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7.1.G. - Page 1 <br /> REPORT <br /> To the Honorable Mayor and City Council <br /> From the City Manager <br /> January 27, 2014 <br /> SUBJECT <br /> Approve Supplemental Agreement VI to Joint Exercise Powers Agreement, South <br /> Bayside System Authority <br /> RECOMMENDATION <br /> By motion, adopt Resolution Authorizing City Manager to Execute Supplemental <br /> Agreement VI to Joint Exercise of Powers Agreement, South Bayside System Authority. <br /> BACKGROUND <br /> In order to complete all of the actions for the bond program, SBSA has requested the <br /> City also approve an amendment to the Joint Powers Agreement (JPA), which the other <br /> member agencies have approved. However, the City identified a number of concerns <br /> with proposed Supplemental Agreement VI. The key area of concern is that the JPA <br /> and Amendment carry over old language regarding the implementation of new sewer <br /> connection charges to be charged by the Agency members for financing the <br /> construction of Stage 2. That language could be read to require the City to adopt the <br /> charges as set by the JPA. Instead, the City must comply with Cal. Gov't Code 66000, <br /> et. seq. (including 66013 and 66016) by reviewing the fee to ensure that the charges do <br /> not exceed the estimated reasonable cost of providing the service unless approved by a <br /> 2/3 vote of the electors. The City must also hold a noticed public hearing at which staff <br /> presents this information. <br /> ANALYSIS <br /> As confirmed by Dan Childs, SBSA's Manager, SBSA has agreed to prepare and <br /> recommend a subsequent amendment to the JPA with language acceptable to the City <br /> acknowledging the obligation to comply with Cal. Gov't Code 66000, et seq. In the <br /> meantime, the execution of the Supplemental Agreement has the advantage of allowing <br /> the SBSA bond issuance to move forward (as requested in a separate staff report). <br /> Moreover, execution of the Supplemental Agreement will also reset the City's share of <br /> capital expenses and bond payments from the current 53% to 48%, which aligns with <br /> the City's share of the plant capacity. Based on this agreement between staff, it is <br /> recommended that the City Council authorize the City Manager to sign Supplemental <br /> Agreement #6 of the JPA. Finally, SBSA will also need to correct the numbering of the <br />