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HomeMy WebLinkAboutCAG1998-0125 - Amendment - #2 - City of Tacoma Water Division - Interim Funding Agreement - 11/12/1996 INTERIM FUNDING AGREEMENT #2 BETWEEN CITY OF TACOMA WATER DIVISION AND CITY OF KENT THIS AGREEMENT is made by and between the City of Tacoma Water Division (hereinafter referred to as "Tacoma"), a municipal corporation of the State of Washington, and the City of Kent (Kent) along with other South King County municipal water purveyors, Covington Water District and the Lakehaven Utility District (hereinafter referred to collectively as the "Utilities"). This Agreement is consistent with the Joint Operating Agreement developed by the South King County Regional Water Association and its members. RECITALS WHEREAS, Tacoma and the Utilities previously entered into a contract, as modified by Amendment #1, executed in 1988, which contract shall hereinafter be referred to as the "1985 Contract", which called for Tacoma to finance and build water transmission facilities (hereinafter referred to as the "Second Supply Project" or "Project"), a proportionate share of the cost of which would be subsequently collected from the Utilities, to enable Tacoma, to deliver, and the Utilities to receive, certain quantities of water and which has been allocated to Tacoma under a water right permit (Permit 3787), and to construct other facilities as would be necessary to reliably maintain the agreed level of water supply for delivery to the Utilities, the cost of which would also be shared by the Utilities following installation of said facilities; and, WHEREAS, Permit 3787, which identifies the service area of Tacoma and the Utilities as the approved place of use for the supply of water secured thereunder, was granted in 1986; and 1 WHEREAS, due to a number and variety of difficult circumstances facing the project however, construction of the majority of the facilities has not yet commenced; and WHEREAS, due to the project delays and costs, King County Water District #111 has relinquished and transferred all its rights in the project to Kent, Lakehaven Utility District, and Covington Water District; and WHEREAS, Tacoma has formally recognized and approved this transfer; and WHEREAS, Tacoma and Utilities remain jointly committed to the construction of the Second Supply Project; and WHEREAS, Tacoma and the Utilities believe that the Second Supply Project would benefit their respective water systems and the region in providing for more efficient water resources management through transfer of water as needed for supply, fish protection, and other resources; and WHEREAS, Tacoma, City of Seattle, and the Utilities are pursuing sharing the Project's benefits and costs on an equal basis, (1/3 Tacoma, 1/3 Seattle, 1/3 Utilities); and WHEREAS, Tacoma has committed its resources to developing, planning, permitting, designing, and constructing the Second Supply Project and offering the opportunity for interested water utilities to share the project benefits; and WHEREAS, pursuant to the methodology called for in the 1985 Agreement, Tacoma has exclusively provided all Second Supply Project funding to date, and additional funds are needed to continue the Program Management/Permitting activities; and 2 WHEREAS, due to the inability of Tacoma to continue funding project development without assistance, in June of 1995 Tacoma and the Utilities executed an Interim Funding Agreement in the amount of$195,000 as contribution towards funding the project development cost; and WHEREAS, in doing so, the Utilities recognized the benefits to be gained through a partnership with Tacoma on the Project and have agreed to provide financial assistance on work necessary to complete permit procurement and program management activities; and WHEREAS, Tacoma has requested an additional contribution towards such funding in the amount of$292,632; and WHEREAS, Tacoma recognizes its responsibility to manage any project funding received from the Utilities in a thoughtful and responsible manner; and WHEREAS, the City of Kent, as a project sponsor agency, accepts the responsibility to share the project funding, and this Agreement is intended to record and formalize a financial commitment by the City of Kent and Tacoma to develop and complete mutually acceptable amendments to revise the 1985 Contract and to financially support the Program Management/Permitting activities until complete Project financing is obtained. AGREEMENT NOW THEREFORE, in consideration of the provisions and conditions set forth herein, it is mutually agreed by and between Tacoma and the City of Kent as follows: 1. RECITALS INCORPORATED The foregoing Recitals are hereby incorporated into this Agreement as if fully set forth herein. 3 2. CITY OF KENT SHARE FOR INTERIM FUNDING For the consideration herein, the City of Kent share for funding of project management and permit procurement activities per this Agreement will be $97,544, Lakehaven Utility District, $97,544 and Covington Water District, $97,544. 3. PAYMENT Payment is due 30 days following the execution of this Agreement. 4. UPDATING AND AMENDING CONTRACT In parallel with the program management and permit procurement effort funded by this agreement, Tacoma and Kent will pursue the development, by December 1, 1997, of contract principles sufficiently detailed and complete to guide the parties in the development of appropriate amendments to revise the 1985 Contract, which amendments shall be in final form and ready to execute prior to April 15, 1998. The above dates may be adjusted only by mutual agreement of Tacoma and Kent. In furtherance of the efforts towards developing the contract principles and final contract amendments as described herein, the parties acknowledge the existence of areas of concern, including, but not limited to, the following, which shall be considered in developing the amendment: * Adjustments in financing arrangements * Differential pricing of winter and summer supplies * Kent and Utilities roles in decision-making process on Project. * Flexibility in quantities of water received * Ownership of facilities * Scheduling and phasing of construction * Equivalency of costs between participants 5. MANAGEMENT OF CONTRIBUTED FUNDS Tacoma will provide accountability in the management of funds and will provide 4 accounting on a monthly basis for the work performed and expenditure of funds contributed to the Second Supply Project to Kent and each Utility. 6. RISK CONSIDERATION The Utilities and Tacoma acknowledge that notwithstanding the best efforts of all involved, construction of the Second Supply Project could be delayed or deferred to a future date unknown. Therefore, any funds expended in accordance with this agreement will not be rebated or returned, however, if Tacoma is unable to proceed with the Second Supply Project or abandons the Second Supply Project without the concurrence of the Utilities, any unexpended contributed funds will be returned on a pro rata basis, to the Utilities. Tacoma will work with the Utilities to develop an alternative certificated supply, that will provide 15 MGD to the Utilities as expeditiously as possible. 7. CREDIT FOR INTERIM FUNDING The amount of Interim Funding that Kent contributes prior to complete Project Financing being obtained will be held as a direct credit against its Project share. 8. LEGAL RELATIONS Tacoma agrees to defend, indemnify, and save harmless Kent, its officials, officers, employees, agents, volunteers and assigns from and against all loss or expense, including but not limited to, judgments, settlements, attorney's fees, and costs by reason of any and all claims and demands upon Kent, which may occur or be sustained by it on account of any claim or action made or brought against Kent resulting from or in connection with an act or omission of Tacoma, or its employees officials, officers, agents, volunteers and assigns in connection with the financing, permitting, and design of the Project, but only to the extent of Tacoma's negligence or comparative fault. 5 9. RECORDS Books and records shall be kept by Tacoma and Kent reflecting all expenses and costs incurred and paid. The records required by this paragraph shall be available for examination at any reasonable time by the other party. Such records, or copies thereof, shall be maintained for at least 5 years and in complete compliance with State of Washington Law. 10. NOTICE Whenever in this Contract notice is required to be given, the same shall be given by Registered Mail addressed to the respective parties at the following addresses: City of Tacoma Dept. of Public Utilities, Water Division P.O. Box 11007 Tacoma, WA 98411 City of Kent Dept of Public Works Attention: Director of Public Works 220 4th Avenue South Kent, WA 98032 unless a different address shall be hereafter designated in writing by any of the parties. The date of giving such notice shall be deemed to be the date of mailing thereof. Billings and payments for water charges may be made by regular mail. 11. EXECUTION OF DOCUMENT This Agreement shall be executed in two counterparts, either of which shall be regarded for all purposes as one original. The parties agree that they shall execute any and all deeds, instruments, documents and resolutions or ordinances necessary to give effect to the terms of this Agreement. 6 12. WAIVER No waiver by either party of any term or condition of this Agreement shall be deemed or construed as a waiver of any other term or condition, nor shall a waiver of any breach be deemed to constitute a waiver of any subsequent breach whether of the same or a different provision of this Agreement. 13. INTEGRATION This Agreement merges and supersedes all prior negotiations, representations and agreements between the parties hereto relating to the subject matter hereof and constitutes the entire contract between the parties. 14. TIME OF THE ESSENCE It is hereby agreed by the parties that time is of the essence in all matters relating to the performance of each and every term of this Agreement. 15. INTERLOCAL COOPERATION It is agreed that the parties shall cooperate to comply with all terms and requirements of the Interlocal Cooperation Act. 16. DISPUTE RESOLUTION The parties hereto may proceed with arbitration to resolve disputes that arise with respect to the Agreement. In order to contest any matter by arbitration, a request to proceed to arbitrate the dispute or controversy shall be submitted to the other party within one hundred eighty (180) days from the date the claim arose or the party, using reasonable diligence, became aware of the claim, whichever is later, with written notice of the claim and the detailed reasons therefore. Failure to seek arbitration within said period shall cause such party to waive arbitration and the matter may then be contested only by bringing suit in the Superior Court within the applicable limitation of action period. Where arbitration is to be utilized, 7 each party shall appoint one qualified arbitrator from Judicial Arbitration and Mediation Services (J*A*M*S) of Seattle, within thirty days of the written request for arbitration. The two arbitrators so appointed shall appoint a third arbitrator from JAMS within thirty days. The three arbitrator shall render a written decision within ninety days of appointment of the third arbitrator. Arbitration shall be conducted in accordance with Washington State Law, Chapter 7.04 RCW as amended. Provided that, the results of arbitration shall be final and conclusive and may only be revised or vacated as presently allowed by Chapter 7.04 RCW. In addition, the rules for pretrial Superior Court discovery shall be applicable to all parties hereto and the burden of proof shall be with the party requesting arbitration. The costs of arbitration shall be shared equally by the parties thereto and each side shall pay its own costs and attorneys fees, however in the event the arbitrator rules that the matter was brought to arbitration frivolously or where the matter was forced to arbitration by the willful failure of a party to abide by the terms of this Agreement, the party frivolously bringing the matter to arbitration, or wilfully causing the matter to be brought to arbitration, shall pay all costs of JAMS and the other party. Litigation of disputes shall be initiated in the Thurston County Superior Court for the State of Washington within the time limitations established by Washington State Law. No visiting Judge from King County or Pierce County may hear the case. (Signatures on following page) 8 CITY OF TACOMA DEPARTMENT OF PUBLIC UTILITIES WATER DIVISION Z�L� /41� DATE: nneth Me , Superint en Approved as to form Senior Asst. city .attorney CITY OF KE Gj DATE: A/Tit M'759 9 INTERIM FUNDING AGREEMENT #3 BETWEEN CITY OF TACOMA WATER DIVISION AND CITY OF KENT THIS AGREEMENT is made by and between the City of Tacoma Water Division (hereinafter referred to as "Tacoma'), a municipal corporation of the State of Washington, and the City of Kent (Kent) along with other South King County municipal water purveyors, Covington Water District and the Lakehaven Utility District (hereinafter referred to collectively as the "Utilities"). This Agreement is consistent with the Joint Operating Agreement developed by the South King County Regional Water Association and its members. RECITALS WHEREAS,Tacoma and the Utilities previously entered into a contract, as modified by Amendment #1, executed in 1988,which contract shall hereinafter be referred to as the "1985 Contract', which called for Tacoma to finance and build water transmission facilities (hereinafter referred to as the "Second Supply Project' or "Project"), a proportionate share of the cost of which would be subsequently collected from the Utilities, to enable Tacoma, to deliver, and the Utilities to receive, certain quantities of water and which has been allocated to Tacoma under a water right permit (Permit 3787), and to construct other facilities as would be necessary to reliably maintain the agreed level of water supply for delivery to the Utilities, the cost of which would also be shared by the Utilities following installation of said facilities; and, MP021 98 Page 1 of 9 WHEREAS, Permit 3787,which identifies the service area of Tacoma and the Utilities as the approved place of use for the supply of water secured thereunder, was granted in 1986; and WHEREAS, due to a number and variety of difficult circumstances facing the project however, construction of the majority of the facilities has not yet commenced; and WHEREAS, due to the project delays and costs, King County Water District #I I I has relinquished and transferred all its rights in the project to Kent, Lakehaven Utility District, and Covington Water District; and WHEREAS, Tacoma has formally recognized and approved this transfer, and WHEREAS,Tacoma and Utilities remain jointly committed to the construction of the Second Supply Project; and WHEREAS, Tacoma and the Utilities believe that the Second Supply Project would benefit their respective water systems and the region in providing for more efficient water resources management through transfer of water as needed for supply, fish protection, and other resources; and WHEREAS, Tacoma, and the Utilities have executed a Memorandum of Understanding which establishes the principles to guide the parties in the development of appropriate language of the Second Supply Project contract; and WHEREAS, the Memorandum of Understanding includes, among other guiding principles, that Tacoma, City of Seattle and the Utilities will share the project's benefits MP021.98 Page 2 of 9 and costs on an equal basis (1/3 Tacoma, 1/3 Seattle, and 1/3 Utilities) and further, that the Utilities will have the options to pursue implementing at their expense elements of the project (down-sized to their needs, depending on the project status) with the understanding that Tacoma will provide an interim Water Supply to at least 2011; and WHEREAS, Tacoma has committed its resources to developing, planning, permitting, designing, and constructing the Second Supply Project and offering the opportunity for interested water utilities to share the project benefits; and WHEREAS, pursuant to the methodology called for in the 1985 Agreement, Tacoma has exclusively provided all Second Supply Project funding to date, and additional funds are needed to continue the Program Management/Permitting activities; and WHEREAS, due to the inability of Tacoma to continue funding project development without assistance, in June of 1995 and again in November of 1996, Tacoma and the Utilities executed Interim Funding Agreements I and 2 respectively, for the combined total amount of$487,632 as contribution towards funding the project development cost; and WHEREAS, in doing so, the Utilities recognized the benefits to be gained through a partnership with Tacoma on the Project and have agreed to provide financial assistance on work necessary to complete permit procurement and program management activities; and WHEREAS, Tacoma has requested an additional contribution towards such funding in the amount of $703,999; and MP021.98 Page 3 of 9 WHEREAS,Tacoma recognizes its responsibility to manage any project funding received from the Utilities in a thoughtful and responsible manner; and WHEREAS, the City of Kent, as a project sponsor agency, accepts the responsibility to share the project funding, and this Agreement is intended to record and formalize a financial commitment by the City of Kent and Tacoma to develop and complete mutually acceptable supplemental contract to the 1985 Contract and to financially support the Program Management/Permitting activities until complete Project financing is obtained. AGREEMENT NOW THEREFORE, in consideration of the provisions and conditions set forth herein, it is mutually agreed by and between Tacoma and the City of Kent as follows: 1. RECITALS INCORPORATED The foregoing Recitals are hereby incorporated into this Agreement as if fully set forth herein. 2. CITY OF KENT SHARE FOR INTERIM FUNDING For the consideration herein, the City of Kent share for funding of project management and permit procurement activities per this Agreement will be $117,333, Lakehaven Utility District, $117,333 and Covington Water District, $117,333. 3. PAYMENT Payment is due 30 days following the execution of this Agreement. MP021.98 Page 4 of 9 4. UPDATING AND AMENDING CONTRACT In parallel with the program management and permit procurement effort funded by this agreement, Tacoma and Kent will pursue the development of a supplemental contract to the 1985 contract which said supplement shall be in final form and ready to execute prior to December 1, 1998. The above dates may be adjusted only by mutual agreement of Tacoma and Kent. 5. MANAGEMENT OF CONTRIBUTED FUNDS Tacoma will provide accountability in the management of funds and will provide accounting on a monthly basis for the work performed and expenditure of funds contributed to the Second Supply Project to Kent and each Utility. 6. RISK CONSIDERATION The Utilities and Tacoma acknowledge that notwithstanding the best efforts of all involved, construction of the Second Supply Project could be delayed or deferred to a future date unknown. Therefore, any funds expended in accordance with this agreement will not be rebated or returned, however, if Tacoma is unable to proceed with the Second Supply Project or abandons the Second Supply Project without the concurrence of the Utilities, any unexpended contributed funds will be returned on a pro rata basis, to the Utilities. Tacoma will work with the Utilities to develop an alternative certificated supply, that will provide 1/3 of the water available under Tacoma's Water Right permit (Permit #3787) to the Utilities as expeditiously as possible. 7. CREDIT FOR INTERIM FUNDING The amount of Interim Funding that ICent contributes prior to complete Project Financing being obtained will be held as a direct credit against its Project share. MP021.98 Page 5 of 9 8. LEGAL RELATIONS Tacoma agrees to defend, indemnify, and save harmless Kent, its officials, officers, employees, agents,volunteers and assigns from and against all loss or expense, including but not limited to, judgments, settlements, attorney's fees, and costs by reason of any and all claims and demands upon Kent, which may occur or be sustained by it on account of any claim or action made or brought against Kent resulting from or in connection with an act or omission of Tacoma, or its employees officials, officers, agents, volunteers and assigns in connection with the financing, permitting, and design of the Project, but only to the extent of Tacoma's negligence or comparative fault. 9. RECORDS Books and records shall be kept by Tacoma and Kent reflecting all expenses and costs incurred and paid. The records required by this paragraph shall be available for examination at any reasonable time by the other party. Such records, or copies thereof, shall be maintained for at least 5 years and in complete compliance with State of Washington Law. 10. NOTICE Whenever in this Contract notice is required to be given, the same shall be given by Registered Mail addressed to the respective parties at the following addresses: City of Tacoma Dept. of Public Utilities, Water Division P.O. Box 11007 Tacoma, WA 98411 MP021.98 Page 6 of 9 City of Kent Dept of Public Works Attention: Director of Public Works 220 4th Avenue South Kent, WA 98032 unless a different address shall be hereafter designated in writing by any of the parties. The date of giving such notice shall be deemed to be the date of mailing thereof. Billings and payments for water charges may be made by regular mail. 11. EXECUTION OF DOCUMENT This Agreement shall be executed in two counterparts, either of which shall be regarded for all purposes as one original. The parties agree that they shall execute any and all deeds, instruments, documents and resolutions or ordinances necessary to give effect to the terms of this Agreement. 12. WAIVER No waiver by either party of any term or condition of this Agreement shall be deemed or construed as a waiver of any other term or condition, nor shall a waiver of any breach be deemed to constitute a waiver of any subsequent breach whether of the same or a different provision of this Agreement. 13. INTEGRATION This Agreement merges and supersedes all prior negotiations, representations and agreements between the parties hereto relating to the subject matter hereof and constitutes the entire contract between the parties. MP021.98 Page 7 of 9 14. TIME OF THE ESSENCE It is hereby agreed by the parties that time is of the essence in all matters relating to the performance of each and every term of this Agreement. 15. INTERLOCAL COOPERATION It is agreed that the parties shall cooperate to comply with all terms and requirements of the Interlocal Cooperation Act. 16. DISPUTE RESOLUTION The parties hereto may proceed with arbitration to resolve disputes that arise with respect to the Agreement. In order to contest any matter by arbitration, a request to proceed to arbitrate the dispute or controversy shall be submitted to the other party within one hundred eighty (180) days from the date the claim arose or the party, using reasonable diligence, became aware of the claim, whichever is later, with written notice of the claim and the detailed reasons therefore. Failure to seek arbitration within said period shall cause such party to waive arbitration and the matter may then be contested only by bringing suit in the Superior Court within the applicable limitation of action period. Where arbitration is to be utilized, each party shall appoint one qualified arbitrator from Judicial Arbitration and Mediation Services (J*A*M*S) of Seattle, within thirty days of the written request for arbitration. The two arbitrators so appointed shall appoint a third arbitrator from JAMS within thirty days. The three arbitrator shall render a written decision within ninety days of appointment of the third arbitrator. Arbitration shall be conducted in accordance with Washington State Law, Chapter 7.04 RCW as amended. Provided that, the results of arbitration shall be final and conclusive and may only be revised or vacated as presently allowed by Chapter 7.04 RCW. In addition, the rules for pretrial Superior Court discovery shall be applicable to all parties hereto and the burden of proof shall be with the party requesting arbitration. The costs MP021.98 Page 8 of 9 of arbitration shall be shared equally by the parties thereto and each side shall pay its own costs and attorneys fees, however in the event the arbitrator rules that the matter was brought to arbitration frivolously or where the matter was forced to arbitration by the willful failure of a party to abide by the terms of this Agreement, the party frivolously bringing the matter to arbitration, or wilfully causing the matter to be brought to arbitration, shall pay all costs of JAMS and the other party. Litigation of disputes shall be initiated in the Thurston County Superior Court for the State of Washington within the time limitations established by Washington State Law. No visiting Judge from King County or Pierce County may hear the case. CITY OF TACOMA DEPARTMENT OF PUBLIC UTILITIES WATER DIVISION DATE: Kenneth Merry, Superintendent CITY OF KENT &2 DATE: Nam tle by 1W IkiTE, MA-/OK- MP021.98 Page 9 of 9