Resolution 1149
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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
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Mayor of the City of Gilroy,
California
Attest:
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City Clerk
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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
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IN WITNESS WHEREOF, I have hereunto set my hand
and affixed the official seal of the City of Gilroy, this
13th
day of
Oct0ber
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City Clerk of the City 0 Gilroy
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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
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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.
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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.
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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.
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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
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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.
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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
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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.
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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.
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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
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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
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$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.
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(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
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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.
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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.
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(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
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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
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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.
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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
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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
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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
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affixed, as of the day and year first above written.
[Seal]
Attest:
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C ty Clerk of the
Gilroy
[Seal]
Attest:
City Clerk of the City of
Morgan Hill
~
CITY OF GILROY
By
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Mayor
CITY OF MORGAN HILL
By
Mayor
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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.
!
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:: OFFICIAL SE.<lL =
~ a: SYDNEY JOHNSON !
:: HOTARY PUBLIC - CALIFORNIA 5
::.. priNCIPAL OfFICE IN J
:inl THE COUNTY OF SANtA Cl.ARA
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[Notarial Seal]
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My commission expires /)~4U f / tile, f
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,
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