HomeMy WebLinkAboutITEM VIII-B-1
CITY OF
AGENDA BILL APPROVAL FORM
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'BWASHWGTON
Agenda Subject: Resolution No. 4503 Date: July 8, 2009
Department: Attachments: JAG Property Proceeds Budget Impact:
Police Distribution sheet; and Resolution No. 4503 and
Exhibit A- Proceeds Distribution and Hold
Harmless A reement
Administrative Recommendation:
City Council adopt Resolution No. 4503.
Background Summary:
FISCAL IMPACT: The Jail Advisory Group (JAG) designated the City of Bellevue lead agency for
maintaining and disposing of three parcels of land abutting 116`" Avenue N.E. just north of NE 12'h St (tax
parcels # 2825059291, 2825059292, and 2825059015). These parcels were provided to cities through
negotiation of the Jail Services Agreement with King County in 2002. As lead agency, Bellevue is holding
the proceeds from the sale of the property on behalf of all King County cities. The total amount of
proceeds (net sale proceeds plus investment interest revenue) is approximately $13.1 million. The cities,
through the Jail Oversight Assembly, have directed distribution of the proceeds to each city signing the
Proceeds Agreement based on a methodology that utilizes an average of each city's assessed valuation
and jail population (see Attachment 1).
As the caretaker of the property, Bellevue is allowed to recover costs incurred to manage and sell the
properties, which totaled approximately $100,000. This amount will be deducted from the total proceeds
prior to distribution to all of the cities in order to reimburse Bellevue for incurred expenses. Based upon
the Oversight Assembly's approved methodology, the City of Auburn's estimated share of the remaining
proceeds is approximately $802,194.52 Based upon the 2002 Jail Services Agreement (JSA) with King
County, the proceeds must be used for the purpose of providing or contracting for secure jail beds. The
City of Auburn, however, maintains discretion over the specific use of its share of the proceeds, provided
the funds are used in a manner consistent with the JSA
P0720-2 A3.16.8, 01.7
Reviewed by Council & Committees: Reviewed by Departments & Divisions:
❑ Arts Commission COUNCIL COMMITTEES:' ❑ Building ❑ M&O
❑ Airport ❑ Finance , ❑ Cemetery ❑ Mayor
❑ Hearing Examiner ❑ Municipal Serv. I ❑ Finance ❑ Parks
❑ Human Services ❑ Planning & CD ❑ Fire ❑ Planning
❑ Park Board ❑Public Works ❑ Legal ❑ Police
❑ Planning Comm. ❑ Other ❑ Public Works ❑ Human Resources
Action:
Committee Approval: ❑Yes ❑No
Council Approval: ❑Yes ❑No Call for Public Hearing
Referred to Until
Tabled Until
Councilmember: Cerino Staff: Kell
Meetin Date: Jul 20, 2009 Item Number: VI11.B.1
AUBURN ~ ~ORE THAN Yov IMAGINED
Agenda Subject: Resolution No. 4503 Date: July 8,2009
POLICY CONSIDERATION: Contracts providing jail beds for city misdemeanant inmates at King
County and Yakima County expire in 2012 and 2010 respectively. Cities have been working together to
plan for secure jail beds for city inmates in the future. As a component of the 2002 JSA with King County,
King County transferred ownership of property located in Bellevue to the City of Bellevue on behalf of all
King County cities. The JSA allows cities to use the proceeds from the sale of the property for the
purpose of building or contracting for secure jail beds. As the lead city designated to maintain and
dispose of the property, Bellevue is responsible for making the distribution of the proceeds from the
property's sale according to the methodology approved by the Jail Oversight Assembly. In Bellevue's
lead role, it also has unique obligations to return proceeds to King County should one or more cities
misspend their proceeds. On July 6, 2009, the Bellevue City Council approved the Proceeds Agreement,
carrying out direction made by the Jail Oversight Assembly last year to distribute proceeds from the sale
of the of the jail property to each city for jail purposes and to protect Bellevue in its lead role should a
return of proceeds to King County be required.
BACKGROUND INFORMATION: The JAG Jail Administration Group) was formed after
renegotiation of the JSA which calls for a phased reduction in cities' misdemeanant prisoners. The
current agreement ends on December 31, 2012, which is the date that all city misdemeanants must be
housed in alternate facilities unless other arrangements are made with King County. The JAG provides
an organizational structure for coordinating the contract for jail beds with Yakima and King counties and
to plan for new local jail beds that would be needed when the King County contract expires.
The full JAG represents thirty-seven King County cities and includes an oversight committee composed of
elected officials from each city (the Jail Oversight Assembly). A jail needs study was completed in 2006
which identified a total projected average daily bed need of 1,450 beds for all JAG cities in 2026. In 2007,
the cities formed two groups for regional jail planning purposes, SCORE (South County Correctional
Entity) and the North East Cities (NEC). Both groups are currently engaged in feasibility or construction
planning for new jail facilities.
At the time cities entered into the current JSA with King County, the County transferred ownership of
property within the Bellevue city limits to Bellevue to hold on behalf of King County cities. The property, or
proceeds from sale of the property, was to be used to help provide funding to cities for new
misdemeanant jail capacity.
Based on the anticipated sale of the jail property, on March 26, 2008, the Jail Oversight Assembly
authorized distribution of the sales proceeds based on a formula of an average of each King County city's
AV (assessed value) and ADP (inmate average daily population). Distribution of the funds would allow
cities to utilize the funds to meet the intent of the property transfer. The City of Auburn's estimated share
of the funds is approximately $801,366.31 (see Attachment 1). The Council has the authority to determine
how these funds are spent by the City, provided the funds are applied as required in the JSA.
In March, 2009, the City of Bellevue completed the sale of the jail property to Children's Hospital.
Bellevue is holding the proceeds in a designated account pending the completion of the Agreement with
each city to receive their share of the proceeds.
Each city will need to enter into an agreement with the City of Bellevue to receive the designated amount
of funds. Staff is seeking Council approval for the City Manager to sign a Proceeds Agreement to receive
an apportionment of the estimated designated funds as provided in Attachment 1.
Use of the property or proceeds from the property is spelled out in the JSA. The JSA indicates JAG cities
will: 1) use the funds to contribute to the cost to construct or contract for secure facilities, and also may
use the funds to construct or contract for alternative correction facilities at the discretion of the cities; and
2) the cities will reach the zero targets at King County facilities by December 31, 2012. The property
transfer agreement and JSA provide that in its lead role, Bellevue is responsible for returning to King
Page 2 of 3
Agenda Subject: Resolution No. 4503 Date: July 8,2009
County proceeds distributed to Bellevue and other cities should King County prove these provisions have
not been met. These documents are ambiguous as to the scope of proceeds that must be returned in this
circumstance or in the event of failing to meet the zero targets. It is Bellevue's and other King County
cities position (we believe) that each city is only individually liable for return of its proceeds should its
actions violate the agreements. It is not clear at this point whether King County would assert another
reading of the agreements. One purpose of this Proceeds Agreement is to protect Bellevue so that it
does not have any greater liability or costs than any other city solely because if its lead role functions in
returning proceeds. The proceeds distribution agreement has been drafted to ensure that all cities must
accept an appropriate share of potential liability/costs under various possible scenarios involving King
County making a claim against Bellevue for return of other cities' proceeds.
Page 3 of 3
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cf~H~Y
RESOLUTION NO. 4503
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
AUBURN, WASHINGTON, APPROVING THE PROCEEDS
DISTRIBUTION AND HOLD HARMLESS AGREEMENT
BETWEEN THE CITY OF AUBURN AND THE CITY OF
BELLEVUE REGARDING THE CITIES JAIL SERVICES
AGREEMENT =
WHEREAS, the City of Auburn, along with a variety of other King County
area cities, entered into a contract with King County and the City of Bellevue for
a jail services agreement whereby property initially intended to be used for a jail
site could be sold if that site were not to be used for a jail facility, and proceeds
from the sale distributed to the cities; and
WHEREAS, pursuant to the agreement, the City of Bellevue was to take
the lead in any such sale of the property, with the proceeds to be divided as
agreed by the party cities; and
WHEREAS, pursuant to the agreement of the cities, the property is being
sold and the funds distributed according to an agreed formula.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
KING COUNTY, WASHINGTON, HEREBY RESOLVES as follows:
Section 1. That the proceeds distribution and hold harmless
agreement in substantial conformity with the copy attached hereto, marked as
Exhibit A, and incorporated herein by this reference, is approved and the Mayor
is authorized to execute this agreement on behalf of the City of Auburn
Resolution No. 4503
July 8, 2009
Page 1 of 2
Section 2. The Mayor is hereby authorized to implement such
administrative procedures as may be necessary to carry out the directives of
this legislation.
Section 3. This resolution shall be in full force and effect upon
passage and signatures hereon.
Dated and Signed this day of 12009.
CITY OF AUBURN
PETER B. LEWIS
MAYOR
ATTEST:
Danielle E. Daskam, City Clerk
11,7
A F~ VED S TO FORII: ~
~
~ ~aniel B. H44, ity A orney
Resolution No. 4503
July 8, 2009
Page 2 of 2
PROCEEDS DISTRIBUTION AND HOLD HARMLESS AGREEMENT !
This Proceeds Distribution and Hold Harmless Agreement (Agreement) is entered into
between Auburn (JAG City) and the City of Bellevue and is effective upon the date of the
last signature below.
RECITALS `
A. Whereas, King County entered into a Jail Services Agreement (JSA) with many of the
cities located in King County (Contract Cities) to house and provide jail services far
Contract Cities' misdemeanants;
B. Whereas, the JSA provides for the transfer of real property located in Bellevue with
tax parcel numbers 2825059291, 2825059292, and 2825059015 (Jail Property) to the
City of Bellevue on behalf of the JAG Cities to facilitate the Contract Cities reducing
their jail population housed by King County as provided in Section 11 of said JSA;
C. Whereas, Section 12 of the JSA provides that the Jail Property (or the proceeds from
its sale [Proceeds]) will be used to contribute to the cost of building secure capacity,
or contracting for secure capacity, and at the sole discretion of the Contract Cities,
building or contracting for alternative corrections facilities, sufficient to enable the
Contract Cities to meet the final step of the population reduction schedule in the:JSA;
D. Whereas, Section 12 of the JSA further provides that in the event the Contract Cities
do not meet the objectives set forth in said section, King County would be entitled to
return of Proceeds;
E. Whereas, on October 31, 2002, the City of Bellevue and King County entered into a
Land Transfer Agreement [City of Bellevue Clerk's Receiving # 33014] conveying
the Jail Property to the City of Bellevue on behalf of all cities in King County (JAG
Cities) for the purposes described in Section 12 of the JSA;
F. Whereas, JAG Cities, except Kent and Enumclaw, entered into an Interlocal
Agreement for Jail Administration (Interlocal Agreement) in part to create rules'for
administering the obligations related to Sections 11 and 12 of the JSA;
G. Whereas, the obligations of Section 12 of the JSA are incorporated into Section 7.1 of
the Interlocal Agreement including its application to all King County Cities;
H. Whereas, on March 16, 2009, the City of Bellevue (Bellevue) sold the Jail Property to
Seattle Children's Hospital for $13 million;
1. Whereas, on March 26, 2008, the Assembly created by the Interlocal Agreement
approved the distribution of Jail Proceeds;
- 1 - July 7; 2009
J. Whereas, some Cities have acted to designate their portion of the Proceeds towards
fulfilling their obligations under the JSA through undertakings such as the SCORE
facility;
K. Whereas, it is the intent of this Agreement that Bellevue stand in no worse (or better)
position than any other JAG City with respect to liability or costs associated with the
distribution of and/or possible return of Proceeds to King County because of its '
unique obligations to King County in Section 12 of the JSA as incorporated into the
Interlocal Agreement (unique Section 12 obligations);
L. Now therefore, in consideration of the mutual promises contained herein and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and as a precondition for receipt of said Proceeds, the JAG City and
Bellevue agree:
AGREEMENT
1. Per the Jail Oversight Assembly approved formula noted in the city-by-city proceeds
distribution (Attachment A), Bellevue shall pay JAG City, $ 802,194.52 (representing
$ 808,341.32 - its proportionate share of the Proceeds/Interest minus $ 6,146.80 its
proportionate share of the expenses Bellevue may recoup as provided in Section 7.2
of the Interlocal Agreement) within 30 days of the execution of this Agreement.
2. Upon receipt of said Proceeds, JAG City acknowledges and agrees that Bellevue has
lawfully discharged all obligations and duties of Bellevue to that JAG City under the
first paragraph of Section 7.2 of the Interlocal Agreement, and that Bellevue is
discharged from all of its obligations and duties to that JAG City under the second
paragraph of Section 7.2 of the Interlocal Agreement.
3. JAG City will abide by all requirements regarding the use of and goals related to the
proceeds as provided in Section 7.1 of the Interlocal Agreement (whether a party to a
JSA or not). JAG City will only leave or place a City Inmate in King County Jail
after December 31, 2012 (post 2012 inmate housing) if King County confirms in
writing that this post 2012 inmate housing does not violate the population reduction
schedule referenced in Section 12 of the JSA and incorporated into Section 7.1 of the
Interlocal Agreement.
4. Should there be a determination that a JAG City failed to abide by the requirements
of Section 7.1 (at-fault JAG City) triggering an obligation for Bellevue to return all or
part of the at-fault JAG City's Proceeds and any required interest to King County,
said Proceeds shall be paid to Bellevue within 10 working days of written notice
unless the at-fault JAG City makes other acceptable arrangements with Bellevue
and/or King County or the at-fault JAG City obtains injunctive or other legal relief
against King County that absolves Bellevue of any legal obligation to return said
Proceeds and interest prior to the expiration of the 10 working day period.
- 2 - July 7, 2009
5. Bellevue and JAG Cities maintain that King County may only require return of
Proceeds from an at-fault JAG City. However, if there is a determination that there is
an obligation to return to King County Proceeds in an amount in excess of the amount
distributed to an at-fault JAG City(s) then each non at-fault JAG City shall pay up to
the full amount of its Proceeds and any required interest to Bellevue within 10 '
working days of written notice unless the non at-fault JAG City malces other
acceptable arrangements with Bellevue andlor King County or the non at-fault JAG
City obtains injunctive or other legal relief against King County that confirms
Bellevue has no legal obligation to return said Proceeds and interest prior to the
expiration of the 10 working day period. If the obligation to return Proceeds is in
excess of the at-fault JAG City's distribution, but less than each JAG City's full
Proceeds, the amount due King County from the non at-fault JAG Cities shall be a
prorated amount based on the percent of Proceeds received to the total Proceeds
minus the amount representing the at-fault JAG City's share. The same prorated
formula shall apply to required interest due from non at-fault JAG Cities.
6. Should Bellevue be sued for return of proceeds solely because of its unique Section
12 obligations, the alleged at-fault JAG City(s) shall immediately undertake the
defense of Bellevue and pay all expenses and costs (including attorney's fees)
associated with said defense whether or not said JAG City maintains it is or is
ultimately determined to be not at-fault. Should King County be entitled to its
attorney's fees in the suit, the at-fault JAG City shall hold Bellevue harmless anci
indemnify Bellevue from any liability or costs associated with the obligation to pay
King County's attorney's fees.
7. Should Bellevue be the only party sued based on the alleged fault of other JAG Cities,
those alleged at-fault JAG Cities agree to stipulate to being named as defendants with
the concurrence of Plaintiff and/or not oppose Bellevue's motion to be included in the
suit as an indispensible party. The obligations of Paragraph 6 shall apply whether or
not the alleged at-fault JAG City is named in the litigation.
8. If King County sues Bellevue for return of proceeds because of Bellevue's alleged
violation of Section 12 of the JSA regarding use of proceeds or the reduction in jail
population along with other JAG Cities for their violations, each party will undertake
its own defense at its own cost.
9. At-fault JAG Cities shall be responsible for costs of whatever form or nature ,
associated with Bellevue's unique Section 12 obligations, including but not limited to
staff costs in coordinating and collecting proceeds or attorneys fees, and including
administrative costs Bellevue incurs even where timely payment of Proceeds is made.
Said costs shall be prorated among at-fault JAG Cities as appropriate.
10. In the event Bellevue incurs liability or costs associated with its unique Section 12
obligations and said liability or costs are not addressed in any other provision of this
Agreement, each JAG City shall indemnify, hold harmless and defend Bellevue and
- 3 - July 7, 2009
its elected officials, employees agents and representatives from and against any and
all claims, demands, causes of action, liabilities, judgments, settlements, damages or
costs, including reasonable attorney's fees of whatever form related to Bellevue's
unique Section 12 obligations in proportion to its share of the proceeds.
11. Each JAG City shall keep its Proceeds in a segregated fund and keep records
sufficient to demonstrate that all expenditures of the Proceeds comply with Section
7.1 of the Interlocal Agreement. Said records shall be kept for at least 6 years from
the date of the expenditure of the last Proceeds of the JAG City.
12. The JAG City representative who will be responsible for management and '
expenditure of the fund and for receiving notices related to the obligations under 7.1
of the Interlocal Agreement is (include name, title, address & phone
a.
JAG City shall notify Bellevue of any change in this designated representative or
contact information.
13. The City of Bellevue as a recipient of $ 971,638.82 (representing $ 979,083.98 - its
proportionate share of the Proceeds/Interest minus $ 7,445.16 its proportionate share
of the expenses) is also a JAG City and in that capacity shall be bound by the same
terms under this Agreement as any other JAG City.
14. This Agreement shall be authorized by each JAG City's legislative body or other
authorizing authority if not within authority of legislative body.
15. General Provisions:
A. Governing Law; Forum. The Agreement will be governed by the laws of
Washington and its choice of law rules. The JAG City consents to the exclusive
personal jurisdiction and venue of the federal and state courts located in King
County, Washington, with respect to any dispute arising out of or in connection
with the Agreement, and agrees not to commence or prosecute any action or
proceeding arising out of or in connection with the Agreement other than in the
aforementioned courts.
B. Severability. If any provision of the Agreement is held to be invalid or
unenforceable for any reason, the remaining provision will continue in full force
without being impaired or invalidated in any way. The parties agree to replace
any invalid provision with a valid provision that most closely approximates the
intent and economic effect of the invalid provision.
- 4 - July 7, 2009
C. Nonwaiver. Any failure by a party to enforce strict performance of any
provision of the Agreement will not constitute a waiver of that party's right to
subsequently enforce such provision or any other provision of the Agreement.
D. No Assignment. Neither the Agreement nor any of the rights or obligations of
the JAG City arising under the Agreement may be assigned without Bellevue's
prior written consent. Subject to the foregoing, the Agreement will be binding
upon, enforceable by, and inure to the benefit of, the parties and their successors
and assigns.
E. Notices. All notices and other communications under the Agreement must be in
writing, and must be given by registered or certified mail, postage prepaid, or
delivered by hand to the party to whom the communication is to be given, at its
address set forth in this agreement.
F. Legal Fees. In any lawsuit between the parties with respect to the matters
covered by the Agreement, the prevailing party will be entitled to receive its
reasonable attorney's fees and costs incurred in the lawsuit, in addition to any
other relief it may be awarded.
G Counterparts. The Agreement may be signed in counterparts, each of which
shall be deemed an original, and all of which, taken together, shall be deemed
one and the same document.
In witness whereof, the parties have executed this Agreement and it shall be effective as
of the last date written below.
CITY OF AUBURN
By: Date:
Title:
~
CITY OF BELLEVUE
By: Date:
Title:
- 5 - July 7, 2009