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HomeMy WebLinkAbout4248RESOLUTION NO. 4 2 4 8 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, APPROVING, AS A SUBSTITUTE AGREEMENT, AN INTERLOCAL AGREEMENT BETWEEN THE CITIES OF AUBURN, BONNEY LAKE AND SUMNER FOR THE PURCHASE OF PROPERTY WHEREAS, the City Council of the City of Auburn, Washington approved by Resolution No. 4240 an interlocal agreement between the cities of Auburn, Bonney Lake and Sumner for the purchase of certain property; and WHEREAS, the interlocal agreement was to implement the purchase and sale agreement between the same cities and Puget Sound Energy for Lake Tapps water and property rights; and WHEREAS, since the City Council's approval of Resolution 4240, issues surfaced, which would reasonably be addressed by a modification of certain portions of the interlocal agreement. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, KING COUNTY, WASHINGTON, HEREBY RESOLVES as follows: Section 1. The City Council of the City of Auburn, Washington approves the interlocal agreement between the cities of Auburn, Bonney Lake and Sumner for the purchase of Lake Tapps property, a copy of which interlocal agreement is attached hereto, marked as Exhibit "A" and incorporated herein by Resolution No. 4248 September 25, 2007 Page 1 of 2 this reference, and which agreement is a substitution agreement for the interlocal agreement approved by Resolution No. 4240. Section 2. That this Resolution ratifies and reaffirms the actions taken in connection with Resolution No. 4240 other than substitution of the interlocal agreement substituted hereby. Section 3. The Mayor is hereby authorized to implement such other administrative procedures as may be necessary to carry out the directives of this legislation. Section 4. This resolution shall be in full force and effect upon passage and signatures hereon. Dated and Signed this a laic of `~ r ~~ , 2007. ``~ .- _,- _~UR ATTEST: i / ~1 t Danielle E. Daskam, City Clerk AP OV AS TO FORM: Daniel B. Heid, City Attorne PETER B. LEWIS, MAYOR Resolution No. 4248 September 25, 2007 Page 2 of 2 Exhibit A, Resolution No. 4248 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: 1. 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 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 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 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 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 Page 3 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 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. Prior to waiving the Due Diligence provisions and proceeding to purchase, the Cities shall adopt an interlocal agreement setting forth the percentage of the final purchase price that each City shall pay, the percentage of each City's ownership of the Lake Tapps Property, and establishing a mechanism through which the Cities shall operate and maintain the Lake Tapps Property ("Ownership Interlocal"). The Cities agree that unless and until it is mutually agreed by the Cities differently, the future interlocal agreement described in this Paragraph shall set forth terms substantially in compliance with the following. a. Ownership. The percentage of each City's ownership of the Lake Tapps Property purchased (including the percentage of the water rights) shall be equal to that City's percentage of the purchase price. Each City shall have equal rights to possess all real Property and shall not have the right to exclude any other City from entering onto or using the real property. b. Retained Water For Use By The City's Water Utility Customers. Each City shall be initially assigned a percent allotment of the total MGD water rights, if and when available for a City's use, consistent with that City's percentage ownership interest. Each City shall then decide whether to retain all or some of its water allotment for use within its water utility service area by its own water utility's customers. Because of the currently anticipated need to enter into long term agreements for the sale of water, the Cities shall agree to an initial date certain for making this decision immediately after water is available for use. The Cities also agree to Page 4 plan for future reviews of that decision, if necessary, consistent with a joint goal of maximizing water sales at fair market value prices as identified in part c. below. No City shall sell retained water to a third party until all of the non-retained for sale water ("FSW") has been previously sold, unless all the Cities mutually agree to such sale in advance. Revenue from the sale shall be distributed in accordance with subsection c below. c. Sales of Non-retained Water. Water not retained shall be combined and made available for sale to third parties at fair market prices ("FMV"). These non- retained water allotments shall be called "for sale water" or "FSW." The Cities who contribute to FSW shall jointly determine the terms of each sale. Purchasers shall pay the System Development Charge(s) ("SDC(s)") agreed to by the Cities. Each City shall have a right to purchase FSW at FMV prices before water is sold to third parties. A City who purchases FSW shall also pay SDC amounts. All revenue generated by sale of FSW shall be credited to each contributing City based on that City's percentage share of the total for sale water. d. Responsibility for Costs. The Cities shall be responsible for all costs associated with the joint enterprise based on each City's percentage ownership interest. Each City shall be separately responsible for the additional costs associated with transporting that City's retained water allotments to the point of use. e. Operational dispute resolution. Any dispute between the Cities as to decisions required by the joint enterprise 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. £ Sale of interest. Each City may sell or assign its interest or any share of its interest to another City provided that such sale or assignment is offered to all the other Cities on equivalent terms unless all Cities otherwise consent in writing to such sale or assignment. Any sale or assignment to a third party requires the consent of all Cities. g. Agency. No City shall be able to bind or represent another City or Cities, or act as the agent of another City or Cities, except as specifically necessary to run the day-to-day operations of the joint enterprise and as specifically outlined in the ownership interlocal agreement. Page 5 h. Conformity. The Cities agree that the foregoing provisions maybe modified by mutual agreement of the parties during the due diligence process if financial or legal analysis indicate that any provision would create a conflict with any of the Cities' current outstanding utility bonds, including their covenants and restrictions. The intent of these provisions is to ensure that there is fair and equitable distribution of both costs and benefits, to ensure the maintenance of the Cities' fiduciary duties, and to promote the economic viability of the Joint Venture. 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. 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. Page 6 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 maybe 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 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 Page 7 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 Pierce County Auditor's Office, the Secretary of State of the State of Washington, and the respective Clerks of the parties hereto. Page 8 IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written. CITY OF AUBURN Peter B. Lewis, Mayor Attest: City Clerk CITY OF BONNEY LAKE Neil Johnson Jr., Mayor Attest: City Clerk Approved as to form: Bonney Lake City Attorney CITY OF SUMNER David Enslow, Mayor Attest: City Clerk Approved as to form: Sumner City Attorney Page 9