Loading...
HomeMy WebLinkAboutPW13-025 - Original - East Hill Community Well Company - Acquisition of Service Area - 05/01/1985 AGREEMENT This Agreement is made this 1st day of May, 1985 by and between the EAST HILL COMMUNITY WELL COMPANY a Washington corporation, (the "COMPANY") , and the CITY OF KENT, a Washington municipal corporation (the "CITY") . RECITALS A. The COMPANY is a Washington corporation organized and operating as a mutual water company serving shareholders in an area located on the east boundaries of the CITY and lying primarily within the boundaries of King County. The COMPANY' s service area is located generally between Southeast 224th Street, 116th Avenue S.E. , Southeast 252nd Street and 96th Avenue S.E. B. Since its incorporation in July 1923, the COMPANY has constructed or acquired certain assets and facilities consisting of land, three wells, three pressure pumps, deep well turbines, water service dis- tribution lines, water meters and related facilities as set forth on Exhibits "A" and "B" attached hereto and by this reference made a part hereof. Page 1 of 13 C. The CITY as a municipal corporation pro- vides water service to residents of the CITY and adjoining areas including properties within the bound- aries of the COMPANY' s service area. The CITY currently has many parallel lines existing within and adjacent to the boundaries of the COMPANY' s service area. D. The COMPANY has been required by the State of Washington and King County to undertake certain improvements to its facilities and, after reviewing all available alternatives, the COMPANY has determined that it is in the best interest of all of the COMPANY' s shareholders that the COMPANY' s facilities be incorpo- rated into the CITY' s water service facilities. E. The CITY has determined that the COMPANY is located within its sphere of influence and area of logi- cal annexation and that it is desirable for the CITY to takeover and incorporate the facilities of the COMPANY and has made prior proposal to the COMPANY with regard thereto; and F. The COMPANY and the CITY are desirous and willing to proceed with such takeover and incorporation of facilities and are desirous of setting forth the terms and conditions of such takeover. Page 2 of 13 In consideration of the foregoing and the following undertakings and agreements, it is hereby mutually agreed as follows: I. CITY'S RESPONSIBILITIES 1 . 1 Prior to acquisition as defined in Section IV below, the CITY shall cooperate with and assist the COMPANY in promoting annexation and in obtaining coven- ants for annexation within the areas set forth on the site plan marked Exhibit "C" attached hereto and by this reference made a part hereof. 1 .2 Upon the CITY' s acquisition of the COM- PANY' s facilities, the COMPANY' s shareholders and customers shall be entitled to the same rights and benefits and shall be subject to the same rates, rules and regulations as pertain to other CITY water customers. 1 .3 The current monthly rate for water within the CITY is $1 .64 per 100 cubic feet, plus demand charge for service and meter, and the current monthly rate for water outside the CITY is $2.00 per 100 cubic feet. Upon acquisition and whereupon covenants for annexation from owners of properties holding at least seventy-five Page 3 of 13 (75%) of the assessed valuation within an annexation area are held by the CITY, the COMPANY' s shareholders in that respective annexation area shall be entitled to within rates until annexation shall have been secured. 1 .4 Such rights and benefits shall include, without limitation, the waiver by the CITY of any col— lection against the COMPANY' s shareholders, or the prop— which such share is held prop— erty for , Provided howev er those COMPANY shareholders, or the property for which such share is held, who did not execute a covenant for annexation shall be subject to latecomer charges, charges in lieu of assessment, system development charges and meter charges; and also provided that 1 .4. 1 Water meter installation charges only would be allowed as to the property of any COMPANY shareholder which is not presently actively served by water meter. 1 .4. 2 Shareholders shall be entitled to such rights and benefits only as to properties upon which the hold a share or shares and P y would be subject to the same rates, rules and regulations as pertain to other CITY water cus— tomers in the event of future subdivision or short platting of shareholder' s properties and changes in use requiring increase in meter size. Page 4 of 13 1 .5 Upon U acquisition, the CITY shall have the q , right to pursue and collect any outstanding debt or obligations or receivable owed to the COMPANY. 1 . 6 Upon acquisition, the CITY shall endeavor to initiate within two years from the date of acquisi- tion such replacements and/or improvements of the COMPANY's water lines as are necessary to comply with all current county and state requirements with emphasis on provision of fire protection to all areas of the COMPANY' s system. 1 .7 From the date of acquisition the City shall be solely responsible for the operation, repair and maintenance of the Company' s facilities, which operation, maintenance and any improvement will be at the sole cost of the City. II COMPANY' S RESPONSIBILITIES 2. 1 Prior to acquisition, the COMPANY shall maintain its facilities in operating condition and not undertake any modifications or improvements to its facilities without prior written approval by the CITY. 2.2 Prior to acquisition, the COMPANY shall endeavor to secure the annexation of the areas outlined on Exhibit "C" and shall obtain covenants for annexation with the CITY OF KENT from the COMPANY' s shareholders all as provided in said Section III . Page 5 of 13 2.3 Upon or before the date of acquisition, the COMPANY shall be free of all debts, liens or other obligations. 2.4 Upon the date of acquisition, the COMPANY at its expense shall in accordance with the provisions of Section IV: 2.4. 1 Deed the real property owned by the COMPANY to the CITY as described on Exhibit "A" , less that portion thereof adjoining 104th S.E. required for street right-of-way purposes, which the COMPANY may sell and convey to the State of Washington. 2.4.2 Provide a Bill of Sale for all COMPANY property and facilities as described on Exhibit "BOO • 2.4.3 Assign to the CITY all approved water rights, existing or pending. 2.4.4 Provide the CITY with all records in the possession of the COMPANY which relate to the operation, maintenance and repair of the COMPANY's water system, including without limitation, customer accounts and billing records; provided that the COMPANY shall have the right to designate historical records and to offer same to a local historical society. Page 6 of 13 2.4.5 Pay to the CITY the sum of $80,000.00 less that amount credited under Section III - 3.4. 2.4.6 Deliver to the CITY the original executed covenants for annexation. III . ANNEXATION 3. 1 It is a condition to the acquisition to be undertaken by the CITY hereunder, that the COMPANY shall endeavor to secure the annexation of the areas desig- nated on Exhibit "C" to the CITY or that covenants for annexation, in form and substance acceptable to the CITY OF KENT, be obtained from the COMPANY' s shareholders as provided in Paragraph 3.4 below. 3. 2 The CITY has previously obtained cove- nants for annexation from certain of the owners of prop- erties within the areas identified on Exhibit "C", which areas are hereinafter referred to as the Annexation Areas" . 3.3 The COMPANY with the cooperation and assi- stance of the CITY shall endeavor to promote annexation of the Annexation Areas and obtain covenants from the shareholders of the COMPANY and other owners in the Annexation Areas so as to provide to the CITY covenants Page 7 of 13 for annexation, including those prior covenants held by the CITY, from the owners of properties holding at least seventy-five percent (75%) of the assessed valuation within the Annexation Areas. 3.4 It is recognized that there are two areas of annexation and that the motivation of owners within each of those areas and the interests of the COMPANY' s shareholders and other property owners generally may differ. Accordingly it is agreed that the condition for annexation shall be fulfilled and satisfied by the Com- pany as to both Annexation Areas if the COMPANY shall deliver to the CITY covenants for annexation duly exe- cuted by at least seventy-five percent (75%) of the COMPANY shareholders of record, including convenants already in the possession of the CITY. For each and every full percentage point of covenants for annexation delivered above said seventy-five percent, the CITY will credit $1 , 600 against the $80,000 sum of Section II - 2.4. 5 to a maximum credit of $40, 000. For those COM- PANY' s shareholders who do not execute the covenant for annexation, the CITY will continue to provide water ser- vice to their property for five years after the date of acquisition. After the expiration of said five years, the CITY may terminate the respective service. Should Page 8 of 13 the CITY choose to do so, any reinstatement of the ser- vice would require the payment of the system development charges, charges in lieu of assessment, or latecomer charges for which the CITY may have paid or absorbed in conjunction with this agreement. 3.5 It is agreed that the COMPANY may utilize the current tax rolls of King County, Washington, to obtain and verify the record ownership of properties in 3 the Annexation Area. In the event any questions shall arise as to the identity of any property owner, the COMPANY shall refer such verification to a third party to be mutually designated by the parties, whose verification shall be binding upon the parties. 3.6 The delivery of covenants for annexation must be accomplished before six (6) months from the date of this agreement, or such additional period as may be agreed upon by the parties. In the event that this con- dition shall not be satisfied within such time period, either party may terminate this agreement if the condi- tion shall not be satisfied within sixty (60) days after prior written notice to the other party. 3.7 Once covenants for annexation from owners of properties holding at least seventy-five percent Page 9 of 13 (75%) of the asessed valuation within either area of the annexation areas are held by the CITY the CITY will use its best effort to process the respective annexation as expediently as possible. IV. ACQUISITION 4. 1 Acquisition is herein defined as the date upon which the COMPANY' s real and personal property, water rights, service facilities, and other items as identified and set forth on Exhibits "A" and "B" attached hereto shall be assigned, transferred and con- veyed by the COMPANY to to the CITY. 4.2 Acquisition shall occur within sixty (60) days of the date that the annexation covenants provided for in Section III above shall be verified by the Public Works Department, by notice of verification provided to the COMPANY. Notice of verification, or lack thereof rAC shall be provided later than 120 days from the date that annexation covenants are delivered to the CITY. 4.3 Any and all deeds, bills of sale, assign- ments and other instruments of conveyance shall be in form approved by the CITY and shall be prepared at the expense of the COMPANY. Any cost or expense of record- ing or filing same shall be born by the CITY. Page 10 of 13 V. WAIVER 5. 1 Any waiver of a right to enforce provision of this agreement either by the CITY or the COMPANY shall not constitute a waiver of any similar or other subsequent right. VI. NOTICES 6. 1 Any notice or demand required or permitted to be given under this agreement shall be sufficient to be given in writing and if sent by registered or certi- fied mail, return receipt requested, to the address of the parties set forth below. Any party may give notice in the manner provided in this paragraph to the other parties of a change of address. Any notice shall be deemed to have been given on the date it is deposited in the U.S. Postal Service mail with postage prepaid. CITY: Director of Public Works CITY of Kent Kent, WA 98032 COMPANY: East Hill Community Well COMPANY P.O. Box 5113 Kent, WA 98064-5113 3 Page 11 of 13 6.2 It is understood that within six months following satisfactory completion of the conditions set forth in this agreement, the COMPANY will be terminating water service operations, and no longer actively conducting such business. At such point, the CITY shall no longer have any obligations to provide notice to the COMPANY. VII. CONSTRUCTION AND VENUE 7. 1 This agreement shall be governed and con- strued in accordance with the laws of the State of Washington, and venue in connection with any legal proceedings effecting this agreement shall be laid in the Superior Court of the State of Washington for King County. VIII . ENTIRE AGREEMENT 8. 1 This instrument and the documents referred to herein shall not be changed orally, but only by an agreement in writing signed by both parties. I Page 12 of 13 a IX. EFFECTIVE DATE 9. 1 This agreement shall take effect on the date set forth above. THE EAST HILL COMMUNITY WELL COMPANY BY: /Z,LLriL--6t.L'k u RESIDENT X- (/ x-e- zex� ECRETAR CITY OF KENT, WASHINGTON BY: Page 13 of 13 Al