Resolution #14-32: Memorandum of Agreement between Township of Vernon and the Vernon Township Municipal Utilities Authority

Date of Adoption: October 9, 2014

(Revised November 28, 2011, amended and adopted October 9, 2014)

WHEREAS, there are certain financial obligations and duties between Vernon Township and the Vernon Township Municipal Utilities Authority (VTMUA);

WHEREAS, the parties would like to memorialize certain balances, payments, obligations, rights, and debts between the parties;

WHEREAS, this agreement was originally executed in 2011 and it appears to the parties that certain modifications or clarification to this agreement should be made at the recommendation of the Auditors and Risk Managers;


  1. Subject to all applicable laws and regulations, the VTMUA shall administer and operate on a franchise basis the municipal sanitary sewer system in Vernon by collecting the fees due and being responsible for the operation, repair, maintenance and capital costs of the system, including salaries and fees from SCMUA related to the sewer system.
  2. The Vernon Township Municipal Utilities Authority endorses Vernon Township’s purchase of the sewer assets and customers belonging to United Water at a purchase price of $3,675,000.00. [completed].
  3. The VTMUA endorses Vernon Township’s Bond Ordinance 11-22 in the amount of $4,000,000.00 and Bond Ordinance No. 11-23 in the amount of $2,800,000.00.
  4. Vernon Township will use the proceeds from Bond Ordinance 11-22 to close on the purchase of the United Water Sewer assets. [completed].
  5. In exchange for the condition set forth in paragraph 6 and elsewhere in this Agreement, VTMUA agrees to be responsible for the debt service related to Bond Ordinance 11-22.
  6. VTMUA agrees that the proceeds from Bond Ordinance No. 11-23 can be used to reimburse the municipality for the sewer utility expenses as set forth in paragraph 6. [completed].
  7. The remaining balance of Bond Ordinance No. 11-22 and 11-23 will be held by Vernon Township for the benefit the VTMUA. These funds will be used to pay any deficiency in the VTMUA budget for, at least, the 2014, 2015, and 2016 budget years.
  8. The VTMUA agrees that the following expenses paid by Vernon Township may be deducted from the proceeds of 11-23 and paid to VT$120,866.75 for the 2010 SCMUA debt $697,052.00 for the 2011 SCMUA debt. [completed].
  9. Vernon Township has a balance in Ordinance 00-33 for sewer related expenses in the amount of $449,930. VTMUA agrees that these funds may be used to pay the required down payment for ordinance 11-22 and 11-23 totaling $325,000. Vernon Township agrees to pay the balance of $124,930 to the VTMUA. Vernon Township has balances in special legislative grants in the amount of $142,772.19 (#11530000) and $214,767.97 (#11553100). These amounts shall be paid to the VTMUA for use for sewer related capital expenditures. [completed].
  10. VTMUA agrees to provide for payment of sewer related expenses in its budget as billed from the Sussex County Municipal Utilities Authority beginning on January 1, 2012 subject to the contribution provision set forth in paragraph 6.
  11. Vernon Township agrees to continue to be responsible for the payments required under the Vernon Bond as defined in the Vernon Township Mountain Creek Resort, Inc. Agreement dated October 24, 2005 and referenced in the Vernon Township MCRI 2011 Agreement. Both Agreements provide that MCRI shall make the payments on the Vernon Bonds. A copy of the payment schedule is attached hereto as Schedule C as a definitional substitute.
  12. Vernon Township agrees to enforce the Agreement between Vernon Township and MCRI dated October 24, 2005 and forward all sewer related payments from MCRI to the VTMUA, except as referenced in paragraph 12.
  13. This agreement shall be in effect for 5 years from the date of execution and shall automatically renew for one year terms until terminated by written notice of one party or modified by agreement of both parties.