Intermunicipal Agreements

Safe Drinking Water Loan Program

An intermunicipal agreement is necessary when either: 1) an applicant municipality's water is obtained from facilities of another municipality; or 2) another municipality is obtaining water from the applicant's facilities. The intermunicipal agreement is a contract between two or more municipalities, which defines the responsibilities of each municipal entity. The SDWLP reviews the conditions of the contract to assure the conditions are consistent with the requirements of statutes and administrative code.

The final executed intermunicipal agreement must:

• identify ownership for each individual portion of the water system;

• establish the term of the agreement;

• demonstrate the basis for generating revenue for operation, maintenance, depreciation and tax equivalent costs based on actual use, and state who is responsible for paying for these charges;

• indicate the method for generating revenue for capital costs and who is responsible for payment;

• indicate that the owner of the regional facility shall provide the applicant's water; and

• require that each entity adopt a user fee system and water use ordinance, if applicable.

For additional information contact an EIF project manager, or the SDWLP specialist, Jeanne Cargill.