply. Section 1.2 Audit Predicate. Cascade's supply obligations (water quantity and quality) and related supply obligations and the Member's obligations concerning planning, conservation, shortage management, Independent Supply, and payment of Rates and Charges are established by the Interlocal. This Audit Agreement is intended to implement, not modify the Interlocal, and nothing herein shall change the benefits or obligations of a party to the Interlocal. Section 1.3 Audit. This Audit Agreement incorporates and adopts the audit of Tukwila's public water system, dated May 23, 2008, performed by Cascade Water Alliance (the "Audit The Audit was performed according to a methodology adopted by the Board of Directors of Cascade (the Board') in Resolution No. 2008 -04. The original Audit is on file with Cascade. A true and accurate copy is attached hereto as Exhibit A. Section 1.4 Definitions. Capitalized terms not otherwise defined in this Agreement shall have the meaning assigned to them in the Interlocal. The following words have the following meanings when used in this Agreement: a) Production Requirement The quantity (seasonal and annual) of water a Member is required to supply from its Independent Supply as established by the Audit and set forth in Section V of Exhibit A. b) Failure to meet Production Requirement A Member's voluntary or involuntary failure to meet Production Requirements and so declared by a resolution of the Board. c) Loss of Supply A Member's permanent Failure to Meet Production Requirements, or a portion thereof, and so declared by a resolution of the Board. Article I1: Independent Supply The Audit accurately identifies and quantifies Tukwila's Independent Supply for the purpose of establishing Cascade's supply commitment to Tukwila. Audit Acceptance Agreement Page 2 of 7 May 23, 2008 Article III: Supply Commitment Cascade's supply commitment, as provided in the Interlocal and further defined by the Audit, shall be implemented through the Points of Delivery that are identified in Exhibit A. Article IV: Wheeling All existing wheeling arrangements between Members or between Members and non- members as described in Exhibit A shall remain in effect. For future wheeling arrangements, Cascade shall pay wheeling charges when, in the judgment of the Board, a wheeling arrangement represents a cost effective way to provide water to a Member or non member. Article V: Points of Delivery Section 5.1 Cascade shall either own, or by contract with Seattle, have wholesale master meters at all points of delivery of the regional transmission system as set forth in Exhibit A. Section 5.2 Costs related to installation of future wholesale master meters initiated by Cascade shall be borne by Cascade. The cost of installing any future wholesale master meters not initiated by Cascade and not listed in Exhibit A shall be charged pursuant to Cascade's fiscal policies to the entity (Member or non member) receiving the water. Section 5.3 The hydraulic gradients for the points of delivery are established in Exhibit A. A Member may request changes to such hydraulic gradient(s) to avoid adverse impacts to their distribution system. Cascade shall assume the initial cost of any adjustments required at the Member supply connection to match the defined range. Cascade shall also assume the initial cost of any adjustments (within the Member's distribution system) resulting from changes to the defined hydraulic gradient range caused by Cascade. Thereafter, the cost of any subsequent adjustments shall be borne by each individual Member. Under emergency conditions or other unusual short-term operating situations, Cascade shall not be obligated to, meet minimum hydraulic gradients. Article VI: RCFC Credits Independent Supply Production Requirements Loss Section 6.1 Award of Credits. According to the Audit, Tukwila is entitled to and shall have 0 credits against the Regional Capital Facilities Charge. Section 6.2 Production Requirements Waiver 6.2.1 Tukwila accepts the Audit and the Production Requirement established by the Audit and set forth in Exhibit A, and agrees to produce water from its independent Supply in an amount at least sufficient to meet its Production Requirements. Audit Acceptance Agreement Page 3 of 7 May 23, 2008 6.2.2 The Board may temporarily modify or waive Production Requirements when: a. the modification or waiver will not result in any increased demand upon Cascade or any increased cost to Cascade; b. the modification or waiver is based upon unforeseen events such as equipment failure, natural disaster, or other situation that could not have been reasonably foreseen by Member(s); c. the modification or waiver is based upon a planned temporary interruption of production as might be needed to perform routine maintenance or modification to a Member's system, the impacts of which have been coordinated in advance with Cascade; d. the modification or waiver is warranted by considerations of equity and fairness as determined in the sole discretion of the Board; e. the modification or waiver is based upon an agreed demand mitigation plan submitted by a Member and accepted by the Board; or f. The modification or waiver is in effect only for a specified and limited (not to exceed one year) period of time. Section 6.3 Production Requirements Administration and Enforcement. Production Requirements shall be administered and enforced as follows: 6.3.1 Cascade will monitor Members' Independent Supply and Cascade's supply to Members through the collection of necessary reports and data. Cascade will evaluate Independent Supply production relative to Production Requirements and periodically report to Members on status. The frequency of such reports will be determined by practical timeframes for receipt and compilation of necessary data from regional and local sources. If a Member fails to meet Production Requirements, Cascade will notify the Member and the Board as soon as practical. 6.3.2 Each year, Cascade will periodically assess the supply and demand situation to determine whether Production Requirements may be waived or reduced based on a finding of surplus in water supply capacity or capability relative to demands. In the event of shortage conditions invoking shortage response, Cascade will work with Members to maximize those Members' reliance on Independent Supply while recognizing that concurrent demand reductions may cause de facto reductions in the ability to put Independent Supply to full productive use. 6.3.3 The Production Requirement shall be reduced pro rata to reflect a reduction in demand levels in any year. For this purpose, Cascade shall determine the actual Cascade usage per CERU for its collective Members, divide this usage by the standard usage per CERU established and used by Cascade, and multiply this ratio times the Production Requirement. This shall be done separately for annual and peak season demands and Production Requirements. 6.3.4 Shortfalls in production that are not waived by the Board or otherwise satisfied by any of the foregoing shall be documented by a resolution of the Board that shall impose penalties according to a graduated series of financial surcharges and operational sanctions, as follows: Audit Acceptance Agreement Page 4 of 7 May 23, 2008 Cascade Actions for Member Shortfall in Independent Supply Production Financial Response (applies to volume of shortfall) Peak Season Shortfall Frequency 9 occurrence in 20- year rol ling period 2nd occurrence in 20 -year rolling period 3 and subsequent occurrences in 20- year rolling period Audit Acceptance Agreement None Surcharge equal to 25% of Cascade's average cost per ccf delivered* Surcharge equal to 200% of Cascade's average cost per ccf delivered* Annual Shortfall None Surcharge equal to 5% of Cascade's average cost per ccf delivered* Surcharge equal to 80% of Cascade's average cost per ccf delivered* Operational Response Cascade notifies Member and Board adopts resolution declaring production failure Cascade notifies Member and Board adopts resolution declaring 2" production failure, imposing penalties, and detailing consequences of further failures Cascade notifies Member and Board adopts resolution declaring 3 production failure, imposing penalties, and waming that a fourth failure will be deemed a Member declaration of "loss of supply" "average cost per ccf delivered" is defined as total annual Cascade Demand Share revenue divided by total annual Cascade volume delivered. Provided that only one occurrence of a shortfall in Independent Supply Production may be declared per year, and provided further that in the event of multiple shortfalls in the same year (e.g. both peak season and annual shortfalls), the financial penalty shall be the greater of the calculated penalties. 6.3.5 A resolution declaring a permanent Loss of Supply shall be adopted by the Board upon the 4 occurrence of a Failure to Meet Production Requirements in a 20 year rolling period. 6.3.6 Whenever a resolution declaring a Loss of Supply has been adopted by the Board, (a) the Member shall concur in the declaration of Loss of Supply and formally request an additional Full Supply Commitment from Cascade in accordance with Section 5.2.2 of the Interlocal; (b) Cascade shall, at the Member's expense, perform an audit according to the approved audit methodology to quantify Cascade's additional Full Supply Commitment to the Member; and (c) Cascade shall impose, by resolution of the Board, the applicable annual financial penalties provided for in Section 6.3.4 of this agreement for that Loss of Supply, until the Member submits to Cascade a formal request for an additional Full Supply Commitment according to the Interlocal. 6.3.7 Whenever a Member experiences a Loss of Supply, that Loss of Supply shall be documented in a resolution of the Board and copy provided to the Member. The resolution shall Page 5 of 7 May 23, 2008 state the basis for the Board's declaration. A resolution declaring a Loss of Supply may be rescinded upon a showing satisfactory to the Board of replacement of lost supply consistent with the requirements of the Interlocal. ARTICLE VII: General Section 7.1 Integrated Agreement. This Agreement implements provisions of the Interlocal and shall be construed and interpreted to that effect; otherwise, this document and all attachments integrates all prior oral and written representations between the parties and is the complete agreement between Cascade and Tukwila concerning the Audit of Tukwila's public water system. Section 7.2 Amendment. Except as otherwise provided, this Audit Agreement may be amended only in writing and only if such writing is signed by the Member and by Cascade; provided, however, an approved water system plan that modifies the Member's service area shall amend the service area described in Section 2.1 pending a further Audit of the Member's public water system in accordance with the Inter local. Section 7.3 Interpretation and Venue. This Audit Agreement shall be interpreted and construed according to the laws of the State of Washington; provided that the Interlocal, the Audit, and applicable Cascade resolutions may be consulted as aids to interpretation and construction. Any action to enforce this Agreement shall be brought in King County, Washington. Section 7.4 Effective Date. This Audit Agreement shall be effective on the date that it is approved by resolution of the Board. CASCADE WATER ALLIANCE By: Chair, Board of Directors Attest: Secretary, Board of Directors Date Date" Audit Acceptance Agreement Page 6 of 7 May 23, 2008 MEMBER By: Mayor or City Manager or President of Commissioners Attest: Date Date Audit Acceptance Agreement Page 7 of 7 May 23, 2008 To: Mayor Haggerton From: Public Works Directo Date: July 2, 2008 Subject: Utilities Policy Issues ISSUE INFORMATION MEMORANDUM Identify and discuss utility policies that could have an impact upon the budget and Capital Improvement Program. DISCUSSION Enterprise Fund Budget Water, sewer and surface water: o Establish a sufficient reserve amount that would allow for project contingencies and emergency response. o Establish sewer rates that are based upon consumption. Asset Management: o Inventory all City -owned and maintained utility facilities and systems asset type, location, age, and condition. o Establish dedicated utility revenue source adequate to allow replacement of infrastructure when it reaches the end of its useful life. Ensure the average age of each utility's infrastructure is not increasing. National Pollutant Discharge Elimination System: o Fully implement the City's National Pollutant Discharge Elimination System NPDES) Surface Water Management Plan. o Establish new operations and maintenance procedures that comply with NPDES. Surface Water Systems: o Establish a list and implementation schedule to retrofit private and public outfalls that restrict or limit fish passage. RECOMMENDATION For discussion. P: \Utilities Info Memo\Info Memo Utilities Policy Issues.doc