11-27-1995 Council Packet - Laserfiche WebLink

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^Utiicnnov REQUEST FOR COUNCIL ACTION ^ 1995 DATE: November 22.1995 ITEM NO: P Department Approval: Name Ron Moorse Thie City Administrator Administrator Reviewed: M Agenda Section: Administrator’s Report Item Description: Metropolitan Sewer Interceptor Reconveyance Agreement Background The city constructed a sewer trunk line in the early 1960 ’s to serve the North Arm area. In 1977 the MWee purchased this line from the city because it was carrying flows from Minnetonka Beach. At that time it was the MWCC’s policy to purchase all lines carrying flows from more than one city as part of creating the regional sewer system. The MWCC financed the purchase of this line by agreeing to provide credits to the city toward if MWCC bill for a period of thirty years. The amount of these credits has been $29,340 per year. During the years 1987 through 1990 the MWCC constructed a partial replacement facility for the interceptor described above. Prior to construction of the interceptor project, the MWCC and the city of Orono reached an informal arrangement regarding the city’s assistance in constructing the project and reconveying p<mions of the interceptor to the city. One of the elements of the arrangement was that the city would take over operation and maintenance of the portion of the interceptor to be reconveyed to the city upon completion of the replacement interceptor. Another element is that the city would pay the sum of $3,500 per year over a 20 year period to the MWCC for work completed in conjunction with the interceptor project which allowed the c*ty to eliminate a lift station. The informal arrangement was never formalized and the two elements of the arrangement listed above were never carried out. In 1994 the city and the MWCC reinitiated a process to formalize the elements of an agreement for the reconveyance of the interceptor from the MWCC to the city. This process added an additional element to the agreement. The additional element relates to the MWCC’s payment to the city for the original purchase of the interceptor from the city in 1977. The MWCC has been paying the city for the interceptor in the form of annual current value credits, credited against amounts owed by the city to the MWCC for sewer service. These credits continue through the year 2006. As pan of the reconveyance, the city and MWCC agreed that the amount of the credits provided to the city sh suld be reduced to reflect the reconveyance of portions of the interceptor to the city. The amount of the credits will be reduced from $29,394 per year to $17,401.25 per year through the year 2006.