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039-11 - West Sound Utility District - ContractAGREEMENT BETWEEN THE CITY OF PORT ORCHARD AND WEST SOUND UTILITY DISTRICT FOR THE SHARING OF THE BETHEL WATER TANK 9011 This AGREEMENT is made and entered into this lR day ofQ)A:1)M*,, by and between the WEST SOUND UTILITY DISTRICT, a municipal corporation, hereafter referred to as West Sound and the CITY OF PORT ORCHARD, hereinafter referred to as Port Orchard, collectively referred to as the parties. Whereas, the parties desire to jointly design and construct a water tank to be used jointly as hereinafter set forth (hereafter referred to as "Bethel Water Tank") to be located at 4986 Bethel Road; and Whereas, Port Orchard owns property located at 4986 Bethel Road, Kitsap County Tax Parcel: 112301-1-045-2000 upon which Port Orchard's 1-million gallon Sedgwick Water Tank is already located (hereafter referred to as "City Property ); and Whereas, the parties believe that the joint design and construction of the Bethel Water Tank as proposed herein and to be placed on the City Property, will provide greater efficiency and reduce costs to the public; and Whereas, Port Orchard and West Sound desire to provide the highest reliability of service to their customers at reasonable cost. West Sound needs additional water storage at this time. Port Orchard anticipates that it will need additional water storage as it continues to grow. Additional storage will: Improve overall system reliability Increase fire flow availability Improve mutual water supply support between West Sound and Port Orchard Whereas, Port Orchard's hydraulic grade for this vicinity is 392 feet above mean sea level. West Sound's hydraulic grade for this vicinity is 487 feet above mean sea level. The 95- foot difference in hydraulic grade complicates sharing the same water in the proposed water tank. IT IS AGREED: I. Cooperative Water System Development Plan: Port Orchard and West Sound agree to cooperate in the design, installation, operation, maintenance, and management of the Bethel Water Tank. 2. Easement and, access: Port Orchard agrees to grant West Sound an unrestricted easement to the City Property for access to the Bethel Water Tank, water mains, valves, and associated appurtenances. The City shall retain the same rights of access as granted to West Sound for the same purposes. Both parties shall have unencumbered access to the property site and Bethel Water Tank at anytime, day or night. The parties agree to execute all documents necessary to fulfill this provision. 3. REAL PROPERTY OWNERSHIP, LESS BETHEL WATER TANK: This Agreement does not affect or change the ownership of the real property (City Property) where the Bethel Water Tank will be located. However, it is anticipated the Bethel Water Tank structure shall be jointly owned by Port Orchard and West Sound. IL.;; Sharing the 6elhel 6Yuler Turk Pagc 1 qf'6 4.. Project Design: Both parties shall work together to select a qualified engineering firm to design the Bethel Water Tank and to perform construction administration of the project. The selection process shall be in accordance with applicable State and/or federal law; including but not limited to compliance with all public bidding requirements. Both parties shall agree upon the selection process, the selected engineer, and the terns of the engineer contract. It is expressly understood by the parties that the project design phase of this project will not commence until agreed upon by both parties; and that the timing of funding may delay the commencement of the project design phase indefinitely. 5. Design Concept: The design concept is shown in Exhibit A of this Agreement. N0 changes to the design concept shall be effective unless in writing and approved by both the City Council and West Sound Board of Commissioners. 6. Funding: This project is not currently funded, nor do the parties anticipate any joint funding. Each party will seek its own funding sources and cooperate on budget preparation as it affects this project. Funding shall be approved in writing by both the City Council and West Sound Board of Commissioners, prior to any commitments by either party as it pertains to the Bethel Water Tank project. Should funding fail for either party, this agreement may be terminated subject to each party's cost sharing obligations pursuant to the other provisions of this Agreement. All third -party contracts shall contain a provision, in language approved by both parties, that provides for such termination due to failure of funding. 7. Bethel Intertie: This Agreement does not change, modify, or otherwise affect the Interlocal Agreement for the Bethel Emergency Intertie between Port Orchard and West Sound, formerly known as Annapolis Water District. 8. Tower and Rental to Third Parties: Port Orchard shall possess the exclusive right to rent the space and the associated revenue on the Bethel Water Tank and City -owned real property for communication and data transmission purposes to third parties. 9. Communication and Data Transmission Facilities: Both West Sound and Port Orchard may, without monetary compensation to either party, install and operate their own communication and data transmission facilities on the Bethel Water Tank. Port Orchard will allow West Sound to place a 10 foot x 10 foot building near the Bethel Water Tank for equipment to support West Sound's communication and data transmission facilities. Said building shall be removed at West Sound's expense upon the termination of this AGREEMENT. 10. Compensation: Prior to West Sound using the Bethel Water Tank for water storage, there shall not be any compensation due Port Orchard. Upon West Sound using the Bethel Water Tank for water storage, West Sound shall pay rent to Port Orchard an amount of One Thousand Dollars annually, payable upon the first date of water storage and each anniversary thereafter. This amount shall be automatically adjusted annually for inflation, as determined by the Seattle CPI index, in an amount not to exceed 5% and not less than 1.5%. 11. Cost Sharing for Design: Mutually agreed upon expenditures associated with the design and permitting of the Bethel Tank will be shared equally by both parties. Neither party shall pay the staff time of the other party. The design phase shall end upon the bid opening for construction. 12. Cost Sharing for Construction: The parties understand and agree the most restrictive bid requirements under state law shall control the construction bid process. West Sound, in consultation with Port Orchard, shall be the lead agency for purpose of complying with all bid law requirements. Unless otherwise agreed upon in writing, no third -party contract(s) shall be effective unless signed by both parties. It is agreed each party's share of the expenditures associated with the construction shall be based on the percent of total stored water in the Bethel Water Tank attributed to each party as designed. The construction phase ILA; Sha ngtile Be!"ei 11Va tui %Oln rG,�(' L o/ I shall start at the bid opening. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, under no circumstances shall West Sound be responsible for any environmental cleanup to the City Property occasioned by activities on the City Property prior to construction of the Bethel Water Tank or that did not in any way relate to West Sound's activities thereafter. 13. Cost Sharing for Operation and Maintenance: With the following exceptions, both parties are solely responsible for operation and maintenance of its own section of the Bethel Water Tank. It is agreed each parry's share of the expenditures arising under the following exceptions shall be based on the percent of total stored water in the Bethel Water Tank attributed to each party as designed. Except in the case of an emergency, the following expenditures shall be mutually agreed upon in writing prior to any action being taken by either party: a. Exterior painting of the Bethel Water Tank, at any exterior location; b. Repairing any metal surface, interior or exterior; c. Earthquake damage; and d. Future seismic or structural improvements. 14. Cost Sharing for Demolition: Upon expiration of the Bethel Water Tank's useable life, mutually agreed upon expenditures associated with the demolition of the Bethel Water Tank and foundation shall be shared equally by both parties, except for costs directly associated with environmental cleanup. Except when the provisions of paragraph 28 apply, the costs associated with environmental cleanup shall be shared equally. It is anticipated but not required that the tank will be demolished at the end of the duration of the Agreement. 15. Notices: Except as expressly provided elsewhere in this Agreement, all notices and other written communications required hereunder shall be in writing and be deemed given at the time of delivery, if personally delivered, or at the time of mailing if mailed by first class mail, postage pre -paid and addressed to the party at its address stated below; or at such address as a party may designate at any time in writing pursuant to the notice requirements set forth herein. Public Works Director City of Port Orchard 216 Prospect Street Port Orchard, WA 98366 Phone: (360) 876-4991 General Manager West Sound Utility District 2924 SE Lund Avenue Port Orchard, WA 98366 Phone (360) 876-2545 16. Duration: The term of this Agreement shall be 75 years. 17. Termination: Either party may terminate this Agreement for any reason whatsoever prior to the bid award to the lowest responsible bidder and entry into the construction contract with such bidder by written notice to the other party. After the construction contract has been entered into, termination will require written notice to the other party and full payment of that party's share of the construction costs. Construction costs consist of the costs contracted to the design engineer, construction contract amount incurred at the time of termination notice, and additional contractor costs based on change orders that have been approved by the City and West Sound. Unless agreed upon in writing, neither party may terminate this AGREEMENT after construction has been substantially completed. 18. Severability: It is the intent of the parties that if any provision of this contract or its application is held by a court of competent jurisdiction to be illegal, invalid, or void, the validity of the remaining provisions hereof or its application to other entities, or IL.d; Shuri,tg if Gei itel if$der 7urrk Pine 3 uiw circumstances, shall not be affected. The remaining provisions shall continue in full force and effect. The rights and obligations of the parties shall be construed and enforced as if the contract did not contain the particular invalid provision. However, if the invalid provision or its application is found by a court of competent jurisdiction to be substantive and to render performance of the remaining provisions unworkable and non -feasible, it is found to seriously affect the consideration and/or is inseparably connected to the remainder of the contract, the entire Agreement shall be null and void. 19. Complete Agreement / Modifications: This document represents the entire Agreement between the parties. No change, termination or attempted waiver of any provision hereof shall be binding on either party, unless executed in writing by authorized representatives of each. This Agreement shall not be modified, supplemented, or otherwise affected by the course of dealings between the parties. 20. Benefits: This Agreement is entered into for the benefit of the parties to it only and shall confer no benefits, direct or implied, on any third persons. 21. Assignment: The rights granted by this Agreement may not be assigned without written consent of the Board of Commissioners of West Sound Utility District and the City Council of the City of Port Orchard; said written consent shall not be unreasonably withheld. 22. Arbitration: Unless otherwise agreed upon in writing by the parties, disputes arising under this Agreement shall be settled through binding arbitration. In furtherance thereof the parties agree and stipulate to that the Mandatory Arbitration Rules for Superior Court shall apply and arbitration limits as provided in those rules shall be waived; the arbitrator shall possess full legal and equitable authority to fashion appropriate relief so that all disputes hereunder may be fully and completely resolved. 23. Consent: Whenever it is provided in this Agreement that the prior written consent or approval of either party is required as a condition precedent to any actions, the requested consent or approval shall not be unreasonably withheld. This provision shall not apply to requests for amendments to this Agreement. 24. No Joint Venture —Individual Liability: This Agreement does not create a joint venture or partnership between the parties. Further, neither party shall be an agent of the other hereunder and neither party shall be liable for the acts of the other party in any type of representative capacity whatsoever. 25. Water Rights: This Agreement shall not serve to transfer water rights from one party to the other. Each shall be responsible for acquiring any water rights necessary for its use of the Bethel Water Tank. In no event shall a failure of water rights or a lack of available water excuse a party from the performance of its obligations hereunder. 26. Indemnifcation: a. Port Orchard hereby agrees to indemnify, defend and hold West Sound and its agents, contractors, employees, officers, and directors, harmless from and against any and all claims, damages, losses and expenses, including but not limited to attorneys' fees and disbursements, directly arising out of any claim, action or other proceeding (including without limitation any proceeding by any of Port Orchard's employees, agents or contractors) based upon (a) Port Orchard's breach of this Agreement, (b) the conduct or actions of Port Orchard within or outside the scope of this Agreement, or (c) any negligent act or omission or willful misconduct of Port Orchard. b. West Sound hereby agrees to indemnify, defend and hold Port Orchard and its agents, contractors, employees, officers, and directors, harmless from and against any and all claims, damages, losses and expenses, including but not limited to attorneys' fees and disbursements, directly arising out of any claim, action or ILA'; slimingd:e&th,e; 1'r.;;zrTam( Poxa;o/ other proceeding (including without limitation any proceeding by any of West Sound's employees, agents or contractors) based upon (a) West Sound's breach of this Agreement, (b) the conduct or actions of West Sound within or outside the scope of this Agreement, or (c) any negligent act or omission or willful misconduct of West Sound This Section shall survive the termination or expiration of this Agreement. 27. Liability and Property Damage Insurance: Prior to commencement of the Bethel Water Tank's design phase, the City and West Sound shall develop a written agreement defining the terms -and specifics of liability and property damage insurance coverage to be carried by each, or both jointly. 28. Environmental Hold Harmless: Each party agrees to defend, indemnify and hold harmless the other from and against any and all administrative and judicial actions and rulings, claims, causes of action, demands and liability (collectively, "Claims") including, but not limited to, damages, costs, expenses, assessments, penalties, fines, losses, judgments and reasonable attorney fees that the indemnitee may suffer or incur due to the existence or discovery of any Hazardous Substances on the Property or the migration of any Hazardous Substance to other properties or the release of any Hazardous Substance into the environment (collectively, "Actions"), that relate to or arise from the indemnitor's activities on the Property. The indemnifications in this section specifically include, without limitation, costs incurred in connection with any investigation of site conditions or any cleanup, remedial; removal or restoration work required by any governmental authority. This Section shall survive the termination or expiration of this Agreement. 29. Venue, Jurisdiction, and Special Performance: In the event of litigation between the parties, venue and jurisdiction shall lie with the Kitsap County Superior Court of the State of Washington. In any action brought to enforce any provision of the Agreement, the prevailing party (the party who substantially prevails) shall be entitled to recover from the losing party all of its reasonable costs and attorney fees incurred in the suit. This section is subject to the terms of Section 22 hereof entitled "Arbitration". 30. Default: In the event of default of any provision of the contract, the non -defaulting party shall send written notice to the other party setting forth the nature of the default. If the default is for a monetary payment due hereunder, the defaulting party shall have thirty (30) calendar days to cure the default. In the event of other defaults, the defaulting party shall use its best efforts to cure the default within ninety (90) calendar days. If such default cannot be reasonably cured within such ninety (90) calendar day period, the defaulting party shall, upon written request prior to the expiration of the ninety (90) calendar day period, be granted an additional sixty (60) calendar days to cure the default. Should West Sound fail to pay compensation pursuant to this provision, Port Orchard may suspend West Sound's rights to access and use of the Bethel Water Tank until said time as any outstanding compensation is paid in full. If West Sound is in arrears for more than six (6) months, West Sound's ownership interest and right of access shall be forfeited in full to Port Orchard and shall not be redeemable. Notwithstanding the termination provisions set forth in Section 17 hereof, this Agreement shall terminate upon forfeiture of West Sound's interests pursuant to this paragraph; provided that any financial obligations previously accrued shall remain due and owing. Notwithstanding anything to the contrary herein, however, prior to Port Orchard suspending West Sound's rights to access and/or use of the Bethel Water Tank, or forfeiting West Sound's ownership interest or right of access thereto, such action(s) shall first be litigated in arbitration and granted by the arbitrator pursuant to the arbitration provisions hereof. 31. Agreement Approval: Port Orchard approved the terms of this Agreement at its regularly scheduled City Council meeting held on the )a? day of -) ) , 2011. West Sound lL ; Sharing the I eiiie� Iii77�i' Tan' Page 5 Oj approved the terms of this Agreement at its regularly scheduled Board of Commissioners meeting held on the 7 day of March, 2010. 32. Effective Date: The effective date of this AGREEMENT is the 1,2 day of P2r, 1 2011. WEST SOUND UTILITY DISTRICT L Jeannie Screws, Chair awre99e Manage Gen7ral Manage APPRO AS TO F RM: - P Richard Gross, District Attorney CITY OF PORT ORCHARD S p.' VA i�. Oi iLi; Sharingihe Bernei [,VarerTank rage n q— contract No. 039-11 Exhibit A WEST SOUND UTILITY DISTRICT Memorandum 17 October 2008 TO: Public Works Director PM: General Manager RE: Bethel Combined Water Tank Design Concepts It appears that the City and District see a mutual interest if the second tank can, be constructed at the Bethel Tank site. The purpose of this memo is to begin to develop the design concept. CONCEPT There is not enough room for both a City and a District tank, so a combined tank should be considered. If the combined tank is one container in which the water is shared, administrative issues such as consumption billing and water sharing would be required. Stacked tanks could be the easiest solution. The District's water elevation is 487 feet, which is 55 feet higher than the City's 392 foot elevation. One version of the stacked tank could be: 1. The City duplicates its Bethel Tank with a 40' high, 68' diameter tank for 1.0 million gallons of storage. 2. The District's tank would be a 55' high 68' diameter tank on top of the City's tank. The outside appear would be a 95' high tank, probably steel, next to the existing 40 high tank. 3. The interior of the City's tank would have additional columns and a reinforced roof to carry the District's 1,5 MG of water.. 4. Each entity would feed its separate tank directly and connect it to its existing distribution system. 5. The existing intertie would be used to share water and would not need any modifications. The inter -local agreement would address construction costs, maintenance responsibilities, water sharing and other issues, such as sharing cell tower revenue if the tanks are leased for that purpose. Let me know what you think. t4odl �', /. 39 Contract No. 039-11 Exhibit A ao e "L'cfG[ NO. 039-11 Exhibit A \:l 360 s9f I i