In 1999 when the Town of Pewaukee incorporated into the City, the two sanitary districts technically ceased to exist: The Town of Pewaukee Sanitary District No. 3 became the City of Pewaukee Sewer Utility; and the Lake Pewaukee Sanitary District (LPSD) reached an agreement to allow LPSD to continue to own and operate their sewer system within the City under certain cooperative agreements. One agreement is the 2000 Sewer Service Agreement. That agreement expires at the end of 2017, and prior to expiration and automatic extension, we believe it prudent to discuss two areas with LPSD: Section D LPSD User Charge where LPSD bills the City and City staff prepare and administer the individual sewer bills on behalf of LPSD; and Sect F Debt Service where City agreed to pay LPSD through 2017 for certain debt commitments LPSD made prior to this agreement. We believe it prudent to open up discussion on the City billing LPSD charges as we estimate that City will incur a loss of about $3,000 next year without any further action. We believe it prudent that Section F Debt Service be renegotiated as the City agreed to continue funding LPSD that Debt Service amount in 2018, past the obligated date for other reasons, and we think it prudent that neither party construes this agreement/contract to be continued at that funding level in perpetuity.

Note that Jane's Sept. 26th memo to the Public Work's Committee contains information on LPSD billings and City of Waukesha billings, but the Waukesha issue is not on this agenda for discussion awaiting input from Public Works Committee.

There are two specific fiscal impacts to the requested actions:
1) Should the City not change the billing agreement with LPSD, and barring any City rate increases to accommodate the costs of service LPSD billings, then the City projects an approximate $3,000 additional annual cost moving forward under the current agreements.

2) The Pewaukee Common Council agreed to continue funding LPSD at the approximate debt service level in the 2018 budget despite the fact that City had no obligation to continue this funding. We believe it appropriate to amend or change the agreement so that neither party believes that this continued funding is required under this 2000 agreement. That is, remove the debt service commitments since the timeframe for payment has expired.