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RESOLUTION NO. 2 9 2 5
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE
SETTLEMENT AGREEMENT BETWEEN THE CITY OF AUBURN AND THE CITY
OF BONNEY LAKE.
WHEREAS, Auburn and Bonney Lake are currently involved in
several related disputes regarding the provision of water
service to a development known as "Lakeland Hills South"
within Auburn's currently-designated Pierce County Potential
Annexation Area; and
WHEREAS, Auburn is currently seeking to annex a portion
of its Pierce County Potential Annexation Area; and
WHEREAS, Bonney Lake is currently opposing said
annexation proposal; and
WHEREAS, Bonney Lake has initiated litigation against
Auburn in Pierce County Superior Court alleging tortious
interference with a contractual relationship; and
WHEREAS, Auburn has threatened legal and/or
administrative action with respect to various water rights
owned by Bonney Lake; and
WHEREAS, Bonney Lake has threatened legal and/or
administrative action with respect to various water rights
owned by Auburn; and
Resolution No. 2925
February 27, 1998
Page 1
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WHEREAS, the parties hereto desire to enter into a
settlement agreement, the express intent of which is to settle
all claims and disputes between Auburn and Bonney Lake
relating to the provision of water service to Auburn's Pierce
County Potential Annexation Area and related water rights
issues; and
WHEREAS, Bonney Lake and Auburn are both desirous of
entering into cooperative arrangements to provide for the
efficient and cost-effective provision of water to their
customers.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, IN A REGULAR MEETING DULY ASSEMBLED, HEREWITH
RESOLVES AS FOLLOWS:
Section 1. The Mayor and City Clerk of the City of
Auburn are herewith authorized to execute the Settlement
Agreement between the City and the City of Bonney Lake. A
copy of said Settlement Agreement is attached hereto,
designated as Exhibit "A" and incorporated by reference in
this Resolution.
Section 2. The Mayor is hereby authorized to implement
such administrative procedures as may be necessary to carry
out the directives of this legislation.
DATED and SIGNED this 2nd day of March, 1998.
Resolution No. 2925
February 27, 1998
Page 2
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ATTEST:
Danielle E. Daskam,
City Clerk
APPROVED AS TO FORM:
ids,
City Attorney
Resolution No. 2925
February 27, 1998
Page 3
CITY OF AUBURN
CHARLES A. BOOTH
MAYOR
SETTLEMENT AGREEMENT
CITY OF AUBURN AND CITY OF BONNEY LAKE
THIS SETTLEMENT AGREEMENT ("Agreement") is entered into
this ~L-~ day of March, 1998, by and between the CITY OF
AUBURN, ("Auburn"), a municipal corporation, and the CITY OF
BON~-~¥ LAKE ("Bonney Lake"), a municipal corporation.
WHEREAS, Auburn and Bonney Lake are currently involved
in several related disputes regarding the provision of water
service to a development known as Lakeland Hills South
("LHS') within Auburn's currently-designated Pierce County
Potential Annexation Area ("PC PAA');
WHEREAS, Auburn is currently seeking to annex a
portion of its PC PAA; and
WHEREAS, Bonney Lake is currently opposing said
annexation proposal; and
WHEREAS, Bonney Lake has initiated litigation against
Auburn in Pierce County Superior Court alleging tortious
interference with a contractual relationship; and
WHEREAS, Auburn has threatened legal and/or
administrative action with respect to various water rights
owned by Bonney Lake; and
Settlement Agreement
City of Aubum& City of Bonney Lake
March 3, 1998
Page 1 rc/agree/sa- c i tybonney]
Exhibit "A"
Auburn Resolution No. 2925
WHEREAS, Bonney Lake has threatened legal and/or
administrative action with respect to various water rights
owned by Auburn; and
WHEREAS, the parties hereto desire to enter into a
settlement agreement, the express intent of which is to
settle all claims and disputes between Auburn and Bonney
Lake relating to the provision of water service to Auburn's
PC PAA and related water rights issues; and
WHEREAS, Bonney Lake and Auburn are both desirous of
entering into cooperative arrangements to provide for the
efficient and cost-effective provision of water to their
customers.
NOW, THEREFORE, the parties agree as follows:
1. Bonney Lake's claims against Auburn in Pierce
County Cause No. 97-2-05212-8 shall be dismissed with
prejudice and without costs to either party.
2. Bonney Lake shall withdraw its opposition to
Auburn's proposed annexation of a portion of Auburn's PC PAA
in Pierce County Boundary Review Board Case No. A-97-5.
3. Auburn recognizes and agrees to Bonney Lake's
exclusive right to serve with water all portions of Bonney
Lake's water service area as designed by the 1995 Pierce
County Coordinated Water System Plan for a period of seven
years from the effective date of any Auburn annexation of
Settlement Agreement
City of Auburn & City of Bonney Lake
March 3, 1998
Page 2 [c/agree/sa-¢itybonney]
Exhibit "A"
Auburn Resolution No. 2925
any area within such service area. It is understood that
Auburn anticipates multiple annexation proceedings regarding
such areas. Bonney Lake shall not oppose such annexation
proposals, and pursuant to this paragraph, Bonney Lake shall
have the exclusive right to serve each annexation area for
seven years from the effective date of annexation.
4. Upon the expiration of each seven-year period, or
sooner if requested by Bonney Lake, provided for in
paragraph 3 with respect to a particular portion of Bonney
Lake's water service area, Auburn shall, at its option, have
the exclusive right to serve such area with water, subject
to the further requirements and conditions contained in
paragraphs 5 and 6 of this Agreement.
5. Upon the expiration of each seven-year period, or
sooner if requested by Bonney Lake, provided for in
paragraph 3 with respect to a particular portion of Bonney
Lake's water service area, Bonney Lake shall, at Auburn's
option, transfer to Auburn, by bill of sale, all of its
ownership rights in water system facilities located within
and used to serve such area, with the exception of
facilities retained by Bonney Lake in accordance with
paragraph 6, below. Auburn shall have no obligation to
compensate Bonney Lake for such facilities as are
transferred by Bonney Lake pursuant to this Section.
Settlement Agreement
City of Aubum& City of Bonney Lake
March 3, 1998
Page 3 lc/agree/sa- ci tybonney]
Exhibit "A"
Auburn Resolution No. 2925
Facilities to be transferred pursuant to this paragraph
shall include water pipes, but shall not include source or
storage facilities, including but not limited to Bonney
Lake's Tacoma Point Wells and Tacoma Point Reservoir, nor
those facilities reserved to Bonney Lake under paragraph 6.
6. In contemplation of Auburn's anticipated eventual
takeover of water service from Bonney Lake within Auburn's
annexation area, and for the purpose of providing Bonney
Lake a looped system after Auburn's takeover of water
service within its annexed areas hereunder, Auburn shall,
prior to the takeover of service within any portion of
Bonney Lake's current water service area, construct or cause
to be constructed and transfer or cause to be transferred to
Bonney Lake, free of charge, future 12" water transmission
line as shown on the attached Exhibit A to the southern
boundary of Auburn's PC PAA; provided, that in the event the
particular alignment shown on Exhibit A shall prove
impractical or unavailable, such lines shall be constructed
in an alignment as mutually agreed to by the parties.
Auburn shall construct or cause these facilities to be
constructed and transferred to Bonney Lake without regard to
the progress or lack of progress of the development of LHS.
Such facilities shall be constructed in accordance with
applicable Bonney Lake standards. In addition, Auburn will
Settlement Agreement
City of Aubum& City of Bonney Lake
March 3, 1998
Page 4 [c/agree/sa-citybonney]
Exhibit "A"
Auburn Resolution No. 2925
not take over water service from Bonney Lake, and Bonney
Lake will retain ownership of its water system, within that
area shown on Exhibit B, attached hereto. This area will
remain part of Bonney Lake's water service area and the
facilities serving it will remain part of Bonney Lake's
water system in perpetuity, notwithstanding possible
annexation of the area by Auburn at any time in the future.
7. Auburn shall guarantee Bonney Lake the right, in
perpetuity, to transport water through Auburn's corporate
boundaries within Pierce County, in order that Bonney Lake's
ability to serve its water service area as recognized in
this Agreement is not hindered or rendered impractical.
Such guarantee shall be effectuated by the execution of such
easements, agreements, franchises, licenses or other
documents as are appropriate, on terms that are in no
respect less favorable or advantageous to Bonney Lake than
those governing the operations of Auburn's own water utility
within its corporate limits. Auburn shall not condemn or
otherwise interfere with any Bonney Lake .water facilities
covered by this paragraph or paragraph
8. Neither Auburn nor any of its agents, employees,
attorneys or contractors shall challenge, directly,
indirectly or through third parties, through legal or
administrative proceedings or any other means, Bonney Lake's
Settlement Agreement
City of Auburn & City of Bonney Lake
March 3, 1998
Page 5 lc/agree/sa- ci tybonney]
Exhibit "A"
Auburn Resolution No. 2925
existing water rights, including but not limited to Bonney
Lake's water rights associated with its Tacoma Point Wells.
The rights associated with its Tacoma Point Wells are,
specifically, as follows:
(1) Lake Tapps Water Co. Certificate No. C 2809-A,
with a date of priority 1/23/57, for 100gpm and
45af;
(2) Tacoma Point Well No. 2 Certificate No. C G2-
2~-C
685~, with a date of priority of 2/5/86, for
~[~1000gpm and 800af; and
(3) Tacoma Point Well No. 4 Permit Number G2-27693,
with a date of priority of 1/30/90, for 1200gpm
and 1600af.
Because of production problems associated with Bonney Lake's
current wells at Tacoma Point, Auburn's agreement not to
protest or interfere extends to and includes Bonney Lake's
drilling of another well or wells at Tacoma Point to achieve
full production of its certificated and permitted water
rights. It also includes Bonney Lake's effort to proceed to
certificate on its permit rights in Tacoma Point Well No. 4,
referenced above. Bonney Lake agrees not to seek to
increase its water rights in the Tacoma Point well field for
any appropriation beyond these permitted/certificated
levels. Bonney Lake shall not challenge, directly,
Settlement Agreement
City of Auburn & City of Bonney Lake
March 3, 1998
Page 6 [c/agree/sa-citybonney]
Exhibit "A"
Auburn Resolution No. 2925
indirectly or through third parties, through legal or
administrative proceedings or any other means, Auburn's
existing water rights or Auburn's efforts to use those
rights in order to serve its PC PAA with water, including
any application to permit the withdrawal of water from wells
located within LHS commonly known as Lakeland wells 5b and
5c, provided that such rights in Lakeland wells 5b and 5c
are supplemental to Auburn's existing rights in wells 5 and
Sa. For purposes of this paragraph, the word ~'challenge'
shall include both direct actions, such as the filing of any
lawsuit, complaint or letter of protest, as well as indirect
actions, such as assisting, facilitating, encouraging or
approving any such actions on the part of a third party.
Each party will terminate and withdraw any pending
challenges to the other's water rights that have been
initiated.
Each party expressly reserves the right to challenge
any application for new water right or change in water right
that is made after the date of this Agreement; provided,
that any application for certification of a water right for
which a party already holds a permit shall not be deemed an
application for new water right or change in water right
made after the date of this Agreement.
Settlement Agreement
City of Auburn & City of Bonney Lake
March 3, 1998
Page 7 [c/a~ree/sa-citybonney]
Exhibit "A"
Auburn Resolution No. 2925
9. In order to facilitate the practical and efficient
provision of water service to the portion of LHS outside
Bonney Lake's current water service area, the parties will
work together cooperatively to agree on an amendment of
their respective water service area boundaries in this area.
10. At such time as either party wishes to pursue the
development of additional water source or supply or water
storage facilities in the vicinity of LHS, the party will
provide notice of same to the other party and the parties
will thereupon meet to confer with respect to their
respective needs and interests in regard to additional
source, supply or storage. Should it appear that the
interests of the parties are sufficiently aligned, the
parties will mutually agree to join in the development of
said additional source, supply or storage facilities, on
such terms as the parties may agree are equitable.
11. In the future, at such time as Auburn's water
system has been more fully developed in the area of LHS
and/or on its common boundary with Bonney Lake's water
service area, the parties may agree that it is in their
mutual best interests, and the best interests of their
respective customers, to enter into an agreement providing
for one or more interties between their water systems to be
constructed.
Settlement Agreement
City of Auburn & City of Bonney Lake
March 3, 1998
Page 8 [c/agree/sa-citybonne¥l
Exhibit "A"
Auburn Resolution No. 2925
12. Each party agrees to sign such documents and to
take such actions as are necessary to implement the purpose
and intent of this Agreement.
13. Time is of the essence under this Agreement. The
terms of this Agreement shall be specifically enforceable by
the parties hereto.
14. Each of the individuals signing this Agreement on
behalf of a party warrants that he/she has the authority to
sign the Agreement and thereby to bind the party on whose
behalf he/she signs.
15. This Agreement shall be binding on the heirs,
successors and assigns of the parties.
16. This Agreement is designed strictly for the
purpose of compromising disputed claims and avoiding the
expense and risks of litigation. The Agreement shall be
construed according to the fair intent of the language as a
whole, and not for or against either party.
17. In the event of any disputes arising out of the
implementation or enforcement of this Agreement, the parties
agree to submit said disputes first to mediation and, if
mediation is unsuccessful, then to binding arbitration in
accordance with Ch. 7.04 RCW; provided, however, that each
party reserves the right to seek injunctive or other similar
equitable relief from a court of competent jurisdiction in
Settlement Agreement
City of Auburn & City of Bonney Lake
March 3, 1998
Page 9 [c/agree/sa- ci tybonney]
Exhibit "A"
Resolution No. 2925
order to preserve the status quo pending any mediation or
arbitration or to otherwise protect a right or remedy that
might otherwise be lost if such interim relief were not
obtained.
18. This Agreement shall not waive Auburn's right to
assess and collect any taxes, assessments or fees which it
is otherwise authorized under law to assess or collect on
any water service; provided, that Auburn's assessment and
collection of any such taxes, assessments or fees with
respect to any area served with water by Bonney Lake shall
be upon the same terms as Auburn's assessment and collection
of any such taxes, assessments or fees with respect to areas
served with water by Auburn.
By:
Its:
By:
CITY OF AUBURN
CHARLES A. BOOTH
Its:
Settlement Agreement
City of Auburn & City of Bonney Lake
March 3, 1998
Page 10 [¢/agree/sa-citybonneyl
Exhibit "A"
Resolution No. 2925
EXISTING 6-INCH AND 12-INCH
WATER MAINS, APPURTENANCES,
CUSTOMERS ALON~ 2ND
TRANSFEjtRED TO iAU~-L.---¥
EXlSTINO 6" WATE~ MAIN IN
BETWEEN 2nd ST AND 4(h ST
TRANSFERRED TO AUBURN. BONNEY
LAKE TO RETAIN 2" DI WATER MAi
TACOMA POINT
~ T
LEGEND
EXISTING BONNEY LAKE WATER MAIN
~ PROPOSED t2" DIAMETER WATER MAIN TO BE PROVIDED BY AUBURN
~mmmmmm EXIST, BONNEY LAKE WATER MAIN tN FRANCHISE Wll'H AUBURN
EXISTING BONNEY LAKE WAI~__R "Al" TO ~E ~R~ ~? ~BU_R_N~
EXHIBIT A
CITY OF AUBURN AND CITY OF BONNEY LAKE
SETTLEMENT AGREEMENT ~~
SCALE: I' = 1000'
King County
· ~!erce
URBAN GRO
SERVICE AR
~TH AREA/WATER
EA BOUNDARY TO
FOLLOW PR,)PERTY LINES,
CENTERLIN[ OF RIGHT-OF-WAY,
OR NORTHWEST BOUNDARY OF GAS
NATURAL GAS PIPELIN~ASEMENT
EXHIBIT B
CITY OF AUBURN AND CITY OF BONNEY
AREA TO REMAIN IN BONNEY SETTLEMENT AGREEMENT
LAKE SERVICE AREA IN PERPETUITY,
BONNEY LAKE WATER SERVICE AREA BOUNDARY ~_~
SCALE: 1" = 1500'