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050-08CONCURRENT RESOLUTION OF THE CONIlVION COUNCIL OF THE CITY OF WINCHESTER �� AND THE BOARD OF SUPERVISORS OF FREDERICK COUNTY TO AMEND THE ARTICLES OF INCORPORATION OF THE FREDERICK - WINCHESTER SERVICE AUTHORITY WHEREAS, by Concurrent Resolution of the City of Winchester (the "Cit}�') and the Board of Supervisors of Frederick County (the "Count}') and a Certificate of Incorporation issued by the State Corporation Commission pursuant to the Virginia Water and Waste Authorities Act (the "Act "), the Frederick- Winchester Service Authority) the "Authority') was incorporated as a public body politic and corporate in 1974, subsequently amended by appropriate similar action in 1985 and 1987; and WHEREAS, the City and the County desire to further amend the Articles of Incorporation of the Authority to extend the term of the Authority for a period to expire January 1, 2058, the Authority contemplating fmancing beyond the current date for termination of the Authority's existence in 2024. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Winchester and the Board of Supervisors of Frederick County, in separate meetings assembled, that the Articles of Incorporation of the Frederick- Winchester Service Authority be amended in the following manner: ARTICLES OF AMENDMENT OF FREDERICK - WINCHESTER SERVICE AUTHORITY 1. The name of the Authority is Frederick- Winchester Service Authority. 2. The amendment adopted is to extend the term of the Authority for a period to expire January 1, 2058. 3. These Articles of Amendment were approved by a Concurrent Resolution of the Common Council of the City of Winchester, Virginia, and the Board of Supervisors of Frederick County, Virginia, in separate meetings assembled, adopted by the City on , 2008, following a public hearing held , 2008, and adopMad bh th2 County on rlarch 12 , 2008, following a public hearing held , 2008. IN WITNESS WHEREOF, the Common Council of the City of Winchester, Virginia, and the Board of Supervisors of Frederick County, Virginia, have caused these Articles of ��-} � `�`��� ex�.��.� -k�9 c ��a Amendment to be executed this day of , 2008. (SEAL) Attest: J. Brannon Godfrey, Jr., Clerk of Council (SEAL) Attest: By: o .Riley, Jr.,Clerk, oard of Supervisors BOS 1�es. #050 -08 CTTY OF WINCHESTER, VIRGINIA Charles T. Gaylor, Jr. President of Council FREDERICK COUNTY, VIRGINIA By� O S� Q v �o Richard C. Shickle, Chairman Board of Supervisors RESOLUTION A RESOLUTION TO AMEND THE ARTICLES OF INCORPORATION OF THE FREDERICK COUNTY SANITATION AUTHORTIY TO EXTEND THE TERM OF THE AUTHORITY FOR A PERIOD TO EXPIItE JANUARY 1, 2058. WHEREAS, the Board of Supervisors (the "Board ") of Frederick County, Virginia (the "Count}') adopted a Resolution on April 17, 1967, creating the Frederick County Sanitation Authority (the "Authority"); and WHEREAS, on July 13, 1998, the Board adopted a Resolution extending the term of the Authority for 50 years from the date of such adoption; and WHEREAS, the obligations of the Authority contemplate financing covering a period in excess of the remaining term of the Authority under § 15.2 -5114. NOW, THEREFORE, BE IT RESOLVED, that the Articles of Incorporation of the Frederick County Sanitation Authority adopted April 10, 1967, as amended from time to time, be further amended by Articles of Amendment in the following form: ARTICLES OF AMENDMENT _ OF FREDERICK COUNTY SANTIATION AUTHORITY The name of the Authority is "Frederick County Sanitation Authorit}�'. 2. The amendment adopted is to extend the term of the Authority for a period to expire January 1, 2058. 3. These Articles of Amendment were approved by a Resolution of the Board of Supervisors of Frederick County, Virginia, adopted on March 12 , 2008, following a public hearing held March 12 , 2008. IN WITNESS WHEREOF, the Board of Supervisors has caused these Articles to be executed this 12th day of March , 2008. (SEAL) Att t: J .Riley, Jr., Clerk d of Supervisors BOS des• #049 -08 FREDERICK COUNTY, VIRGINIA By �---sZ �� Richard C. Shickle, Chairman Board of Supervisors HARRISON b JOHNSTON,PLC 3URR P. HARRISON 1904 -19T3 ATTORNEYS AT LAW WILLIAM A. )JOHN5TON H. R. BENHAM III BILLY J. TISINGER IAN R. D. WILLIAMS CHARLES S. McCANDLISH 1948 -200I BRUCE E. DOWNING STEPHEN L. PETTLER, JR. POET OFFICE BOX B09 WINCHESTE$, VIRGINIA 22604 February 5, 2008 Mr. John R. Riley, Jr. Frederick County Administrator 107 North Kent Street Winchester, Virginia 22601 Re: Amendment to Frederick County Sanitation Authority Charter and Frederick- Winchester Service Authority Charter Dear John: STREET ADDRE66: 21 6. LOUDOUN STREET WINCHESTER, VIRGINIA 22601 TELEPHONE 540 - 667 -1266 PAC6IMILE s40. 667.1312 540 - 667 -7893 /; 4 - w i � ��,+ti` y �'') `` � �1 ,.,. W� , �. . �, tti�e J I— c;�/ ��`�Ci'�i t "L� At Wendy Jones' request, I enclose herewith Resolutions which, if adopted by the Board, would amend the Charters of FCSA and FWSA by extending the term of the each Authority for a period to expire January 1, 2058, under § 15.2 -5114, Code of Virginia, (1950), as amended. A draft of the Notice of Public Hearing on each Resolution is also enclosed. § 15.2 -5110, Code of Virginia, provides the method for amending the Articles 'of Incorporation of the Authorities. Essentially it is the same procedure specified for their creation. § 15.2 -5104 requires advertisement at least one time in a newspaper of general circulation in Frederick County, Virginia, giving notice of the time and place of a public hearing to be held not less than 30 days after the publication. I will leave it to you to work out the scheduling of dates. Please give me a call if I can be of help. If you or Wendy have any questions, please give me a call. WAJ:nh Enclosures cc: Mr. W. H. Jones (with enclosures) Sincerely yours, ,���� William A. John NOTICE OF PUBLIC HEARING The Frederick County Board of Supervisors will hold a public hearing on 2008, at P. M., in the Board of Supervisors' Room at 107 North Kent Street, Winchester, Virginia, to consider the following: RESOLUTION A RESOLUTION TO AMEND THE ARTICLES OF INCORPORATION OF THE FREDERICK COUNTY SANITATION AUTHORITY TO EXTEND THE TERM OF THE AUTHORITY FOR A PERIOD TO EXPIItE JANUARY 1, 2058. WHEREAS, the Board of Supervisors (the "Board ") of Frederick County, Virginia (the "County") adopted a Resolution on Apri] 17, 1967, creating the Frederick County Sanitation Authority (the "Authority"); and WHEREAS, on July 13, 1998, the Board adopted a Resolution extending the term of the Authority for 50 years from the date of such adoption; and WHEREAS, the obligations of the Authority contemplate fmancing covering a period in excess of the remaining term of the Authority under § 15.2 -5114. NOW, THEREFORE, BE IT RESOLVED, that the Articles of Incorporation of the Frederick County Sanitation Authority adopted April 10, 1967, as amended from time to time, be further amended by Articles of Amendment in the following form: ARTICLES OF AMENDMENT OF FREDERICK COUNTY SANITATION AUTHORITY The name of the Authority is "Frederick County Sanitation Authorit}�'. 2. The amendment adopted is to extend the term of the Authority for a period to expire January 1, 2058. 3. These Articles of Amendment were approved by a Resolution of the Board of Supervisors of Frederick County, Virginia, adopted on , 2008, following a public hearing held 2008. IN WITNESS WHEREOF, the Board of Supervisors has caused these Articles to be -1- executed this day of 2008. (SEAL) Attest: John R. Riley, Jr., Clerk Board of Supervisors -2- FREDERICK COUNTY, VIRGINIA Richard C. Shickle, Chairman Board of Supervisors FREDERICK COUNTY SANITATION AUTHORITY P.O. Box 1877 R Winchester, VA 22604 -8377 OBERT P. MOWERY, C.PA., Chairman JOHN STEVENS, Vice - chairman RICHARD A. RUCKMAN, P.E., Sec - treasurer J. STANLEY CROCKETT DARWIN S. BRADEN January 22, 2008 Mr. John R. Riley, Jr. County of Frederick 107 North Kent Street Winchester, VA 22601 Dear John: Wellington H. Jones, P.E. Engineer - Director Ph.- (540)868 -1061 Fax - (540) 868 -1429 �- �i, � � r'� ��E � 1 -iti _i_; � _ � ��PJ� =PY _f rJ ..i Enclosed are two resolutions passed by the Authority Board on January 15, 2008. The first resolution requests the Board of Supervisors extend the term of the Authority until January 1, 2058. You should also receive a similar request from the Frederick - Winchester Service Authority. This is to provide a sufficient term to retire the bond the Service Authority intends to float. This bond will finance the expansion and improvements to the Opequon Water Reclamation Facility. The Authority also approved the intermunicipal agreement providing for that expansion and improvements, contingent upon the Supervisors extending the Authority's term.. The second resolution is to inform the Supervisors the Authority endorsees and supports the findings and recommendations of the Water and Sewer Unifications Committee Report of September 20, 2007. With regards to extending the term of the Authority, I'm having William A. Johnston draft a resolution for the Supervisors consideration. Should you have any questions please call. /tll Sincerely yours, A W.H. Jones, P.E. Engineer- Director WATER AT YOUR SERVICE RESOLUTION REQUESTING 50 -YEAR EXTENSION TO THE TERM OF THE FREDERICK COUNTY SANITATION AUTHORITY WHEREAS, the Frederick- Winchester Service Authority (Service Authority) is expanding the Opequon Water Reclamation Facility, and WHEREAS, the Service Authority is floating 30 -year bonds to finance the local share, and WHEREAS, the Frederick County Sanitation Authority (Authority) must enter an agreement with the Service Authority to provide the Authority with additional wastewater treatment capacity along with the Authority's responsibility to pay its share of debt service required for the expanded capacity, and WHEREAS, the remaining life of the Authority does not provide sufficient time for repayment of the bond issue. NOW, THEREFORE, BE IT RESOLVED, the Frederick County Sanitation Authority does hereby respectfully request the Frederick. County Board of Supervisors to extend the term of the Authority for a period of fifty years as provided in Section 15.2- -- 5114 of the Code of Virginia. I certify this Resolution was adopted by a unanimous vote of the Frederick County Sanitation Authority at a regular meeting held on January 15, 2008, at which 5 of 5 members were present. RESOLUTION WATER AND SEWER UNIFICATION COMMITTEE REPORT FREDERICK COUNTY SANITATION AUTHORITY WHEREAS, the Winchester- Frederick County Unification Steering Committee appointed a Water and Sewer Unification Sub - committee to evaluate the consolidation of the Winchester Utilities, Frederick County Sanitation Authority and Frederick - Winchester Service Authority, and WHEREAS, the Water and Sewer Unification Sub - committee, over a period of ten months, studied the three utilities and published a report September 20, 2007, recommending the existing utilities be merged into a regional water and sewer service authority. NOW, THEREFORE, BE IT RESOLVED, the Frederick County Sanitation Authority does hereby endorse and support the findings and recommendations of the Water and Sewer Unification Committee Report of September 20, 2007 and by copy of this resolution conveys such support to the Frederick County Board of Supervisors. I certify this Resolution was adopted by a vote as shown below at the Frederick County Sanitation Authority's regular meeting held on January 15, 2008, at which 5 of 5 members were present. Darwin Braden Nay J. Stanley Crockett Aye Robert Mowery Aye Richard Buckman Aye John Stevens Aye NOTICE OF PUBLIC HEARING The Frederick County Board of Supervisors will hold a public hearing on 2008, at P. M., in the Board of Supervisors' Room at 107 North Kent Street, Winchester, Virginia, to consider the following: CONCURRENT RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF WINCHESTER AND THE BOARD OF SUPERVISORS OF FREDERICK COUNTY TO AMEND THE ARTICLES OF INCORPORATION OF THE FREDERICK- WINCHESTER SERVICE AUTHORITY WHEREAS, by Concurrent Resolution of the City of Winchester (the "Cit}�') and the Board of Supervisors of Frederick County (the "Count}') and a Certificate of Incorporation issued by the State Corporation Commission pursuant to the Virginia Water and Waste Authorities Act (the "Act "), the Frederick- Winchester Service Authority) the "Authority') was incorporated as a public body politic and corporate in 1974, subsequently amended by appropriate similar action in 1985 and 1987; and WHEREAS, the City and the County desire to further amend the Articles of Incorporation of the Authority to extend the term of the Authority for a period to expire January 1, 2058, the Authority contemplating financing beyond the current date for termination of the Authority's existence in 2024. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Winchester and the Board of Supervisors of Frederick County, in separate meetings assembled, that the Articles of Incorporation of the Frederick- Winchester Service Authority be amended in the following manner: ARTICLES OF AMENDMENT OF FREDERICK - WINCHESTER SERVICE AUTHORITY 1. The name of the Authority is Frederick- Winchester Service Authority. 2. The amendment adopted is to extend the term of the Authority for a period to expire January 1, 2058. -1- 3. These Articles of Amendment were approved by a Concurrent Resolution of the Common Council of the City of Winchester, Virginia, and the Board of Supervisors of Frederick County, Virginia, in separate meetings assembled, adopted by the City on 2008 following a public hearing held , 2008, and adopted by the County on 2008, following a public hearing held 2008. IN WITNESS WHEREOF, the Common Council of the City of Winchester, Virginia, and the Board of Supervisors of Frederick County, Virginia, have caused these Articles of Amendment to be executed this day of 2008. (SEAL) Attest: By: J. Brannon Godfrey, Clerk of Council (SEAL) Attest: John R. Riley, Jr., Clerk Board of Supervisors -2- CITY OF WINCHESTER, VIRGINIA I: Charles T. Gaynor, Jr., President of Council FREDERICK COUNTY, VIRGINIA Richard C. Shickle, Chairman Board of Supervisors Frederick - Winchester Service Authority Post Office Box 43 Winchester, Virginia 22604 Office: 107 North Kent Street County Offzce Complex Winchester, Virginia 22601 1 -540- 722 -3579 December 26, 2007 �,.-� Mr. Wellington H. Jones, P.E. Engineer- Director Frederick County Sanitation Authority PO Box 1877 Winchester, VA 22604 Mr. John R. Riley, Jr. County Administrator County of Frederick 107 N. Kent Street Winchester, VA 22601 Mr. Charles T. Gaynor Acting City Manager City of Winchester Rouss City Hall 15 North Cameron Street Vllinchester; VA 22601 Gentlemen:' Please find; attached, an amended Intermunicipal Agreement for the Opequon Water Reclamation Facility. As noted in the document and in Mr. Johnston's correspondence, we have made the appropriate changes to the agreement that would allow for defining present and future ownership of capacity at the Opequon Facility. We request you review this document and forward it for appropriate approval by your governing bodies. This is essential to continuing our undertaking of expanding and upgrading the Opequon Facility to meet future regulatory and growth needs. If there should be any questions, please feel free to contact this office. o s truly, ��� �%�N1�. J sse W. Moffett Executive Director Frederick - Winchester Service Authority JWM:ncg Enclosure (1) CC: William A: Johnston — Harrison &Johnston, PLC "MwintwinlNg and prorhatiNg Ilia VaBuag of tRa G�a��unity tliroagR 8NVlronrMa�faB StaWwrdsAip" HARRISON E� JOHNSTON,PI,C ATTORNEYS AT LAW 'URR P. HARRISON 1904 -1973 — 1LLIAM A. JOHNSTON • -- .. K. BENHAM iIi P06T OFFICE sox soa BILLY J• TISINGER WINCHESTER, VIRGINIA 22604 IAN R. D. WILLIAMS CHARLES 6. McCANDL18H 1948 -2001 BRUCE E. DOWNING 6TEPHEN L. PETTLER, JR. October 31, 2007 Mr. Jesse W. Moffett Executive Director Frederick - Winchester Service Authority P. O. Box 43 Winchester, Virginia 22604 Re: Intermunicipal Agreement - Opequon Water Reclamation Facility Dear Jesse: STREET ADDRE66: 21 6. LOUDOUN STREET WINCHESTER, VIRGINIA 22601 TELEPHONE 540 -bbl -1266 FAC6IMILE 540 - 667.1312 540 - 667.7893 I have prepared, and enclose herewith, a document intended to be a second amendment to the Intermunicipal Agreement which incorporates the terms of the original, as amended. -- Therefore, this document should contain everything to date. I have underlined the language which is either new or added or revised from the prior documents. This is intended to call your attention to the changes. have. Please review it carefully and get in touch with me to discuss any questions you may With kind regards, I am ra�.�� Enclosure r,i, ,a! J ?t` " j Sincerely yours, �� �� William A. Johnston OPEQUON WATER RECLAMATION FACILITY INTERMUNICIPAL AGREEMENT INDEX Page 1 • ARTICLE I - Definition and Warranties 3 2. ARTICLE II -Term of Agreement 5 3. ARTICLE III - Construction of Facilities 6 4. ARTICLE IV - Obligations of Authority 7 5. ARTICLE V - Obligation of Political Subdivisions 9 6. ARTICLE VI -Rates and Charges 15 7. ARTICLE VII - Miscellaneous 1 g OPEQUON WATER RECLAMATION FACILITY INTERMUNICIPAL AGREEMENT THIS AGREEMENT, made as of the __ day of .2008, by and between the CITY OF WINCHESTER, VIRGINIA, a municipal corporation (the CITYI, active by and through its Common Council the COUNTY OF FREDERICK VIRGINIA (the COUNTYh acting by and through its BOARD OF SUPERVISORS FREDERICK COUNTY SANITATION AUTHORITY, a public body politic and corporate organized and existing under the provisions of the Virginia Water and Waste Authorities Act, Sections 15.2 -5100, et seq., Code of Virginia (1950), as amended, (the SANITATION AUTHORITY) and the FREDERICK - WINCHESTER SERVICE AUTHORITY, a public body politic and corporate organized and existing under the provisions of the Virginia Water and Waste Authorities Act, Sections 15.2 -5100, et seq., Code of Virginia (1950), as amended (FREDERICK- WINCHESTER) provides that: WHEREAS, the CITY formerly owned and operated wastewater treatment facilities which provided wastewater treatment for all of the City and certain outlying areas in the County, and the SANITATION AUTHORITY likewise owned and operated wastewater treatment facilities which provided wastewater treatment for certain areas of the County; and WHEREAS, in the interest of efficient water quality management for the Opequon Creek �e drainage basin and other basins within the confines of Frederick County, the CITY and the COUNTY caused FREDERICK- WINCHESTER to be formed by Concurrent Resolution adopted by the County on January 24, 1974 and by the City on February 12, 1974 and by a certificate of incorporation issued by the State Corporation Commission of Virginia on March 8, 1974; and WHEREAS, the CITY and the COUNTY subsequently revised the purposes for which FREDERICK - WINCHESTER was formed by the passage of Addendum #2 to the Concurrent Resolution on April 12, 1983 and April 13, 1983, respectively; such purposes are to provide the following services: (1) To acquire, finance, construct, operate and maintain facilities for the abatement of pollution by the treatment of sewage collected from the CITY and the COUNTY, including treatment plants, trunks or interceptors and pumping stations, together with all appurtenant equipment and appliances and properties, rights, easements and franchises related thereto or deemed necessary or convenient by FREDERICK - WINCHESTER for their operation, but not including sewage collection facilities; and (2) To acquire, finance, construct, operate and maintain garbage and refuse disposal facilities for the CITY and the COUNTY, including landfills, incineration and other disposal facilities, together with all appurtenant equipment and appliances and properties, rights, easements and franchises related thereto or deemed necessary or convenient by FREDERICK- WINCHESTER for their operation, but not including garbage and refuse collection facilities. WHEREAS, the parties desire to enter into this Agreement to provide for the -2- construction of such wastewater treatment facilities as are agreed upon from time to time and the fmancing, operation and maintenance of all such facilities and recognize that this Agreement will be used to facilitate interim fmancing, and/or the issuance of revenue bonds by FREDERICK- WINCHESTER to finance the cost of such construction; and WHEREAS, the parties heretofore entered into that certain Intermunicipal Agreement dated September 12, 1983, subsequently amended June 22, 1998. This document is a further amendment and constitutes a restatement of the entire agreement as so amended. NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter contained, the parties agree as follows: ARTICLE I Definitions and Warranties SECTION 1.1. DEFINITIONS. The following words as used in this Agreement shall have the following meanings: "Act" shall mean the Virginia Water and Waste Authorities Act (Chapter 51, Title 15.2, Code of Virginia of 1950, as amended. "BOD" is the abbreviation for biochemical oxygen demand: the quantity of oxygen used in the biochemical oxidation of organic matter in a specified time, at a specified temperature and under specified conditions; a standard test used in assessing wastewater strength. "BONDS" shall mean the revenue bonds issued from time to time by FREDERICK- WINCHESTER to obtain funds, together with other available funds, to pay a portion of the cost -3- of the Project and shall include any notes or other obligations issued for such purpose. "CITY" shall mean the CITY OF WINCHESTER, a municipal corporation of the Commonwealth of Virginia, and shall include the Common Council as its governing body. "COST ", when used with respect to the Project, shall have the meaning specified in Section 15.2 -5101 of the Act (including the definition of "cost" and "cost of improvements "). "COUNTY" shall mean FREDERICK COUNTY, a County of the Commonwealth of Virginia, and shall include the County Board of Supervisors as its governing body. "POINTS OF DELIVERY" shall mean such points as FREDERICK- WINCHESTER may establish from time to time for receipt of wastewater from the CITY and the SANITATION AUTHORITY. "POLITICAL SUBDIVISION" shall mean the CITY, the COUNTY and the SANITATION AUTHORITY. "PROJECT" shall mean the existing Opequon Water Reclamation Facility (OWRF) and the facilities to be hereafter constructed in connection therewith by FREDERICK- WINCHESTER pursuant to Article III, whether by purchase, lease or otherwise, and the facilities to be provided by FREDERICK - WINCHESTER pursuant to Article IV, as the same may from time to time exist. "FREDERICK- WINCHESTER" shall mean FREDERICK - WINCHESTER SERVICE AUTHORITY, a public body politic and corporate and organized and existing under the provisions of the Act. Ct S "SANITATION AUTHORITY" shall mean FREDERICK COUNTY SANITATION AUTHORITY, a public body politic and corporate organized and existing under the provisions of the Act. "TRUSTEE" shall mean the trustee under the resolution or indenture authorizing or securing the Bonds. SECTION 1.2. REPRESENTATIONS AND WARRANTIES. Each of the parties represents and warrants that it has full power and authority to enter into and perform this Agreement. ARTICLE II Term of Agreement SECTION 2.1. INITIAL TERM. -This Agreement shall be in full force and effect from the date of its execution until June 30.2038; provided, however, that if on such date the Bonds have not been paid or provisions made for their payment, the term of this Agreement shall continue until the Bonds shall have been paid or provisions made for their payment. SECTION 2.2. CONTINUATION OF AGREEMENT. This Agreement shall continue in effect beyond June 30, 2038 (or such later date as provided above), until terminated by the CITY, the COUNTY, the SANITATION AUTHORITY or FREDERICK- WINCHESTER. No such termination shall become effective until two years after written notice thereof shall have been given to each of the other parties hereto. -5- ARTICLE IH Construction of Facilities SECTION 3.1. PROJECT. FREDERICK - WINCHESTER will provide the wastewater facilities existing and to be constructed in accordance with this Agreement, as the same may be modified to meet requirements of appropriate regulatory bodies. FREDERICK- WINCHESTER may also undertake the provisions of such additional facilities as maybe agreed upon from time to time by the CITY, the COUNTY, the SANITATION AUTHORITY and FREDERICK- WINCHESTER. SECTION 3.2. PAYMENT FOR FACILITIES. The obligation of FREDERICK- WINCHESTER to provide the facilities described in Section 3.l is limited to the funds available to it from time to time for such purpose. FREDERICKWINCHESTER shall be under no obligation to provide funds for such purpose except in accordance with Section 4.1. SECTION 3.3. ADDITIONAL FACILITIES. In the event that the CITY, the COUNTY, or the SANITATION AUTHORITY determines the need for additional wastewater interceptors or treatment facilities that have not been agreed upon by each of the CITY, the COUNTY, the SANITATION AUTHORITY and FREDERICK - WINCHESTER, then FREDERICK - WINCHESTER shall provide the requested facilities at the sole cost of the CITY, the COUNTY, or the SANITATION AUTHORITY as the case may be. ARTICLE IV Obligations of Authority SECTION 4.1. SALE OF BONDS. FREDERICK - WINCHESTER shall, from time to time, issue and sell Bonds pursuant to the Act in an amount, together with other available funds, which will be sufficient to pay the cost of constructing and placing the initial Project in operation, as well as any subsequent expansions; provided, however, that nothing contained in this Agreement shall require FREDERICK- WINCHESTER to issue the Bonds except upon terms deemed reasonable by it. SECTION 4.2. ACQUISITION AND CONSTRUCTION OF PROJECT. FREDERICK- WINCHESTER shall, as soon as may be practicable and with all reasonable . �. � dispatch after the necessary funds are made available to it, acquire, construct and place the initial Project, as well as any subsequent expansions, in operation. SECTION 4.3. ACCEPTANCE AND TREATMENT OF WASTEWATER. FREDERICK - WINCHESTER shall accept and treat all sewage delivered by the CITY and SANITATION AUTHORITY at Point of Delivery up to their respective allocated plant capacities as set forth herein, provided the sewage complies with the requirements of the Rules and Regulations from time to time adopted by FREDERICK - WINCHESTER. FREDERICK- WINCHESTER shall be under no obligation to treat wastewater delivered by the CITY or the SANITATION AUTHORITY in excess of their allocated daily plant capacities. SECTION 4.4. FORMULA FOR ALLOCATION OF CAPACITY. The allocation of the existing and future capacity of the Opequon Water Reclamation Facility shall be measured -7- in both flow and biological treatment in such proportion as FREDERICK - WINCHESTER shall from time to time determine. SECTION 4.5. EXISTING CAPACITY AND ALLOCATION. The capacity of the Opequon Water Reclamation Facility immediately prior to the amendment of this Agreement is 8.25 million gallons en r day(MGD flow capacity and 18,000 pounds per day of biological capacity (BODI. These capacities (hereafter sometimes called "existing capacity "� are presently allocated between the CITY and the SANITATION AUTHORITY in the following manner: 1. The CITY is allocated 6.125 MGD of the existing flow capacity and 10.000 pounds der day of BOD. 2. The SANITATION AUTHORITY is allocated 2.125 MGD of the existing flow capacity and 8,000 pounds per day of BOD. SECTION 4.6. FUTURE CAPACITY AND ALLOCATION. Present needs of the CITY and the SANITATION AUTHORITY require an additional capacity at the Opeq ikon Water Reclamation Facility which has been authorized and is expected to be completed in 2010. The�lanned expansion is to provide an additiona14.35 MGD of flow capacity and an additional 6 000 pounds per daYof BOD. Effective January 1.201 1. or the date that the presentlY,planned exnansion and uverade goes into service, whichever occurs first, the then existing capacity shall be allocated between the CITY and the SANITATION AUTHORITY in the following manner: 1. The CITY shall be allocated 7.125 MGD of the existing flow capacity and 11,000 founds per day of BOD. 2. The SANITATION AUTHORITY shall be allocated 5.475 MGD of the existing flow capacity and 13 OOO�ounds per day of BOD. SECTION 4.7. OPERATION OF PROJECT. The CITY, by contractual agreement with FREDERICK - WINCHESTER, shall operate and maintain the Project in an efficient and economical manner, making all necessary and proper repairs, replacements and renewals, consistent with good business and operating practices for comparable facilities and in accordance with applicable standards of regulatory bodies. Treatment of wastewater shall meet or exceed all applicable standards of regulatory bodies. SECTION 4.8. ADOPTION AND ENFORCEMENT OF RULES AND REGULATIONS. FREDERICK - WINCHESTER shall adopt and enforce such reasonable rules and regulations as may be necessary or desirable to insure the efficient operation and maintenance of its facilities and the compliance with allocable regulations and orders of regulatory bodies. ARTICLE V Obligation of Political Subdivisions SECTION 5.1. FREDERICK - WINCHESTER TO TREAT ALL WASTEWATER. All publicly owned wastewater treatment facilities except septic tank the field systems owned by the COUNTY or the SANITATION AUTHORITY shall be operated by FREDERICK - WINCHESTER under this Agreement. The CITY and the SANITATION AUTHORITY shall deliver to FREDERICK - WINCHESTER at Points of Delivery all wastewater collected by !� them which will drain or can be economically pumped to FREDERICK - WINCHESTER and shall not permit or provide for the treatment of wastewater collected by them in any other manner. SECTION 5.2. LIMITATION ON PLANT CAPACITY. The Political Subdivisions recognize that the capacity ofFREDERICK- WINCHESTER'S advanced wastewater treatment plant will be regulated by the State Water Control Board and that reallocation of plant capacity may have to be made in order to avoid overloading. The CITY and the SANITATION AUTHORITY each covenants and agrees not to exceed its plant capacity as allocated from time to time. The CITY and the SANITATION AUTHORITY have the primary responsibility for the necessary. action to insure that their wastewater flows remain within their allocations. At such time as FREDERICK - WINCHESTER has been advised by the Virginia Department of Environmental Quality (DEQ) or the State Water Control Board (SWCB) that there is inadequate existing capacity or other conditions of the permit are not met requiring improvement or expansion of its facilities, the CITY and/or the COUNTY, as the case maybe, shall suspend, if necessary, the issuance of permits which allow start of construction of projects in the affected area until capacity is increased by reason of reallocation or it is advised by FREDERICK - WINCHESTER that additional wastewater may be delivered to FREDERICK- WINCHESTER. SECTION 5.3. EXCEEDING CAPACITIES. Each Political Subdivision recognizes -10- that limitations on capacity, both flow and biological, exist at the Opequon Water Reclamation Facility and that the CITY and SANITATION AUTHORITY are entitled to reserve both existing and future capacities and allocations for their sole use as set forth in Sections 4.4, 4.5 and 4.6 of this Agreement. To insure that the CITY and SANITATION AUTHORITY remain within those established allocations FREDERICK - WINCHESTER shall at the end of each calendar year calculate the actual daily capacity utilization for both BOD loading and Flow for both parties. BOD shall be measured in pounds per day and Flow in units of million gallons per day. It is also recognized by each entity that reserved capacities are estimates of each entity's anticipated future capacity needs and transfer of ownership and cost responsibility of reserve capacity may be necessary to maintain each party within capacity limits. Following the annual review of actual utilized daily capacity of the CITY and SANITATION AUTHORITY the following evaluation shall be undertaken. 1) If the actual daily capacity utilization of the CITY and SANITATION AUTHORITY is less than their reserved capacities, no modifications to reserve capacity allocations will be necessary, unless agreed upon. 2) If a party exceeds its BOD capacity, the exceeding party shall compensate the other party by the average daily amount (in pounds per day) in excess of reserved capacity multiplied by the Unit Debt Service Costs for BOD reserved capacity. This compensation will not transfer the ownership of the reserved capacity. 3) If a party exceeds its Flow capacity, the exceeding party will compensate the other party by the average daily amount (in gallons per day) in excess of reserved capacity multiplied by the Unit Debt Service Costs for Flow reserved capacity. This compensation will not transfer the ownership of the reserved capacity. 4) If a party exceeds its BOD capacity by more than ten (10) percent of the reserved capacity, the exceeding party may purchase capacity from the other party, provided the other party is willing to sell. The purchasing party shall assume the annual principal and interest payments for the amount of BOD capacity purchased. In addition, the purchasing party shall reimburse the selling party for prior principal and interest payments made to reserve such capacity. This reimbursement shall be in the form of equal annual payments for the remaining years of the Bonds at an interest rate equal to the bond interest rate. The purchased capacity shall increase the amount of the reserved capacity of the purchasing party. The reserved capacity for the selling party will decrease by the corresponding amount. 5) If a party exceeds its Flow capacity by more than fi8een (15) percent of the reserved capacity, the exceeding party may purchase capacity from the other party, provided the other party is willing to sell. The purchasing party shall assume the annual principal and interest payments for the -12- amount of flow capacity purchased. In addition, the purchasing party shall reimburse the selling party for prior principal and interest payments made to reserve such capacity. This reimbursement shall be in the form of equal annual payments for the remaining years of the Bonds at an interest rate equal to the bond interest rate. The purchased capacity shall increase the amount of the reserved capacity of the purchasing party. The reserved capacity for the selling party will decrease by the corresponding amount. 6) If one party should exceed its reserved capacity for flow and/or BOD as set forth in paragraphs 4 and 5 above and the total utilized capacity of the facility for flow and/or BOD exceeds 80 %, then capacity must be either purchased or constructed. 7) The Unit Debt Service Costs for BOD shall be determined by taking all construction costs associated with BOD and BNR capacity and dividing this total by the total construction cost of the Project to determine the percentage of the cost associated with BOD capacity. This percentage shall be used to determine the amount of the annual debt service (principal and interest) that provides for the biological capacity. The unit cost shall be calculated by taking the portion of the annual debt service divided by the units of available capacity created in pounds per day to establish a unit debt service cost for BOD capacity. -13- 8) The Unit Debt Service Costs for Flow capacity shall be determined by taking all construction costs associated with Flow capacity and dividing this total by the total construction cost of the Project to determine the percentage of the cost associated with Flow capacity. This percentage shall be used to determine the amount of the annual debt service (principal and interest) that provides for the hydraulic capacity. The unit cost shall be calculated by taking the portion of the annual debt service divided by the units of available capacity created in gallons per day to establish a unit debt service cost for Flow capacity. SECTION 5.4. PAYMENT OF CHARGES. The CITY and the SANITATION AUTHORITY each covenants and agrees to pay promptly when due the charges of FREDERICK - WINCHESTER as determined pursuant to Article VI and billed to it from time to time; provided, however, that the CITY and the SANITATION AUTHORITY shall not be obligated to pay such charges except from revenues received by the CITY and the SANITATION AUTHORITY, respectively, from the charges to be paid by the users of its sewerage systems and available to them for such purposes, including availability, connection, consumption and service charges or fees and other revenues of such systems. FREDERICK- WINCHESTER shall provide the CITY and the SANITATION AUTHORITY with information as to the minimum charges necessary for their respective required payments. SECTION 5.5. OBSERVANCE OF REGULATIONS. The Political Subdivisions each covenant and agree to observe al] reasonable rules and regulations respecting the use of and -14- services furnished by the Project in accordance with Section 4.8 or legally required by any other authorized regulatory body. ARTICLE VI Rates and Charges SECTION 6.1. RATES AND CHARGES IN GENERAL. FREDERICK- WINCHESTER shall fix and determine from time to time operational rates and debt service charges. Such operational rates shall be established by FREDERICK- WINCHESTER to provide funds, together with other funds that maybe available, at all times to pay (a) the cost of operating and maintaining the Project, and (b) reserves for purposes such as replacements and improvements to the Project. Such debt service charges shall be established by FREDERICK- WINCHESTER to provide necessary funds, together with other funds that maybe available, at all times to pay (a) the principal of, premium, if any, and interest on the Bonds, (b) reserves required by the Bonds and (c) trustee's, administrative, and other fees required by the Bonds. Debt service charges shall be charged to the CITY and the SANITATION AUTHORITY regardless of whether the Project is completed or operational. SECTION 6.2. OPERATIONAL RATES AND CHARGES. FREDERICK- WINCHESTER shall fix and determine from time to time a wholesale operational rate for BOD. Such rates shall be established at such levels as shall be necessary to provide funds, together with other funds that maybe available, sufficient at all times to pay (a) the cost of operation and maintenance of the Project and (b) provide reserves for purposes such as -15- replacements and improvements to the Project. The wholesale operational rates shall be designed and calculated so as to recover two- thirds of the necessary funds for the aforesaid purposes from charges for flow and one -third for charges for BOD. FREDERICK- WINCHESTER shall charge the CITY and the SANITATION AUTHORITY the same wholesale rate for flow and the same wholesale rate for BOD. SECTION 6.3. DETERMINATION OF OPERATIONAL CHARGES. FREDERICK - WINCHESTER shall determine operational charges associated with the operations and maintenance of the Project by applying the operational rates determined pursuant to Section 6.2 to the total gallons of wastewater received from the CITY and the SANITATION AUTHORITY, as obtained by their respective wholesale meter readings; and the BOD received from the CITY and the SANITATION AUTHORITY as obtained by monthly average of weekly samples. SECTION 6.4. DETERMINATION OF DEBT SERVICE CHARGES. FREDERICK- WINCHESTER shall determine the debt service charges by (1) prorating the annual debt service due on the Bonds, including any deposits to any reserve Funds, on the same basis as the allocation of existing capacity as established in Section 4.5 and (2) prorating additional debt service based on the allocation of flow and biological capacities and their associated capital costs with regard to flow and BOD as established in Section 4.6 as modified by Section 5.3. SECTION 6.5. RATES CHARGED BY CITY AND SANITATION AUTHORITY TO THEIR RETAIL CUSTOMERS. The CITY and the SANITATION AUTHORITY -16- shall establish retail sewer rates; said rates to be independent and at the sole discretion of the CITY and the SANITATION AUTHORITY. The rates established shall recover charges made by FREDERICK - WINCHESTER and capital and operational costs and reserves needed to operate and maintain the respective sewerage collection systems. The CITY agrees that the retail sewer rate established by it shall be the rate charged both CITY customers and COUNTY customers on the CITY sewer system. SECTION 6.6. PAYMENT OF CHARGES. FREDERICK - WINCHESTER may present charges based on budget estimates, subject to adjustment on the basis of an independent audit at the end of each fiscal year. All charges of FREDERICK - WINCHESTER shall be billed and shall be payable upon presentation. In the event the CITY or the SANITATION ` AUTHORITY shall fail to make payment in full within thirty (30) days after presentation; interest on such unpaid amounts shall occur at the highest rate of interest payable by FREDERICK - WINCHESTER on any of the Bonds then outstanding. FREDERICK- WINCHESTER shall bill the CITY and the SANITATION AUTHORITY, and no one else, for the wastewater treated or the charges set forth in this Article VI. The charges to the CITY and the SANITATION AUTHORITY are several and not joint obligations. SECTION 6.7. EFFECTIVE DATE OF RATES AND CHARGES. Any revised rates and charges provided for in this amendment shall be effective the first full month following completion of the facilities necessary to provide additional capacity, but in no event later than the -17- due date of the first payment on debt services to pay for the facilities. Until such time, the existing rates and charges shall remain in effect. SECTION 6.8. INDUSTRIAL SURCHARGE. Surcharges collected by FREDERICK - WINCHESTER from customers of the CITY and SANITATION AUTHORITY shall reduce the charges determined under Section 6.3 for the respective provider of retail service. ARTICLE VII Miscellaneous SECTION 7.1. AMENDMENTS. It is recognized by the parties hereto that this Agreement will constitute an essential part of the FREDERICK - WINCHESTER financing plan and that, after the Bonds are sold, this Agreement cannot be amended, modified, or otherwise altered in any manner that will impair or adversely affect the security afforded hereby for the payment of the principal of, premium, if any, and interest on the Bonds, but that this Agreement can be modified or amended only with the consent of the Political Subdivisions, FREDERICK - WINCHESTER and the Trustee given in accordance with the resolution or indenture under which it has been designated. SECTION 7.2. BOOKS AND RECORDS. FREDERICK - WINCHESTER shall keep proper books and records in accordance with accepted accounting practice which shall be available for inspection at all reasonable times by the Political Subdivisions through their duly authorized agents. FREDERICK - WINCHESTER shall cause an annual audit of its books and records to be made by an independent certified public accountant at the end of each fiscal year and a certified copy thereof to be filed promptly with the governing bodies of the Political Subdivisions. SECTION 7.3. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns. SECTION 7.4. SEVERABILITY. If any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not affect any other provision hereof. SECTION 7.5. COUNTERPARTS. This Agreement shall be executed in several counterparts, any of which shall be regarded. for all purposes as one original. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and their seals to be affixed and attested by their duly authorized officers, all as of the date first above written. (SEAL) Clerk of Council -19- CITY OF WINCHESTER President of Common Council (SEAL) County gdmin— I n (SEAL) Secretary- Treasurer (SEAL) Secretary - Treasurer -20- COUNTY OF FREDERICK By Chairman, Its Board of Supervisors FREDERICK COUNTY S`�'ITATION AUTHORITY Chairman FREDERICK- WINCHESTER SERVICE AUTHORITY Chairman