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Resolution 1149 41. '" CITY OF GILROY RESOLUTION NO. 1149 RESOLUTION AUTHORIZING THE EXECUTION OF A JOINT POWERS AGREEMENT WITH THE CITY OF MORGAN HILL BE IT RESOLVED that the City of Gilroy be authorized to execute the Joint Exercise of Powers Agreement with the City of Morgan Hill, in the form attached hereto as Exhibit A and incorporated herein; and BE IT FURTHER RESOLVED that the Mayor of the City of Gilroy be authorized to execute said agreement for and on behalf of the City of Gilroy, and that the City Clerk of the City of Gilroy be authorized to attest said execu- tion, and affix the seal of the City of Gilroy to said agreement. PASSED AND ADOPTED October ~, 1967, by the following vote: AYES: Councilmlembers: Duffin, Kennedy,Jr., Quartiroli, Silva, Wentworth, and Goodrich. NOES: Council Members: None ABSENT: Council Member: Allemand :' Mayor of the City of Gilroy, California Attest: /( ~: ~ C(/iJ- '1!L) City Clerk //~/ " I, SUSANNE E. PAYNE , City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 1149 is an original resolution, duly adopted by speci a I the Council of the City of Gilroy at a r~lat meeting of said Council held on the 12th day of OC tober ~, 19~, at which meeting a quorum was present. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Gilroy, this 13th day of Oct0ber { 12w , 19~. u{}~ City Clerk of the City 0 Gilroy .. " ... " "y JOINT EXERCISE OF POWERS AGREEMENT CITY OF GILROY AND CITY OF MORGAN HILL T HIS A G R E E MEN T, dated for convenience as of July 1, 1967, by and between the CITY OF GILROY ("Gilroy"), a chartered city, and the CITY OF MORGAN HILL ("Morgan Hill"), a general law city, each duly organized and existing in the County of Santa Clara (the "county"), State of California (the "State") under the Constitution and laws of the State, WIT N E SSE T H: WHEREAS, Morgan Hill has been notified by the Central Coastal Regional Water Pollution Control Board of the State that Morgan Hill must expand its capacity to treat and dispose of sewage in the immediate future and it is necessary for Morgan Hill to carry out said order; and Morgan Hill has determined that, although the most feasible method of carrying out said order is to relocate its sewage treatment and disposal facilities (the "Morgan Hill plant") at a point south of the present city limits of Morgan Hill, such relocation may result in the eventual contamination of the underground water supply of the southern part of the county; and WHEREAS, Gilroy owns and operates a sewage treatment and disposal plant (the "Gilroy plant") located approximately three miles south of Gilroy; and the Gilroy plant has, or can be expanded to have, sufficient capacity to treat and dispose of all sewage produced in both Gilroy and Morgan Hill for an uncertain period of time hereafter (estimated to be at least three years), but at the expiration of said time the Gilroy plant will have to be replaced by the new plant (hereinafter referred to) to be located further south; and EXHIBIT A , . . r I ~ ~,.; WHEREAS, each of the cities has power to acquire, construct, complete and operate sewage collection, interceptor and outfall lines and plants and facilities for the treatment and disposal of sewage; and the cities propose by this agree- ment to exercise said power jointly for the purpose of providing for the more efficient disposal of the sewage produced in each city, all to the economic and financial advantage of each city and otherwise for the benefit of each city; and Morgan Hill desires to construct the new interceptor line from the Morgan Hill plant to a point of connection with the existing inter- ceptor line (now owned and operated by Gilroy), so that sewage produced in Morgan Hill may be transported through the new interceptor line and the existing interceptor line to the Gilroy plant; and Gilroy is willing to permit said connection on the terms and conditions hereinafter stated so that Morgan Hill may solve its sewage disposal problem; and Gilroy is willing to plan with Morgan Hill for future joint sewage treat- ment and disposal facilities which will protect both cities; and WHEREAS, the joint exercise of powers herein provided for will inure to the benefit of the entire southern portion of the county and will aid in its growth; NOW, THEREFORE, Gilroy and Morgan Hill, for and in consideration of the mutual promises and agreements herein con- tained, do agree as follows: Section 1 Definitions Unless the context otherwise requires, the terms defined in this Section 1 shall, for all purposes of this agreement have the meanings herein specified. 2 . . . ': ~,#' Agreement The term "agreement" shall mean this agreement dated as of July 1, 1967. County The term "county" shall mean the County of Santa Clara, a chartered county duly organized and existing under the Constitution and laws of the State. City and Cities The term "city" shall mean Gilroy or Morgan Hill as indicated by the context. The term "cities" shall mean Gilroy and Morgan Hill. Commission The term "Commission" shall mean the Local Agency Formation Commission of the county. Committee The term "committee" shall mean the sewer advisory committee referred to in Section 10 hereof. Existing Interceptor Line The term "existing interceptor line" shall mean the existing interceptor sewer line within the city limits of Gilroy owned and operated by Gilroy for the purpose of trans- mitting sewage from the collection sewer system of Gilroy to the Gilroy plant. Fiscal Year The term "fiscal year" shall mean the fiscal year of the city referred to, being for each city as of the date of this agreement the period from July 1 to and including the following June 30. Gilroy The term "Gilroy" shall mean the City of Gilroy a municipal corporation and chartered city duly organized and exist- ing in the county under the Constitution and laws of the State. 3 r . ~ . '.~ Gilroy Plant The term "Gilroy plant" shall mean the existing sewage treatment and disposal plant now owned and operated by Gilroy approximately three miles south of Gilroy. Inter-City Boundary Line The term "inter-city boundary line" shall mean that certain line set forth and delineated on the map attached hereto, labeled Exhibit A, which is incorporated herein. Joint Facilities The term "joint facilities" shall mean the joint pipe line, the existing interceptor line and the Gilroy plant. Joint Pipe Line The term "joint pipe line" shall mean that portion of the new interceptor line from the inter-city boundary line to the point of connection with the existing interceptor line. Law The term "law" shall mean Chapter 5 of Di vision 7, Title 1 of the Government Code of the State (Sections 6500-6578). Morgan Hill The term "Morgan Hill" shall mean the City of Morgan Hill a municipal corporation and a general law city duly organized and existing in the County under the constitution and laws of the State. Morgan Hill Plant The term "Morgan Hill plant" shall mean the existing sewage treatment and disposal plant now owned and operated by Morgan Hill in the vicinity of Edmundson Avenue in Morgan Hill. 4 ': New Interceptor Line The term "new interceptor line" shall mean the new interceptor sewer line to be constructed by Morgan Hill as provided for in Section 5 hereof. New Plant The term "new plant" shall mean the contemplated sewage treatment and disposal plant referred to in Section 10 hereof, proposed to be jointly constructed by the cities in the fut ure . Sewage The term "sewage" shall mean all domestic sewage and industrial waste received into the joint facilities, but shall not include any industrial waste treated or dis- posed of separately and not through the joint facilities. The term "domestic sewagell shall mean all water borne human and animal wastes. The term "industrial waste" shall mean liquid and/or solids contained in a liquid, other than domestic sewage, resulting from any manufacturing, processing, com- mercial or industrial activities. State The term "State" shall mean the State of California. Section 2 Purpose This agreement is made pursuant to the law and relates to the joint exercise of powers common to Gilroy and Morgan Hill. This common power shall be jointly exercised by Gilroy and Morgan Hill in the manner hereinafter set forth. Section 3 Term This agreement shall become effective as of the date hereof and shall continue in force and effect until amended by Gilroy and Morgan Hill by an agreement supplemental hereto or until canceled upon one year's written notice 5 by either city to the other, excepting, however, Section 4 hereof which shall continue in force and effect so long as any of the joint facilities are jointly owned by the cities. Section 4 Boundary Agreement The cities have established the inter-city boundary line for the purpose of designating a line beyond which neither city shall extend or attempt to extend its city limits. Neither city shall extend its city limits beyond the inter-city boundary line without the consent of the other evidenced by a resolution of the City Council of the consenting city. Each city agrees to give such consent whenever necessary to avoid having the boundary line of any area to be annexed to either city or the city limit lines of either city splitting or extending through any parcel of real property owned by a single owner. The establishment of the inter-city boundary line shall be presented to the Commission and its consent and approval thereof shall be requested by the cities. In the event the Commission fails to consent to or ratify or approve the inter- city boundary line, the inter-city boundary line shall never- theless be effective and binding upon the cities. The cities agree that if either city shall by annexation proceedings of any kind extend its city limits beyond the inter-city boundary line without the consent of the other city, then no part of the area to which such annexation proceedings relate shall be served by the joint facilities. If Morgan Hill shall violate this Section 4, it shall have no right thereafter to extend or enlarge its then use of the joint facilities. 6 t' J The provisions of this Section 4 shall survive the term of this agreement as provided in Section 3 hereof and shall be and become a part of any new joint powers agree- ment hereafter entered into by the cities relating to the new plant or any other sewage transmission, treatment or disposal facilities. Section 5 Construction of Facilities (a) New Interceptor Line (i) Morgan Hill will forthwith upon the exe- cution of this agreement initiate proceedings to construct and install a new interceptor line from the Morgan Hill plant to the most northe~ly point, within the Gilroy city limits, on the existing interceptor line that is feasible for con- nection with the new interceptor line, such point to be designated in writing by Gilroy within 120 days after the date of this agreement. Morgan Hill shall determine the maximum capacity that Morgan Hill will require for the new interceptor line and Gilroy will determine and advise Morgan Hill in writing within 120 days after the date of this agreement as to the amount of over-sizing of the new interceptor line that Gilroy desires to have constructed over and above Morgan Hill's requirements. Morgan Hill agrees to include such over-sizing in the diameter of the new interceptor line as constructed. (ii) Each city shall pay its proportionate share of the cost of construction and installation of the new interceptor line as follows: Morgan Hill shall pay for that part of the cost of the new interceptor line attributable to the size thereof required by Morgan Hill and Gilroy shall pay for that part of the cost of the new interceptor line attributable to said over-sizing desired by Gilroy. Upon completion of construction of the new inter- ceptor line, that portion of the new interceptor line from the 7 ,I 'I ", inter-city boundary line to the point of connection with the existing inter- ceptor I ine shall be known as the IIjoint pipe 1 inell and shall be jointly owned by the cities. (iii) Any grant or grants received jointly or severally by the cities from any State or Federal governmental agency or authority for any part of the cost of construction of the new interceptor line shall, for the purposes of clause (ii) of this paragraph (a). be credited to the respective cities in the same proportion that such city is bearing the cost of constru- ction of the new interceptor line as herein provided. (b) Replacement of portion of Existing Interceptor Line Gilroy shall. at its own cost and expense. replace with appropriately larger-sized pipe that fourteen (14) inch diameter portion of the existing interceptor line lying between Pacheco Pass Highway and southerly to the Gilroy plant so that said section will have a capacity sufficient to trans- mit the increased volume of sewage resulting from connection of the new interceptor line to the existing interceptor line. Any additional replace- ments of Gilroy's presently existing sewerage pipe system to serve this joint venture shall be paid for jointly by the two cities on a pro-rata basis determined upon the volume of flow requested by each city under such pipeline replacements. (c) Installation of Meter Morgan Hill shall install, at its own cost and expense. an appropriate meter, to be approved in writing by Gilroy, on the new interceptor line immediately north of the inter-city boundary line, such installation to be completed before any sewage flows through the new interceptor line. (d) Harmful Connections Probibited Morgan Hill agrees that it will not permit any connection to be made to its sewer system that will result in any effluent entering the joint facilities that will be harmful to the Gilroy plant or its equipment or that will upset the balance of the treatment processes at the Gilroy plant. 8 , Section 6 Services by Gilroy Gilroy agrees to treat and dispose of all sewage originating in Morgan Hill and received at the Gilroy plant through the joint facilities and to pay all costs and expenses of operating and maintaining the joint facilities and all costs of disposing of treated sewage at the Gilroy plant. Morgan Hill agrees in consideration of said services by Gilroy to pay to Gilroy the charges provided for in Section 7 hereof in the amounts, on the dates and for the periods of time specified in said Section 7. Section 7 Charges to be Paid by Morgan Hill (a) Rental by Morgan Hill of Capacity in Gilroy Plant The cities agree that the Gilroy plant has the capacity to treat and dispose of 2,000,000 gallons of sewage per day; that Morgan Hill shall have the right to one-quarter of said capacity, which is 500,000 gallons per day or 182,500,000 gallons per year. Morgan Hill agrees to rent said one-quarter of said capacity from Gilroy and to pay to Gilroy as rental therefor during the term of this agreement by monthly rental payments the first of which shall be made by Morgan Hill for the month ending after the date of connection of the new interceptor line to the existing interceptor line. Each such monthly payment shall be in an amount computed on the basis of 7.75 cents per one hundred cubic feet of sewage delivered during each monthly period into the joint pipe line from the new interceptor line as measured by the meter referred to in Section 5(c) hereof; and Morgan Hill agrees to pay to Gilroy on or before the 30th calendar day of each month following the expiration of each such monthly period a sum in dollars equal to the number of cubic feet of sewage transmitted into the joint pipe line, as measured by said meter during each such monthly period, multiplied by 7.75 cents per one hundred cubic feet. 9 ; If at any time during the term of this agreement Morgan Hill's allocated capacity in the Gilroy plant shall be increased pursuant to Section 8 hereof, Morgan Hill shall pay therefor as provided in said Section 8. (b) Share of Operation Costs and Expenses Morgan Hill agrees to pay to Gilroy Morgan Hill's share of the costs of operating and maintaining the joint facilities and of disposing of treated sewage at the Gilroy plant. Morgan Hill shall pay its said share at the rate of 5 cents per 100 cubic feet of sewage treated at the Gilroy plant and measured by the meter referred to in Section 5(c) hereof for the period beginning on the date of connection referred to in paragraph (a) of this Section 7 and ending February 28, 1969. Thereafter said rate shall be adjusted annually, if required, commencing with the twelve-month period beginning on March 1, 1969, to reflect any increases or de- creases in Gilroy's said costs, all of which shall reflect as closely as possible Gilroy's actual costs. All payments by Morgan Hill under this paragraph (b) shall be made monthly at the same times as the payments under paragraph (a) of this Section 7. Section 8 Increases in Capacity of Gilroy Plant Allocated to Morgan Hill (a) The cities agree that Morgan Hill shall initially have and is hereby allocated a capacity of 500,000 gallons of sewage per day in the Gilroy plant. The remaining capacity of the Gilroy plant (1,500,000 gallons per day) is hereby allocated to Gilroy. Morgan Hill shall have the right to request in writing from time to time increases in the capacity of the Gilroy plant to be allocated to Morgan Hill. The cities understand that the first such request from Morgan Hill may be made within ninety days after the execution of this agreement by the cities and that such request will be 10 " # for an increase of 500,000 gallons per day in the capacity of the Gilroy plant to be allocated to Morgan Hill. Each such request from Morgan Hill shall be approved by a reso- lution of the City Council of Gilroy unless such approval would result in overburdening the capacity of the Gilroy plant; and Gilroy agrees that approval of any such request will not be unreasonably withheld. Morgan Hill understands that Gilroy shall have no obligation to expend any of Gilroy's funds for increasing the Gilroy plant capacity for Morgan Hill and that Gilroy may, at its option and at its own expense, increase the capacity of the Gilroy plant for Gilroy's own purposes at the same time that an increase is made for Morgan Hill. Morgan Hill agrees that if any request by it for an increase in the capacity of the Gilroy plant which cannot be made available from the capacity of the Gilroy plant hereby allocated to Gilroy and which will require the purchase and installation of additional equipment or facilities or any capital expenditure by either Morgan Hill or Gilroy, Morgan Hill will make written request for such increase in capacity (i) at least six months before the increase in capacity is needed if the total capital expenditure is estimated by Morgan Hill and Gilroy to not exceed $100,000 or is all to be provided by Morgan Hill, or (ii) at least one year before the increase in capacity is needed if the total capital expenditure is estimated by Morgan Hill and Gilroy to exceed 11 ~ $100,000 and any portion thereof is to be provided by Gilroy; all to permit Gilroy to purchase equipment or facilities and to provide time in which to obtain the funds required for the capital expenditure and to permit the adjustment of the charges provided for in Sections 6 and 7 hereof and in paragraph (b) of this section before any such increase in capacity is provided for Morgan Hill. (b) Morgan Hill agrees that it will rent from Gilroy any increase in the capacity of the Gilroy plant allocated to Morgan Hill in excess of the 500,000 gallons per day referred to in Section 7(a) and to pay to Gilroy as rental therefor monthly rental payments at the same times and computed on the same basis as the rental payments provided for in Section 7(a); provided, however, that to the extent that the cost of any such increase in capacity allocated to Morgan Hill is paid for by Morgan Hill, the cities will negotiate and agree on a rate lower than 7.75 cents per one hundred cubic feet of sewage to compensate Morgan Hill for its capital investment in paying for the cost of such increase in capacity. 12 ,r ~ (c) Beginning on March 1 of each year (commencing in March, 1969) each city shall confer with the other relative to the prospective increases in sewage disposal facilities which will be required by each city during the next succeeding fiscal year. (d) Morgan Hill shall provide in its budget for each fiscal year, commencing with the fiscal year 1968-1969, for the cost of such additions to the joint facilities as will be necessary during such fiscal year and will make adequate provision for financing (by the levy of taxes or otherwise) and for collecting a sum sufficient to pay the cost of such additions and will deposit each such sum in a special fund to be used exclusively to pay for such additions. If Morgan Hill should be unable to provide the sum required to pay for any such additions for a period of six months after making the written request therefor, Morgan Hill's share of the total capacity of the Gilroy plant shall not thereafter be increased above the capacity allocated to Morgan Hill on the date of such request. (e) If Morgan Hill shall be delinquent in making any payment to Gilroy for any such additions to be provided by Gilroy to Morgan Hill under this Section 8 or in making any payment to Gilroy under Section 6 hereof, then so long as such 13 . r . I # delinquency exists Morgan Hill shall have no right under this agreement or otherwise to increase its use of the joint facilities above the average of the next preceding four quarterly metered amounts of sewage as registered by the meter referred to in Section 5(c) hereof. (f) The cities agree that neither shall permit any connection to its sewer system by, or provide any sewer service to, any area outside its city limits as they then exist; except for any connection made by Gilroy to its independent industrial sewer facilities. (g) Morgan Hill agrees that it will not permit any connection to be made to its sewer system which shall result in Morgan Hill exceeding its then allocated capacity in the Gilroy plant. If Morgan Hill shall exceed or attempt to exceed its then allocated capacity in the Gilroy plant without first having obtained written approval from Gilroy, Morgan Hill shall be deemed to have thereby violated this agreement and Gilroy (i) shall thereupon have the right to obtain a restraining order, an injunction or other proper relief in any court of competent jurisdiction to require Morgan Hill to cease violating this agreement and (ii) shall have no further obligation after such violation to accept from Morgan Hill for delivery into the jOint facilities any amount of sewage in excess of the amount which Morgan Hill was entitled to deliver immediately prior to such violation. Section 9 Damages In any action or proceeding arising out of any viola- tion of this agreement by either city, such city shall pay all damages suffered by the other city and all of the other city's costs resulting from such violation. 14 ~ r It. f ~ ~ Section 10 Future Policy The cities intend to set forth in this Section a statement of the policies to be jointly adopted by them in the future. None of the provisions of this Section shall be deemed to constitute a binding agreement upon either city. (a) One of the considerations motivating the cities in preparing and executing this agreement is that in the future, if and when the need shall arise, the cities will, pursuant to a new joint powers agreement, provide for the construction and financing of the new plant on or near the Pajaro River (which is the south boundary line of the county). The cities intend to acquire jointly sufficient land on which to locate the new plant after the joint facilities are in operation under this agreement; and the cities will cooperate to determine the amount of land required and to purchase such land as soon as it is feasible to do so. The cities intend that each will pay that proportion of the cost of acquisition of such land that the average annual volume of sewage produced by each city and treated by the Gilroy plant bears to the total average annual volume of sewage treated by the Gilroy plant, such average annual volume to be computed for a 24-month period commencing twelve months prior to the date of acquisition of any such land and ending twelve months after each such date of acquisition. The cities intend that each city will pay its share of the cost of each acquisition pf land, based on an estimate of said average annual volume and that the exact amount payable by each city will be determined upon expiration of said 24-month period with payment by one city to the other for any overpayment made by the latter. 15 ,fI ,. (b) '_....e cities intend that afte):,~. d'he initial acquisition of required land, a new interceptor sewer line will be financed and constructed from the Gilroy plant to the site of the new plant and that the cost of construction of said new interceptor sewer line will be allocated between the cities on the same basis that the cost of land acquisition is allocated as provided in paragraph (a) of this Section 10. (c) The cities also intend that, if and when the need arises or when the cities deem it advisable, all effluent discharged from the Gilroy plant will be transmitted by said new interceptor sewer line to new filter beds to be constructed on said land so to be acquired; that eventually the new plant will be constructed on said land and financed by the cities; that each city will pay that proportion of the cost of con- struction of the new plant and that portion of the cost of operating and maintaining it that the capacity of the new plant to be used by such city bears to the total capacity of the new plant; and that if and when the capacity of the plant actually used by either city increases or decreases the costs of operating and maintaining it will be adjusted between the two cities. (d) The cities intend that if and when the new plant is constructed the Gilroy plant can be disposed of at Gilroy's discretion. The cities also intend that (i) all land purchased for the new plant, (ii) the new interceptor sewer line and (iii) the new plant will be owned by the cities as tenants in common and that the percentage of ownership of each city shall be equal to that percentage of the total cost of such land, new interceptor sewer line and new plant paid for by such city plus the cost of any such land contributed by such city. The cities also intend that each city will reserve the right to sell to the other all or any part of its undivided ownership in any such land or in the new interceptor sewer line or in the new plant. (e) The cities also intend that the new plant, if and when constructed, will be operated by the cities under said 16 . t . l' ,,",,,.,t .~. ./ new joint powers agreement which will provide for a sewer advisory committee to be composed of five members to be appointed by and to serve at the pleasure of the respective city councils of the cities. Each city would be entitled to appoint one member to the committee for each 20% interest (or a majority fraction thereof) in the capacity of the new plant. The committee would have the responsibility of formulating the policy for both the day to day operation of the new plant and the overall plans for its development. Any four members of the committee would con- stitute a quorum for the conduct of business at any meeting legally called and held. The committee would provide for dates upon which it shall hold regular meetings; and special meetings could be called and held upon 24 hours advance written notice by the committee chairman or any two members thereof. The approving votes of at least three members of the committee would be required to approve or change any operational rule or regulation. The committee would deliver a report of all actions taken by each meeting of the committee to the city council of each city after such meeting of the committee and prior to the next succeeding meeting of such council. The city council of each city would be permitted to refer to the committee any questions relating to changes in rules or regulations or to the general management of the new plant or to the sewage systems of the cities and to request the committee's advice concerning the same. (f) It is the intention of the cities that all applications for any sewage output from any single industrial or commercial plant exceeding 200,000 gallons per day proposed to be treated by the new plant would not be granted until approved by a majority vote of the committee; that the committee 17 .j .. ~ ,/ would have the right to require the person or persons pro- ducing any such sewage output to provide adequate pretreatment, at its own expense, of any effluent that the committee determines will be injurious or over-burdening to the new plant; and that the committee's determinations in such matters would be final. (g) The cities intend that if the committee should determine that additional capital outlays were required to provide more capacity for the new plant or for any part of the sewer system serving the cities, then upon demand by the committee each city would provide its proportionate share of each such capital outlay; and that in the event that either city did not have or was unable to provide its said share of any required capital outlay for a period of one year after demand therefor, such city's share of the capacity of the new plant would not be increased after the date of such demand until such city did provide its said share of such capital outlay; and that in the event either city did not provide its share of any such capital outlay within six months of the date of demand therefor, the other city should have the following options: (i) to increase the capacity of the new plant and of the sewer system serving it to the extent required for its own needs only and thereby increase to that extent its interest in the new plant and said sewer system and its repre- sentation upon the committee; or (ii) to increase the capacity of the new plant and of the sewer system serving it to the extent required to serve the needs of both cities and thereby increase to that extent its interest in the new plant and said sewer system and its representation upon the committee. 18 .' .~ "~,r,"'''' ."r' In the event that either city should exercise the option provided in the foregoing clause (ii), it would have the right to charge the other city on an annual basis an amount sufficient to recover the cost of its capital outlay over a period of from ten to twenty years as determined by it together with interest on the unpaid balance of the total charge at the rate being paid by it in connection with such capital outlay or at the rate which it would be paying had it financed such capital outlay by issuance of its general obligation bonds. (h) The cities intend that neither city could finance any improvements to the new plant or the sewer system serving it by means of a general obligation bond issue of such city or any form of lease-purchase agreement or by means of a special district or assessment district without first having received approval of a majority of the members of the committee. (i) The cities will endeavor to make long range plans which will provide for the eventual sewerage of the entire county from Morgan Hill to the southern boundary of the county to the extent that the same is feasible from an engi- neering and economic viewpoint. Section 11 Growth of Gilroy Morgan Hill agrees that none of the provisions of this agreement relating to the joint use of the joint facilities is intended to restrict the growth or development of Gilroy. Gilroy operates industrial filter beds separate and apart from its sewage collection system, the existing interceptor line and the Gilroy plant, and Morgan Hill agrees that none of the provisions of this agreement shall affect in any way Gilroy's freedom of action relating to the operation of said industrial filter beds or in connection with any separate industrial waste 19 ~.. '. "--- disposal program which Gilroy may undertake. It is understood, however, that Morgan Hill and Gilroy shall share the costs of increasing the capacity of the joint facilities in accordance with this agreement whenever any such increase shall be necessary. Section 12 Disposition of Assets Upon the termination of this agreement as provided in Section 3, that portion of the new interceptor line not included in the joint pipe line shall become the property of Morgan Hill and the joint facilities shall be jointly owned by Morgan Hill and Gilroy with Morgan Hill having an undivided 25% interest and Gilroy having a 75% interest therein. Any additional facilities constructed by the cities pursuant to this agreement shall, upon termination of this agreement, be jointly owned by the cities in the proportions in which each contributed to the cost of acquisition, construction and com- pletion thereof. Section 13 Federal Project Morgan Hill has filed an application with the Depart- ment of Housing and Urban Development of the United States of America for a grant in aid of construction of the new inter- ceptor line (including the joint pipe line) which has been designated as D.H.U.D. Project No. W8-6-05-0169. Each city agrees that it will take all steps required to be taken by it in order to carry out and complete said project as described in such application. Section 14 Accounts and Reports Each city shall establish and maintain such funds and accounts and shall maintain such records in connection with the matters covered by this agreement as may be required by good accounting or sound business practice. All books and records 20 ..~ ., ......,.", ,"",.. '"'-,,~ of each city relating to any of the matters provided for in this agreement shall be open to inspection at all reasonable times by the other city and its representatives. Section 15 Severability Should any part, term or provision of this agree- ment be decided by the courts to be illegal or in conflict with any law of the State, or otherwise be rendered unenforceable or ineffectual, the validity of the remaining portions or provisions of this agreement shall not be affected thereby. Section 16 Successors; Assignment This agreement shall be binding upon and shall inure to the benefit of the respective successors of the cities. Neither city may assign any right or obligation hereunder without the consent of the other. Section 17 Amendments This agreement may be amended by an agreement sup- plemental hereto executed by Gilroy and Morgan Hill at any time. The cities agree that this agreement will be amended when necessary to provide for operational, financial or other requirements of the joint facilities. Section 18 Headings All section headings contained in this agreement are for convenience of reference only and are not intended to define or limit the scope of any provision of this agreement. IN WITNESS WHEREOF Gilroy and Morgan Hill have caused this agreement to be executed and attested by their proper officers thereunto duly authorized and their official seals to be hereto 21 ~ !*ii_ '. ..........., I" ' ~ '.. ....~"'" I affixed, as of the day and year first above written. [Seal] Attest: <?f~ . C ty Clerk of the Gilroy [Seal] Attest: City Clerk of the City of Morgan Hill ~ CITY OF GILROY By ~~c6~~~ Mayor CITY OF MORGAN HILL By Mayor 22 'tI" .. '. ยท .. .~ ...........- ",,",,' State of California ) ) ss County of Santa Clara ) On this 13th day of October, in the year 1967, Sydney S. Johnson , a notary public in before me and for the State of California, duly commissioned and sworn, personally appeared Norman B. G00dri ch , known to me to be the Mayor, and Susanne E. Payne , known to me to be the Clerk, respectively of the City of Gilroy, Santa Clara County, California, that executed the within instrument on behalf of said City therein named, and acknowl- edged to me that such City executed the within instrument pursuant to a resolution of its City Council. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day and year in this I ; certificate first above written. ! i' , I /J}4~ =....'"Ulllllllll.lun 111111111. ~ IlIIIIUUIIIUIIIIH. :: OFFICIAL SE.<lL = ~ a: SYDNEY JOHNSON ! :: HOTARY PUBLIC - CALIFORNIA 5 ::.. priNCIPAL OfFICE IN J :inl THE COUNTY OF SANtA Cl.ARA , ""'ol.n...'.'.......II......I.IIII............. [Notarial Seal] .,/ // My commission expires /)~4U f / tile, f ~ ,. ... '" , State of California ) ) 55 County of Santa Clara ) On 'this , in the year 1967, day of be fore me , a notary public in and for the State of California, duly commissioned and sworn, personally appeared known to me to be the Mayor, and known to me to be the Clerk, respectively, of the City of Morgan Hill, Santa Clara County, California, that executed the within instrument on behalf of said City therein named, and acknowl- edged to me that such City executed the within instrument pursuant to a resolution of its City Council. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day and year in this certificate first above written. Notary Public State of California [Notarial Seal] My commission expires