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Home My WebLink About094-26 (Modifications-IntermunicipalAgreement-Fred-Winc-FrederickWater-FWSA) 4 RESOLUTION APPROVING MODIFICATIONS TO THE INTERMUNCIPAL AGREEMENT BETWEEN THE CITY OF WINCHESTER,VIRGINIA,COUNTY OF FREDERICK,VIRGINIA,FREDERICK COUNTY SANITATION AUTHORITY,AND FREDERICK-WINCHESTER SERVICE AUTHORITY WHEREAS, in the interest of efficient water quality management for the Opequon Creek drainage basin and other basins within the confines of Frederick County,the City and the County formed Frederick Winchester Service Authority("FWSA")in 1974;and WHEREAS, in 1983,the City and the County revised the purposes for which FWSA was formed to include acquisition, 'financing, construction,operation,and maintaining 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 FWSA for their operation,but not including sewage collection facilities;and WHEREAS,the parties entered into the Opequon Water Reclamation Intermunicipal Agreement, as amended in 1998 and 2008,to provide for the construction of such wastewater treatment facilities as are agreed upon from time to time and the financing,operation,and maintenance of all such facilities and recognize that this Agreement will be used to facilitate interim financing and/or the issuance of revenue bonds by FWSA to finance the cost of such construction;and WHEREAS,the parties desire to amend the Intermunicipal Agreement as attached hereto and incorporated herein as Exhibit 1. NOW,THEREFORE,BE IT RESOLVED by the Frederick County Board Of Supervisors,Virginia,that the Opequon'Water Reclamation Intermunicipal Agreement as amended,in substantial form as is set forth in Exhibit 1,is hereby approved, and the County Administrator or designee is directed and authorized to take any and all actions that are reasonable and necessary to effectuate the purpose of the Agreement and this Resolution, including,without limitation,executing the Agreement,subject to any changes deemed reasonable and necessary by the County Attorney. ADOPTED this 101 day of June 2026.This Resolution shall take effect upon adoption by the Frederick County Board of Supervisors and approval of the amended Intermunicipal Agreement by the Common Council of the City of Winchester and the Frederick Water Board of Directors. John F.Jewell,Chairman Aye Michael D.Guevremont Aye Albert L. Orndorff Aye Robert T.Liero Aye Jason C. Aikens Aye Gary R.Oates Aye Robert W.Wells Aye Michael L.Bollhoefer T Clerk,Board of Supe rs County of Frederick irginia No. 094-26 �\�ester se F� rP'�� Frederick-Winchester Service Authority Mailing Address:P.O.Box 43 Winchester,Virginia 22604 1974 Office:2 N Cameron Street Winchester,Virginia 22601 (540)7913-3049 MEMORANDUM TO: Frederick County Board of Supervisors FROM: Candice Perkins, FWSA Executive Director DATE: May 28, 2026 SUBJECT: Frederick-Winchester Service Authority — Proposed Amendments to the Opequon Wastewater Reclamation Facility Intermunicipal Agreement The Opequon Water Reclamation Facility Intermunicipal Agreement is the document that outlines the operation of the Opequon Plant and any construction projects and bonds for the plant. This agreement was originally approved in 1983 and amended in 1998 and 2008. Over the past two years the FWSA has been reviewing the document and has identified a number of areas that need to be updated to simplify and modernize how the wastewater treatment operations are managed under the agreement. The revised agreement includes the following primary provisions: • Removal of refuse/landfill language • Addition of language for the document to be reviewed every five years • Addition of language stating that future wastewater improvements shall be outlined in a Memorandum of Understanding • Removal of references to Biological Oxygen Demand (BOD). Future charges to Frederick Water and the City for treating wastewater at the OWRF will be based strictly on flow. The current charges are based on a combination of flow and biological strength of the wastewater. • Wholesale user rates will be eliminated with this change which simplifies the billing process. • The ownership of the Opequon Water Reclamation Facility (OWRF) will become 50% owned by the City and 50% owned by Frederick Water. To accomplish this, Frederick Water is purchasing excess flow capacity from the City, and the City is purchasing excess biological capacity from Frederick Water. The FWSA Board discussed these changes at their April 20, 2026 meeting and recommended approval of the amendment Intermunicipal Agreement. Frederick Water Board approved at their April 2026 meeting, and the City of Winchester approved the amendments at their meeting on May 26, 2026. Requested Action:The FWSA is seeking approval from the Frederick County Board of Supervisors on the requested amendments to the OWRF Intermunicipal Agreement Frederick-Winchester Service Authority RE: CWRF Intermunicipal Agreement Amendments May 29, 2026 Page 2 Attachments: • Current Approved Intermunicipal Agreement • Intermunicipal Agreement with proposed changes (strikethrough for deleted text and red for added text) • Intermunicipal Agreement (Clean) OPEQUON WATER RECLAMATION FACILITY INTERMUNICIPAL AGREEMENT Draft—April 2026 INDEX Page 1. ARTICLE I - Definition and Warranties 3 2. ARTICLE II- Term of Agreement 4 3. ARTICLE III - Construction of Facilities 5 4. ARTICLE IV - Obligations of Authority 5 5. ARTICLE V - Obligation of Political Subdivisions 8 6. ARTICLE VI - Rates and Charges 11 7. ARTICLE VII -Miscellaneous 14 OPEQUON WATER RECLAMATION FACILITY INTERMUNICIPAL AGREEMENT THIS AGREEMENT,made as of the day of 2026,by and between the CITY OF WINCHESTER,VIRGINIA, a municipal corporation (the CITY). acting by and through its Common Council, the COUNTY OF FREDERICK, VIRGINIA (the COUNTY). acting by and through its BOARD OF SUPERVISORS, FREDERICK COUNTY SANITATION AUTHORITY(dba Frederick Water), 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 WATER and the FREDERICK-WINCHESTER SERVICE AUTHORITY(FWSA), 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(FWSA)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 FREDERICK WATER 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 drainage basin and other basins within the confines of Frederick County, the CITY and the COUNTY caused FWSA 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 - 1 - WHEREAS, the CITY and the COUNTY subsequently revised the purposes for which FWSA 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 FWSA for their operation, but not including sewage collection facilities; and oe . -. - -ation and other-disposal f4eilities, together-with all appttt4enant e"ipfnent and 0 0SSffy OF 0 0 OF 0 WHEREAS, the parties desire to enter into this Agreement to provide for the construction of such wastewater treatment facilities as are agreed upon from time to time and the financing, operation and maintenance of all such facilities and recognize that this Agreement will be used to facilitate interim financing, and/or the issuance of revenue bonds by FWSA 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, and April 16, 2008. 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: -2- ARTICLE I Definitions and Warranties SECTION I.I. 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. "BONDS" shall mean the revenue bonds issued from time to time by FWSA to obtain funds, together with other available funds,to pay a portion of the cost 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 FWSA may establish from time to time for receipt of wastewater from the CITY and FREDERICK WATER. -3 - "POLITICAL SUBDIVISION" shall mean the CITY, the COUNTY, FREDERICK WATER and t4e FWSA. "PROJECT" shall mean the existing Opequon Water Reclamation Facility (OWRF) and the facilities to be hereafter constructed in connection therewith by FWSA pursuant to Article III, whether by purchase, lease or otherwise, and the facilities to be provided by FWSA pursuant to Article IV, as the same may from time to time exist. "FWSA" shall mean FREDERICK WINCHESTER SERVICE AUTHORITY, a public body politic and corporate and organized and existing under the provisions of the Act. "FREDERICK WATER" shall mean the 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, FREDERICK WATER or FWSA. No such -4- termination shall become effective until two years after written notice thereof shall have been given to each of the other parties hereto. SECTION 2.3. REVIEW OF AGREEMENT. The agreement shall be reviewed by the CITY, FREDERICK WATER and FWSA every five years from the date of this amendment. ARTICLE III Construction of Facilities SECTION 3.1. PROJECT. FWSA 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. FWSA may also undertake the provisions of such additional facilities as may be agreed upon from time to time by the CITY, the COUNTY-, FREDERICK WATER and FWSA. SECTION 3.2. PAYMENT FOR FACILITIES. The obligation of FWSA to provide the facilities described in Section 3.1 is limited to the funds available to it from time to time for such purpose. FWSA 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-,4ke rnT� or FREDERICK WATER determines the need for additional wastewater interceptors or treatment facilities that have not been agreed upon by each of the CITY, toe COS NT%FREDERICK WATER and FWSA, then FWSA shall provide the requested facilities at the sole cost of the CITY, t4e COUNT-Y,or FREDERICK WATER as the case may be. Any future additional wastewater interceptors, treatment facilities, and facility upgrades that have been agreed upon by the CITY, FREDERICK WATER and FWSA shall be outlined in a Memorandum of Understanding. ARTICLE IV Obligations of Authority SECTION 4.1. SALE OF BONDS. FWSA shall, from time to time, issue and sell Bonds pursuant to the Act in an amount, together with other available funds, which -5 - 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 FWSA to issue the Bonds except upon terms deemed reasonable by it. SECTION 4.2. ACQUISITION AND CONSTRUCTION OF PROJECT. FWSA 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 WASTE WATER. FWSA shall accept and treat all sewage delivered by the CITY and FREDERICK WATER at Point of Delivery"to t4ei-r-espeetive alleeated plant set fqA her-eiii,provided the sewage complies with the requirements of the Rules and Regulations f of time to time adopted by FWSA. FWSA shall be under no obligation to treat wastewater delivered by the CITY or FREDERICK WATER in excess of "lleeated daily the total plant capacities. SECTTON 4.4. FORMULA FOR ALLOCATION T O A TION OF CAPACITY. Tl,o shall ff am time te time detefmlk— SECTION 4.4. EXII G PREVIOUS CAPACITY AND ALLOCATION. The capacity of the Opequon Water Reclamation Facility immediately prior to t4-e amendmen prior to 2011 was of t4is A g-eefne„t is 8.25 million gallons per day (MGD) flow capacity . The capacities (hereafter semetime called"e*istiiig previous capacity") were allocated between the CITY and FREDERICK WATER in the following manner: 1. The CITY was allocated 6.125 MGD of the existing flow capacity aad 10,000 p ,,ds per-day f BOD 2. FREDERICK WATER was allocated 2.125 MGD of the existing flow capacity and 8,000 p rds per-day of BOD -6 - SECTION 4.5. FUTURE EXISTING CAPACITY AND ALLOCATION. and t e SANITATION A UT-14ODTTV i t e fell ,w ing m ,,neF The existing capacity of the Opequon Water Reclamation Facility is 12.6 million gallons per day (MGD) flow capacity. and 11,000 p rds per-day f BOD 7 TiDL'iITJ'RICK MIATER shall be .,ll..e to d 5.4 75 A4GD of t e existing flow eapae4y 13,000 r nds per-day f BOD The existing Flow capacity shall be divided between the CITY and FREDERICK WATER; all amounts paid by each entity identified as reserved capacity in the 2008 agreement shall be recalculated and each entity shall pay or reimburse their applicable monetary amount to achieve equal capacity ownership. All future operational billing will be based on the monthly flow usage for each entity. SECTION 4.6. OPERATION OF PROJECT. The CITY, by contractual agreement with FWSA, 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 4.7. ADOPTION AND ENFORCEMENT OF RULES AND REGULATIONS. FWSA shall adopt and enforce such reasonable rules and regulations as may be necessary or desirable to ensure the efficient operation and maintenance of its facilities and the compliance with allocable regulations and orders of regulatory bodies. -7 - ARTICLE V Obligation of Political Subdivisions SECTION 5.1. FWSA TO TREAT ALL WASTEWATER. All publicly owned wastewater treatment facilities to*k the field systems owned by tke COUNTY e FREDERICK WATER shall be operated by FWSA, or it's agent, under this Agreement. The CITY and FREDERICK WATER shall deliver FWSA at Points of Delivery all wastewater collected by them which will drain or can be economically pumped to FWSA and shall r e+ro. ,,;* Fevide f9-toe tfe t,, en f ste 4ef SECTION 5.2. LIMITATION ON PLANT CAPACITY. The Political Subdivisions recognize that the capacity of FWSA'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 FREDERICK WATER each covenants and agrees not to exceed it�i plant capacity as alleea4edf em tifne to tifne. The CITY and FREDERICK WATER have the primary responsibility for the necessary action to ensure that their wastewater flows do not exceed the plant capacity r-emaiff wit4ifft4ei,-allee +ie ffs. At such time as FWSA 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 FREDERICK WATER COUNT, as the case may be, 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 FWSA that additional wastewater may be delivered to FWSA. SECT-!ON 5.3. TJ'X!''TJ'TJ'iIING CAPACITIES.P A CITIES Eaeh Pooh;... C„l,diyisi - 8 - in eerie 4.5 and 4.6 fthis n gr-eefne efistir-e that the CITY r a efid of eaeh ealefidar-year-ealettiate the aetual daily eapaeit-y tAilizatieft for-both BOD leadifig and Flew fer-beth pafties. BOD shall be ffleastifed ift petifids per-day and Flew iii tinits of millieft gallons -per-day. Follo ; g the . .,lr-eview . f aet,,.,l tAilized daily eapae4y of the CITY of l 1) if the aet,,.,l daily eapae4y „t;liz do of the CITY .,,,.1 TiD>G`ilE ICK eempensate the other-paF�y by the aver-age daily afnetint(ifi-potmds per-day) ift e*eess 0 r-esen,ed eapae4y multiplied by the Unit Debt Sen,iee Costs for-BOD r-eseR,ed eap—+— eempensate the other-paFty by the aver-age daily afnetint(ifi gallefis per-day) ift e*eess 0 r-esen,ed eapae4y multiplied by the Unit Debt Sen,iee Costs for-Flow r-eseR,ed eapaeity. n) if a r.F, y o eeds its BOD eapae4y by fner-e tha ton (l n)r „t f tl,o pFovided the othef:paFty is willing to sell. The pur-ehasing paFty shall assume the a-mmal , -9 - t e befid;„to,-ost,-.,to Gl if a paFty o eeds its Flo eapae4y by f o than fi too„ !1 Gl p „t 4 t4e ptir-ehasing paAy shall Feifnbtir-se t4e selling pa4y f9r-prior-pfineipal and inter-es the bond;„to,-ost,-.,to eofr-espo,4 •fig afnet„t set faFth ift paragraphs 4 a*d 5 above a*d the total tAilized eapae4y of�he faeiky for-flow eonstmetieft eests asseeia-ted with BOD a*d BNR eapaeit-y and dividing this total by the with BOD eapaeit��. This per-eefilage shall be tised to deter-mine the afnetifit of the afli4tfal eest shall be ealetilated by takii4g the poFtiefl of the a*fittal debt sen,iee divided by-Ow fee BOD eapae4y, The Unit Debt Co. o Costs for-Flo eapae4y shall be deto.- ifie.1 by taking a eonstmetion eests asseeia4ed with Flow eapae4y and dividifig this total by the - 10- be ealetilated by taking t4e peFtien of t4e annual debt sen4ee divided by the tMi SECTION 5.3. PAYMENT OF CHARGES. The CITY and FREDERICK WATER each covenants and agrees to pay promptly when due the charges of FWSA as determined pursuant to Article VI and billed to it from time to time; provided, however, that the CITY and FREDERICK WATER shall not be obligated to pay such charges except from revenues received by the CITY and FREDERICK WATER, 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. FWSA shall provide the CITY and FREDERICK WATER with information as to the minimum charges necessary for their respective required payments. SECTION 5.4. OBSERVANCE OF REGULATIONS. The Political Subdivisions each covenant and agree to observe all reasonable rules and regulations respecting the use of and services furnished by the Project in accordance with Section 4.7 or legally required by any other authorized regulatory body. ARTICLE VI Operational and Debt Service Charges SECTION 6.1. RATES AND OPERATIONAL AND DEBT SERVICE CHARGES IN GENERAL. FWSA shall set operational and debt service charges annually. . Such operational rates charges shall be established by FWSA to provide funds, together with other funds that may be 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 FWSA to provide necessary funds, together with other funds that may be a at all times to pay (a) - II - 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 FREDERICK WATER regardless of whether the Project is completed or operational. The operational rates shall be calculated as to recover the necessary funds for aforesaid purposes from charges for flow use for each entity as calculated over a twelve-month period. SECTION 6.2. OPERATIONAL RATES TES AND CHARGES. FMIS A shall fi &Rd detefmiiie f+em time to time a wholesale eper-atieiial r-a+e f6f:BOD. Stieh f:a+es shall a*d FREDERICK WATER�he same whelesale f:a+e fef: flow a*d t4e same whelesale SECTION 6.2. DETERMINATION OF OPERATIONAL CHARGES. FWSA as part of the fiscal year budget shall prepare an annual estimate of the Operational Costs expected to be incurred during the following year, and the estimated share of these costs for FREDERICK WATER and the CITY. The operational costs for billing shall be based on the operational costs identified in the FWSA budget divided by the projected monthly billing flow for each entity. Quarterly, the actual flow percentage utilized by each entity shall be determined, and any overpayments or underpayments shall be prorated to the CITY and FREDERICK WATER-with the next subsequent monthly payment. MIATER as oared by their-iespeetiso e wholesale le meter-r-eading .*.a the BOO - 12- ed f.,,,, t e CITY .,,,.1 FREDERICK WATER TTi'D ., obtained by ,v, „tl y aN,er-agee weekly samples. SECTION 6.3. DETERMINATION OF DEBT SERVICE CHARGES. FWSA shall determine the debt service charges by (1)prorating the annual debt service due on the Bonds, including any deposits to any reserve Funds. The Debt Service Costs shall be determined by taking all construction costs associated with the Project to determine the amount of the annual debt service (principal and interest) and dividing those costs between FREDERICK WATER and the CITY (See Exhibits A and B). , e t>, same modified by Seetieff 5.3. SECTION 6.4. RATES CHARGED BY CITY AND FREDERICK WATER TO THEIR RETAIL CUSTOMERS. The CITY and FREDERICK WATER shall establish retail sewer rates; said rates to be independent and at the sole discretion of the CITY and FREDERICK WATER. The rates established shall recover charges made by FWSA 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 6.5. PAYMENT OF CHARGES. FWSA 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 FWSA shall be billed and shall be payable upon presentation. In the event the CITY or FREDERICK WATER 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 FWSA on any of the Bonds then outstanding. - 13 - FWSA shall bill the CITY and FREDERICK WATER, and no one else, for the wastewater treated or the charges set forth in this Article VL The charges to the CITY and FREDERICK WATER are several and not joint obligations. SECTION 6.6. EFFECTIVE DATE OF CHARGES. Any revised ffttes an 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 due date of the first payment on debt services to pay for the facilities. Until such time, the existing r charges shall remain in effect. SECTION 6.7. INDUSTRIAL SURCHARGE. Surcharges collected by FWSA from customers of the CITY and FREDERICK WATER shall .-e,auee the eha fges deten et: Seetien 6.3 zfet: Fspeetive pt:evideF of retail set-14ee.be included in operational budget revenue utilized to determine the estimated yearly budget. ARTICLE `VII Miscellaneous SECTION 7.1.AMENDMENTS. It is recognized by the parties hereto that this Agreement will constitute an essential part of the FWSA 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, FWSA and the Trustee given in accordance with the resolution or indenture under which it has been designated. SECTION 7.2. BOOKS AND RECORDS. FWSA 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. FWSA 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. - 14- 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. - 15- 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. CITY OF WINCHESTER (SEAL) By President of Common Council Clerk of Council COUNTY OF FREDERICK (SEAL) By Chairman, Its Board of Supervisors County Administrator FREDERICK WATER (SEAL) By Chairman Secretary-Treasurer FREDERICK-WINCHESTER SERVICE AUTHORITY (SEAL) By Chairman Secretary-Treasurer - 16- EXHIBIT A Frederick-Winchester Service Authority Proposal for Equalizing Capacity in OWRF Between the City and Frederick Water 1. Frederick Water will pay $2,039,469 in additional capital improvement costs from the expansion and upgrade project completed in 2008-2009. See Attachment A. 2. To date, the City has already paid 54.04% of this $2,039,469, which is $1,102,129. See Attachment B. ($2,039,469*.5404= $1,102,129) a. To reimburse the City this amount, Frederick Water will pay an additional $84,779.15 in principal payments over the next 13 years until the debt service is paid off for this project(City's principal payments will be reduced this same amount). $1,102,129/13 years = $84,779.15 per year 3. The remaining balance of the $2,039,469, or $937,340, will be paid for by adjusting the split of the debt service payments as follows — see Attachment C. ($2,039,460- $1,102,129 = $937,340) Entity Current Split New Split City of Winchester 36.1% 30.9% Frederick Water 63.9% 69.1% - 17- EXIBIT B Proposed Debt Service Schedule to Achieve 50-50 Ownership Series 2009 Frederick County City of Frederick County Bond Year Principal City of Sanitation Interest Sanitation Debt Service (6/30/XX) Winchester Authority Winchester Authority 30.90% 69.10% 30.90% 69.10 2027 $ 1,164,379.21 $ 359,793.18 $ 804,586.03 $ 100,456.23 $ 31,040.98 $ 69,415.25 $ 1,264,835.44 2028 $ 1,184,845.00 $ 366,117.11 $ 818,727.90 $ 79,990.44 $ 24,717.05 $ 55,273.39 $ 1,264,835.44 2029 $ 1,205,670.49 $ 372,552.18 $ 833,118.31 $ 59,164.95 $ 18,281.97 $ 40,882.98 $ 1,264,835.44 2030 $ 1,226,862.04 $ 379,100.37 $ 847,761.67 $ 37,973.40 $ 11,733.78 $ 26,239.62 $ 1,264,835.44 2031 $ 1,248,426.15 $ 385,763.68 $ 862,662.47 $ 16,409.38 $ 5,070.50 $ 11,338.88 $ 1,264,835.53 2032 $ - $ - $ - $ - $ - $ - $ - 2033 $ - $ - $ - $ - $ - $ - $ - 2034 $ - $ - $ - $ - $ - $ - $ - 2035 $ - $ - $ - $ - $ - $ - $ 2036 $ - $ - $ - $ - $ - $ - $ - 2037 $ - $ - $ - $ - $ - $ - $ 2038 $ - $ - $ - $ - $ - $ - $ 2039 $ - $ - $ - $ - $ - $ - $ 2040 $ - $ - $ - $ - $ - $ - $ 2041 $ - $ - $ - $ - $ - $ - $ 2042 $ - $ - $ - $ - $ - $ - $ 2043 $ - $ - $ - $ - $ - $ - $ 2044 $ - $ - $ - $ - $ - $ - $ $ - $ - $ - $ - $ - $ - $ - Total $ 6,030,182.89 $ 1,863,326.51 $ 4,166,856.38 $ 293,994.40 $ 90,844.27 $ 203,150.13 $ 6,324,177.29 Exhibit B Page 1 of 5 - is- Series 2015A of Frederick County Frederick County Winchester City ster Sanitation Interest City s Sanitation Debt Service Authority Winchester Authority 30.90% 69.10% 30.90% 69.10% $ 705,000.00 $ 217,845.00 $ 487,155.00 $ 179,390.63 $ 55,431.70 $ 123,958.93 $ 884,390.63 $ 735,000.00 $ 227,115.00 $ 507,885.00 $ 149,840.63 $ 46,300.75 $ 103,539.88 $ 884,840.63 $ 760,000.00 $ 234,840.00 $ 525,160.00 $ 118,881.26 $ 36,734.31 $ 82,146.95 $ 878,881.26 $ 795,000.00 $ 245,655.00 $ 549,345.00 $ 86,337.51 $ 26,678.29 $ 59,659.22 $ 881,337.51 $ 820,000.00 $ 253,380.00 $ 566,620.00 $ 59,278.13 $ 18,316.94 $ 40,961.19 $ 879,278.13 $ 845,000.00 $ 261,105.00 $ 583,895.00 $ 30,709.38 $ 9,489.20 $ 21,220.18 $ 875,709.38 $ $ $ $ 16,131.26 $ 4,984.56 $ 11,146.70 $ 16,131.26 $ 445,000.00 $ 137,505.00 $ 307,495.00 $ 8,065.63 $ 2,492.28 $ 5,573.35 $ 453,065.63 $ 5,105,000.00 $ 1,577,445.00 $ 3,527,555.00 $ 648,634.43 $ 200,428.04 $ 448,206.39 $ 5,753,634.43 Exhibit B Page 2 of 5 - 19- Series 2016B City of Frederick County City of Frederick County City of Frederick County Principal Sanitation Interest Sanitation AdminFee Sanitation Debt Service Winchester Authority Winchester Authority Winchester Authority 30.901/6 69.100/6 30.90% 69.10°k 30.901/6 69.10% $ 10,000.00 $ 3,090.00 $ 6,910.00 $ 128,118.76 $ 39,588.70 $ 88,530.06 $ 4,568.75 $ 1,411.74 $ 3,157.01 $ 142,687.51 $ 10,000.00 $ 3,090.00 $ 6,910.00 $ 127,693.76 $ 39,457.37 $ 88,236.39 $ 4,556.25 $ 1,407.88 $ 3,148.37 $ 142,250.01 $ 10,000.00 $ 3,090.00 $ 6,910.00 $ 127,293.76 $ 39,333.77 $ 87,959.99 $ 4,543.75 $ 1,404.02 $ 3,139.73 $ 141,837.51 $ 10,000.00 $ 3,090.00 $ 6,910.00 $ 126,943.76 $ 39,225.62 $ 87,718.14 $ 4,531.25 $ 1,400.16 $ 3,131.09 $ 141,475.01 $ 10,000.00 $ 3,090.00 $ 6,910.00 $ 126,568.76 $ 39,109.75 $ 87,459.01 $ 4,518.75 $ 1,396.29 $ 3,122.46 $ 141,087.51 $ 10,000.00 $ 3,090.00 $ 6,910.00 $ 126,168.76 $ 38,986.15 $ 87,182.61 $ 4,506.25 $ 1,392.43 $ 3,113.82 $ 140,675.01 $ 465,000.00 $ 143,685.00 $ 321,315.00 $ 117,887.51 $ 36,427.24 $ 81,460.27 $ 4,209.38 $ 1,300.70 $ 2,908.68 $ 587,096.89 $ 480,000.00 $ 148,320.00 $ 331,680.00 $ 101,368.76 $ 31,322.95 $ 70,045.81 $ 3,618.76 $ 1,118.20 $ 2,500.56 $ 584,987.52 $ 500,000.00 $ 154,500.00 $ 345,500.00 $ 84,131.26 $ 25,996.56 $ 58,134.70 $ 3,006.26 $ 928.93 $ 2,077.33 $ 587,137.52 $ 505,000.00 $ 156,045.00 $ 348,955.00 $ 68,803.13 $ 21,260.17 $ 47,542.96 $ 2,378.13 $ 734.84 $ 1,643.29 $ 576,181.26 $ 525,000.00 $ 162,225.00 $ 362,775.00 $ 55,268.75 $ 17,078.04 $ 38,190.71 $ 1,734.38 $ 535.92 $ 1,198.46 $ 582,003.13 $ 550,000.00 $ 169,950.00 $ 380,050.00 $ 36,481.25 $ 11,272.71 $ 25,208.54 $ 1,062.51 $ 328.32 $ 734.19 $ 587,543.76 $ 575,000.00 $ 177,675.00 $ 397,325.00 $ 12,350.00 $ 3,816.15 $ 8,533.85 $ 359.38 $ 111.05 $ 248.33 $ 587,709.38 $ 3,660,000.00 $ 1,130,940.00 $ 2,529,060.00 $ 1,239,078.22 $ 382,875.17 $ 856,203.05 $ 43,593.80]'l$ 13,470.48 11$ 30,123.32 $ 4,942,672.02 Exhibit B Page 3 of 5 -20- Series 2021'Series 2015A Refunded Frederick County Frederick County Winchester Principal City of Sanitation Interest City s Sanitation Debt Service Authority Winchester Authority 30.90% 69.10% 30.90% 69.10% $ 40,000.00 $ 12,360.00 $ 27,640.00 $ 84,685.26 $ 26,167.75 $ 58,517.51 $ 124,685.26 $ 40,000.00 $ 12,360.00 $ 27,640.00 $ 84,097.06 $ 25,985.99 $ 58,111.07 $ 124,097.06 $ 40,000.00 $ 12,360.00 $ 27,640.00 $ 83,409.06 $ 25,773.40 $ 57,635.66 $ 123,409.06 $ 40,000.00 $ 12,360.00 $ 27,640.00 $ 82,659.86 $ 25,541.90 $ 57,117.96 $ 122,659.86 $ 40,000.00 $ 12,360.00 $ 27,640.00 $ 81,849.46 $ 25,291.48 $ 56,557.98 $ 121,849.46 $ 45,000.00 $ 13,905.00 $ 31,095.00 $ 80,929.78 $ 25,007.30 $ 55,922.48 $ 125,929.78 $ 470,000.00 $ 145,230.00 $ 324,770.00 $ 75,048.45 $ 23,189.97 $ 51,858.48 $ 545,048.45 $ 30,000.00 $ 9,270.00 $ 20,730.00 $ 69,305.95 $ 21,415.54 $ 47,890.41 $ 99,305.95 $ 490,000.00 $ 151,410.00 $ 338,590.00 $ 62,844.35 $ 19,418.90 $ 43,425.45 $ 552,844.35 $ 510,000.00 $ 157,590.00 $ 352,410.00 $ 50,134.35 $ 15,491.51 $ 34,642.84 $ 560,134.35 $ 520,000.00 $ 160,680.00 $ 359,320.00 $ 36,530.70 $ 11,287.99 $ 25,242.71 $ 556,530.70 $ 525,000.00 $ 162,225.00 $ 362,775.00 $ 22,286.48 $ 6,886.52 $ 15,399.96 $ 547,286.48 $ 535,000.00 $ 165,315.00 $ 369,685.00 $ 7,519.43 $ 2,323.50 $ 5,195.93 $ 542,519.43 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 3,325,000.00 $ 1,027,425.00 $ 2,297,575.00 $ 821,300.19 $ 253,781.76 $ 567,518.43 $ 4,146,300.19 Exhibit B Page 4 of 5 -21 - City of Winchester Frederick Water Additional Principal Principal For Total Debt Principal Reduction For 50- Net Principal Interest Total Principal 50-50 Net Principal Interest Total Service 50 Ownership Ow nership J $ 593,OSS.18 $ (94,779.15) $ 509,309.03 ■$ 153,640.97 $ 661,949.99 S 1,326,291.03 $ 84,779. 5 $ 1.411,070.1a ■$ 343,578.76 $1,754,649.95 $ 2,416,599.94 ■ $ 608,682-11 $ (84,779-15) $ 523,902.46 $ 137,864-05 $ 661,772-00 S 1,361,162-90 $ 84,779.15 $ 1,445,442-05 $ 308,309-09 $1,754,251.14 $ 2,416,023.14 ■ $ 622,.842-18 $ (84,779..15) $ 538,063.03 $ 121,527-47 $ 659,590.50 S 1,342,828-31 $ 84,779.15 $ 1,477,607-46 $ 271,765.31 $1,749,372-77 $ 2,408,96327 $ 64-0,205-37 $ (84,779..15) $ 555,42622 $ 104,579-75 $ 660,005-47 $ 1.431,656-67 $ 94,779.15 $ 1.516-,435-92 $ 233,866.03 $1,750,30195 $ 2,410,307.52 ■ ■ $ 654,593-68 $ (84,779..15) $ 569,814..53 $ 89,184-96 $ 658,994..49 S 1,463,832.47 $ 94,779.15 $ 1,548,611-62 $ 199,439..52 $1,748,051-14 $ 2,407,050.63 $ 279,100-00 $ (84,779-15) $ 193,320.85 ■$ 74,975-08 $ 268,195.943 S 621,900-00 $ 94,779.15 $ 706,679.15 ■$ 167,439.09 $ 874,11924 $ 1,142.314.17 $ 298,915.00 $ (84,779-15) $ 204.135.8.5 ■$ 65,902-47 $ 270,038.32 S 646,085.00 $ 94,7713.15 $ 730,864.15 ■$ 14.7,374.13 $ 878,238.28 $ 1,149.276.60 $ 295,G95-00 $ (84,779-15) $ 21a.315.85 $ 56,348-96 $ 266,664.81 S 659,905.GG $ 84,779.15 $ 744,684.15 $ 126,010-14 $ 870,694-29 $ 1,137.359.10 $ 305,410-00 $ (84,779-15) $ 221,130.95 $ 46,344-40 $ 267,475-25 S 694,090-00 $ 94,779.15 $ 769.869.15 $ 103,637-47 $ 872,506-62 $ 1,139.991.97 $ 313,635.00 $ (94,779.15) $ 229,855.95 ■$ 37,495.52 $ 266,342.37 S 701,365.00 $ 94,779.15 $ 786,144.15 ■$ 83,829.09 $ 869,973.24 $ 1,136.315.61 ■ $ 322,905.00 $ (94,779.15) $ 239,125.95 $ 28,441.95 $ 267,027.80 S 722,G95.00 $ 94,779.15 $ 8O6,974.15 $ 64,531.58 $ 871,5D6.03 $ 1,138.533.83 ■ $ 332,175.00 $ (84,779-15) $ 247,395.85 $ 18,487..54 $ 265,883-39 S 742,825-00 $ 84,779.15 $ 827,604-15 $ 41,342-70 $ 868,446-85 $ 1,134,830.24 $ 342,990-00 $ (84,779..15) $ 259,210.95 ■$ 6,250-70 $ 264,461.55 S 767,010.00 $ 94,779.15 $ 851,799-15 ■$ 13,978-11 $ 865,76726 $ 1,130,228.91 5,599,136.51 $ (1,102,128.95) $ 4,497,007.56 $ 941,399.72 $ 5,438,407.28 1.2,521,046.33 1,102,123.95 13,623,175.33 2,105,201.32 35,729,376.65 $21,155,783.93 Exhibit B Page 5 of 5 -22-