Greendale Council Approved Proposed Contract with VRUC

AGREEMENT

This Agreement is executed by the City of Greendale (“Greendale”) and the Valley Rural Utility Company (“VRUC”) in order to facilitate the provision of wastewater collection, treatment, and disposal service for unincorporated Dearborn County and in order to provide water service for VRUC’s customers. This Agreement is premised on the following recitals:

A. Greendale is a municipality in the State of Indiana. Greendale provides sewer collection and treatment service and water treatment and distribution service in and around its corporate limits.

B. Wastewater collected by Greendale is treated at the South Dearborn Regional Sewer District (‘South Dearborn”) plant. Pursuant to a contract among South Dearborn, Greendale, the Cities of Lawrenceburg (“Lawrenceburg”) and Aurora (“Aurora”), and Pernod Ricard USA (Seagrams), the contracting parties Greendale, Lawrenceburg, Aurora and Seagrams each own defined capacity in the South Dearborn treatment plant. A copy of that contract is attached hereto as Exhibit A (the “South Dearborn Contract”).

C. VRUC is a public utility and a sewage disposal company pursuant to I.C. 8-1-2-89, possessing certificates of territorial authority (“CTAs”) to provide sewage disposal service in certain unincorporated areas of Dearborn County issued by the Indiana Utility Regulatory Commission (“IURC”). VRUC is also a water utility.

D. VRUC’s most recent sewer CTA was issued pursuant to an order of the IURC issued July 6, 2005 in Cause No. 42673 (the “Expansion Territory”). The Expansion Territory is shown in yellow on the map attached hereto as Exhibit B. Greendale is presently providing sewage utility service to the Sugar Ridge Development in the Expansion Territory, but the balance of the Expansion Territory is presently unserved. Unless Greendale provides the treatment capacity, VRUC is incapable of providing sewer service to the Expansion Territory. Greendale has sewer facilities in the immediate vicinity of the unserved portions of the Expansion Territory, and the Expansion Territory lies within the area to which Greendale is lawfully authorized to provide sewer service.

E. For the most part VRUC’s sewer service consists of service to the platted subdivision known as Hidden Valley Lake (“HVL”). Except for a few customers who are already connected and being served as of the date of this Agreement, VRUC’s existing service area (the “Existing Service Area”) is shown in green on the map attached as Exhibit B. The Existing Service Area does not include the area shown in pink on Exhibit B except to the extent of customers who are already connected and being served as of the date of this Agreement. Treatment for wastewater collected by VRUC is provided through Greendale at the South Dearborn treatment plant. At one time this service was provided pursuant to an agreement with Greendale, the term of which has since expired. Since the expiration of the term of that agreement, such wastewater treatment service has been provided by Greendale to VRUC pursuant to Greendale’s schedule of sewer rates established by ordinance.

F. Greendale and VRUC desire to enter a new agreement specifying the terms under which Greendale will provide for wastewater treatment service to VRUC and providing for the provision of sewer service to the Expansion Territory.

G. VRUC also provides water service to its members in HVL and a few existing customers located outside HVL, and Greendale provides water service to VRUC for a limited time pursuant to a Settlement Agreement dated October 31, 2005, between the parties. The parties desire to extend the duration and further define the terms for such water service.

NOW THEREFORE the parties agree as follows:

1. For a period of thirty (30) years commencing from the date of this Agreement, Greendale shall provide sewer service to VRUC for all wastewater collected by VRUC in the Existing Service Area (the Existing Service Area shown in green on Exhibit B plus other customers who are already connected and being served as of the date of this Agreement) pursuant to the following terms:

(a) For the entire 30-year period, VRUC will deliver to Greendale at the current point of interconnection all wastewater collected by VRUC in the Existing Service Area.

(b) Greendale shall charge VRUC for all wastewater delivered a rate of $2.18 per 1,000 gallons, which rate may be changed from time to time by ordinance subject to the following limitation: any changes to the rate will be made at the same time Greendale changes all of its sewer rates based upon volumetric water usage and must be made in the same percentage as Greendale changes such rates generally applicable within the corporate limits of Greendale.

(c) For all new connections or new construction or remodeling of existing construction producing additional wastewater flow in the Existing Service Area, VRUC shall pay the Greendale system development charge per equivalent dwelling unit pursuant to Greendale Municipal Code § 53.15(B).

(d) The service provided pursuant to this paragraph shall be construed as a requirements contract. During the thirty (30) year period, VRUC shall not displace the wastewater treatment service provided by Greendale under this paragraph by building its own sewage treatment capacity or contracting with any other person or entity for wastewater treatment service to the Existing Service Area.

(e) VRUC shall not deliver to Greendale quantities of wastewater in excess of Greendale’s capacity to accept, treat, and transport such wastewater.

2. VRUC agrees that VRUC and all VRUC customers shall be subject to such sewer use ordinances that Greendale may adopt on a nondiscriminatory basis and which are consistent with the definition of “Sewer Usage Ordinance” in Sec. 1.35 of the South Dearborn Contract and with the requirements of Section 4 of the South Dearborn Contract.

3. For a period of the longer of (a) twelve years from the date of this Agreement or (b) with respect to each Subdivision (as defined herein), when that Subdivision has been annexed into Greendale, VRUC shall be the wastewater treatment provider for the Expansion Territory exclusive of Sugar Ridge Development (the “Subdivisions”) pursuant to the terms of this Agreement. Each “Subdivision” within the “Subdivisions” shall refer to each particular platted subdivision development within the Subdivisions. VRUC shall provide such service only pursuant to the terms of this Agreement and shall not serve the Subdivisions through any other means. Developers of the Subdivisions shall construct sewer lines, pumps, valves, appurtenances, and such other sewer facilities necessary to serve the respective developments and connect them to Greendale’s existing sewer lines. To the extent recoupment and/or reimbursement may be owed to other customers and/or developers related to the facilities to which such sewer facilities will connect, the Developers must agree to pay such recoupment and/or reimbursement. The design and construction of these sewer facilities shall be subject to Greendale’s reasonable approvals. Upon completion of construction, the ownership of the sewer mains, pumps, valves, appurtenances, and other sewer facilities to serve the respective developments will be dedicated by the developer(s) to Greendale, subject to a lease of such facilities to VRUC for a period of the longer of (a) twelve (12) years from the date of this Agreement or (b) with respect to each Subdivision, when that Subdivision has been annexed into Greendale. Upon such dedication and acceptance, Greendale shall commence serving these customers directly as the agent of VRUC. No rent will be owed by VRUC or otherwise for such lease, but VRUC will hold such leasehold interest pursuant to this Agreement throughout the period of the lease as set forth in this paragraph. Upon the termination of the lease, these customers shall become direct customers of Greendale and VRUC shall no longer have the right to serve them.

4. Greendale’s sewer service to these customers in the Subdivisions will be commensurate with the service and level of service Greendale provides its own customers. Greendale shall be responsible for all aspects of service, including maintenance, repairs, capital improvements (as necessary), customer service, billing, and collecting of payments. The treatment capacity to serve the Subdivisions will be provided from Greendale’s capacity in the South Dearborn treatment plant. The wastewater flow from the Subdivisions shall not be subject to the volumetric rate provided in Paragraph 1.(b) of this Agreement.

5. Throughout the term of this Agreement, VRUC’s generally applicable schedule of rates as approved by the IURC shall apply to service provided to the Subdivisions. Greendale shall bill and collect from customers in the Subdivisions VRUC’s rates and charges so approved for VRUC.

6. For all new connections or new construction or remodeling of existing construction producing additional flow in the Subdivisions, VRUC shall pay the Greendale system development charge per equivalent dwelling unit pursuant to Greendale Municipal Code § 53.15(B).

7. As compensation for operating and maintaining the system and providing service on a contract basis to the Subdivisions as provided herein, Greendale shall receive the portion of the receipts from customers in the Subdivisions which is equivalent to the rates and charges that would have applied and been collected as if the customers were direct customers of Greendale. On a daily basis, Greendale will deposit all funds collected from customers in the Subdivisions into an account in VRUC’s name with a financial institution in Greendale or Lawrenceburg. On a monthly basis, Greendale shall provide a report showing all funds collected, the portion of the funds collected which represents Greendale’s compensation hereunder, and the remainder which is VRUC’s portion. Within five (5) days of receipt of such report, the VRUC shall transfer to Greendale the portion which represents Greendale’s compensation hereunder as shown on such report. If VRUC fails to pay the amount shown, Greendale may provide thirty (30) days notice to terminate the lease provided in Paragraph 3 of this Agreement. If VRUC has not paid in full by the conclusion of such thirty (30) day period, the lease shall be terminated immediately, the customers in the Subdivisions will become the direct customers of Greendale, and VRUC shall no longer have the right to serve customers in the Subdivisions. In addition to authority to terminate the lease for nonpayment by VRUC, Greendale may offset the amounts due and owing by VRUC against the daily deposits of funds collected from customers in the Subdivisions pursuant to this Paragraph.

8. Pursuant to Ind. Code § 36-9-22-2, Greendale’s contract with the developers of the Subdivisions for the construction of the needed sewer main extensions shall include on behalf of the developer and the developer’s successors in title the waiver of the right to remonstrate in a future annexation by Greendale. The contract will be recorded by Greendale before the sale of lots by the developer. Before being permitted to connect, any customer served by these mains must also waive the right to remonstrate in a future annexation by Greendale.

9. For so long as Greendale is providing sewer service to VRUC, VRUC agrees not to seek to provide sewer service to areas outside the Existing Service Area (shown in green on Exhibit B together with existing customers who were already connected and receiving service as of the date of this Agreement) and outside the Subdivisions as provided herein and not to seek additional or expanded CTAs from the IURC without Greendale’s consent. Greendale will consent to the provision of such service in the area shown in pink on Exhibit B but only pursuant to the same terms set forth in Paragraph 3-8 herein as apply to the Subdivisions. This term shall survive the expiration of the thirty-year period set forth in Paragraph 1 herein and shall continue thereafter for so long as Greendale provides service to VRUC at the conclusion of such period.

10. For a period of thirty (30) years from the date of this Agreement, Greendale shall supply and VRUC shall purchase all of VRUC’s requirements for water to be supplied to VRUC’s existing customers and VRUC’s future customers within HVL. Such service shall be provided at a rate of $1.08 per thousand gallons through October 31, 2007. The rate will change to $1.11 per thousand gallons effective November 1, 2007, and again to $1.15 per thousand gallons effective November 1, 2008. After October 31, 2009, the rate shall be the lowest volumetric rate in Greendale’s rate schedule as established by ordinance. Thereafter, such rate may be changed at such time as Greendale changes all of its volumetric rates for water service and in the same percentage as Greendale changes its volumetric rates for water service generally applicable within the corporate limits of Greendale. Greendale shall not have an obligation to deliver quantities of water in excess of its capability to deliver water to VRUC. In the event of a shortage of water supply, supply may be limited to VRUC on the same terms as such supply is limited to all Greendale customers. VRUC shall be responsible to maintain its own system to maintain minimum pressures and fire flows which VRUC considers to be necessary and adequate. Greendale shall only be obligated to provide water to serve VRUC’s existing customers and VRUC’s future customers within HVL and shall have no obligation to provide VRUC water to serve customers in any other location. VRUC shall not extend its water lines within HVL to serve areas outside HVL. The service provided pursuant to this paragraph shall be construed as a requirements contract. VRUC shall not displace the water service provided by Greendale hereunder by constructing its own source of supply or contracting with any other person or entity for water supply. VRUC may, however, make provision for a redundant source of supply for emergencies or water shortages and shall be permitted to utilize that redundant source of supply as necessary in order to flush lines connecting to said supply.

11. Greendale shall not be liable for an interruption in water or sewer utility service occurring due to circumstances that are outside Greendale’s reasonable control or occurring absent gross negligence on the part of Greendale.

12. Greendale shall be the owner of the water and sewer meters that measure the water and wastewater flow for purposes of the volumetric rates provided in Paragraphs 1 and 10 of this Agreement. Greendale shall have the right and the duty to test, repair and replace such meters in its discretion. Not any more often than once every 12 months, VRUC may request that Greendale test either or both meters. When a meter is found to be inaccurate by greater than 2%, the meter shall be repaired or replaced by Greendale as necessary. Bills for service to VRUC shall be corrected for the period of the inaccuracy, but not for more than one year, by using flows measured from a comparable period.

13. At the conclusion of the thirty (30) year periods provided in Paragraphs 1 and 10, the parties may negotiate new agreements pursuant to terms that are mutually acceptable. In the event new agreements are not negotiated for water and/or sewer service, VRUC may continue to receive water and/or sewer service pursuant to rates and charges duly adopted by ordinance by Greendale for all customers of VRUC who are connected and receiving service as of the conclusion of such thirty (30) year periods. Greendale shall have no obligation to supply water to or to receive wastewater from customers of VRUC who were not connected as of the conclusion of such thirty (30) year periods.

14. Neither party shall have right to assign its interests under this Agreement without the consent of the other party.

15. Each of the undersigned represents that he is duly authorized to execute this Agreement on behalf of the respective party.

__________________________________________
Valley Rural Utility Company

By: ______________________________________
Date:______________________________________

___________________________________________
City of Greendale

By: ________________________________________
Date:_______________________________________



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