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2015 JEFFCO-WHITEHALL/SEWER TO SUGERBEET ROW INTERLOCAL AGREEMENT REGARDING SEWER MAIN EXTENSION TO SUGARBEET ROW This Interlocal Agreement(the"Agreement") is entered into on this day of January, 2015, by and between Jefferson County, Montana (the"County") and the Town of Whitehall, Montana(the"Town"). The County and the Town are referred to herein individually as a"Party" and jointly as the"Parties." RECITALS: WHEREAS,the Town is a duly incorporated municipality located in Jefferson County, Montana, and a political subdivision of the State of Montana(the "State"); and WHEREAS,the County is a county in and a political subdivision of the State; and WHEREAS, the Town owns and operates a public wastewater system consisting of collection and main lines and a wastewater treatment plant and related appurtenances and improvements (as now existing and as improved, extended, or replaced,the"Sewer System"); and WHEREAS, adjacent to but outside of the limits and boundaries of the Town is an area containing approximately 15 houses grouped along Sugarbeet Row and Kountz Road, which unincorporated area is shown on the map attached as Exhibit A and is commonly known as "Sugarbeet Row"; and WHEREAS, the septic system serving the houses in Sugarbeet Row has failed and, among other things,untreated sewage is being discharged into Big Pipestone Creek; and WHEREAS, Sugarbeet Row and the owners of property therein will, absent remedying wastewater discharge violations, be placed under an Administrative Order from the Montana Department of Environmental Quality ("DEQ"); and WHEREAS,the Parties have determined that causing the Sewer System to be extended to Sugarbeet Row is an acceptable way to address the dei'ects in wastewater collection and treatment; and WHEREAS,the Town desires to assist in addressing the deficiencies in the wastewater infrastructure in Sugarbeet Row, but for a variety of reasons does not desire to annex Sugarbeet Row into the limits and boundaries of the Town; and WHEREAS, to facilitate the financing of the costs of extending sewer service to Sugarbeet Row, the County has agreed to seek to create a rural special improvement district encompassing Sugarbeet Row(the"Sugarbeet Row RSID")pursuant to Title 7, Chapter 12, Part 21, M.C.A.; and Interlocal Agreement I WHEREAS,pursuant to Title 7, Chapter 13, Part 43, MCA,the Town may furnish wastewater service to properties outside the Town limits, and may enter into contracts for wastewater service outside the Town limits; and WHEREAS,pursuant to Title 7, Chapter 11,Part 1,MCA,the Town and the County have the authority to enter into an interlocal agreement regarding the extension of wastewater collection service and the provision of wastewater treatment service; and WHEREAS,the County has applied for a grant from the Renewable Resource Grant and Loan Program of the Department of Natural Resources and Conservation(the "DNRC") and a loan and grant from USDA Rural Development("RD")to pay the costs of extending a sewer main from the Sewer System to properties in Sugarbeot Row and associated improvements (the "Project"); and WHEREAS, the County and the Town agree that upon the County's receipt of proceeds of the loan and grant from the DNRC and RD to pay costs of the Project,the County will pay the Town the sum of$17,000, representing the Town's preliminary costs expended on the Project, but only from then available loan or grant proceeds approved by the applicable funding agencies for application to such use. Said sum is accounted for by the loan and grant program as predevelopment financing; and WHEREAS, as a condition to consideration for a funding determination by RD, the Parties must enter into this Interlocal Agreement. AGREEMENTS: NOW, THEREFORE, the Town and the County, for reasons stated above and pursuant to Section 7-11-104, M.C.A., agree it is to their mutual advantage to enter into this Interlocal Agreement as follows: 1. PURPOSE AND DURATION It is the purpose of this Agreement to delineate the responsibilities between the County and the Town with respect to financing, construction, ownership, operation, maintenance, repair, and replacement of the Project (for purposes of this Agreement, "Project"has the meaning given in the recitals above and as well means the improvements resulting from constructing, installing, maintaining,repairing,or replacing the Project);to set forth the agreement of the Town to accept, properly treat and dispose of wastewater originating from properties in Sugarbeet Row; and to provide for the operation and maintenance of the Sewer System as improved by the Project. The duration of this Agreement is not limited, except as it may be limited by Section 3.6 below. 2. ADMINISTRATION 2.1. Legal Entity. No separate legal entity is established by this Agreement. Interlocal Agreement 2 2.2. Funding Administration. Great West Engineering, Inc., of Helena, Montana, the consulting engineering firm retained by the County in connection with the Project(the "County Engineer"),will assist the County in administering the funding established for the Project and act as the consulting engineer to the County in regard to the design and construction of the Project. 2.3. Budget: Administration of Funds. The Parties agree that the preliminary budget for the Project attached hereto as Exhibit B sets forth the estimated costs of the Project and the sources of funds to pay the costs of the Project, each as of the date hereof, and that such preliminary budget may change from time to time. The County with the assistance of its County Engineer will be responsible for managing the grant and loan funds shown in the preliminary budget in accordance with the requirements of RD and the DNRC, and for monitoring compliance with the budget. The County will maintain the file regarding funding for the Project for a period of 3 years after substantial completion of the Project. The Clerk and Recorder of the County will be responsible for submitting reports to RD in the forms required by RD quarterly and annually. For purposes of this Agreement, "substmtial completion of the Project' or words to similar effect means the completion of the initial construction and installation of the Project and is evidenced by the certification of substantial completion of the Project delivered by the County Engineer; "completion of the Project' or words to similar effect means the latest date of conclusion of the construction warranty period relating to the improvements constituting all or a portion of the Project. 2.4. County Engineer: Representatives. 2.4.1 The County Engineer will be responsible for overseeing the design, construction and certification of substantial completion of the Project. 2.4.2. The County will appoint a representative (the "County Representative") and the Town will appoint a representative (the "Town Representative")to coordinate and provide input with respect to the Project. The Chair of the Board of County Commissioners or his or her designee will be the County Representative. The Town Public Works Director or his or her designee will be the Town Representative. The County Engineer will coordinate activities and undertakings contemplated by this Agreement with the County Representative and the Town Representative, as necessary or appropriate. The County may appoint a new County Representative and the Town may appoint a new Town Representative at any time and from time to time after written notice to the other representative and to the County Engineer. 3. CREATION OF RSID 3.1. The County agrees that, with the assistance of bond counsel and the County Engineer, it will seek to create the Sugarbeet Row RSID by complying with the procedures set forth in Title 7, Chapter 12, Part 21, M.C.A., for the creation of rural special improvement districts. 3.2. In connection with the creation of the Sugarbeet Row RSID, the County will undertake to make the necessary findings to pledge its revolving fund to the repayment of the Interlocal Agreement 3 RSID bonds of the County (the "Sugarbeet Row RSID Bonds"), which bonds will be secured primarily by the levy of special assessments against the properties in Sugarbeet Row. 3.3. The Sugarbeet Row RSID Bonds, if authorized, will evidence the loan from RD to the County to pay a portion of the costs of the Project. 3.4. If the Sugarbeet Row RSID is created on the terms contemplated in the resolution of intention of the County to create such district or, if 100% of the property owners petition for creation of the Sugarbeet Row RSID, in the resolution of the County creating such district, the County agrees that it will seek to issue the Sugarbeet Row RSID Bonds to pay a portion of the costs of the Project and incidental costs. The County will administer the Sugarbeet Row RSID Bonds, including, without limitation, making the timely levy of special assessments, collecting special assessments and allocating the receipts to the appropriate funds and accounts to pay the Sugarbect Row RSID Bonds, maintaining appropriate amounts in funds and accounts of the Sugarbeet Row RSID Fund, and applying prepayments of special assessments and unspent construction proceeds, if any, appropriately. 3.5. The County will seek to create a rural maintenance district(the "Maintenance District') in conjunction with the creation of the Sugarbeet Row RSID. 3.6. If the Sugarbeet Row RSID is not created or the Sugarbeet Row RSID Bonds are not issued or grants or loans are not available to the County for the Project, the County shall have no obligation to pay for or fund portions of the costs of the Project. If the Sugarbeet Row RSID Bonds are not issued or grants or loans are not available to the County for the Project,the obligations of the Parties under this Agreement will cease and be of no further force or effect, unless the Parties amend this Agreement to reflect this unanticipated circumstance pursuant to Section 9 below. 4. DESIGN AND CONSTRUCTION OF PROJECT 4.1. Town Approval of Plans. 4.1.1. The County agrees that it will cause the County Engineer to submit to the Town Representative plans and specifications for the Project. The Town Representative shall review and provide any comments on the plans and specifications within 10 business days after receiving such plans and specifications. 4.1.2. After the comments of the Town Representative have been addressed to the reasonable satisfaction of the Parties, the Town agrees to provide written approval of the plans and specifications and permission to the County to connect to the Sewer System. 4.2. Application of Project Funds. The County Engineer will oversee the application of funds in the Project budget to the costs of the Project, including all grant funds and proceeds of the Sugarbeet Row RSID Bonds. Interlocal Agreement 4 4.3. Construction of the Project. 4.3.1, The County, with the assistance of the County Engineer, will bid the construction of the Project in accordance with the approved plans and specifications. 4.3.2. The County Engineer will perform construction engineering services in regard to the Project for the County. 4.3.3. The County will enter into a construction contract for the Project with the successful bidder and, with the assistance of the County Engineer, will manage construction of the Project in accordance with the approved plans and specifications and the construction contract. 4.3.4. The County Engineer shall provide the necessary certification of substantial completion to the DEQ and furnish record drawings of the Project as substantially completed to the County Representative,the Town Representative, and the DEQ. 4.4. Town Approval and Acceptance of Construction. 4.4.1. The County Engineer agrees to notify the Town Representative at least 7 days in advance of connecting to the Town's Sewer System. 4.4.2. Prior to substantial completion of construction of the Project, the Town will review the work and provide to the County any necessary punchlist items to meet the requirements of the construction contract. Upon correction of those items, if any,the Town shall provide a letter of acceptance of substantial completion to the County. 4.5. Obtaining Easements. To the extent the Project is not located in the public right of way, the County, with the assistance of the County Engineer, will obtain necessary and appropriate easements for the Project and access to the Project for construction, installation, operation, maintenance, repair, and replacement. The County and the Town will be named as grantees under such easements; provided that, if there is a conflict between any provisions of this Agreement and of such easements,the provisions of this Agreement will control and prevail in all instances. 5. OPERATION, CONTROL AND OWNERSHIP 5.1 Operation, Maintenance. Ownership of Project; Responsibility for Sewer System. 5.1.1. From and after substantial completion of the Project, the Project will form apart of the Sewer System and the Town will, at its own expense, operate, maintain, repair, and replace the Sewer System, as improved and extended by the Project. The Town is responsible for any and al I operation, maintenance, repair, and replacement costs of the Sewer System, including the Project. From and after substantial completion of the Project, the Town is responsible for any and all Interlocal Agreement 5 claims or liabilities relating to the Project, except those that are covered during the warranty period by the construction warranty related to the Project. The County shall be responsible for prosecution of any construction warranty claims during the construction warranty period related to the Project. 5.1.2. The County agrees to own the Project for so long as the Sugarbeet Row RSID Bonds are outstanding and the County:.s obligated to repay such bonds. Because the term of the Sugarbeet Row RSID Bonds is expected to be 40 years,the Town agrees to indemnify, defend, and hold harmless the County and its employees and agents from and against any claims, liabilities, causes of action, demands, or losses arising out of or relating to the operation, maintenance, repair, replacement or condition of the Project or the System, unless such claims, liabilities, causes of action, demands, or losses are caused by the intentional misconduct or gross negligence of the County. The County will grant, convey, and transfer to the Town all of its right,title, and interest in and to the Project, as is, where is, and with all faults, and the Town agrees to accept such grant, conveyance, and transfer of the Project, at such time as the Sugarbeet Row RSID Bonds are no longer outstanding or the County is no longer obligated to repay such bonds, whichever is earlier. 5.1.3. From and after completion of the Project the Town will carry and maintain with respect to the System, as improved by the Project, (i) property insurance against loss or damage by such hazards and risks as are ordinarily insured against in such amounts as are ordinarily carried by public bodies owning and operating properties of a similar character and size; and (ii) insurance against liability of the Town and its employees for injuries to persons (including death) and damage to property resulting from the operation,maintenance,repair, replacement, improvement or extension of the System in amounts not less than $750,000 for death of or personal injury to any one person, $1,500,000 for all personal injuries and deaths resulting from any one accident and$1,500,000 for property damage in any one accident. All such insurance policies shall name the County as an additional insured to the extent the Town's insurance policies reasonably allow the naming of a county as an additional insured. Each policy shall provide it cannot be cancelled without giving the Town and the County 30 days' prior written notice. 5.1.4. Other than as provided in Section 3.4 above in connection with the Sugarbeet Row RSID Bonds and Section 8 below in connection with levying assessments for cost of maintenance, upon completion of the Project,the County will have no obligations or liabilities in connection with the Project or the Sewer System. 6. INSURANCE DURING CONSTRUCTION; PERFORMANCE AND SURETY BONDS The County shall carry and maintain property and liability insurance on the Project during its construction in amounts required by RD and shall name the Town as an additional insured to the extent the County's insurance policy reasonably allows the naming of a town as an Interlocal Agreement 6 additional insured. The County will acquire and maintain in effect a performance or surety bond in regard to the construction and functionality of the Project during its construction in form and substance satisfactory to RD. Upon the conclusion of the construction warranty period related to the Project,the County shall have no further obligation to maintain the foregoing insurance policies or performance or surety bonds, but,to the extent reasonably requested by the Town, the County will assign, but only to the extent permissible and practical and at the Town's expense, its right, title and interest in and to such insurance or bonds to the Town. The County and the Town also agree that the County will assign to the Town, to the extent reasonably practical and at no additional expense to the County, such other documents or rights that are reasonably necessary or appropriate in connection with the maintenance and operation of the Project. 7. NO ANNEXATION The Town will not annex any property in Sugarbeet Row as a condition to extending the Sewer System, but agrees to make wastewater service available to the properties in Sugarbeet Row on the terms and conditions outlined in this Agreement. 8. MAINTENANCE ASSESSMENT If the Project is placed in service and the Maintenance District created,the County agrees to levy a maintenance assessment against each property in the Maintenance District that benefits from the Project and to turn over amounts it receives from such assessments to the Town within 45 days after receipt of such amounts. The amount of the maintenance assessment levied against each lot,tract, or parcel in the Maintenance District that is connected to the Sewer System will be equivalent to the amount that an equivalent user of the Sewer System in the Town pays for the use and availability of the Sewer System. Each year on or before July 1,the Town will provide to the County a budget showing the total dollar amount that the properties in the Maintenance District that are connected to the Sewer System would be expected to pay as rates and charges over the ensuing fiscal year if such properties were located in the Town and were connected to the Sewer System, and the underlying figures for how the total amount was calculated, including a table of current rates and charges for the use and availability of the Sewer System for users in the Town. If such amount appears to be reasonable to the County, the County,pursuant to Section 7-12-2161, M.C.A., will determine the amount to be assessed against each lot, tract, or parcel in the Maintenance District by taking the total budgeted amount provided by the Town for the ensuing fiscal year, dividing such amount by the number of lots, tracts, or parcels in the Maintenance District that are connected to the Sewer System, and, following adoption of a resolution as provided in Section 7-12-2161, M.C.A., assessing that amount as an annual maintenance assessment against each lot,tract, or parcel in the Maintenance District. Such assessments will be due and owing by the properties so assessed on each November 30 and May 31. The County shall have no obligation to make any payments to the Town, and shall be obligated only to transfer to the Town amounts received by the County from property tax owners in payment of the maintenance assessment. 9. AMENDMENT Interlocal Agreement 7 This Agreement, excluding the exhibits hereto, may be amended only after a duly held and noticed public meeting identifying the proposed amendment by both the County and the Town and approved by a majority of the Board of County Commissioners of the County and a majority of the Town Council of the Town. The requirements of this Section 9 shall not apply to amendments or changes to any exhibits hereto. 10. NO JOINT ENTITY CREATED This Agreement does not affect each Parry's responsibility to manage its own affairs. No joint board or budget shall result from the undertakings set forth in this Agreement and no partnership or joint venture exists or shall be deemed to exist between the Parties. 11. MISCELLANEOUS 11.1. Headings. The headings used herein are for convenience only and shall not be deemed to be relevant in resolving any question of interpretation or construction of any provision contained herein. 11.2. Entire Agreement. The Parties intend that the terms of this Agreement shall be the final expression of their agreement with respect to the subject matter hereof and may not be contradicted by evidence of any prior or contemporaneous agreement. The Parties further intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, arbitral, or other legal proceeding involving this Agreement. 11.3. Severabilitv. If any term or provision of this Agreement shall, to any extent, be determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 11.4. Further Assurances. The Parties will cooperate in undertaking such activities and executing all further documents necessary to effect the transactions discussed herein. 11.5. Assignment. This Agreement shall not be assigned by a Party without the prior written consent of the other Party and RD, which may be withheld conditioned, of delayed in the sole discretion of the Party from which consent is sought and of RD. 11.6. Counterparts. This Agreement may be executed in counterparts, all of which, when taken together, will constitute one and the same agreement. [Balance of page intentionally left blank] Interlocal Agreement 8 JEFFERSON COUNTY,, MONTANA By Its thairman, Board of County Commissioners ATTEST: County Clerk and Recor er Interlocal Agreement 9 ,y„ S 10 r r M Ya . .` �• s+, rie , — �pi as �h s 0 uO +f v v P. TO N OF WHfTE = MONTANA ASTEWATER COLLECTION EXHIBIT B Preliminary Budget BUDGET-MAY,2014 WASTEWATER SYSTE MJMPROVEMENTS SUGAR BEET-ROW WHITEHALL, MONTANA -- Prepared By: Great West Engineering ADMINISTRATIVE/FINANCIAL COSTS SOURCE: SOURCE: SOURCE: DNRC* RD GRANT* RD LOAN* TOTAL Personnel Costs $ Office Costs $ Grant Administration 14,000 $ 14,000 Formation of RSID $ 2,500 $ 2,500 Training $ - Le al $ 2,500 $ 2,500 RSID Revolving Fund Deposit $ 3,750 $ 3,750 RSID Reserve $ 3,7 $ 3,750 Bond Cost $ 13,000 $ 13,000 Audit $ 1,000 $ 1,000 It 40,500 .4t $ 40,500 ACTIVITY COSTS Pre-development Financing $ 17,000 -$ 17,000 Right-Of-Way&Permit Services $ 7,500 $ 7,500 Right-Of-Way Acquisition $ 7,500 $ 7,500 Environmental Services $ - Basic Services-Preliminary&Final Design Construction Management 10,800 $ 34,700 $ 45,500 Inspection/Close Out Services Construction-Wastewater Collection System Improvements $ 125,000 $ 53,500 $ 178,500 Contingency $ 13,500 $ 13,500 $ 125,000 $ 92,800 $ 51,700 $ 269,500 $ 125,000 $ 133,300 $ 51,700 $ 310,000 *Estimates for purposes of submitting loan and grant applications;the above preliminary budget is not an offer of funding and establishes no expectation of,and no basis for reliance on,funding. Interlocal Agreement B-1