As per the Subdivision Improvements Agreement (SIA) for Legends West Subdivision, an interior water main and sanitary sewer main will be constructed in Bell Avenue across the subdivision's frontage as part of it's Phase III construction.  These mains are to serve future development west of Legends West Subdivision.  Language in the SIA specifies that the City of Billings is to pay 50% to the developer for the cost of said water and sanitary sewer mains constructed in Bell Avenue.  Payment to the developer will be handled through the attached Compensation Agreement.   It has been determined that the sanitary sewer main is not needed in Bell Avenue during the Phase III construction of the subdivision.  As such, only the water main construction costs will be included in the compensation to the developer. 

The extensions of the water and sanitary sewer mains are not scheduled Capital Improvement Projects.  As such, the developer will initially pay the total cost of improvements which are associated with Private Contract 639 along Bell Avenue.  The City will then pay its share of the water main construction as funds become available.  The annual budget typically sets aside $300,000 for compensation agreements. 

The Council may:

• Accept the Compensation Agreement; or
• Do not accept the compensation agreement.  Rejecting the agreement would be contrary to the Subdivision Improvement Agreement approved during the platting of Legends West Subdivision.  

Based on the Engineer's estimate of probable cost, it has determined that the cost eligible to be recovered by the Developer is $38,783.50. The timing of the City’s participation in the project costs is determined in conformance with the budget approved by City Council.

Staff recommends that Council authorize the Mayor to execute the attached Agreement. Compensation shall be based on final water utility construction costs.