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HomeMy WebLinkAboutJ.2 Impact_Fee_MSU_Credit_Balance_Program_Update_Agreement AN AGREEMENT OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA AND MONTANA STATE UNIVERSITY, AMENDING AND UPDATING THE WATER IMPACT FEE AND WASTEWATER IMPACT FEE DEMAND OFFSET PROGRAM FOR MONTANA STATE UNIVERSITY INITIALLY ESTABLISHED BY RESOLUTION 4939 WHEREAS, Chapter 2, Article 6, Division 9, Bozeman Municipal Code (BMC) sets forth the impact fee regulations of the City of Bozeman, which are codified as Sec. 2.06.1600 BMC et seq.; and, WHEREAS, Sections 2.06.1670.G and 2.06.1680.G provide authority for exemptions under defined conditions from payment of water impact fees and wastewater impact fees respectively; and, WHEREAS, Montana State University (MSU) is a unique and major customer of the City’s water and wastewater utilities that owns and operates its own water distribution and wastewater collection systems within the MSU campus, and these systems are provided water from the City water utility by means of a ring of meter pits that surround the MSU campus, and discharges wastewater into the City’s wastewater collection and treatment system; and, WHEREAS, MSU has invested and continues to invest significant capital resources to implement water efficiency measures within campus buildings that have produced measurable reductions in demand and impact to the City’s water and wastewater utilities; and, WHEREAS, MSU’s measurable reductions in water use and associated wastewater discharges attributable to efficiency measures completed since 2014 can be utilized to offset new water and wastewater demands for post-2014 campus developments by an amount equivalent to the measurably reduced volumes; and, WHEREAS, MSU has sub-metered existing buildings on campus to capture actual indoor water use and associated wastewater discharge data and affirms that it will sub-meter each future building to be constructed on campus; and, Docusign Envelope ID: EB1306F3-092B-8ACF-82A6-8188D5B9B7E8 WHEREAS, a measurable reduction in water use and associated wastewater discharges is defined as the metered water use occurring in a pre-2014 campus building prior to the implementation of efficiency measures completed since 2014 less the metered water use occurring after the implementation of efficiency measures; and, WHEREAS, the total respective water and wastewater demand offsets available to MSU is defined as the summation, on an annual basis, of all measurable reductions, as metered per building, in water use and associated wastewater discharges directly attributable to water use efficiency measures that have already been undertaken on campus since 2014, or that may occur in the future; and, WHEREAS, the water and wastewater impact fee exemption program created by this Resolution is effective insofar as MSU has water and wastewater demand offsets available; and, WHEREAS, it is appropriate to update the demand offset program to reflect changed circumstances over time where demand offsets were used or created, WHEREAS, both the City of Bozeman and Montana State University desire to continue to encourage water conservation and efficiency, NOW, THEREFORE, BE IT AGREED: PART 1 - FINDINGS 1. The City Commission finds that the purpose of Sections 2.06.1670.G.1 and 2.06.1680.G.1 BMC is to exempt payments of water and wastewater impact fees in specific instances where development for which impact fees are applicable does not create an additional demand or impact to the City’s water treatment and distribution system, and wastewater collection and treatment system. 2. The City Commission has established as part of the Integrated Water Resources Plan a policy to encourage the conservation of water and has established various programs to reduce water consumption both internal and external to existing buildings and to encourage more efficient new construction. 3. The City Commission and Montana State University find that due to the unique manner in which MSU’s water system is provided water through a ring of water meter pits surrounding campus that are connected to the City’s water utility, and that because these meters are Docusign Envelope ID: EB1306F3-092B-8ACF-82A6-8188D5B9B7E8 currently sized to meter MSU’s water usage and do not require enlargement to satisfy metering capacity for new development to be connected to the campus water system, that the exemption criteria contained in Sections 2.06.1670.G.1.a and 2.06.1680.G.1.a are met. 4. The City Commission and Montana State University find that increasing the size of the existing meters from 6-inch diameter to 8-inch diameter to match revised City standards for water mains would result in a significant water and wastewater impact fee despite an absence of commensurate increase in demand for service and that such a fee without associated documented demand is not appropriate. 5. The City Commission finds that future water and wastewater impact fee exemptions requested by Montana State University are valid claims so long as there remain unused demand offsets, and that future exemption requests for future Montana State University development will be resolved under the process described in Part 2 below. 6. This agreement does not affect elements of the impact fee program not explicitly addressed in this agreement. PART 2 - MSU WATER AND WASTEWATER IMPACT FEE EXEMPTION FOR FUTURE MONTANA STATE UNIVERSITY DEVELOPMENT 1. Offset Credits. Future MSU development may utilize available water and wastewater demand offsets to exempt MSU from the payment of respective water and wastewater impact fees for future development so long as there is a positive remaining demand offset balance. Demand offsets are established by documented measurable reductions in water use and associated wastewater discharges directly attributable to the implementation of water efficiency measures conducted at MSU since 2014. Montana State University will provide to the City sub-metering data for MSU buildings for which efficiency measures have been completed. These data shall include the metered water use for both pre- and post- efficiency measure completion for each building in which the efficiency measures have been completed. Respective demand offsets will be determined per building on an annual basis by subtracting the post-efficiency metered usage from pre-efficiency metered usage. The total respective water and wastewater demand offsets available is the summation of demand offsets calculated for each building in which efficiency measures have been completed. 2. Documentation. MSU will provide documentation of prior demand and the reduction in demand created by water conservation measures to support additions to the demand offset balance tracked by the City. Demand reduction must be demonstrated for a period of two years prior to being added to the balance. Docusign Envelope ID: EB1306F3-092B-8ACF-82A6-8188D5B9B7E8 3. Reconciliation. The City will evaluate the provided sub-metered data and will maintain an accounting of the total respective demand offsets available. The accounting will be shared with MSU upon request. The accounting will be maintained periodically, but no less frequently than with each MSU development for which a demand offset is requested, or when documentation for additional reduction in demand is provided by Montana State University under this agreement. The accountings will take the general form of Table 1 and Table 2 attached and made part of this agreement as Exhibit A. The City reserves the right to modify the tables as necessary over time to maintain a record of the remaining demand offsets. If insufficient offset credits are available to cover all new demand, then Montana State University must provide a payment to the City for impact fees for the remaining demand amount not offset. The payment must be made within 90 calendar days of the date of the reconciliation of expected and actual demand for an amount at the inflation-adjusted cost per gallon established in the most current water or sewer impact fee service area report in effect at the time of the impact fee evaluation. PART 3 – TERMINATION Either party may terminate this agreement and return to standard impact fee processes by providing written notice to the City Manager not less than six months prior to the date upon which the agreement will terminate. Any buildings for which a building permit has been issued prior to the date of notice of termination will complete development subject to the procedures of this agreement. Any balance of credits in place prior to the date of termination may be applied to new or existing projects until credits are depleted or otherwise required by law. Effective Date. This Agreement continues the program initially established by City Commission resolution 4939 and revisions shall be in full force and effect immediately upon signature by both parties. **** END OF AGREEMENT EXCEPT FOR SIGNATURES **** Docusign Envelope ID: EB1306F3-092B-8ACF-82A6-8188D5B9B7E8 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement the day and year first above written or as recorded in an electronic signature. CITY OF BOZEMAN, MONTANA MONTANA STATE UNIVERSITY By________________________________ By__________________________________ Chuck Winn, City Manager John How, Associate Vice President University Facilities Management APPROVED AS TO FORM: By_______________________________ Greg Sullivan, Bozeman City Attorney Docusign Envelope ID: EB1306F3-092B-8ACF-82A6-8188D5B9B7E8