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.
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ATTEST:
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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.
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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
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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
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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.
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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.
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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
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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.
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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
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