HomeMy WebLinkAbout4240RESOLUTION N0.4 2 4 0
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF AUBURN, WASHINGTON, APPROVING
THE REAL ESTATE PURCHASE AND SALE
AGREEMENT BETWEEN PUGET SOUND ENERGY
AND THE CITIES OF AUBURN, BONNEY LAKE
AND SUMNER
WHEREAS, in connection with the need by the three cities to provide to
their water customers presently and prospectively, water resources, the cities
have endeavored to assure adequate water rights to meet their needs; and
WHEREAS, in connection with those efforts, the cities have sought to
explore purchase of Lake Tapps from Puget Sound Energy as that entity needs
or uses Lake Tapps for its hydroelectric uses; and
WHEREAS, in order secure for their present and future customers,
adequate water supplies to meet the needs of the cities, it is appropriate that the
City purchase Lake Tapps not only to provide adequate sources of water but to
protect the current aquifer levels and spring levels from which water resources
are currently obtained; and
WHEREAS, in connection with the purchase and sale agreement for Lake
Tapps, there are other agreements that are appropriate including interlocal
agreement between the three cities to help define how they will operate the
resources jointly and how resources and responsibilities are to be divided in
connection therewith; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
HEREBY RESOLVES as follows:
Resolution No. 4240
September 17, 2007
Page 1 of 3
Section 1. That the Real Estate Purchase and Sale Agreement
between Puget Sound Energy and the cities of Auburn, Bonney Lake and
Sumner, in substantial conformity to the agreement a copy of which is attached
hereto, marked as Exhibit "A" and incorporated herein by this reference, is
hereby approved.
Section 2. That the Interlocal Agreement between the cities
implementing the Purchase and Sale, in substantial conformity to the agreement
a copy of which is attached hereto, marked as Exhibit "B" and incorporated
herein by this reference, is also approved to implement the purchase and sale
agreement.
Section 3. That the Mayor and/or designee are authorized to implement
such administrative procedures as may be necessary to carry out the directives
of this legislation, including execution of a joint representation agreement
between the cities of Auburn, Bonney Lake and Sumner.
Section 4. That this Resolution shall take effect and be in full force
upon passage and signatures hereon.
~ - /_
Dated and Signed this ~ ~~~ day of ~ ~.~.~.+°t-~ , 2007.
CI 41~ . UR
_~.
__ _..__
PETER B. LEWIS
MAYOR
ATTEST:
'~ ~ ~~~~~
l~ t
Dan Ile E. Daskam, City Clerk
Resolution No. 4240
September 17, 2007
Page 2 of 3
APPBrpVE~? AS TO
riiel B. Heid, Ci{'~i A
Resolution No. 4240
September 17, 2007
Page 3 of 3
.~
REAL ESTATE PURCHASE AND SALE AGREEMENT
PUGET SOUND ENERGY AND THE
CITIES OF AUBURN, BONNEY LAKE AND SUMNER
This Agreement is made and entered into thisl ay of 2007, by
and between the purchasers, CITIES OF AUBURN, NNE E and SUMNER (the
"Cities"), and PUGET SOUND ENERGY ("PSE").
WITNESSETH:
Whereas, the Cities and PSE are desirous of entering into an agreement whereby
the Cities will purchase property owned by PSE.
NOW, THEREFORE, in consideration of the following terms, conditions and
covenants and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, IT IS AGREED by the parties as follows:
1. SALE OF PROPERTY. PSE shall sell, convey and transfer to the Cities, and
the Cities shall purchase, acquire and take from PSE, the real property, located in Pierce
County, Washington, generally known as Lake Tapps, and legally described as follows:
LEGAL DESCRIPTION TO BE PROVIDED IN GENERAL
CONFORMITY WITH THE BELOW DESCRIPTIONS
and all rights, herediments, appurtenances, easements, licenses, improvements, and
buildings belonging or in any way appertaining to said property, including all interests
relating to the White River Hydroelectric Project. PSE shall also specifically sell, convey
and transfer to the Cities, and the Cities shall purchase, acquire and take from the PSE,
all rights to the waters of Lake Tapps held by PSE, whether perfected or not, and whether
said rights exist as an appurtenance to said property or for the use of the water on other
land or for other purposes. Without limiting in any way any of the foregoing, PSE shall
also specifically sell, convey and transfer to the Cities, and the Cities shall purchase,
acquire and take from the PSE, all existing claims, permits and pending permit
applications associated in any way with said property and/or the White River Hydroelectric
Project to the fullest extent such claims, permits and/or permit applications may be
transferred. The property, assets, and all other rights/entitlements of any kind identified in
this paragraph to be sold, conveyed and or transferred from PSE to the Cities shall
hereinafter be referred to collectively as "the Lake Tapps Property."
2. EARNEST MONEY DEPOSIT. The Cities agree to pay herewith Five Hundred,
Ten Thousand US Dollars ($510,000.00) as earnest money, in the form of checks or
warrants from the Cities to be deposited with the closing agent as part payment on the
purchase price, payable to PSE upon closing, subject to the conditions set forth in
Paragraph 4. The earnest money will be delivered to the closing agent upon approval of
1
this Agreement by the City Council of the respective cities in accordance with Section 22
but no later than September 27, 2007 if this Offer is accepted by PSE.
3. PURCHASE PRICE. The purchase price for the Lake Tapps Property is Thirty-
Three Million US Dollars ($33,000,000.00). The parties acknowledge that the purchase
price represents the fair market value of the Property. The agreed upon amount is
payable by checks or warrants from the Cities at closing.
4. DUE DILIGENCE. The Cities shall have the right for a period of one hundred
eighty (180) days from the date of PSE's written confirmation that it has delivered all
documents set forth in Paragraph 6 of this Agreement to the City of Auburn at the address
set forth in Paragraph 19 (the "Due Diligence Period") to conduct the Cities' due diligence
review, examination and inspection of all matters pertaining to their acquisition of the Lake
Tapps Property, including such inspections, tests, and surveys as the Cities deem
appropriate to determine the suitability of the Lake Tapps Property for the Cities' intended
use. The Cities' obligation to purchase the Lake Tapps Property shall be contingent upon
the Cities' approval of the Lake Tapps Property after conducting their due diligence
review. If, based upon the Cities' review, examination and inspection, the Cities shall
determine in their sole discretion that they intend to acquire the Lake Tapps Property, then
the Cities shall promptly notify PSE of such determination in writing prior to the expiration
of the Due Diligence Period, whereupon the Cities' due diligence contingency shall be
deemed satisfied and waived, the Earnest Money shall become nonrefundable (except as
otherwise provided herein), and the Cities shall proceed to Closing. In the event that the
Cities shall fail to have delivered such notice to PSE on or before the expiration of the Due
Diligence Period, then this Agreement shall automatically terminate, the Earnest Money
shall be returned to the Cities, and the Cities' rights under this Agreement shall be of no
further force or effect.
5. INSPECTION OF PROPERTY. PSE grants to the Cities the right to enter onto
the Lake Tapps Property, including areas not open to the public, to conduct such
investigations and testing as the Cities may find necessary to assess the feasibility of
purchasing the Lake Tapps Property. The Cities shall give PSE three (3) days written
notice of any investigations or testing that require the collection of samples or other
physical investigations on the Lake Tapps Property.
6. INVESTIGATION OF WATER RIGHTS AND OTHER RECORDS. PSE agrees
to share with the Cities all of its records relating in any way to the Lake Tapps Property
and/or the water rights associated with it. This includes but is not limited to all records,
data, studies, assessments, etc. which exist in any form whatsoever and includes, but is
not limited to; environmental, hazardous waste, endangered species, hydrological,
engineering, dike safety and any related geotechnical assessments and studies; dike
safety improvements and state approvals thereof; all materials associated with PSE's
current and pending water rights; information on any pending litigation relating to or
impacting the Lake Tapps Property; all agreements of any kind relating to lake level
maintenance or minimum instream flows; and such other materials as the Cities may
require to assess the feasibility of purchasing the property. This provision shall be
interpreted to the broadest extent possible to facilitate full disclosure of all information
which exists concerning the Lake Tapps Property.
2
7. MAINTENANCE OF FACILITIES. During the period of this Agreement, PSE
shall continue to maintain and operate the Lake Tapps Property in conformance with state
and federal law, existing binding legal agreements, and with accepted industry standards.
The Cities have taken on no duty for such maintenance and operation by entering into this
Agreement.
8. REPRESENTATIONS OF PSE. PSE hereby represents to the Cities the
following:
(A) To the best of PSE's knowledge there are no pending special assessments or
condemnation actions with respect to the Lake Tapps Property or any part thereof, and
PSE has no knowledge of any special assessment or condemnation actions being
contemplated, and;
(B) There is no pending litigation or suit threatened or asserted which could result
in a lis pendens being lawfully filed against the Lake Tapps Property or any part thereof,
and;
(C) PSE will cooperate with the Cities and execute all documents necessary to
remove or release liens, assessments, encumbrances, mortgages or deeds of trust in
order to deliver to the Cities marketable title to the Lake Tapps Property and all parts
thereof;
(D) PSE has good and marketable title and fee simple to the Lake Tapps Property
and all parts thereof, which is not subject to any liens, encumbrances, restrictions, or
easements of any kind except those which have been disclosed on the Commitment for
Title Insurance received by the Cities.
(E) PSE will cooperate with the Cities and execute all documents necessary to
transfer to the Cities the existing permits and pending permit applications set forth in
Paragraph 1.
9. LEGAL AUTHORITY TO ENTER INTO AGREEMENT. The Cities and PSE
affirm that they have the full legal right to enter into this Agreement. PSE also affirms that
it is not a party to any agreement with Cascade Water Alliance, or any other potential
purchaser of the Lake Tapps Property or its water .rights, that precludes it from entering
into this agreement or transferring clear title to the Lake Tapps Property to the Cities.
10. CLOSING. The closing date and place shall be mutually agreed upon by the
parties upon the Cities notifying PSE of their intention to purchase the Lake Tapps
Property under Paragraph 4 of this Agreement. All parties shall be responsible and
entitled to have all closing documents reviewed by its own counsel or agent prior to
closing. The risk of loss to the improvements, if any, on the Lake Tapps Property prior to
closing shall be PSE's and in the event of damage or destruction, the Cities shall be
entitled to terminate this agreement, and the Earnest Money shall be returned to the
Cities. Either the Cities or PSE may propose delays in closing and/or extensions to the
Due Diligence Period, that shall become effective upon written, mutual agreement of the
parties.
11. PSE'S CLOSING DOCUMENTS. At the closing, PSE shall produce and
execute:
(A) a Warranty Deed (The "Deed"), duly executed and acknowledged in a
recordable form, conveying to the Cities marketable title to the Lake Tapps Property free
3
and clear of all liens, assessments, deeds of trust, mortgages, or encumbrances except
those expressly agreed to by the Cities;
(B) a detailed statement, prepared by the escrow officer and/or the closing
attorney, setting forth the appropriate adjustments and prorations to be made at the
closing;
(C) a completed PSE's Disclosure Statement; and
(D) all other documentation reasonably required by the Cities.
12. EXPENSES.
(A) Expenses of PSE. PSE shall pay:
(i) real estate taxes prorated to the date of closing;
(ii) all assessments, liens, mortgages, deeds of trust or other encumbrances
(i.e. real estate excise tax);
(iii) PSE's attorney fees; and
(iv) all other expenses incurred by PSE which relate to the Lake Tapps
Property;
(v) title insurance premiums.
(B) Expenses of Cities. The Cities shall pay:
(i) all recording fees;
(ii) their attorney fees;
(iii) real estate taxes due after the closing date, if any.
13. POSSESSION. PSE shall deliver possession of the Property to the Cities on
the date of closing.
14. TIME. Time is of the essence of this Agreement.
15. TITLE EXAMINATION. This Agreement is subject to and conditioned on PSE
providing to the Cities clear title to the real property, to the Cities' satisfaction, as shown
on a Policy of Title Insurance covering the purchase of the Property in the amount of the
cash purchase price, provided and paid for by PSE. In the event that PSE is unable to
cure any title encumbrances which are unacceptable to the Cities, the Cities may at their
option: (1) terminate this agreement by written notice, whereupon no party shall have any
further liability under this agreement; or (2) postpone the date of closing for up to sixty (60)
days, during which time PSE shall use all reasonable efforts and expend reasonable sums
as may be necessary to cure the objections of the Cities. If the objections to title are not
cured on or before the closing date, as postponed, the Cities may terminate this
agreement or waive the objections to title.
16. COMMISSION. PSE warrants and represents to the Cities that if any real
estate brokerage commission or fees are payable, PSE hereby indemnifies the Cities from
and against any and all claims for any real estate brokerage commission fees which may
arise as a result of any acts of PSE. PSE will pay any real estate fees at closing, unless
agreed otherwise.
17. HAZARDOUS WASTE. To the best of PSE's knowledge the Lake Tapps
Property is not in violation of any federal, state or local law, ordinance, or regulation
relating to the environmental conditions on, under, or about the Lake Tapps Property,
4
including but not limited to, soil and surface and ground water conditions, and that during
the time in which PSE owned the Lake Tapps Property, neither PSE nor, to the best of
PSE's knowledge, any third party has used, generated, stored, or disposed of, on, under,
or about the Lake Tapps Property or transported to or from the Property any hazardous
waste, toxic substances, or related materials (the "Hazardous Materials"). For the
purposes of this paragraph, Hazardous Materials shall include, but is not limited to,
substances defined as "Hazardous Substances," "Hazardous Materials," "Hazardous
Waste," "Toxic Substances," in the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, and RCW Title 7 and the
regulations promulgated pursuant to such laws.
PSE will indemnify and hold harmless the Cities from all required remediation,
damage, claim or loss (including attorney fees incurred in defending any claim) arising
from the placement, storage, disposal or release on the Lake Tapps Property of any
Hazardous Materials during such time as PSE was in possession or had any interest in
the Lake Tapps Property. This indemnification and hold harmless shall survive and not be
merged into the deed delivered by PSE to the Cities for the Lake Tapps Property.
If prior to the closing date the Cities discover that the Lake Tapps Property contains
any Hazardous Waste, of which it has not been previously advised, the Cities may
terminate this Agreement, and the Earnest Money shall be returned to the Cities.
18. CONDEMNATION. The Cities and PSE acknowledge that the Property being
sold/purchased is not being purchased under the threat of condemnation pursuant to
RCW Title 8.
19. NOTICES. Any notices required or permitted to be given shall be in writing and
delivered either in person or by certified mail, return receipt requested, postage pre-paid,
addressed as follows or such other address as may be designated by either party:
Cities: Office of the Mayor
City of Auburn
25 W. Main St.
Auburn WA 98001
Office of the Mayor
City of Bonney Lake
19306 Bonney Lake Blvd.
Bonney Lake, WA 98391
Office of the Mayor
City of Sumner
1104 Maple Street,
Sumner, WA 98390
PSE:
5
Any notice given pursuant to this Agreement shall be deemed effective the day it is
personally delivered or three (3) business days after the date it is deposited in the United
States mails.
20. ENTIRE AGREEMENT/MODIFICATION. This written Agreement constitutes
the entire and complete Agreement between the parties hereto and supersedes any prior
oral or written agreements between the Parties with respect to the Property. It is
expressly agreed that there are no verbal understandings or agreements, which in any
way change the terms, covenants, and conditions herein set forth. No modifications of
this Agreement and waiver of any of its terms and conditions shall be effective unless in
writing and duly executed by the parties hereto.
21. BINDING EFFECT. All covenants, agreements, warranties and provisions of
this Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, executors, administrators, personal representatives, successors
and assigns.
22. CITY COUNCIL APPROVALS. PSE acknowledges that this Agreement does
not bind the Cities until (1) the Mayors of Auburn, Bonney Lake and Sumner execute the
Agreement and (2) their City Councils approve the Agreement.
23. PSE DISCLOSURE STATEMENT. PSE shall, within five (5) days of accepting
this Agreement, deliver to the Cities a completed, signed and dated Real Property
Transfer Disclosure Statement substantially in the form set forth in RCW 64.06.020. The
Cities shall within three business days, or as otherwise agreed to, after receipt of the Real
Property Transfer Disclosure Statement have the right to (1) approve and accept the Real
Property Disclosure Statement; or (2) rescind this Agreement pursuant to the Cities' sole
discretion. If the Cities elect to rescind the Agreement, the Cities will deliver written notice
of rescission to PSE within the above three (3) business day period, or as otherwise
agreed. Upon delivery of a rescission statement, the Cities shall be entitled to immediate
return of all deposits and other consideration paid to PSE. If the Cities do not deliver a
written rescission notice, the Real Property Transfer Disclosure Statement will be deemed
approved.
24. DEFAULT AND ATTORNEY'S FEES. In the event that any party fails, without
legal excuse, to perform any obligation under this Agreement, then the other parties may,
at their option, bring suit against the party failing to perform for the other parties' actual
damages, or pursue any other rights or remedies available at law or in equity.
If one or more parties institute suit concerning this Agreement, the prevailing party
or parties shall be entitled to court costs and reasonable attorney's fees. In the event of
trial, the court shall fix the amount of the attorney's fees. Venue of any suit shall be in
Pierce County, and this Agreement is to be governed by the laws of the State of
Washington.
25. LEGAL RIGHTS. EACH OF THE PARTIES SHALL SUBMIT THIS
AGREEMENT TO THEIR ATTORNEYS AND TAX SPECIALISTS FOR THEIR REVIEW
AND APPROVAL PRIOR TO SIGNING THIS AGREEMENT. NO REPRESENTATIONS
6
OR WARRANTIES ARE MADE BY ONE PARTY TO THE OTHER PARTY AS TO THE
LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX CONSEQUENCES OF THIS
AGREEMENT, THE TRANSACTION DESCRIBED HEREIN, OR ANY ATTACHMENTS
TO THIS AGREEMENT.
26. TIME LIMIT FOR ACCEPTANCE. The Cities offer to buy the property on the
above terms and conditions. PSE has until midnight of September 27, 2007 to accept this
offer (if not filled in, the day following the Cities' signature date below.) Acceptance is not
effective until a signed copy hereof along with any earnest money is actually received by
the office of Closing Agent. If this offer is not so accepted, it shall lapse.
27. ASSIGNMENT. No party to this Agreement shall assign any right or obligation
hereunder in whole or in part, without the prior written consent of the other parties hereto;
provided, one or more of the Cities may assign its rights and obligations hereunder to the
remaining Cities (or City) without such written consent. No assignment or transfer of any
interest under this Agreement shall be deemed to release the assignor from any liability or
obligation under this Agreement, or to cause any such liability or obligation to be reduced
to a secondary liability or obligation.
28. AMENDMENT, MODIFICATION OR WAIVER. No amendment, modification or
waiver of any condition, provision or term of this Agreement shall be valid or of any effect
unless made in writing, signed by the party or parties to be bound, or such party's or
parties' duly authorized representative(s) and specifying with particularity the nature and
extent of such amendment, modification or waiver. Any waiver by any party of any default
of another party shall not effector impair any right arising from any subsequent default.
Nothing herein shall limit the remedies or rights of the parties hereto under and pursuant
to this Agreement.
29. INDEMNIFICATION. Each party hereto ("Indemnifying Party") shall indemnify,
defend and hold harmless the other parties hereto and their officers, agents and
employees, or any of them ("Indemnified Party or Parties") from any and all claims,
actions, suits, liability, loss, costs, expenses, and damages of any nature whatsoever,
including attorney fees, by any reason of or arising out of the act or omission of the
Indemnifying Party, its officers, agents, employees, or any of them relating to or arising
out of the performance of this Agreement except to the extent a court of competent
jurisdiction finds that the claim, action, suit, liability, loss, cost, expense, or damage is
caused by the Indemnified Party or Parties. If a final judgment is rendered against an
Indemnified Party or Parties, or jointly against an Indemnified Party or Parties and the
Indemnifying Party, the Indemnifying Party shall satisfy the same to the extent that such
judgment was due to the Indemnifying Party's negligent acts or omissions.
30. CAPTIONS, HEADINGS AND TITLES. All captions, headings or titles in the
paragraphs or sections of this Agreement are inserted for convenience of reference only
and shall not constitute a part of this Agreement or act as a limitation of the scope of the
particular paragraph or sections to which they apply. As used herein, where appropriate,
the singular shall include the plural and vice versa and masculine, feminine and neuter
expressions shall be interchangeable. Interpretation or construction of this Agreement
7
shall not be affected by any determination as to who is the drafter of this Agreement, this
Agreement having been drafted by mutual agreement of the parties.
31. SEVERABLE PROVISIONS. Each provision of this Agreement is intended to
be severable. If any provision hereof is illegal or invalid for any reason whatsoever, such
illegality or invalidity shall not affect the validity of the remainder of this Agreement.
32. ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties hereto in respect to the transactions contemplated hereby and supersedes all
prior agreements and understandings between the parties with respect to such subject
matter.
33. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be one and the same Agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered to the
other party.
34. SIGNATURES:
CI I CITY OF BONNEY LAKE
_~
--~
.~-- ~
Peter . Le is, M yor Neil J hnson, Jr., May
-,
`~ ~ d .
Date Date
CITY OF SUMNER
David Enslow, Mayor
9-/L -a7
Date
ACCEPTED, the date shown below.
PUGET SOUND ENERGY
By
Date
8
CITIES OF AUBURN, BONNEY LAKE, AND SUMNER
INTERLOCAL AGREEMENT FOR
PROPERTY PURCHASE
THIS INTERLOCAL AGREEMENT made and entered into, pursuant to the Interlocal
Cooperation Act, Chapter 39.34 of the Revised Code of Washington, on the day of September,
2007, by and between the CITY OF AUBURN, the CITY OF BONNEY LAKE, and the CITY OF
SUMNER, municipal corporations of the State of Washington (the "Cities" or individually "City").
WITNESSETH:
WHEREAS, Puget Sound Energy ("PSE") owns Lake Tapps, the water rights thereto, and
the property on which the lake is located; and,
WHEREAS, the Cities wish to jointly make an offer to purchase the Lake Tapps Property;
and,
WHEREAS, the Cities wish to establish the nature of their respective rights and
responsibilities in making the offer and conducting a Due Diligence Investigation of the Lake Tapps
Property,
NOW THEREFORE in consideration of their mutual covenants, conditions and promises,
THE PARTIES HERETO DO HEREBY AGREE as follows:
OFFER OF PURCHASE. The Cities shall make an offer to purchase the Lake Tapps
Property from PSE by delivering to PSE a copy of the Purchase and Sale Agreement
between the Cities and PSE ("Purchase and Sale Agreement").
2. TERMS OF OFFER. The Cities mutually agree that the terms of their offer to purchase the
Lake Tapps Property are set forth in the Purchase and Sale Agreement attached hereto as
Exhibit "A," and hereby incorporated by reference, including any amendments thereto
resulting from negotiations between the Cities and PSE.
3. EARNEST MONEY. The City Councils for each of the Cities, in approving this Interlocal
Agreement have authorized the expenditure of One Hundred, Seventy Thousand US Dollars
($170,000.00) earnest money by each of their respective Cities.
4. FUNDS FOR DUE DILIGENCE INVESTIGATION. The City Councils for each of the
Cities, in approving this Interlocal Agreement have authorized the expenditure of One
Hundred Thousand Dollars ($100,000.00) by each of their respective Cities to pay that
City's one-third of the costs of conducting the Due Diligence Investigations set forth in
Page 1
Paragraph 5.
5. OPERATIONS BOARD AND WORK PLAN FOR DUE DILIGENCE
INVESTIGATION. The Cities shall conduct the Due Diligence Investigations set forth in
the Work Plan, attached hereto as Exhibit "B" and incorporated by reference in the
following manner:
a. Operations Board. An Operations Board is hereby created to govern and
manage the Due Diligence Investigation.
(1) The Due Diligence Investigation shall be governed by an Operations
Board composed of three (3) members from each of the Cities;
comprised of the following individuals, as follows: the Mayor, City
Administrator or designees; and City Attorney from each of the
respective Cities. Each board member shall have an equal vote and
voice in all board decisions. Unless otherwise provided, Robert's
Revised Rules of Order shall generally govern all procedural matters
relating to the business of the Board.
(2) The Operations Board shall be responsible for managing the Due
Diligence funds authorized in Paragraph 4 of this Interlocal
Agreement. The Board is authorized to seek Requests for Proposals
(RFPs) for various components of the Due Diligence Investigation
and components of the Work Plan described below. For any contract
greater than Thirty Thousand Dollars, the consensus of not less than
seven (7) members of the Operations Board must be obtained. The
Operations Board shall submit all contracts to the Cities' respective
City Attorneys for review and approval as to form at least two weeks
before execution of the contract. An accounting of all expenditures
and the remaining balance of the fund shall be provided to the
respective City Councils not less than monthly. In instances where
approval of the contract is required by the City Council, such
approval must be obtained prior to execution of the contract.
b. Work Plan Tasks. In conducting the Due Diligence Investigation, the
Operations Board will be guided by the tasks as set forth in the Work Plan.
For every task in the Work Plan, each City shall have a Primary Contact,
who is charged with overseeing that Task, communicating with the Primary
s The designee for the Cities of Bonney Lake and Sumner shall be the designee appointed by the
City Administrators of these Cities, if a designee is so appointed from such City, and the
designee for the City of Auburn shall be as appointed by the Mayor of such City.
Page 2
Contacts for the other Cities regarding that task, and disseminating
information about that Task within his or her city.
(1) For every Task, there shall be a Lead City. The Contact Person for
the Lead City shall administer the execution of that Task.
(2) Tasks, or portions of Tasks, that can be performed in-house will be
performed by the Lead City's staff, at that city's cost; provided, the
Three Primary Contacts for the Task Operations Board, acting by
consensus and with consent of the Mayor of the City which the tasks
are to be assigned, may assign portions of a Task to another City's
staff, as necessary.
(3) The Contact Person for the Lead City shall oversee any consultants
retained for that Task but does not have the authority to modify or
increase the scope of work without the consent of the Operations
Board.
(4) Consultants retained for a Task shall be retained by the Lead City, on
behalf of the Cities, consistent with Subparagraph 5(b)(5) below.
However, the Consultant's contract shall include indemnification
provisions that holds Sumner, Bonney Lake, and Auburn harmless.
The Lead City shall invoice the other two Cities for payment
commensurate with its percentage of contribution for each consultant
invoice received and shall pay the consultant.
(5) The Primary Contacts for a Task shall make a consensus
recommendation to the Cities regarding which consultants to retain.
The three Mayors, or City Councils if council action is required,
shall jointly select the consultant by consensus.
6. INDEPENDENT REVIEW. Any City may retain a consultant, at its own cost, to assist that
City in evaluating the results of a Task or to assist that City in evaluating the purchase of the
Lake Tapps Property.
7. WITHDRAWAL. The Cities have the right to withdraw their participation in the purchase
of the Lake Tapps Property up until the end of the Due Diligence Period as defined in the
Purchase and Sale Agreement. If any City determines that it no longer wishes to pursue its
participation in the purchase of the Lake Tapps Property, it may do so by giving written
notice to the other Cities. Any City withdrawing during the Due Diligence Period shall be
relieved from the obligation to pay, any and all Due Diligence Investigation expenses
obligated after the receipt of the withdrawal notice, and shall be entitled to the refund from
Page 3
the remaining Cities of its contribution of Earnest Money funds, unless, pursuant to the
Purchase and Sale Agreement, the Earnest Money funds are not refundable; PROVIDED
that if two or more Cities withdraw, each City will be responsible for its proportionate share
of the total costs of the Due Diligence Investigation based upon its percentage of
participation.
8. SATISFACTION OF DUE DILIGENCE. The City Councils of the Cities shall determine
whether the Due Diligence contingency has been satisfied, and whether the Cities shall
proceed with the purchase of the Lake Tapps Property. Should the Cities be unable to reach
consensus, the City or Cities wishing to proceed with the purchase may do so, and the City
or Cities choosing not to proceed shall withdraw under the provisions of Paragraph 7.
9. DETERMINATION OF OPERATIONAL STRUCTURE AND OWNERSHIP.
The Cities shall work in good faith to develop a mutually acceptable plan for
maintenance of the Lake Tapps Property and operation of the resources, including
ownership and the pricing for water to be sold.
10. EXTENSION OF DUE DILIGENCE PERIOD. Prior to expiration of the Due Diligence
Period, the Mayors of the Cities, acting by consensus, may request an extension of the Due
Diligence Period, or a delay in closing under the provisions of the Purchase and Sale
Agreement. The Mayors, acting by consensus, may also agree to, or reject, a request from
PSE for such an extension or delay.
11. DEFINITION OF TERMS. All terms used in this Interlocal Agreement not otherwise
defined herein shall have the same meaning as that given in the Purchase and Sale
Agreement.
12. INDEMNIFICATION. Each City ("Indemnifying City") shall indemnify and hold the other
Cities ("Indemnified Cities") and their agents, employees, and/or officers, harmless from
and shall process and defend at its own expense any and all claims, demands, suits, at law or
equity, actions, penalties, losses, damages, or costs, of whatsoever kind or nature, brought
against one or more of the Indemnified Cities arising out of, in connection with, or incident
to the Indemnifying City's performance or failure to perform any aspect of this Interlocal
Agreement; provided, however, that if such claims are caused by or result from the
concurrent negligence of an Indemnified City, its agents, employees, and/or officers, this
indemnity provision shall be valid and enforceable only to the extent of the negligence of
the Indemnifying City; and provided further, that nothing herein shall require the
Indemnifying City to hold harmless or defend an Indemnified City, its agents, employees
and/or officers from any claims arising from the sole negligence of said Indemnified City,
its agents, employees, and/or officers. No liability shall attach to any City by reason of
entering into this Interlocal Agreement except as expressly provided herein.
Page 4
13. COMPLIANCE WITH REGULATIONS AND LAWS. The Cities shall comply with all
applicable rules and regulations pertaining to them in connection with the matters covered
herein.
14. ASSIGNMENT. A City shall not assign this Interlocal Agreement or any interest,
obligation or duty therein without the express written consent of the other Cities.
15. ATTORNEYS' FEES. Each City shall be responsible for its own attorney fees and costs.
16. DISPUTE RESOLUTION. Any dispute between the any of the Cities as to this Interlocal
Agreement or any other Interlocal Agreement related to Lake Tapps, the joint operations
boards, water rights, water usage retention, sale of water to third parties or any other issue or
decision required by the Cities or boards related hereto shall be resolved by mediation
and/or non-binding arbitration as agreed to by the Cities. The Cities may also agree to
binding arbitration on a case-by-case basis.
17. NOTICES. All notices and payments hereunder may be delivered or mailed. If mailed, they
shall be sent to the following respective addresses:
To the City of Auburn:
City of Auburn
25 West Main
Auburn, WA 98001-4998
Attn: Mayor
Phone:(253) 931-3000
FAX: (253) 931-3053
To the City of Bonney Lake:
City of Bonney Lake
19306 Bonney Lake Blvd.
Bonney lake WA 98391
Attn: Mayor
Phone:(253) 862-8602
FAX: (253) 862-8538
To the City of Sumner:
City of Sumner
1104 Maple St.
Sumner, WA 98390
Attn: Mayor
Phone: (253) 863-8300
FAX: (253) 863-2850
Page 5
or to such other respective addresses as any party hereto may hereafter from time to time
designate in writing. All notices and payments mailed by regular post (including first class)
shall be deemed to have been given on the second business day following the date of
mailing, if properly mailed and addressed. Notices and payments sent by certified or
registered mail shall be deemed to have been given on the day next following the date of
mailing, if properly mailed and addressed. For all types of mail, the postmark affixed by the
United States Postal Service shall be conclusive evidence of the date of mailing.
18. MISCELLANEOUS.
a. This Interlocal Agreement shall be deemed to be made and construed in accordance
with the laws of the State of Washington. Jurisdiction and venue for any action
arising out of this Interlocal Agreement shall be in Pierce County, Washington.
b. The captions in this Interlocal Agreement are for convenience only and do not in any-
way limit or amplify the provisions of this Interlocal Agreement.
c. This Interlocal Agreement shall continue until terminated by all of the Cities.
d. No separate legal entity is created hereby, as each of the Cities is contracting in its
capacity as a municipal corporation of the State of Washington. The identity of the
parties hereto is as set forth hereinabove.
e. The purpose of this Interlocal Agreement is to accomplish the objectives of this
Interlocal Agreement.
f. The performances of the duties of the Cities provided hereby shall be done in
accordance with standard operating procedures and customary practices of the
Cities.
g. No provision of this Interlocal Agreement shall relieve any City of its public agency
obligations and or responsibilities imposed by law.
h. If any term or provision of this Interlocal Agreement or the application thereof to
any person or circumstance shall, to any extent, be held to be invalid or
unenforceable by a final decision of any court having jurisdiction on the matter, the
remainder of this Interlocal Agreement or the application of such term or provision
to persons or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby and shall continue in full force and
effect, unless such court determines that such invalidity or unenforceability
materially interferes with or defeats the purposes hereof, at which time the Cities
shall have the right to terminate the Interlocal Agreement.
i. This Agreement constitutes the entire agreement between the Cities. There are no
terms, obligations, covenants or conditions other than those contained herein. No
modifications or amendments of this Agreement shall be valid or effective unless
evidenced by an agreement in writing signed by all Cities.
j. Copies of this Agreement shall be filed with the King County Auditor's Office, the
Page 6
Pierce County Auditor's Office, the Secretary of State of the State of Washington,
and the respective Clerks of the parties hereto.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
CITY OF AU
_ __
,.~
,.
~\
CITY OF BONNEY LAKE
Peter B. Lewis, Mayor
Attest:
~~ ~~~~
Ci lerk
CITY OF SUMNER
David Enslow, Mayor
Attest:
City Clerk
Neil Johnson Jr., Mayor
Attest:
City Clerk
Approved as to form:
Bonney Lake City Attorney
Page 7
Approved as to form:
Approved as to form:
Sumner City Attorney
Page 8
STATE OF WASHINGTON
COUNTY OF
ss.
ON~HIS % ~~1day of ~ ~ ~ f. , 200 ~, before me, personally
appeared f-~/ .~. /~t~ ~.r and ,,D~zti ,`f ~1~. ~aka,~- , to me known to be the Mayor and City
Clerk of the CITY OF AUBURN, a municipal corporation, the corporation that executed the within
and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and
deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that they
were authorized to execute said instrument.
WITNESS my hand and official seal hereto the day and year in this certificate first above written.
\`~a`a\\1\~~tt1.~F
~.~ dpi ~kA+~NC~
~: QL~ =~ Q~ AR y ~d+''.~
,w=~ z ~ '~
Asa _ '
~.
cI~ , u
~~~® s~~'I,' 3 2~ \1a ~~~~T
r~~rr~ ~'~ Q~~,'~,
STATE OF WASHINGTON )
ss.
COUNTY OF )
r
N A Y PUBLIC i and for th State of
Washington, residing at ~f ~ ~-`~.
My Commission Expires: Q 3 • ~ ~ I /
ON THIS day of , 200_, before me, personally
appeared and , to me known to be the Mayor and City
Clerk of the CITY OF BONNEY LAKE, a municipal corporation, the corporation that executed the
within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that
they were authorized to execute said instrument.
WITNESS my hand and official seal hereto the day and year in this certificate first above written.
NOTARY PUBLIC in and for the State of
Washington, residing at
My Commission Expires:
Page 9
STATE OF WASHINGTON )
ss.
COUNTY OF )
ON THIS day of , 200_, before me, personally
appeared and , to me known to be the Mayor and City
Clerk of the CITY OF SUMNER, a municipal corporation, the corporation that executed the within
and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and
deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that they
were authorized to execute said instrument.
WITNESS my hand and official seal hereto the day and year in this certificate first above written.
NOTARY PUBLIC in
Washington, residing at _
My Commission Expires:
and for the State of
Page 10
Exhibit B
Due Diligence Investigations
1. Retain and manage consultants for review of PSE's current and pending water rights.
2. Retain and manage consultants for environmental review of Lake Tapps property, including
hazardous waste, shoreline management, and water quality.
3. Retain and manage consultants for engineering review of dikes and all other structures on
property, including costs and time frames for any necessary or recommended
repairs/replacement of facilities.
4. Retain and manage consultants for hydrological review of lake and surrounding area.
5. Retain and manage consultants for endangered species review.
6. Retain and manage consultants for feasibility study of using water for potable water supply
for Cities and for third parties, including analysis of water quality, cost and options for
treatment facilities, and cost and options for distribution systems.
7. Retain and manage consultants for analysis of lake management options, incorporating a
range of municipal water usage volumes, instream flows, lake levels, and annual rainfall.
8. Retain and manage consultants for review of PSE records regarding maintenance and
operation actions and costs for the Lake Tapps Property for the past ten years.
9. Undertake such other investigations as the Cities jointly agree should be conducted.