HomeMy WebLinkAboutUtilities 2011-11-15 Item 2B - Interlocal Agreement - Amendment to Cascade Water Alliance ContractCity of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
TO: Mayor Haggerton
UTILITIES COMMITTEE
FROM: Bob Giberson, Public Works Director
DATE: November 10, 2011
SUBJECT: Cascade Water Alliance Interlocal Contract Amendment
ISSUE
The Cascade Water Alliance Board has adopted Resolution 2011 -17 to amend the 2004
Amended and Restated Interlocal Contract. This Contract is to be further ratified by each of the
member agencies.
BACKGROUND
The City of Tukwila receives its wholesale water supply as a member of the Cascade Water
Alliance (CWA). The initial Interlocal Agreement was first signed in 1999. Since then Cascade's
administrative needs have changed. Members pay administrative dues based on the number of
Cascade Equivalent Residential Units (CERU) they serve.
The economic slowdown in the region's growth has affected forecasts anticipated among the
growth agencies. This has caused the revenue from the Regional Capital Facilities Charge
(RCFC) to be materially below forecasts. In response to the overall CWA revenue model, an
equity redistribution and reallocation is needed to maintain member parity so that member costs
are more stable and less likely to be affected by future new water charges.
DISCUSSION
The Board of Directors of CWA which represents the 8- member agencies has unanimously
voted to make changes in the Interlocal Agreement. Section 4.7 of the Amended and Restated
Interlocal Contract (second paragraph) is to be amended in the following format:
Each Member must pay annual dues to defray part or all of Cascade's administrative costs
based on the number of CERU's served by its water system, regardless of water usage or
capacity, and regardless of whether those units are served by the Supply System or by
Independent Supply. Total administrative dues collected from all Members may not exceed
the greatep of $1,000,000 OF 5 9% of Cascade's annual revenue requirement dew+
This limit may be amended in the budaet by a 65% Dual Maioritv Vote of the Board.
The Board may establish minimum annual dues per Member and may provide that less than
all of the Member's CERU's be taken into account in establishing dues.
RECOMMENDATION
The Council is being asked to approve the Amended and Restated Interlocal Contract with
Cascade Water Alliance and consider this item at the November 28, 2011 Committee of the
Whole meeting and subsequent December 5, 2011 Regular Meeting.
Attachments: CWA Letter to Mayor Haggerton dated 11 -4 -11
Amended and Restated Interlocal Contract
W: \Shared Copy Only \TC -UC \Info CWA Amended Interlocal 11 -10 -11 Sb.Docx
13
November 4"20ll
1|400 sE S"ntrec!—syitewo— Bellevue, mm9800«
Phone 4284530930— Fo,�4cs*o3uAu3
14
Jim Haggerton
Mayor
��nnfTobvvlu
B^�nuoxD/mcmra
82O0SouthueoterBoulevard
o»*/'
Tukwila, WA 98188
unvd wo,mn
oumm/ms,ov�aam�aws�
Dear Mayor Haggcrtou:
vvo��'mSe�e,D/om�
Vice Chair
At its regular meeting no October 26, 2011, the Board of Directors of the Cascade
�vrn�am^mno
mayn,Cw,,/Remnono
Water Alliance unanimously adopted Resolution No. 20ll-l7for the purpose of
adopting uo Amended and Restated /nArr/ocu/(]»nti-aoY. /l copy nf the Board's
seureta,��,e*evre,
^M*oo8enon
approval Resolution is enclosed.
wuyrr City u;Tukwila
Graotouou/nou,
Adoption of the Amended and Restated lm/erJomz/ Conti ina two-step process.
cnunm/memue/ City of
Once adopted hya05% Dual Majority \/utnofdzsBourd,ouzoydnoeutstotbc
e�x�vxe
>nterlooal Contract must be ratified by 65%, as nocuourod by Dual Majority Vote of
oavium»is*t
the Members' legislative oo1horitieo,vi�ioone hundred and 1weuty(l�O)days.
cumm/as/oner.
CoVnmmow,/;'D.smv�
Cascade relied upon the amended language in establishing its ZOl2 Rates and
Charges, dhxxcfhr*, vvcrcopeutfuDy request that your legimludvcantborihmondifvthe
�oxrT��on,
Cu.�no/prenmen- city
Amended and Restated lntor/oou/ Contract b9 December gl,2011.
|s,aqoah
pen,y,Swoel
Also enclosed for presentation to, and ratification by your le body are two
orpvtvPvlrv"' City of
originals of the Amended and R( stated Interlocal Contract, dutcdOctober 20,20ll,
Kirkland
executed hyCascade. Once your legislative body has acted to ratify the Amended
Jon Ault
and Restated lmtemhcu/Contract, please have both copies executed. Return one
cumm/*s|one, Skyway
wa'e,a Sewer District
executed copy and the resolution ozotfioiuJ action of your legislative body
approving the agreement to Cascade. Once Cascade has received all the signature
pages, which are being executed in counterparts, Cascade will send each Member
fully executed document.
om°fExummve Oxirw,
There are a series of memorandum available that summarize the changes made to
Chuck Clarke,
the A mended and Restated Interlocal Contract, as well as other actions taken by the
Board ou October 26,2011, related tu Cascade's Rates and Charges. If these
dooun\sotm would be useful in providing your legislative body with additional
background on the nature of the amendments, please let coo know and l will provide
any additional material you require.
1|400 sE S"ntrec!—syitewo— Bellevue, mm9800«
Phone 4284530930— Fo,�4cs*o3uAu3
14
Aft er recording, return to:
GordonDerr LLP
2025 First Avenue, Suite 500
Seattle, Washington 98121
(206) 382 -95
WASHINGTON STATE RECORDER'S Cover Sheet (RCW 65.04)
DOCUMENT TITLES) (or transactions contained therein):
INTERLOCAL CONTRACT
REFERENCE NUMBER(S) OF DOCUMENTS ASSIGNED OR RELEASED:
N/A
Additional reference #s on page of document(s)
GRANTOR(S) (Last name first, then first name and initials)
Cascade Water Alliance/Members of Cascade Water Alliance
Additional names on page of document
GRANTEE(S) (Last name first, then first name and initials)
Cascade Water Alliance/Members of Cascade Water Alliance
Additional names on page of document
LEGAL DESCRIPTION (abbreviated: i.e., lot, block, plat or section, township, range)
N/A
Additional legal is on page of document
ASSESSOR'S PROPERTY TAX PARCEL /ACCOUNT NUMBER
N/A
Assesso Tax not yet assigned
15
I la 0 01
Amended and Restated
October 26, 2011
Cascade Interlocal Contract i
Amended and Restated
October 26, 2011
16
TABLE OF CONTENTS
ARTICLE 1. AGREEMENT l
ARTICLE2. DEFINITIONS ..............................1
ARTICLE 3. FORMATION OF ENTITY; PURPOSE AND POWERS 7
Section3.1
Formation ..............................7
Section3.2
Membership
7
Section 3.3
Conversion to Municipal Corporation Status
9
Section3.4
Purposes 9
Section3.5
Powers .............................10
ARTICLE 4. ORGANIZATION STRUCTURE; BOARD .............................11
Section 4.1 Composition, ByLaws and Meetings l 1
Section 4.2 Powers of the Board .............................12
Section4.3 Voting .............................12
Section 4.4 Officers and Committees .............................12
Section 4.5 Executive Committee .............................13
Section4.6 Staff, Consultants and Contractors .............................14
Section 4.7 Budget; Dues; Financial Management .............................14
ARTICLE 5. ASSET DEVELOPMENT AND SUPPLY COMMITMENT .............................15
Section 5.1 Property Acquisition, Ownership and Disposition .............................15
Section5.2 Supply Commitment .............................16
Section 5.2.1 Commitment to Members .............................16
Section 5.2.2 Additional Rules for Members Retaining Independent Supply .....................18
Section 5.2.3 Additional Rules for Source Exchange .............................19
Section 5.3 Financing of Assets 20
Section 5.3.1 Issuance of Bonds 20
Section 5.3.2 Pledge of Revenues 21
Section 5.3.3 Continuing Disclosure .............................23
Section 5.3.4 Preservation of Tax Exemption for Interest on the Bonds 23
Cascade Interlocal Contract
Amended and Restated
October 26, 2011
17
Section 5.3.5 Additional Certificates
23
Section 5.4
Supply Expansions and System Extensions .............................23
Payment Procedures; Default; Step -Up Provisions
Section 5.5
Regional Capital Facilities Charges
24
Section 5.6
Transfer Upon Mergers, Consolidations and Assumptions .............................26
ARTICLE8.
ARTICLE 6.
NEW INDEPENDENT SUPPLY
27
ARTICLE7.
ASSET MANAGEMENT
27
Section 7.1
Supply System Management .............................28
Section 8.3
Section7.2
Conservation
28
Section 7.3 Shortages and Emergency .............................29
Section7.3.1 Shortages 29
Section7.3.2. Emergency .............................30
Section7.4 Water Quality .............................30
Section 7.5 Water Supply Rates and Charges 31
Section 7.6 New Water Surcharge 33
Section 7.7 Franchises and Easements 33
Section 7.8
Sales of Water to Non Members
33
Section 7.9
Payment Procedures; Default; Step -Up Provisions
34
Section 7.9.1 Invoice and Payment
34
Section 7.9.2 Default and Step- Up
35
ARTICLE8.
PLANNING
36
Section8.1
Water Supply Plan
36
Section 8.2
Watershed Management Plan
37
Section 8.3
System Reliability Methodology
37
ARTICLE9.
FILINGS .............................37
ARTICLE 10.
DURATION AND DISSOLUTION; WITHDRAWAL
37
Section10.1
Duration
38
Section10.2
Withdrawals
38
Section10.3
Dissolution
40
Section10.4
Successor Entity .............................40
ARTICLE11.
AMENDMENTS
41
ARTICLE 12.
APPLICABLE LAW AND VENUE .............................41
Cascade Interlocal Contract Hi
Amended and Restated
October 26, 2011
18
ARTICLE 13. NO THIRD PARTY BENEFICIARIES 41
ARTICLE 14. SEVERABILITY 41
ARTICLE 15. ENTIRE AGREEMENT .............................42
ARTICLE 16. EXECUTION 44
Cascade Interlocal Contract iv
Amended and Restated
October 26, 2011
19
CASCADE WATER ALLIANCE
INTERLOCAL CONTRACT
Recitals
WHEREAS, the Cascade Water Alliance, an intergovernmental organization created
by Interlocal Contract effective April 1, 1999 (as amended July 2000 and November 2002) to
further the interests of its Members with respect to water supply and to work cooperatively
with other water supply entities in the region; and
WHEREAS, Members of the Cascade Water Alliance have determined to amend the
Cascade Water Alliance's Interlocal Contract to better facilitate the purpose of the Cascade
Water Alliance;
NOW, THEREFORE, it is agreed as follows:
ARTICLE 1. Agreement
The Cascade Interlocal Contract, effective April 1, 1999, and entered into under
authority of the Interlocal Cooperation Act, Chapter 39.34 RCW is amended and re- stated as
provided herein.
ARTICLE 2. Definitions
"Asset Transfer Agreement" means an agreement between Cascade and a Member
by which the Member transfers title to Water Supply Assets to Cascade, with or without
monetary consideration, to be operated and maintained as part of the Cascade Water System.
"Authorized Issuer" means either: (a) Cascade (or a successor entity); or (b) a
Member or other entity authorized to issue Bonds for the benefit of Cascade approved by
Resolution of the Board.
"Board" means the Board of Directors of Cascade.
Cascade Interlocal Contract 1
Amended and Restated
October 26, 2011
20
"Bonds" means short-term or long -term bonds, notes, warrants, certificates of
indebtedness, or other obligations issued by, or on behalf of Cascade.
"ByLaws" means the ByLaws of Cascade, as adopted and amended by the Board.
"Cascade" means Cascade Water Alliance.
"Cascade ERUs" "CERUs means equivalent residential units, calculated
according to the Regional Capital Facilities Charge Methodology.
"Cascade Source Exchange Program" means a program adopted by Resolution of
the Board for the replacement of all or a portion of a public water systems existing water
supply to benefit stream flow and fish without serving growth or increasing that system's
water supply. A program utilizing Lake Tapps Water Supply shall include the terms and
conditions for source exchange contained in the Lake Tapps' Water Right Report of
Examination.
"Cascade Source Exchange Program Agreement" means an agreement between
Cascade and a Member or another public water supplier to implement the Cascade Source
Exchange Program.
"Cascade Supply Date" means the date for the Founding Members and each new
Member, established by Resolution of the Board, upon which Cascade undertakes a Supply
Commitment.
"Contract" means this Cascade Water Alliance Interlocal Contract.
"Demand Share" means either a Member's current share of water provided through
the Supply System, or estimated share of water to be provided through the Supply System,
Cascade Interlocal Contract -2-
Amended and Restated
October 26, 2011
21
whether Full Supply or Interruptible Supply, expressed in millions of gallons per day.
Demand Share is calculated according to the Rate Calculation Methodology.
"Dual Majority Vote" means Board approval of a proposal on the basis of a simple
majority of all Members, allowing one vote per Member, together with a simple majority of
all Members on the basis of each Member's Weighted Vote. A "simple majority" means a
majority of all Members of Cascade, not just the Members present and voting.
11 65% Dual Majority Vote" means Board approval of a proposal on the basis of a
65% supermajority of all Members, allowing one vote per Member, together with 65%
supermajority of all Members on the basis of each Member's Weighted Vote. A
supermajority" means 65% of all Members of Cascade, not just the Members present and
voting.
"Founding Member" means the City of Bellevue, Covington Water District, the City.
of Issaquah, the City of Kirkland, the City of Redmond, Sammamish Plateau Water and
Sewer District, Skyway Water and Sewer District, and the City of Tukwila.
"Gross Cascade Revenue" means all of the earnings and revenues received by
Cascade from any source whatsoever including but not limited to: (a) Member Charges; (b)
revenues from the sale, lease or furnishing of other commodities, services, properties or
facilities; (c) the receipt of earnings from the investment of money in any maintenance fund or
similar fund; (d) and withdrawals from any rate reserve or rate stabilization fund or account.
However, Gross Cascade Revenue shall not include: (a) principal proceeds of Bonds
or any other borrowings, or earnings or proceeds from any investments in a trust, defeasance
or escrow fund created to defease or refund obligations relating to the Water Supply System
Cascade Interlocal Contract .3-
Amended and Restated
October 26, 2011
22
(until commingled with other earnings and revenues included in Gross Cascade Revenue) or
held in a special account for the purpose of paying a rebate to the United States Government
under the Code; (b) taxes and other income and revenue which may not legally be pledged for
revenue bond debt service; (c) improvement district assessments; (d) federal or state grants
allocated to capital projects; (e) payments under Bond Insurance or other credit enhancement
policy or device; (f) insurance or condemnation proceeds used for the replacement of capital
projects or equipment; (g) earnings in any construction fund or bond redemption fund; (h)
deposits to any rate reserve or rate stabilization fund or account; or (i) any revenues generated
by any Independent Supply except those amounts that are payable to Cascade pursuant to this
Contract or another interlocal agreement.
"Independent Supply" or "Independent Supplies" means a Member's Water
Supply Assets that are not part of the Supply System.
"Member" or "Members" means one or more member agencies of Cascade.
"Member Charges" means all payments that Cascade Members are required by this
Contract to make to Cascade, including but not limited to all Rates and Charges, RCFCs,
dues, assessments and other payments from Members.
"Net Cascade Revenue" means Gross Cascade Revenue less Operations and
Maintenance Costs.
"Non- Member" means any person or agency that is not a party to this Contract.
"Operations and Maintenance Costs" or "O &M Costs" means all expenses
incurred by Cascade to operate and maintain the Supply System in good repair, working order
and condition, including without limitation, payments made to any other public or private
Cascade Interlocal Contract -4-
Amended and Restated
October 26, 2011
23
entity for water or other utility service. Except as approved by the Board, Operations and
Maintenance Costs shall not include any depreciation, capital additions or capital
replacements to the Supply System.
"Rates and Charges" means the rates and charges (not including RCFCs) chargeable
to each Member using the Rate Calculation Methodology plus any late payment or other
charge that may be due.
"Rate Calculation Methodology" means the method of setting Rates and Charges
adopted by the Board in accordance with Section 7.5
"Regional Capital Facilities Charges" ("RCFCs") means the charges to each
Member for new CERUs connected to that Member's water distribution system.
"Regional Capital Facilities Charge Methodology" "RCFC Methodology
means the method of determining the RCFCs adopted by the Board in accordance with
Section 5.5.
"Satellite Systems" means water supply facilities identified as such by the Board,
including but not limited to facilities that serve a portion of a Member's customers but that are
not part of the Member's main water system.
"Seattle Contract Purveyor" or "Seattle Contract Purveyors". means a Member
that is or was a party to The City of Seattle Water Purveyor Contracts, Version A or Version
B, dated November 1981 (as amended) executed prior to July 1, 1998.
"Supply Commitment" means the obligation undertaken by Cascade, established by
Resolution of the Board to supply water to a Member. With respect to Members, that
Cascade Interlocal Contract -5-
Amended and Restated
October 26, 2011
24
obligation shall be characterized as "Full Supply Commitment," or an "Interruptible
Supply Commitment" defined as follows:
"Full Supply Commitment" for any or all of a Member's water needs means that
those needs, as projected in the Member's lawfully adopted water supply plan, shall be met
from the Supply System, net of independent supply and subject to the other limitations
established in this agreement, on an equal parity with all other Full Supply Commitments, and
with a guaranteed priority no lower than for any other Supply Commitment made by Cascade;
provided that no Member is guaranteed any given amount of supply or capacity.
"Interruptible Supply Commitment" means a supply of all or part of a Member's
water needs from the Supply System on an as- available basis on a lower priority than any Full
Supply Commitment.
The Supply Commitment for a Member shall be defined by this Interlocal Contract,
the terms and conditions of membership, and the Supply Commitment resolution.
"Supply System" means the Water Supply Assets owned or controlled by Cascade.
"Water Supply Assets" means tangible and intangible assets usable in connection
with the provision of water supply, including without limitation, real property, physical
facilities (e.g., dams, wells, treatment plants, pump stations, reservoirs, and transmission
lines), water rights, capacity and/or contractual rights in facilities or resources owned by other
entities, and investments in conservation programs and facilities.
"Watershed Management Plan" means a plan adopted by Cascade for purposes of
regional water supply, water transmission, water quality or protection, or any other water-
related purpose, including but not limited to the plans identified in RCW 39.34.190(3).
Cascade Interlocal Contract -6-
Amended And Restated
October 26, 2011
25
"Water Supply Plan" means the Cascade Regional Water Supply Plan (which may
include the Cascade Watershed Management Plan) adopted by the Board as provided in
Section 8.1 and 8.2.
"Weighted Vote" means a vote in which each Member's vote is counted according to
the Member's Demand Share, but no Member shall have a Weighted Vote of less than one.
ARTICLE 3. Formation of Entity; Purpose and Powers
Section 3.1 Formation. The Cascade Water Alliance was created on April 1, 1999
as a public body and an instrumentality of its Members, which exercises essential
governmental functions on its Members' behalf as authorized by the Interlocal Cooperation
Act (RCW 39.34). Cascade is incorporated under RCW 39.34.040(3) as a public nonprofit
corporation in the manner set forth in RCW 24.03 or 24.06 and it may, with Board approval,
be incorporated as a partnership in the manner set forth in RCW 25.04, or the Board may
organize the form of Cascade in any other manner permitted by law. In addition to its status
under any other applicable law, Cascade shall constitute a "watershed management
partnership" as provided in Chapter 39.34 RCW. The Board may approve the filing of
Articles of Incorporation or similar documents in connection with incorporating Cascade or
organizing it in some other manner.
Section 3.2 Membership. Subject to restrictions on future Cascade water rights, or
to limitations upon water's place of use imposed by contract or permit, any municipal water
utility serving within the Central Puget Sound Region may be admitted to Cascade. The
decision to admit new Members rests with the sole discretion of the Board, which shall
Cascade Interlocal Contract -7-
Amended and Restated
October 26, 2011
26
determine whether to extend a membership offer taking into consideration the audit findings,
Cascade water resources, and any other factors the Board deems advisable.
When a municipality applies for membership, Cascade shall conduct a water supply
audit according to the methodology and within the period determined by the Board. Audit
results shall be provided to the Board and to the applicant.
If a membership offer is extended, it shall address the nature of the Water Supply
Assets being transferred or retained and the "value" of those assets in terms of the calculation
of an applicant's Demand Share, RCFCs and other matters relating to the rights and
obligations of the applicant and Cascade, which must be recorded in the form that the Board
determines and which will constitute, along with this Contract, the conditions under which an
applicant becomes a Member of Cascade. An applicant for membership shall be admitted by
adoption of a Resolution of the Board accepting the application for membership and
incorporating the terms and conditions of membership.
Each membership application must be accompanied by a nonrefundable application
fee based on the cost of the audit and other costs related to the admission of a new Member or
a request for new supply. The Board shall set the application fee for each applicant based on
the estimated cost of processing the application, including the cost of the audit.
As a condition of membership, each new Member admitted to Cascade shall, in
addition to any other applicable fees, rates, charges or assessments, pay to Cascade the
membership fee, as established by the Board.
Cascade Interlocal Contract -8-
Amended and Restated
October 26, 2011
27
If an applicant's planning process or plans are materially out of compliance with the
requirements of the Growth Management Act, the Board may condition an offer of
membership upon the applicant's compliance with that act.
Section 3.3 Conversion to Municipal Corporation Status. In accordance with
Section 10.4, Cascade may be converted into a separate municipal corporation if, and as
permitted by law. Upon the creation of such a separate municipal corporation, all Cascade
rights and obligations and all Member rights an obligations under this Contract shall transfer
to that new municipal corporation.
Section 3.4 Purposes. Cascade's purposes include only those related to water
resources, and do not include the provision of other general services to the public, and are to:
a. provide a safe, reliable and high quality drinking water supply to meet the current
and projected demands of Cascade Members serving the Central Puget Sound
Region, and for non Members as determined by Cascade, and to carry out this task
in a coordinated, cost effective, and environmentally sensitive manner;
b. develop, contract for, manage, acquire, own, maintain and operate Water Supply
Assets, including without limitation, surface water supplies, groundwater supplies,
reclaimed water supplies, and other water supply resources as determined by the
Board;
c. contract with Seattle to transfer to Cascade and to modify Seattle's rights and
duties with respect to Seattle Contract Purveyors;
d. contract for, or assume certain contractual rights and duties related to the Tacoma
Second Supply Pipeline project;
e. purchase and provide water supply, transmission services, treatment facilities and
other related services;
f. provide conservation programs to promote the wise and efficient use of resources;
g. carry out emergency water supply and shortage management programs for its
Members when demands exceed available supply;
Cascade Interlocal Contract -9-
Amended and Restated
October 26, 2011
28
I coordinate and plan cooperatively with other regional or local water utilities and
other entities to maximize supply availability and to minimize system costs;
i. develop a Water Supply Plan addressing the needs of its Members and develop a
Watershed Management Plan serving the needs of its Members and Cascade itself
and develop a regional water supply plan with other water providers as Cascade
may find convenient or necessary to meet regional, state and federal planning
requirements, and to take a leadership role in developing and coordinating those
supply plans;
j. share costs and risks among Members commensurate with benefits received; and
k. carry out, or to further other water supply purposes that the Members determine,
consistent with the provisions of this Contract.
Section 3.5 Powers. To further its purposes, Cascade has the full power and
authority to exercise all powers authorized or permitted under RCW 39.34 and any other laws
that are now, or in the future may be, applicable or available to Cascade and to engage in all
activities incidental or conducive to the attainment of the purposes set forth in Section 3.4 of
this Contract, including but not limited to the authority to:
a. acquire, construct, receive, own, manage, lease and sell real property, personal
property, intangible property and other Water Supply Assets;
b. operate and maintain facilities;
c. enter into contracts;
d. hire and fire personnel;
e. sue and be sued;
f. exercise the power or eminent domain (through its Members at their individual
discretion, unless and until Cascade has that power under applicable law);
g. impose, alter, regulate, control and collect rates, charges, and assessments,
h. purchase and sell water and services within and outside the geographical
boundaries of its Members;
Cascade lnterlocal Contract -10-
Amended and Restated
October 26, 2011
29
i. borrow money (through its Members or other entities at their individual discretion
or as authorized by Chapter 39.34 RCW now or in the future), or enter into other
financing arrangements;
j. lend money or provide services or facilities to any Member, other governmental
water utilities, or governmental service providers;
k. invest its funds;
1. establish policies, guidelines, or regulations to carry out its powers and
responsibilities;
m. purchase insurance, including participation in pooled insurance and self insurance
programs, and indemnify its Members, officers and employees in accordance with
law;
n. exercise all other powers within the authority of, and that may be exercised
individually by all of its Members with respect to water supply, conservation,
reuse, treatment and transmission, or any of the other purposes set forth in Section
3.4;
o. exercise all other powers within the authority of, and that may be exercised
individually by all its Members with respect to watershed planning and
management; and
p. exercise all other corporate powers that Cascade may exercise under the law
relating to its formation and that are not inconsistent with this Interlocal Contract
or with Chapter 39.34 RCW or other applicable law.
ARTICLE 4. Organization Structure; Board
Section 4.1 Composition, ByLaws and Meetings. Cascade is governed by a Board
of Directors consisting of one individual representative appointed by Resolution of the
Member's legislative authority. Members may similarly appoint Alternate Board Members.
Each Board Member and each Alternate Board Member must be an elected official of the
Member.
Cascade Interlocal Contract (I
Amended and Restated
October 26, 2411
30
The Board shall adopt ByLaws consistent with this Interlocal Contract that specify,
among other matters, the month of Cascade's Annual Meeting, Board powers and duties and
those of the Executive Committee, Standing Committees, Officers and employees.
The Board shall meet as required by the ByLaws, but not less than quarterly.
Section 4.2 Powers of the Board. The Board has the power to take all actions on
Cascade's behalf in accordance with voting provisions set forth in Section 4.3. The Board
may delegate to the Executive Committee or to specific Cascade Officers or employees any
action that does not require Board approval under this Contract.
Section 4.3 Voting. All Board actions must be approved by Dual Majority Vote of
all Members, except where this Contract requires either a 65% Dual Majority Vote, as
provided in Sections 5.2, 5.5, 7.1, 7.3, 8.3, 10.3, 10.4, and Article 11; or ratification by the
Members' legislative authority, as provided in Section 10.4 and Article 11. The Board may
act by voice votes, as set forth in the ByLaws. Any Member may require a recorded
tabulation of votes either before or immediately after a voice vote is taken. Although voting
is, in part, based on Weighted Vote, the Members expressly agree that there is only one class
of voting membership, and voting occurs within that single class.
Any Member that has been declared to be in default of its obligations under this
lnterlocal Contract by the Board shall lose its right to vote until the Board has declared the
default to be cured.
Section 4.4 Officers and Committees. Cascade Officers shall include a Chair, a
Vice Chair, a Secretary and a Treasurer. The Chair serves as the chair of the Board (and may
Cascade lnterlocal Contract -12-
Amended and Restated
October 26, 2011
31
be known as the "President if the ByLaws so designate) and performs those duties set forth
in the ByLaws.
The Vice Chair shall perform the duties of the Chair in the Chair's absence and shall
perform other duties as set forth in the ByLaws. The Secretary shall be responsible for
Cascade records and performs other duties as set forth in the ByLaws. The Treasurer shall be
responsible for Cascade accounts and financial records and performs other duties as set forth
in the ByLaws.
Consistent with the provisions of this Contract, the Board may, in the ByLaws,
establish additional Officers and set forth their duties.
The Board may create and appoint Members to Standing Committees and special
committees as it deems appropriate. Committee Members need not be elected officials or
employees of Members, but Standing Committee Chairs must be Board Members or Alternate
Board Members.
Section 4.5 Executive Committee. The Chair, Vice Chair, Secretary, Treasurer
and chairpersons of Standing Committees together constitute Cascade's Executive
Committee. The Chair (or acting Chair) shall vote on matters before the Executive
Committee only if necessary to break a tie. The Executive Committee's duties and
responsibilities are set forth in the ByLaws. The Executive Committee shall not have the
power to:
a. approve any contract for a term longer than three years;
b. approve any contract involving expenditure by, or revenue to Cascade in
excess of such amounts and under such circumstances as set forth in the
ByLaws;
Cascade [nterlocal Contract -13-
Amended and Restated
October 26, 2011
32
C. retain or dismiss the chief executive officer or determine the chief executive
officer's compensation; or
d. take any actions expressly reserved to the Board by this Contract or the
ByLaws.
The Executive Committee shall have the authority, if necessary, to avoid default on
any Bond, to withdraw from any capital reserve fund or rate stabilization fund, an amount
equal to the amount necessary to avoid a default and to authorize payment of that amount to
avoid default.
Section 4.6 Staff, Consultants and Contractors. Cascade staff shall consist of a
chief executive officer and other positions established by the Board. The Board shall appoint,
designate the title of, and establish the compensation range of the chief executive officer. The
Board shall hire or retain legal counsel and independent accountants and auditors for Cascade.
The authority to hire other consultants may be delegated to the Executive Committee. The
chief executive officer appoints persons to fill other staff positions, and those appointments
may be subject to ratification by the Board or the Executive Committee if the ByLaws so
provide. The Board may also provide that administrative, professional or technical services
be performed by contract.
Section 4.7 Budget; Dues; Financial Management. The Board must approve an
annual budget determining Cascade's revenues and expenditures no later than sixty (60) days
before the beginning of the fiscal year in which that budget will be in effect. The budget will
be developed and approved according to a schedule established by the ByLaws. The budget
must identify the levels of Member Charges on which revenue projections are based. The
Board may amend the budget.
Cascade lnterlocal Contract -14-
Amended and Restated
October 26, 2011
33
Each Member must pay annual dues to defray part or all of Cascade's administrative
costs based on the number of CERUs served by its water system, regardless of water usage or
capacity, and regardless of whether those units are served by the Supply System or by
Independent Supply. Total administrative dues collected from all Members may not exceed
%v the greater- of $1,000,000.00 or- 2 9% of Cascade's annual revenue requirement t
service. This limit may be amended in the budeet by a 65% Dual Maioritv Vote of the Board.
The Board may establish minimum annual dues per Member and may provide that less than
all of a Member's CERUs be taken into account in establishing dues.
All Cascade books and records shall be open to inspection by the Washington State
Auditor.
ARTICLE 5. Asset Development and Supply Commitment
Section 5.1 Property Acquisition, Ownership and Disposition. Cascade may
construct, purchase, rent, lease, manage, contract for, or otherwise acquire and dispose of
Water Supply Assets and other assets. Cascade may control and manage both the assets it
owns and the assets that are owned by Members that have transferred control and
management of those assets to Cascade. This Contract does not vest in Cascade any authority
with respect to Members' other facilities or assets, such as Water Supply Assets retained by
Members as Independent Supply.
Subject to Cascade's agreement, a Member may transfer to Cascade its title to, or
operational control and management of Water Supply Assets. Water Supply Assets may also
be fully retained Members as Independent Supply, subject to the provisions of Article 6. At
the discretion of the Board, Cascade may accept title to, or operational control and
Cascade Interlocal Contract 15-
Amended and Restated
October 26, 2011
34
management of Water Supply Assets offered by Members or accept supply assets that
constitute all or part of a Member's Satellite System(s). The Board may accept supply assets
subject to the terms and conditions arrange between Cascade and the Member, based on the
result of the audit process and mutual needs.
Cascade may enter into Asset Transfer Agreements which shall provide for the terms
and conditions of: (a) Cascade's operation of the transferred Water Supply Asset with respect
to the Member transferring the asset; (b) Cascade's operation, maintenance and replacement
of the Water Supply Asset as part of the Supply System; (c) return or disposition of the Water
Supply Asset if Cascade terminates its existence or the Member withdraws; (d) continuation
of service (if appropriate) to Members or former Members by the Member receiving the
Water Supply Asset at reasonable rates and charges or payment to Cascade of the cost of
replacing the Water Supply Asset; and (e) such other conditions as the Board and the Member
agree upon.
Members shall not be deemed to hold legal ownership rights in any Water Supply
Assets owned by Cascade whether those Water Supply Assets have been developed by,
purchased by, or transferred to Cascade, and regardless of the accounting treatment of RCFC
payments and other payments made to Cascade.
Section 5.2 Supply Commitment
Section 5.2.1 Commitment to Members. Beginning on the Cascade Supply
Date, Cascade shall provide a Fully Supply Commitment to each Founding Member.
Thereafter, Cascade shall provide a Full Supply Commitment to meet all current and future
water supply needs of a Member that joins with Water Supply Assets sufficient to provide for
Cascade Interlocal Contract -16-
Amended and Restated
October 26, 2011
35
its needs during the following fifteen (15) years (whether or not those Water Supply Assets
are transferred to Cascade or retained as Independent Supply) commencing on the Member's
Cascade Supply Date. When a supply contract is negotiated with Seattle, any Member that is
a Seattle Contract Purveyor shall relinquish its rights under its Seattle Water Purveyor
Contract to Cascade and execute such documents as may be necessary to transfer those rights
to Cascade. Cascade shall accept those rights and a corresponding obligation to provide a
Fully Supply Commitment (net of Independent Supply). The approval of a contract with the
City of Seattle providing for the initial acquisition of rights to substantial Water Supply
Assets, and any material amendment to that contract, shall be effective upon a 65% Dual
Majority Vote.
Any Full Supply Commitment shall be subject to water shortages, to Cascade's ability
to implement the Water Supply Plan, and to the portion of the Member's needs that can be
served by the audited capacity of its Independent Supply. If the needed supply is not
available, the shortage shall be shared by all the Members in accordance with Cascade's
shortage management plan, except as otherwise provided in Section 5.5. Cascade is not
obligated to provide water supply to service area expansions in or outside the urban growth
boundary, unless Cascade agrees to such expanded service area. However, Cascade shall be
obligated to provide water supply to the entire service area of each Member (as that service
area is defined in terms under which the Member was admitted), whether or not some of that
service area is within the Member's current jurisdictional boundaries and /or within the current
urban growth boundary. Cascade is not obligated to provide increased water supply to any
Cascade lnterlocal Contract -17-
Amended and Restated
October 26, 2011
36
Member if it is determined that the Member's planning process or plans are materially out of
compliance with the requirements of the Growth Management Act.
A Member that joins with Water Supply Assets insufficient to provide for its needs for
fifteen (15) years receives the Fully Supply it desires only if, when, and to the extent it is
available within reliability standards determined by Cascade's system reliability
methodology. If sufficient Full Supply is not available within reliability standards determined
by Cascade's system reliability methodology, the Member receives partial Full or
Interruptible Supply, and Full Supply must be provided within fifteen (15) years. Cascade
shall then undertake to include in Cascade's Water Supply Plan, and to acquire the facilities
or other assets necessary in the Board's determination to provide for that deficit. If Cascade
fails to develop sufficient assets to timely provide the increased Full Supply, the commitment
becomes a Full Supply Commitment at the end of that fifteen -(15) year period, and any
shortage shall be shared by all Members in accordance with Cascade's shortage management
plan.
If multiple Members request new Full Supply, requests must be honored in the order
received (i.e., in the order in which application is made accompanied by the application fee).
With respect to new Members, requests for Full Supply "vest" no earlier than the date that
membership is effective. In cases of conflict or ambiguity, the Board may determine the order
of requests.
Section 5.2.2 Additional Rules for Members Retaining Independent
Supply. Whenever Cascade has a Supply Commitment to a Member that retains Independent
Supply, Cascade shall provide Full Supply for all of that Member's water supply needs minus
Cascade lnterlocal Contract -18-
Amended and Restated
October 26, 2011
37
the amount of water that an audit determines may be provided by that Member's Independent
Supply. Members are not required to share shortages resulting from the loss or all or part of
Independent Supply, although Cascade may make Interruptible Supply available to a Member
that loses Independent Supply at prices that are consistent with the price of Interruptible
Supply being made available to others at that time. Cascade may at any time and at its cost
and expense carry out audits of a Member's Independent Supply.
A Member requesting an additional Full Supply Commitment due to loss of
Independent Supply shall make that request by Resolution of the requesting Member's
legislative authority. When and as determined by the Board, the Member shall pay an amount
equal to the RCFCs allocable to the number of CERUs that can be served by the replacement
supply provided or to be provided by Cascade. Cascade shall then include the supply in its
Water Supply Plan, and provide the supply when it becomes available, but in any event within
fifteen (15) years. If, within fifteen (15) years the supply is not available, Cascade's
commitment becomes a Full Supply Commitment and any shortage with respect to that supply
must be shared by all the Members in accordance with the Shortage Management Plan, except
as otherwise provided in Section 7.3.
Section 5.2.3 Additional Rules for Source Exchange. The Board may, at its
sole discretion, authorize a Cascade Source Exchange Program Agreement with a Member or
Non Member. The terms and conditions of a Cascade Source Exchange Program Agreement
shall be developed from a source exchange proposal submitted to the Board. The agreement
shall identify: (a) the water right (instantaneous and annual) to be augmented or replaced; (b)
the Water Supply Assets to be utilized; (c) mechanisms and arrangements for delivery of
Cascade lnterlocal Contract _19-
Amended and Restated
October 26, 2011
38
regional water; (d) characteristics of supply obligation (for example, peak and average
quantities, seasonal or annual delivery duration, interruptibility and shortage management);
(e) reporting requirements; (f) changes in operation needed to benefit stream flow and fish;
(g) rates and charges; and (h) such other conditions as the Board and the Member or public
water supplier agree upon. The agreement may or may not provide for adjustments to a
Member's RCFC payments or credits and whether or not the source exchange is a loss of a
Member's Independent Supply that would be subject to the provisions of Section 5.2.2.
Section 5.3 Financing of Assets. The acquisition of new capital facilities and
other Water Supply Assets may be financing using RCFCs, transfers or Water Supply Assets,
Rates and Charges, the issuance of revenue Bonds and such other sources as the Board may
deem appropriate.
Section 5.3.1 Issuance of Bonds. An Authorized Issuer may issue Bonds
payable from and secured solely by all or a portion of Net Cascade Revenue, evidencing
indebtedness up to an amount approved by Resolution for the Board in order to provide
financing or refinancing to acquire, construct, receive, own, manage, lease or sell real
property, personal property, intangible property and other Water Supply Assets, to establish
debt service reserves, to provide for capitalized interest and to pay the costs of issuance of
and other costs related to the issuance of the Bonds. Such Bonds shall be payable solely from
all or a portion of the Net Cascade Revenue or (if the Authorized Issuer is other than Cascade)
from payments to be made by Cascade out of all or a portion of Net Cascade Revenue, and
such Bonds shall not pledge the full faith and credit or taxing power or, except as expressly
provided by contract, the revenue, assets or funds of any Member.
Cascade Interlocal Contract -20-
Amended and Restated
October 26, 2011
39
Members serving as Authorized Issuers may conduct the financing through "separate
systems" permitted by their applicable bond resolutions, or in some other appropriate manner,
and Cascade may compensate those Members for all costs associated with the financing.
Bond related documents of Authorized Issuers other than Cascade must expressly permit the
Bonds to be refunded or prepaid without penalty prior to their stated maturity, on and after
such dates as are approved by the Authorized Issuer and the Board, to allow for a transfer of
the obligation to Cascade or to Cascade's successor entity, including without limitation a joint
operating agency or similar entity, as may be permitted by law.
Section 5.3.2 Pledge of Revenues. For as long as any Bonds payable from
Net Cascade Revenue (or any portion thereof) are outstanding, Cascade irrevocably pledges to
establish, maintain and collect all Member Charges in amounts sufficient to pay when due the
principal of and interest on the Bonds (and, if the Authorized Issuer is other than Cascade, in
addition to the foregoing pledge, to pledge to make timely payments to that Authorized Issuer
for the payment of principal of and interest on the Bonds), together with amounts sufficient to
satisfy all debt service reserve requirements, debt service coverage requirements, and other
covenants with respect to the Bonds.
Each Member hereby irrevocably covenants that it shall establish, maintain and collect
rates, fees or other charges for water and other services, facilities and commodities related to
the water supply it receives from Cascade and/or its water utility at levels adequate to provide
revenues sufficient to enable the Member to: (a) make the payment required to be made under
this Contract; and (b) pay or provide for payment of all other charges and obligations payable
from or constituting a charge or lien upon such revenues. Each Member hereby
Cascade Interlocal Contract -21-
Amended and Restated
October 26, 2011
40
acknowledges that this covenant and its covenant in Section 7.9 of this Contract may be relied
upon by Bond owners, consistent with this Contract.
Each Member shall pay the Member Charges imposed on its whether or not the Water
Supply Assets to be financed through the issuance of Bonds are completed, operable or
operating, and notwithstanding the suspension, interruption interference, reduction or
curtailment in the operation of any Water Supply Assets for any reason whatsoever, in whole
or in part. Member Charges shall not be subject to any reduction, whether by offset or
otherwise, and shall not be conditioned upon the performance or nonperformance of any
Member, or of any entity under this or any other agreement or instrument. However, credits
against future RCFCs and Rates and Charges described in Sections 5.5 and 7.5, respectively,
for development or addition of excess capacity that is either transferred to Cascade or retained
as Independent Supply, shall not be considered "offsets" or "reductions" for the purposes of
this Section.
If, in connection with the issuance of obligations, any Member establishes a new lien
position on revenues relating to its water utility, that Member shall covenant in the relevant
documents that the amounts to be paid to Cascade as Member Charges shall be treated either:
(a) as part of that Member's internal operation and maintenance costs payable prior to debt
service on those obligations; and/or (b) for any portion of those Member Charges that is
allocable to capital costs, as a contract resource obligation payable prior to debt service on
those obligations. If any Member has existing outstanding revenue obligations relating to its
water utility, it shall include substantially similar "springing covenants" in the documents
relating to any new parity obligations.
Cascade Intcrlocal Contract -22-
Amended and Restated
October 26, 2411
41
Section 5.3.3 Continuing Disclosure. To meet the requirements of United
States Securities and Exchange Commission "SEC Rule 15c2- 12(b)(5) (the "Rule as
applicable to a participating underwriter for any Bonds and any obligation of each Member as
an "Obligated Person" under the Rule, Cascade and each Member agree to make an
appropriate written undertaking, respectively, for the benefit of holders of the Bonds
consistent with the requirements of the Rule.
Section 5.3.4 Preservation of Tax Exemption for Interest on the Bonds.
Each Member covenants that it will take all actions necessary to prevent interest on tax
exempt Bonds from being included in gross income for federal income tax purposes, and it
will neither take any action nor make or permit any use of proceeds of tax- exempt Bonds or
other funds treated as proceeds of those Bonds at any time during the term of those Bonds that
will cause interest on those Bonds to be included in gross income for federal income tax
purposes.
Section 5.3.5 Additional Certificates. Each Member further agrees to
provide such certificates or verifications as are reasonably requested by an Authorized Issuer
in connection with the issuance of Bonds under this Section.
Section 5.4 Supply Expansions and System Extensions. Cascade must provide
for Supply System expansions and extensions to meet the needs of additional water customers
of Members, subject to consistency with applicable growth management plans and
comprehensive plans, Cascade's water supply plan, orderly asset development, reasonable
cost and financing capacity. The Board shall establish a water supply development process,
including criteria governing the evaluation of new projects, and that process must promote
Cascade ]nterlocal Contract -23-
Amended and Restated
October 26, 2011
42
equality of costs and services (other than direct local services), regardless of geographic
location. The results of the water supply planning process must be reflected in Cascade's
Water Supply Plan. The Board shall have the authority to undertake new projects identified
in Cascade's Water Supply Plan for the expansion of Water Supply Assets and regional
transmission system extensions to meet Members' projected needs. To reduce costs, Cascade
may, to the extent that the Board deems advisable, enter into agreements with Members to
wheel water through their existing systems. When facilities are constructed that are used
partially by Cascade for wheeling water and partially by Members or other entities for their
purposes, the Board may determine an appropriate Cascade contribution to the cost of those
facilities. Existing arrangements among Members (and between Members and Non
Members), in place when a Member joins Cascade, remain unaffected except as otherwise
agreed between Cascade and the other entities concerned.
Section 5.5 Regional Capital Facilities Charges. To allocate growth costs to
those Members that require capacity increases, each Member shall pay to Cascade an RCFC
for each new CERU connected to its water distribution system. Growth in water usage by
existing CERUs is not subject to RCFCs unless that growth constitutes as CERU increase as
provided in the RCFC Methodology. Members with a supply deficit must pay an RCFC
commensurate with that deficit. To the extent that a Member transfers to Cascade or retains
as Independent Supply water supply in excess of its needs, it receives a corresponding credit
against future RCRCs.
Cascade lnterlocal Contract -24-
Amended and Restated
October 26, 2011
43
Subject to the provisions of Section 5.2.2, a Founding Member pays no RCFCs with
respect to the number of CERUs served as of January 31, 2003, or other such later date as
determined by Resolution of the Board.
A new Member with adequate supply shall commence paying RCFCs fifteen (15)
years prior to the date that its Water Supply Assets are projected to be insufficient to provide
for its needs as determined by the Board (taking into consideration the results of the Water
Supply Audit).
A Member that joins with Water Supply Assets that are projected to be insufficient to
provide for its needs for fifteen (15) years shall immediately pay RCFCs for the number of
CERUs representing the deficit as determined by the Board.
RCFCs shall be calculated according to the RCFC Methodology, which shall define
the analytical steps required to calculate the RCFCs according to the greater of: (a) the
incremental difference between the average unit cost of expanding the system (i.e., the
marginal cost of new capacity) and the average unit cost of the existing system; or (b) the
average unit cost of past construction of the existing system plus then planned Supply System
improvements. The methodology shall provide for an annual escalator, recalculation and
update not less frequently than every fifth year, and a methodology for determining CERUs.
The RCFCs shall be imposed on the Member for each new CERU of that Member in
accordance with the terms of this Contract. Amendments to the RCFC Methodology shall
require a 65% Dual Majority Vote.
If a Founding Member owns Water Supply Assets or transfers Water Supply Assets to
Cascade under Section 5. 1, to the extent the audited capacity of those assets (including Seattle
Cascade Interlocal Contract -25-
Amended and Restated
October 26, 2011
44
Contract Purveyor rights) exceeds the Member's needs, that Member shall receive a credit
against future RCFCs. If a Member seeks to transfer assets substantially in excess of its
foreseeable needs, Cascade may negotiate appropriate compensation arrangements for the
transfer.
Members that develop new Independent Supply that is approved by the Board in
accordance with Article 6, similarly receive a credit effective when the Independent Supply is
placed in service as determined by the Board.
A Member that accepts ownership of a Satellite System that Cascade agrees to serve
shall pay an RCFC for the amount of supply needed to serve that system in excess of its rated
capacity.
Members that experience a net reduction in the number of CERUs served shall receive
a CERU- for -CERU credit against future RCFCs.
RCFC credits may not be transferred among Members without Board approval.
Members shall not be required to pass RCFCs to their customers as capital facilities
charges, but may provide for the payment of RCFCs in whatever manner they deem
appropriate.
For Members joining with an unmet net supply need, Cascade may, under
circumstances determined by the Board, require the prepayment of RCFCs allocable to the
full amount of the requested supply, i.e., when fiends are needed to begin the construction of
facilities immediately.
Section 5.6 Transfer Upon Mergers, Consolidations and Assumptions. If: (a)
two or more Members merge or consolidate; (b) a Member or a Non Member assumes
Cascade Interloeal Contract -26-
Amended and Restated
October 26, 2011
45
jurisdiction of part or all of a Member; or (c) a Member assumes jurisdiction of part or all of a
Non Member, the jurisdictions' water supply rights from and obligations to Cascade must be
transferred or assumed under applicable law and consistent with the requirements of this
Contract and the obligations of Cascade.
ARTICLE 6. New Independent Supply
Members may not bring new Water Supply Assets on -line as Independent Supply
without Board approval. That approval may be granted or denied following an evaluation
process, based on whether the Board determines that development of the proposed
Independent Supply will benefit or be adverse to the interests of the Members as a whole.
Recognizing that in certain circumstances the acquisition of additional Independent Supply
might benefit (or cause no material harm to) the Members, new supplies under one (1) MGD
may be approved by the Board regardless of the provisions of the Water Supply Plan and
without a formal evaluation process. New supplies in amounts greater than one (1) MGD
must be described in and be consistent with the Water Supply Plan.
Members that have invested in the development of new Independent Supply assets
may offer to sell their interest in such assets to Cascade. Cascade may, in its sole discretion
and subject to mutually agreeable terms and conditions, purchase the Member's interest in
such Independent Supply asset by reimbursing or otherwise compensating the Member for its
investment in the project to the extent that investment has been capitalized. Once Cascade
has purchased a Member's interest in a project, the project will be considered a Water Supply
Asset of Cascade and be incorporated into the Water Supply Plan.
ARTICLE 7. Asset Management
Cascade Interlocal Contract -27-
Amended and Restated
October 26, 2011
46
Section 7.1 Supply System Management. Cascade is responsible for managing,
on behalf of all Members, the Supply System. Cascade is not responsible for managing
Independent Supply unless it has expressly agreed to do so. Supply System management
responsibilities shall be governed by Cascade's system management plan adopted by the
Board. Cascade's system management plan concerns, without limitation, matters such as
daily system operations and maintenance, interface with other supply providers, contractual
obligations, water quality, billing, management and administration. Cascade may delegate
and/or contract out its Supply System responsibilities.
Cascade must manage the Supply System in compliance with applicable laws,
regulations and Cascade's minimum service standards. Adoption and amendments to the
minimum service standards shall require a 65% Dual Majority Vote.
Section 7.2 Conservation. Cascade shall develop and carry out, and Members
must participate in, water conservation programs that are uniform among Members. The
Board shall develop and implement a Cascade conservation management plan that provides a
mandatory base conservation program that functions to reduce both average and peak
demands and may establish a charge or assessment to fund development and implementation
of the program. Members may implement additional conservation programs. The Board may
adopt wholesale charges in addition to normal Demand Share charges to encourage resource
conservation. The Board may also provide or contribute to additional local conservation
programs that are not offered to all Members, and these local programs may be locally funded
or funded by Cascade. Members that fail to comply with base programs as set forth in
Cascade Interlocal Contract -28-
Amended and Restated
October 26, 2011
47
Cascade's conservation management plan may be required to assume a disproportionate
reduction in water supply or to pay penalty charges, or both.
Section 7.3 Shortages and Emergency.
Section 7.3.1 Shortages. Members must respond to water shortages in a
collective, shared fashion under a Cascade shortage management plan adopted by the Board.
Resources must be shared in a manner that reduces the risk of severe shortages to each
Member. Cascade's shortage management plan may include without limitation, a definition
and classification of shortages, a shortage contingency plan including mandatory
programmatic actions among all Members in the event of shortages, allocation of authority for
determining and responding to shortages, and a communications and outreach program for the
public. Members shall not be required to implement Cascade's shortage management plan in
areas not served by the Supply System.
In the event of shortages, Cascade shall reduce or halt Interruptible Supply before
invoking the Shortage Management Plan with respect to all Members with a Full Supply
Commitment. However, the Board may, by 65% Dual Majority Vote, continue service in the
amounts it deems appropriate to one or more Members receiving Interruptible Supply.
The Board may require that Members failing to comply with mandatory shortage
management programs implemented under Cascade's shortage management plan assume a
disproportionate reduction in supply or pay penalty charges, or both.
In the event of a Cascade -wide water shortage, Members with Independent Supply
may, without penalty, decline to participate in the shortage management program for that
shortage by foregoing all supply from Cascade for the duration of the emergency or shortage.
Cascade Interlocal Contract _29-
Amended and Restated
October 26, 2011
48
To avoid shortages resulting from emergencies or the inability to develop sufficient
supplies, the Board may, by 65% Dual Majority Vote, establish moratoria on connections or
additional commitments for future water services by the Members. A moratorium may be
discontinued by a Dual Majority Vote of the Board.
Section 7.3.2. Emergency. The Board shall include in Cascade's shortage
management plan policies and procedures for addressing short-term disruptions of water
supply, transmission or water quality, and it may delegate to the General Manager authority to
address such disruptions according to such policies and procedures.
Section 7.4 Water Quality. Cascade shall be responsible for water quality that
meets or exceeds all federal or state requirements at the point of delivery from Cascade to the
Member, consistent with applicable laws and regulations. Cascade assumes source water
quality responsibility and liability with respect to Water Supply Assets under its ownership or
control (including water wheeled to a Member through another Member's facilities). Cascade
is also responsible for preparing and carrying out water quality activities compatible with the
water quality requirements of regional water suppliers integrated with Cascade's system (e.g.,
Tacoma, Everett and Seattle).
Cascade may, in its sole discretion, determine and adjust the appropriate method and
level of treatment of water that it supplies, so long as that water meets applicable state and
federal requirements. If water that it supplies meets those requirements, Cascade shall not be
obligated to adjust the method or level of treatment so that the water can be more readily
blended with a Member's Independent Supply or more readily transmitted through a
Member's internal system. Each Member shall remain responsible for water quality within its
Cascade Interlocal Contract -30-
Amended and Restated
October 26, 2031
49
respective distribution system, assuming that adequate water supply quality is provided by
Cascade at the point of delivery from Cascade.
Each Member shall be responsible for all costs related to making water supplied by
Cascade compatible with that Member's internal system, including but not limited to, costs of
additional treatment.
Section 7.5 Water Supply Rates and Charges. The Board shall set Rates and
Charges according to a Rate Calculation Methodology adopted from time to time by the
Board. The Rate Calculation Methodology for Members' Supply Commitment shall provide
for the definition and calculation of Demand Shares and for a uniform pricing structure with a
commodity charge and fixed charges allocated by Demand Share.
Cascade may sell water to a Non Member under terms and conditions established by
the Board. The terms and conditions shall not be more favorable than the terms and
conditions under which water is sold to Members. Revenue received from the sale of water to
Non Members shall be used to offset or reduce Rates and Charges to Members to the extent
practicable, except that such revenue need not be treated as reducing or offsetting those
amounts that are necessary for the payment of debt service on Bonds and for the provision of
reserve and coverage requirements for the Bonds.
A Member shall be assigned a Demand Share based on the Board's best estimate of
capacity to be used by that Member. Initially, the Board may base its estimate on a Seattle
Contract Purveyor's use of water from Seattle. For a Member that joins without a supply
history as a Seattle Contract Purveyor, or for a Member that has received only part of its water
from Seattle, the Demand Share shall be established based on an audit of that Member's past
Cascade Interlocal Contract -31
Amended and Restated
October 26, 2011
50
three (3) years of water use. After three (3) years as a Member, the baseline demand and
capacity obligation for that Member shall be fixed based on actual experience as a Member.
Specific Demand Shares may be set by the Board to account for circumstances, such as (by
way of example and not by limitation) costs of extending the Supply System to a Member, or
when Independent Supplies affect regional demand patterns. When water supply from
Cascade is wheeled through a Member to another Member, Cascade may presume that the
first Member receiving the water is the "User" for calculation of Demand Shares unless the
Members concerned instruct Cascade to use a different allocation. Rate credits for Water
Supply Asset transfers are not deducted in the calculation of Demand Shares but are applied
to reduce what a Member would otherwise pay.
The Board must set Member Charges at levels it determines to be sufficient, together
with other available revenue sources, to provide adequately for Operation and Maintenance
Costs, Bond debt service, coverage and other covenants, replacement and renewal of
facilities, reserves and other costs that the Board deems appropriate. The Board may provide
that a Member's failure to participate in the planning process may result in penalty charges.
A Member that has transferred Water Supply Assets shall receive a credit, determined
when those assets are audited and transferred, based on the useful life of those facilities and
on the Member's use of the water produced by those assets or an amount of water equivalent
to the amount of supply from them.
The Board may implement wholesale charges (additional to Demand Share -based
charges and variable commodity charges) to reduce extreme peak use (e.g., "peaking -off of
the pipe
Cascade Interlocal Contract _32-
Amended and Restated
October 26, 2011
51
Water Rates and Charges must be the same for all Members receiving the same class
of service (subject to credits, surcharges and penalty charges).
Section 7.6 New Water Surcharge.
A new water surcharge of $0.75 per 100 cubic feet (ccf) shall be imposed, effective on
the Cascade Supply Date, and continue through December 31, 2011. It shall be applicable to
all water purchased by Members over and above each Member's Old Water Allowance in the
Seattle Purveyor Contract, if applicable, or to all water purchased by non Seattle Purveyor
Members. New water surcharge revenues shall be used to offset or reduce Rates and Charges
to Members to the extent practicable, except that such revenue need not be treated as reducing
or offsetting those amounts that are necessary for payment of debt service on Bonds and for
the provision of reserve and coverage requirements for the Bonds.
Section 7.7 Franchises and Easements. Except to the extent otherwise required
by state law, each Member shall provide franchises and rights of way on, under or across that
Member's streets or other property, to Cascade and to other Members for Water Supply
Assets, without charging any fees, rent or charges other than the customary and usual right -of-
way permit and inspection fees.
Section 7.8 Sales of Water to Non Members. Unless approved by the Board, a
Member shall not sell water, including source exchange water, supplied by Cascade, nor shall
a Member sell Independent Supply offset by water supplied by Cascade to a Non Member.
Notwithstanding the foregoing, any Member may sell water supplied by Cascade to a Non
Member to the extent required by a contract in effect as of the date the Member joins
Cascade.
Cascade Interlocal Contract -33-
Amended and Restated
October 26, 2011
52
Section 7.9 Payment Procedures; Default; Step -Up Provisions.
Section 7.9.1 Invoice and Payment.
(a) Cascade shall provide each Member with periodic invoices showing the
Member Charges payable by that Member for the billing period and the due date. Invoices
shall be provided monthly or on other such periodic schedule as determined by the Board, but
no more frequently than monthly nor less frequently than once every six months. The Board
will determine a due date for all invoices.
(b) Payment of any and all invoices shall be due and payable on or before the due
date, and shall be made by wire transfer or such other means as are agreed to by Cascade and
the Member. If a treasurer, trustee, fiscal agent or escrow agent is appointed in connection
with the issuance of Bonds, Cascade may require, and specify on the invoice, that certain
amounts be provided directly to that person or entity, and the Member shall pay those
amounts in the manner and to the person so specified.
(c) If full payment of any invoice is not received on or before the due date, such
payment shall be considered past due and a late payment charge shall accrue for each day that
the invoice remains unpaid. The late payment charge shall equal the product of the unpaid
amount and an interest rate established by the Board. Late payment charges shall continue to
accumulate until the unpaid amount of the invoice and all late payment charges are paid in
full. Further, if an invoice or any portion thereof remains unpaid for more than sixty (60)
days after the due date, Cascade may pursue any legally available remedy at law or equity for
the unpaid amount, including without limitation, specific performance and collection of the
late payment charge. Cascade's right to enforce payments in this regard may be assigned to a
Cascade Interlocal Contract -34-
Amended and Restated
October 26, 2011
53
treasurer, trustee, credit enhancement provider or other entity. Furthermore, upon written
notice, Cascade may reduce or suspend delivery of water until the invoice and late payment
charges are paid.
(d) If any Member disputes all or any portion of an invoice, it shall notify Cascade
immediately upon receipt. If Cascade does not concur, the Member shall remit payment of
the invoice in full, accompanied by written notice to Cascade indicating the portions of the
invoice that the Member disputes and the reasons for the dispute. The Member and Cascade
shall make a good faith effort to resolve such dispute. If the Member fails to remit payment
of the invoice in full pending resolution of the dispute, the prevailing party in an action
relating to the collection of that invoice shall be entitled to reasonable attorney fees and costs.
Section 79.2 Default and Step -Up.
(a) If any Member fails to make any payment in full for more than fifty (50) days
past the due date, Cascade shall make written demand upon that Member to make payment in
full within ten (10) days of the date that the written demand is sent by Cascade. If the failure
to pay is not cured within the ten (10) day period, the Member shall be deemed to be in
default.
(b) Upon an event of default as described in subsection 7.9.2(a), the other
Members shall pay Cascade (in addition to Member Charges otherwise due) the defaulting
Member's Member Charges in proportion to each remaining Members' Demand Share in
accordance with a schedule established by Resolution of the Board.
(c) The payment of a proportionate share of the existing defaulted Member's
Member Charges by Members shall not relieve the defaulting Member of its liability for those
Cascade Interloeal Contract -35-
Amended and Restated
October 26, 2011
54
payments. Cascade shall have a right of recovery from the defaulting Member on behalf of
each Member. Cascade may commence such suits, actions or proceedings at law or in equity,
including but not limited to suits for specific performance, as may be necessary or appropriate
to enforce the obligations of this Contract against any defaulting Member. Cascade's right to
enforce payments in this regard may be assigned to a treasurer, trustee, credit enhancement
provider or other entity. Amounts recovered by Cascade as payment of amounts due shall be
passed through to each Member in proportion to the share that each assumed, in cash or in
credit against future Member Charges as the Board shall determine.
(d) The prevailing party in any such suit, action or proceeding, shall be entitled to
recover its reasonable attorney fees and costs against the defaulting Member.
ARTICLE 8. Planning
Section 8.1 Water Supply Plan. Cascade must plan for its Members' water supply
needs. That planning shall be to be compatible with the equivalent planning responsibilities
of other wholesale water providers and with state, county and city planning responsibilities
under the Growth Management Act. The Board must adopt, and may from time to time
amend, a Water Supply Plan that must be based on no less than a twenty- (20) year planning
horizon. Cascade shall coordinate its planning effort with local and regional utilities and
other appropriate agencies and work to encourage cooperative region -wide planning and
coordination.
Each Member shall actively participate in Cascade's water supply planning and shall
provide to Cascade accurate data regarding its facilities and operations together with good-
faith estimates of future needs and a description of any involvement in the development of
Cascade Interlocal Contract -36-
Amended and Restated
October 26, 2011
55
new Independent Supplies. Each Member's water comprehensive or system plan shall be
consistent with any plans adopted by Cascade, and shall be consistent with applicable
requirements of the Growth Management Act and comprehensive plans.
Section 8.2 Watershed Management Plan. Cascade may adopt Watershed
Management Plans, as appropriate, for the watersheds within its service area provided that a
Watershed Management Plan may take the place of, or may be incorporated into a Cascade
Water Supply Plan. In fulfilling its responsibilities for watershed management, Cascade may
enter into interlocal agreements with Non- Member municipalities to engage in watershed
management, including development of Watershed Management Plans and the
implementation and financing of such plans.
Section 8.3 System Reliability Methodology. Cascade shall develop and adopt a
system reliability methodology for planning, operation and management purposes. Adoption
and amendments to the system reliability methodology shall require a 65% Dual Majority
Vote.
ARTICLE 9. Filings
This Contract must be filed with the King County Office of Records and Elections or
with any other applicable county auditor, in accordance with RCW 39.34.040, and must be
submitted for review by the Washington State Department of Health and the Washington
State Department of Ecology, in accordance with RCW 39.34.050.
ARTICLE 10. Duration and Dissolution; Withdrawal
Cascade Interlocal Contract -37-
Amended and Restated
October 26, 2011
56
Section 10.1 Duration. Except as provided in Section 10.3, Cascade shall remain in
existence for the longer of the following: (a) the period it holds any assets; (b) the period
during which Bonds are outstanding; or (c) the period it continues to include Members.
Section 10.2 Withdrawals. A Member may notify Cascade of its intent to withdraw
by delivery to Cascade of a Resolution of its legislative authority expressing such intent.
Upon receipt of such Resolution, the Member shall lose its right to vote and the Board shall
determine (a) the withdrawing Member's allocable share of the cost of the then- existing
obligations of Cascade; and (b) the withdrawing Member's obligations to Cascade. "Then
existing obligations of Cascade" means obligations or costs incurred by Cascade as of the date
the Member's withdrawal notice is received, including but not limited to Bond obligations,
contract obligations and cash financed capital projects; provided that a withdrawing
Member's allocable share shall in no event include an obligation for future expenses for
which Cascade has not incurred a legal obligation; and provided further, that to the extent the
Member's obligation (with respect to such costs) is re -paid over time, the Member shall be
entitled to a credit for supply abandoned by the Member and is otherwise used by Cascade. A
"withdrawing Member's obligation to Cascade" includes but is not limited to, the Member's
share of fixed operating costs, any other expenses contained in Cascade's adopted budget for
that year, and any assessments or other similar charges lawfully imposed by Cascade. For
purposes of the preceding sentence, "fixed operating costs" shall be determined in the year of
withdrawal, and the Member's obligation with respect to such costs shall be limited only to
that amount required to pay for supply abandoned by the Member and not otherwise used by
Cascade.
Cascade Interlocal Contract -38-
Amended and Restated
October 26, 2011
57
The allocable share of cost or obligations shall be determined by the Board, taking into
consideration as deemed applicable by the Board: (a) the ratio of the Member's Demand
Share to total Member demand; (b) the ratio of the Member's contribution to Cascade revenue
to total Cascade revenue including RCRCs; (c) the cost or a portion of the cost of capital
projects or facilities specially benefiting the Member; and (d) and any other factor the Board
deems appropriate to consider. The Member's withdrawal shall be effective on payment of
such allocable share or provision for arrangements to pay such allocable share that are
satisfactory to the Board. Until the effective date of withdrawal, the Member shall continue to
comply with all applicable provisions of this Interlocal Contract.
Upon withdrawal, except as provided in an Asset Transfer Agreement, the
withdrawing Member shall have no right to, or interest in any Water Supply Assets owned by
Cascade. The withdrawing Member shall be deemed to have abandoned any and all rights to
service, to the use of Cascade Water Supply Assets or other rights with respect to Cascade
(except as otherwise expressly provided in this Contract).
Notwithstanding the provisions of this Section 10.2, Cascade will, upon the
withdrawal of a Member that has transferred operational control and management of (but not
title to) an Independent Supply Asset to Cascade under Section 5.1, return operational control
of such asset to the withdrawing Member. Return of operational control and management will
be subject to: (a) continued use by Cascade, to the extent and for such time as the Board
deems such use necessary for Cascade to continue providing service to its Members; and (b)
payment or provision for payment of any Cascade costs, including but not limited, to those
associated with the withdrawing Member's Independent Supply Asset.
Cascade Interlocal Contract -39-
Arncnded and Restated
October 26, 2011
58
The Board may establish additional generally applicable conditions and requirements
for withdrawal.
Section 10.3 Dissolution. Cascade may be dissolved by a 65% Dual Majority Vote.
Upon dissolution, except as provided in an Asset Transfer Agreement, Cascade's assets
initially shall be held by its then current Members as tenants in common. Each Member's
ownership interest must be based on that Member's Demand Share as of the time of the
dissolution. Cascade's liabilities (including Bonds and other contractual obligations) initially
shall be distributed based on Members Demand Shares as of the time of the dissolution.
Assets and liabilities must be distributed in accordance with agreement or contract, under a
voluntary mediation process, or by a court of law. A court may appoint an arbitrator or
special master. Distribution shall be based on the best interests of efficient and economic
water supply in the entire area served by the Members, subject to a rebuttable presumption
that Water Supply Assets will be returned to the Member that originally transferred them to
Cascade. That presumption may be overcome by a showing that another asset distribution is
in the best interests of efficient and economic water supply. The proceeds of any sale of
assets must be distributed among the then current Members based on the Demand Shares at
the time of dissolution.
Section 10.4 Successor Entity. Notwithstanding the provisions of Section 10.3,
upon a 65% Dual Majority Vote (ratified within one hundred and twenty (120) days by 65 0 /6),
as measured by Dual Majority Vote of the Members' legislative authorities, all assets,
liabilities, and obligations of Cascade may be transferred to any successor entity (including
without limitation, a joint operating agency or other municipal corporation, as permitted under
Cascade Interlocal Contract -40-
Amended and Restated
October 26, 2011
59
state law), and all obligations of Members and parties contracting with Cascade become
obligations to the successor entity.
ARTICLE 11. Amendments.
Amendments to this Contract shall be effective upon approval by 65% Dual Majority
Vote (ratified within one hundred and twenty (120) days by 65 as measured by Dual
Majority Vote of the Members' legislative authorities.
ARTICLE 12. Applicable Law and Venue.
This Contract is governed by the laws of the state of Washington. The venue for any
legal action arising from a dispute under this Contract is the Superior Court for King County.
ARTICLE 13. No Third Party Beneficiaries.
There are no third -party beneficiaries to this Contract except for the rights of Bond
owners as provided in Section 5.3.2, no person or entity other than an agency signatory to this
Contract shall have any rights hereunder or any authority to enforce its provisions, and any
such rights or enforcement must be consistent with and subject to the terms of this Contract.
ARTICLE 14. Severability.
If any provision of this Contract or its application is held by a court of competent
jurisdiction to be illegal, invalid, or void, the validity of the remaining provisions of this
Contract or its application to other entities or circumstances shall not be affected. The
remaining provisions continue in full force and effect, and the parties' rights and obligations
must be construed and enforced as if the Contract did not contain the particular invalid
provision. But if the invalid provision or its application is found by a court of competent
jurisdiction to be substantive and to render performance of the remaining provisions
Cascade Interlocal Contract
Amended and Restated
October 26, 2011
-41-
.1
unworkable and infeasible, is found to seriously affect the consideration, and is inseparably
connected to the remainder of the contract, the entire Contract is deemed void.
ARTICLE 15. Entire Agreement.
This Contract constitutes the entire and exclusive agreement between the parties
relating to the specific matters covered in this Contract. All prior or contemporaneous verbal
or written agreements, understandings, representations or practices relative to the foregoing
are superseded, revoked and rendered ineffective for any purpose. This Contract may be
altered, amended or revoked only as set forth in Article 11. No verbal agreement or implied
covenant may be held to vary the terms of this Contract, any statute, law, or custom to the
contrary notwithstanding.
Cascade lnterlocal Contract -42-
Amended and Restated
October 26, 2011
61
Cascade Water Alliance
By:
Title: Chair Date: I(Vl?l /e
Attest:
Title: Chief Executive Order Date:
Authorized by: Resolution No. 2011 -17
Date:
Cascade Interlocal Contract
Amended and Restated
October 26, 2011
October 26. 2011
Cascade Water Alliance
-43-
62
ARTICLE 16. Execution.
This Contract may be executed in one or more counterparts.
Signatory Aeencv
I:
Title: Date:
Attest:
Title: Date:
Authorized by (Resolution or Ordinance:
Date:
City of Bellevue
Cascade Interlocal Contract -44-
Amended and Restated
October 26, 2611
63
ARTICLE 16. Execution.
This Contract may be executed in one or more counterparts.
Sienatory Agencv
By:
Title:
Attest:
Title:
Authorized by (Resolution or Ordinance):
Date:
Covington Water District
Cascade Interlocal Contract
Amended and Restated
October 26, 2011
Date:
Date:
64
ARTICLE 16. Execution.
This Contract may be executed in one or more counterparts.
Si2natory Agency
Title: Date:
Attest:
Title: Date:
Authorized by (Resolution or ordinance):
Date:
City of Issaquah
Cascade Interlocal Contract
Amended and Restated
October 26, 2011
65
ARTICLE 16. Execution.
This Contract may be executed in one or more counterparts.
Sienatory Mency
By:
Title:
Attest:
Title:
Authorized by (Resolution or Ordinance):
Date:
City of Kirkland
Cascade Interlocal Contract
Amended and Restated
October 26, 2011
Date:
Date:
W
ARTICLE 16. Execution.
This Contract may be executed in one or more counterparts.
Signatory Agenev
By:
Title:
Attest:
Title:
Authorized by (Resolution or Ordinance):
Date:
City of Redmond
Cascade Interlocal Contract
Amended and Restated
October 26, 2011
Date:
Date:
67
ARTICLE 16. Execution.
This Contract may be executed in one or more counterparts.
Signatory Aaenev
Title: Date:
Attest:
Title: Date:
Authorized by (Resolution or Ordinance):
Date:
Sammamish Plateau Water Sewer District
Cascade Interlocal Contract
Amended and Restated
October 26, 2011
ARTICLE 16. Execution.
This Contract may be executed in one or more counterparts.
Sienatory ALxencv
By:
Title:
Attest:
Title:
Authorized by (Resolution or ordinance):
Date:
Skyway W &S District
Cascade Interlocal Contract
Amended and Restated
October 26, 2011
Date:
Date:
ARTICLE 16. Execution.
This Contract may be executed in one or more counterparts.
SSi natory Agencv
By:
Title:
Attest:
Title:
Authorized by (Resolution or Ordinance):
Date:
City of Tukwila
Cascade Interlocal Contract
Amended and Restated
October 26, 2011
Date:
Date:
70